R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 189 www.r-economy.ru Online ISSN 2412-0731 Original Paper © I. K. Lebedeva, 2019 doi 10.15826/recon.2019.5.4.019 Public-private partnerships and their role in enhancing the cargo handling efficiency of container lines in the Black Sea I. K. Lebedeva Admiral Ushakov State Maritime University, Novorossiysk, Russia; e-mail: lebedeva.irene69@gmail.com ABSTRACT The article discusses the current situation in the container shipping market and the terminal infrastructure in the Black Sea region. The analysis is based on the container fleet database accumulated by the author. These data are used for making observations and predictions and drawing conclusions about the dynamics of the marine transportation market. The methodological frame- work comprises theoretical, empirical and mathematical methods. The com- parative analysis of container services of different Russian terminals and ports has shown that the market is now undergoing major transformations and suf- fers from a considerable imbalance due to the rapid growth in deadweight tonnage and the insufficient capacity of the infrastructure, which means that it is unable to keep up with the rising demand. The excess of deadweight tonnage and the shortage of the necessary equipment leads to chronic bottlenecks in cargo handling, cargo clearance and so on. To address these problems, it is pro- posed to explore the opportunities provided by the integration of public-pri- vate partnerships into the service structure of maritime transport. By focusing on the case of the Russian port of Novorossyisk, the article demonstrates that public-private partnerships are able to enhance the efficiency  of  cargo-han- dling operations of container lines in the Black Sea region. KEYWORDS public-private partnership, logistics, maritime transport, world fleet, container ships, container lines, Black Sea FOR CITATION Lebedeva I. K. (2019) Public- private partnerships and their role in enhancing the cargo handling efficiency of container lines in the Black Sea. R-economy, 5(4), 189–197. doi: 10.15826/recon.2019.5.4.019 Государственно-частное партнерство – как инструмент повышения интенсивности терминальной обработки контейнерных линий черноморского региона И. К. Лебедева осударственный морской университет им. адм. Ф.Ф. Ушакова, г. Новороссийск, Россия; e-mail: lebedeva.irene69@gmail.com АННОТАЦИЯ В данной статье рассмотрено состояние рынка контейнерных перевозок и инфраструктуры терминального сервиса на сегодняшний день. Прове- денное исследование и собранная информация позволили проанализи- ровать нынешнее состояние рассматриваемого сегмента рынка. База дан- ных контейнерного флота, накопленная автором статьи для дальнейшего определения уровня рынка и расчетов показателей флота и последующее наблюдение, предоставляет возможности для дальнейшего развития ис- следования. В рамках статьи автором были применены теоретические, эмпирические и математические методы. Основной целью данной статьи является проведение аналитического исследования рынка контейнерных услуг и управления флотом; сбор актуальных данных; проведение ком- паративного анализа сервиса контейнерного флота различных термина- лов и определение уровня сервиса на терминалах российских морских портов. Состояние рынка контейнерных перевозок претерпевает мас- штабные изменения и приводит к дисбалансу отрасли в связи со стре- мительным ростом тоннажа и неподготовленности сервиса к созданному грузообороту. В современных экономических условиях при избытке тоннажа и дефиците оборудования, соответствующими последствиями ожидается возникновение узких мест на этапах терминальной обработ- ки и оформлении груза в контейнерных перевозках и т.д. В поисках ре- шения проблем в этой связи автором предлагается рассмотреть возмож- ность привлечения Государственно-частного партнерства в сервисную структуру морского транспорта, как инструмент повышения интенсив- ности терминальной обработки контейнерных линий рассматриваемого черноморского региона с последующими выводами. КЛЮЧЕВЫЕ СЛОВА государственно-частное партнёрство, логистика, морской транспорт, мировой флот, контейнерные суда, контейнерные линии, черноморский регион ДЛЯ ЦИТИРОВАНИЯ Lebedeva I. K. (2019) Public- private partnerships and their role in enhancing the cargo handling efficiency of container lines in the Black Sea. R-economy, 5(4), 189–197. doi: 10.15826/recon.2019.5.4.019 http://doi.org/10.15826/recon.2019.5.4.019 http://doi.org/10.15826/recon.2019.5.4.019 mailto:lebedeva.irene69@gmail.com mailto:lebedeva.irene69@gmail.com 190 www.r-economy.ru R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 Online ISSN 2412-0731 Introduction The Russian national economy is now becom- ing more and more open and integrated into the global economic system, which means that it has come to rely more heavily on transport infrastruc- ture. Therefore, it is crucial to analyze the work of maritime transport infrastructure, in particular container terminals and ports. As the internation- al division of labour grows deeper and the inter- national trade relations expand, the container seg- ment in the international logistics supply chain also grows in importance. Interactions between international container lines and container termi- nals are determined by the current trends in the development of trade fleet and regional transport hubs. It is necessary to consider further stages and prospects of development of the Russian port in- frastructure and the related strategic decisions. In this respect, it would be interesting to assess the potential of public-private partnerships in the sphere of maritime transport development. Maritime transport plays a special role in the development of the global trade infrastructure. The structure of maritime transport is determined by a set of factors, including the demands of the market. In their turn, trade organizations face fi- nancial risks when trying to create a certain trans- port and logistics relationships on the basis of the already existing infrastructure. Their attempts to minimize these risks lead to an increase in the de- mand for container shipping services. In addition to the risks, container transpor- tation also allows us to minimize transportation costs and time intervals for cargo handling at ter- minals. Cargo stored in containers does not re- quire additional storage facilities, since the site is used as a warehouse. Introduction of public-pri- vate partnerships (PPP) in this segment of mar- itime transport will let us attract more suppliers to the Russian market, expand the range of export and import and accelerate the processing of ships at a terminal. PPP has different forms of organi- zation and can be used in a range of investment deals and infrastructure industry complexes1. The main forms of PPP are as follows: – BOT (Build, Operate, Transfer) is a form of project financing, wherein a private entity receives a concession from the private or public sector to finance, design, construct, own, and operate a fa- cility stated in the concession contract; 1 Guidelines for Project Realization of Public-Private Part- nership in Russian Regions (2013). The PPP Development Cen- ter, Moscow – BOO (Build, Own, Operate) means that a private entity builds, owns and operates some fa- cility or structure receiving some financial incen- tives from the government; – BOOT (Build, Own, Operate, Transfer) means that a private organization conducts a large development project under contract to a pub- lic-sector partner, such as a government agency; – DBFM (Design, Build, Finance, Maintain) means that the private sector is responsible for the design, building, finance and maintenance of an asset, which incentivises the private sector to de- sign the asset taking into account the long-term maintenance required. In this article we are going to look at the cur- rent state of the sea container fleet and container terminals in the Black Sea region, in order to iden- tify the bottlenecks and opportunities to eliminate them with the help of PPP. The Black Sea plays an important role in Rus- sian economy with Novorossiysk ranking first in terms of cargo turnover in Russia and third in Eu- rope2. We believe that the PPP holds most poten- tial for the development of the regional transport industry. Taking into account this consideration, we are going to research the condition of the world container market and compare it with the situation in the Black Sea region, in particular the ways of enhancing the cargo handling efficiency of container lines. Theoretical framework PPP means cooperation between public and private entities primarily for infrastructure pro- vision within a certain area or region. PPP and its role in regional economies was discussed by G. P. Hasaev, S. A. Martishkin [1], D. I. Shabun- in and others. Container shipping management was studied by Malcolm McLean, E. L. Limon- ov [2], V.  V.  Vinnikov [3], O. N. Baburina [4; 5], V. K. Tsygankov [6] and others. Other authors re- searching the problems of container shipping in- clude L. Edirisinghe, Zhihong Jin, A. W. Wijeratne [7], I. Rekik, S. Elkosantini [8]. Lalith Edirisinghe, Zhihong Jin, and A. W. Wi- jeratne focus on the practical aspects of contain- er exchange and its potential for addressing the problem of imbalance in world trade. Ines Rekik and Sabeur Elkosantini also analyze the contain- er market and seaport terminals service levels as well as the storage area. Eugene Korovyakovsky 2 Retrieved from Source or supplier information. Retrieved from: https://www.vestifinance.ru/articles/108278?page=1 http://doi.org/10.15826/recon.2019.5.4.019 https://www.vestifinance.ru/articles/108278?page=1 R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 191 www.r-economy.ru Online ISSN 2412-0731 and Yulia Panova [9] provide an overview of the dynamics of Russian dry ports. In this article, we are going to analyze the available data on the market of container services, compare the services provided by different termi- nals, assess the current level of terminal services in Russian Black Sea ports, and discuss the ways of optimizing them. Methodology The methodological framework of this re- search includes empirical, theoretical and math- ematical methods: data collection, structuring, comparative analysis and mathematical calcula- tions. Our analysis relies on the data on the world merchant marine fleet and follows the procedure described below. First, to get a clear picture of the current situation in the container market, we need to collect the data such as the vessel types, sizes, tonnage and capacity, age range and container lin- er operators. These data can be obtained from the ‘Review of Maritime Transport’ of 2016 and 2017 [10; 11] and the data on the Russian sea ports found in dispatchers’ daily reports. Second, we are going to structure and visualize the results of our calculations. Third, it is necessary to systemize the results of research for further comparative analy- sis of the world port practices and the practices of Black Sea ports and terminals. Finally, we are going to formulate recommendations concerning the ways to enhance the efficiency of cargo han- dling in the terminals of the Black Sea region. Discussion The structure of the world trade fleet reflects the demand for container shipping, as the total deadweight of the fleet and its share in the total tonnage increases. In 2017, the fleet of dry car- go vessels accounted for 43.2% of the world fleet by deadweight and 17.2% by value. The analysis of the structure of the maritime transport mar- ket has shown the market share of standard ves- sels by deadweight and the share of the total fleet [10, p. 25]. As part of the analysis of the structure of the world fleet in terms of deadweight, the dry cargo fleet occupies the leading position of the world fleet. The tanker fleet is in the second place, and container ships are in the third place. Ves- sels for the transportation of general cargo rank fourth (Table 1). The growth of the fleet is reflected in the com- parative figures of the total tonnage for the peri- od from 2015 to 2017, in which it increased by 6.69%. With the decline in the share of the typi- cal vessels of the total fleet, the total tonnage over the period from 2015 to 2016 increased by 3.47%, and in the period from 2016 to 2017, it grew by 3.06%. Therefore, when considering the structure of the model fleet, it becomes apparent that the share of tankers and container ships among the total deadweight increased in comparison with 2015 and 2017. In 2017, the average age of the commercial fleet exceeded the ones in 2016 by 0.7 age units and was 20.6 years in total (Table 2) [10, p. 27]. The age segmentation of the world fleet varies from the indicators of newly built ships to the number of decommissioned or obsolete ships. In comparison with the established opinion about the average age of the world fleet, the indicators of 2017 indicate a fairly ‘young’ age of ships, es- pecially those in the segment of dry cargo and container ships. The fleet of countries with de- veloping economies is on average 10 years older than ships of countries with developed economies (see Table 2). Therefore, it makes sense to indi- cate that vessels of various types, such as tankers, general vessels and others, are considerably old- er in terms of the average age of a fleet than the youngest fleet of dry cargo and container ships [12, p. 91]. It also becomes evident that over the past 15–19 years, ship sizes have undergone some significant changes. Prior to that, the largest types by deadweight were dry cargo ships and tankers, but over the past few years, the container fleet has Table 1 Structure of the world trade fleet, 2015–2017 Vessel type Deadweight, thous. tons Share, % 2015 2016 2017 2015 2016 Bulkers 761,776 778,890 796,581 43.6 43.1 Oil tankers 488,308 503,343 534,887 28 27.9 Container ships 228,224 244,274 245,609 13.1 13.5 General cargo vessels 74,158 75,258 74,823 4.2 4.2 Others 193,457 204,886 209,984 11.1 11.5 Subtotal 1,745,923 1,806,651 1,861,884 100 100 Source: UNCNAD secretariat calculations, based on the data from Clarksons Research. http://doi.org/10.15826/recon.2019.5.4.019 192 www.r-economy.ru R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 Online ISSN 2412-0731 caught up with the leaders in this indicator. The previously mentioned dimensions and capacity of container ships are currently being brought to the maximum level, and further growth is not being planned in terms of potential opportunities and the bandwidth of channels and straits. In the past five years, the market of sea container transpor- tation of linear type has been characterized by rigorous competition [13], which required enor- mous expenses on the part of the carriers. They had to invest in the new fleet consisting of larger ships (container ships), which lead to a decrease in freight rates for the container on average in af- fordable areas; a decrease in the frequency of ser- vicing; increase in port charges for ship handling; and shortages of container equipment. The specificity of chartering a container fleet lies in the cellular-like structure of the onboard/ bilge space used to store containers [14]. A ful- ly-cellular container vessel is a cellular type of a container carrying ship. This type of container ship makes up 98% of the world container fleet. If, in the market of bulk cargo, loading depends pri- marily on the calculation of the cargo capacity of the vessel according to its specific weight, capaci- ty and carrying capacity, then in linear container transportation the calculation is made for each container, according to its capacity and carrying capacity [15]. This kind of loading can be compared with chartering ‘part cargo’. In this case, the hold and freight are divided between charterers, and, as a rule, this type of chartering is common, both in the general cargo market and in the beam market. The organization and management of the container fleet within the line depend on inter- Table 2 Age and quantitative distribution of the world fleet by vessel types and economic affiliation for 2016–2017 Economic grouping and vessel type 0–4 Years Average age % change 5–9 10–14 15–19 20+ 2017 2016 2016–2017 World fleet Bulk carriers % of total ships 35.77 33.8 12.05 9.33 9.05 8.8 8.8 0.00 % of deadweight tonnage 38.66 34.88 11.91 7.55 7.01 7.95 7.94 0.01 Average vessel size (dwt) 79,099 75,525 72,283 59,244 56,673       Container ships % of total ships 18.63 30.5 22.72 15.66 12.5 11.55 11.1 0.45 % of deadweight tonnage 31.51 32.57 20.82 10.17 4.92 8.72 8.39 0.33 Average vessel size (dwt) 80,624 50,891 43,679 30,961 18,751       General cargo ships % of total ships 7.68 16.5 10.20 7.54 58.08 25.21 24.44 0.76 % of deadweight tonnage 14.98 24.7 12.23 10.24 37.85 18.29 17.83 0.46 Average vessel size (dwt) 8,118 6,081 5,086 5,630 2,561       Oil tankers % of total ships 16.03 22.51 15.46 7.74 38.26 18.76 18.36 0.4 % of deadweight tonnage 22.07 34.74 24.44 12.67 6.09 9.9 9.54 0.36 Average vessel size (dwt) 73,274 82,242 84,610 89,498 8,777       Other % of total ships 14.37 18.65 10.60 8.43 47.96 22.73 22.25 0.48 % of deadweight tonnage 19.4 26.43 14.21 10.29 29.67 15.58 15.65 0.07 Average vessel size (dwt) 7,777 7,907 8,004 7,144 3,954       All ships % of total ships 11.75 17.97 10.13 7.00 53.15 20.57 19.92 0.65 % of deadweight tonnage 29.8 33.16 16.95 9.78 10.31 9.9 9.55 0.34 Average vessel size (dwt) 42,207 34,948 32,847 25,991 5,917       All ships – Developing economies % of total ships 16.92 21.01 11.29 7.92 42.86 29.03 28.33 0.7 % of deadweight tonnage 31.4 30.6 12.74 9.75 15.5 16.72 15.91 0.81 Average vessel size (dwt) 34,624 27,025 22,137 23,195 6,733       All ships – Developed economies % of total ships 16.15 23.86 14.08 10.76 35.15 19.05 18.51 0.54 % of deadweight tonnage 29.25 35.13 19.73 9.76 6.12 9.15 9.04 0.11 Average vessel size (dwt) 53,396 43,538 42,708 28,695 6,589       All ships – Transition economies % of total ships 6.32 8.82 6.02 3.19 75.66 29.39 28.93 0.46 % of deadweight tonnage 12.58 28.76 21.23 11.2 26.22 15.59 16.03 –0.43 Average vessel size (dwt) 14,835 24,533 26,714 25,028 2,447       Source: UNCNAD secretariat calculations, based on the data from Clarksons Research. http://doi.org/10.15826/recon.2019.5.4.019 R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 193 www.r-economy.ru Online ISSN 2412-0731 nal and external factors of the market economy: coordination of terminal service and line repre- sentation at the local level, stable cargo flow (ex- port/import), schedule of port calls, loading and unloading operations rates, etc. [16]. The struc- ture of the world market of liner transportation distributes service offers by regions of demand (Table 3). In mid-2018, the cargo capacity of the linear container fleet was 21.9 million TEU, and in 2016 – 19.8 million TEU. The growth of cargo capacity of the container fleet is 2.1 million TEU for a partial period of 1.5 years. In 2016, 127 new container ships were launched, which is 70% low- er than in the peak year, 2008. In addition, signifi- cant changes in the average size of new ships were revealed. Prior to this, the size of the new fleet had exceeded the size of the existing one, especially in the container segment. This trend, observed until 2016, complicated the relations with port author- ities in terms of setting up and handling ships not only in small ports in all regions, but also in large ports in Asia and Europe. The rapid increase in tonnage and cargo capacity of the container fleet resulted in lower rates on the freight of a contain- er, increased costs of the use of containers outside the port and a reduction in the period of free use. The shortage of container equipment means that reorganization of service centers and regional divisions of container lines is required [17]. Pub- lic-private partnerships may be used to accelerate the process of cargo and ship handing at marine terminals. Planning is one of the most signifi- cant tools used for the reduction of risks in the management of the fleet and container line as a whole. It is necessary for a container line to plan the routes and ways to navigate regions in order Table 3 Top 30 major container shipping line operator companies, 2018 Rank Line operator Cargo capacity, TEU Market share,% 1 APM-Maersk 4,118,975 18.7 2 MSC 3,241,555 14.7 3 CMA CGM Group 2,518,195 1.5 4 COSCO Shipping Co Ltd 1,949,516 8.9 5 Hapag-Lloyd 1,611,772 7.3 6 ONE (Ocean Network Express) 1,522,005 6.9 7 Evergreen Line 1,088,509 5 8 OOCL 694,597 3.2 9 Yang Ming Marine Transport Corp. 662,625 3 10 PIL (Pacific Int. Line) 427,624 1.9 11 ZIM 367,566 1.7 12 Hyundai M.M. 358,981 1.6 13 Wan Hai Lines 251,108 1.1 14 X-Press Feeders Group 144,399 0.7 15 KMTC 128,698 0.6 16 Zhounggu Logistics Corp. 126,182 0.6 17 Antong Holdings (QASC) 126,119 0.6 18 SITC 104,071 0.5 19 IRISL Group 96,383 0.4 20 TS Lines 80,761 0.4 21 Arkas Line/EMES 72,717 0.3 22 Sinotrans 61,925 0.3 23 SM Line Corp. 57,992 0.3 24 Sinokor 56,382 0.3 25 Salam Pasific 53,712 0.2 26 RCL (Regional Container L) 49,687 0.2 27 Heung-A Shipping 48,051 0.2 28 Simatech 47,008 0.2 29 UniFeeder 45,775 0.2 30 Grimaldi (Napoli) 44,773 0.2   Total for the top 30 20,201,606 81.7   Other companies 1,785,690 18.3   Subtotal 21,987,296 100 Source: https://alphaliner.axsmarine.com/PublicTop100/ http://doi.org/10.15826/recon.2019.5.4.019 https://alphaliner.axsmarine.com/PublicTop100/ 194 www.r-economy.ru R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 Online ISSN 2412-0731 to improve its services, to control cargo flow and meet the needs of customers in a particular mar- ket segment. Results The seasonality of the work of many direc- tions of line service is determined by the specifics of the cargo and requirements of the market. Tak- ing into account the specifics of the cargo of cer- tain segments of the market and the calculation of the fleet from the cargo base, a regional represen- tative of the container line has the opportunity to avoid downtime of ships and non-profitable trips with incomplete loading of the vessel. Therefore, while devising a plan for the future operation of the container lines, the representative works to- gether with regional representatives, considering all options, including the use of PPP, and taking into account the technical capabilities of the port. Thus, a plan of anchoring the vessel is formed; the volume of the processed cargo, the capacity of the terminal, the intensity of the PPP, the rates of terminal and ship fees, etc. are calculated [6]. The recommended period of PPP agreement should be no less than three years, with the minimal in- vestment amount of 200 mln. rub.3 Let us now focus on the case of the Russian port of Novorossyisk. In terms of cargo traffic, Novorossiysk is the third largest port in Europe4. We calculated the average speed of container han- dling in PJSC ‘NCSP’ on the basis of the avail- able terminal group data – 24.4 containers per hour. This indicator reflects the average value for the varying degrees of vessel capacity and size of container ships making port calls to the port of Novorossiysk to the terminal of PJSC “NCSP” in the first quarter of 2018. The processing speed is directly dependent on the cooperation of the staff of the terminal, freight forwarders, ship agents, stevedores and ship’s crew, speed of execution and submission of applications for loading/unloading, preparation of tally sheets, design and supply of rolling stock, warehousing, connection (in case of perishable goods), etc. The container line ‘ZIM Russia’, in the first quarter of 2018, has an average ship processing speed that is higher than ‘Maersk Line’ and ‘Lider Line’. The most stable speed of container handling is observed in Maersk, which is 29.9 containers per hour. 3 Guidelines for Project Realization of Public-Private Part- nership in Russian Regions (2013). The PPP Development Cen- ter, Moscow. 4 Retrieved from: http://www.nmtp.info/holding/about/ To compare the performance indicators of Novorossiysk with the world average value of the container ship processing speed, we can look at the average value of the vessel berthing in the port for cargo operations and paperwork. Table 4 Average container processing speed in PJSC ‘NCSP’ (container/hour) Month/ Con- tainer Line ZIM Lider Line Stan- dart-F Maersk Avg speed, container per hr January 33.8 16.5 13.8 – 21.4 February 26.7 13.8 – 29.9 23.4 March 37.5 18 – 29.9 28.5 Average speed, container per hr 32.6 16.1 13.8 29.9 24.4 The average time a ship spends in a port is determined by the average speed and the average number of containers for loading and unloading during the given period. The average processing time of the vessel in PJSC ‘NCSP’ is 22.8 hours or 0.95 days. The indicator of global average pro- cessing time of a ship in a port is 0.87 days or 20.9 hours, the difference being 1.9 hours (Table 5) [11, p. 69]. Table 5 Average port time: container ships, 2016, [11] Country Port time, days Total port calls, units China 0.83 60,795 Japan 0.29 38,415 South Korea 0.49 23,545 USA 0.97 19,844 Taiwan 0.4 16,895 Singapore 0.8 16,159 Malaysia 0.93 15,678 Germany 0.46 14,784 Spain 0.51 14,018 Holland 1.14 12,264 Average world difference 0.87 445,990 Conclusion As the strategy of port infrastructure devel- opment until 2030 indicates, it is planned to im- prove the processing speed of ships through the construction of new storage spaces; improvement of the existing berthing areas, improvement of the technical characteristics of the lifting base of the port; deepening of the mooring lines; and so on5. Nevertheless, the interaction of the port/terminal 5 Strategy of Developing Marine Port Infrastructure of Russia Until 2030 (Adopted by the Marine Congress of the Rus- sian Government on 28.09.2012) Retrieved from: http:// www. rosmorport.ru/ http://doi.org/10.15826/recon.2019.5.4.019 http://www.nmtp.info/holding/about/ http:// www.rosmorport.ru/ http:// www.rosmorport.ru/ R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 195 www.r-economy.ru Online ISSN 2412-0731 and container line with other contractors forms the order of ship handling [3]. This sequence of relationships reflects the basic principle of supply chains – minimizing transport, time and financial costs throughout the entire cycle of linear service. The real issue, in this case, is the specific charac- teristics of organization of the container line at the terminal, which can be illustrated by the case of the container terminal of PJSC ‘NCSP’. Regarding the line service for container fleet maintenance, the shipowner, as in the case of tramp shipping, can delegate management functions of the company to the regional representative of the line or its op- erator6. The parent company distributes responsi- bilities to countries/ports of call, which allows the company to respond promptly to changes in oper- ation and tariffs of the port/terminal and control the process of port call service. The interaction of the line operator with the shipowner, in this case, is limited to the contract of freight, the contract of intermediary services and the corresponding doc- ument circulation [2; 18]. A contract for the pro- vision of services is necessary if the line operator is located in Russia, in which case it is required to sign a bilingual contract approved by the mone- tary control of the bank of the line operator. Thus, the shipowner deals with the operational issues of the vessel, while the line operator organizes the operation of the service on the line. Let us look at this situation in more detail by using the case of PJSC ‘NCSP’ as an illustration: A line operator at the terminal of PJSC ‘NCSP’ performs the following functions and re- sponsibilities: 1. Cargo towing (chartering)7. The chartering department or chartering manager can be found through outsourcing. The panel broker or line operator independently organizes the work of the chartering department. It needs, however, to co- ordinate its plans of loading, trips and ship calls with the owner. The costs of ship calls account for most of the transportation expenses, which means that the preliminary calculation of the flight is re- quired at the planning stage. 2. Port operations. As a rule, each port/coun- try/region has its own line representative. The line operator interacts with the commercial depart- 6 A line operator is an organization that manages and interacts with contractors on behalf of the Shipowner, which preforms the functions of chartering (booking), organization, accounting and control of the line within the terminal service. 7 Chartering is the conclusion of the contract of carriage, specifying the specific conditions, mode of transport, terms and periods of shipment, rates per ton or lot. ment of the port/terminal, forms the required contractual relationship, building a chain of fi- nancial obligations to the port/terminal, and de- vises a work schedule based on the capabilities of the port and the schedule of the line’s ship calls. 3. Sales and customers. When the contain- er line is being organized, it is important to cre- ate a customer base and demand for the carrier’s services. The competitive environment in the container transportation market is gaining mo- mentum every year. If there is a demand for the carrier’s services, the line operator forms the main customer base and informs the customers about the creation or renewal of the service. At the ini- tial stage, the cost of container freight should not exceed the average value in the region, and, while the customer based is still being formed, the cost of freight can be seasonally reduced. A productive relationship with customers is one of the key suc- cess factors in the shipping market. A problem which has to be addressed in Rus- sia is the terms of payment for services. Terms of payment, which is an integral part of the contrac- tual relationship, allow the company to describe in advance the required sequence of money trans- fers for rendered services, or specify whether a prepayment for services needs to be provided. It is particularly important to build a clearly defined sequence of mutual settlement if the company is working with numerous contractors and interme- diaries. For instance, if, according to the schedule of ship calls formed by the port manager, a contain- er ship arrived at the port of discharge, a contain- er was loaded onto the ship, and the freight of the aforementioned container was not paid for. In this situation, there are two scenarios: the operator may be allowed to unload the container and place it in the warehouse, with a ban on its export/release from the territory of the port until the debts have been payed to the line or, after the container has been fully unloaded, in the absence of payment and any counteractions on the part of the cargo owner/ forwarder/charterer of the container, the line has the full right to continue using its own equipment (container) with the goods at its discretion (if the contract does not specify other conditions). The line operator pays for the storage of con- tainers that are located on the territory of the port/ terminal and has the right to decide whether or not they should load the unpaid container togeth- er with empty ones, i.e. issue it as re-export. Such an operation may be cheaper for the line than http://doi.org/10.15826/recon.2019.5.4.019 196 www.r-economy.ru R-ECONOMY, 2019, 5(4), 189–197 doi: 10.15826/recon.2019.5.4.019 Online ISSN 2412-0731 paying for a simple container in the port, until it is required, especially if the container is refrigerat- ed and the cargo is perishable. Such situations are common. The cost of storage, including the costs related to its utilization and maintenance, usually ends up having a price range that starts from USD 50 per day8. Therefore, if it is possible to use PPP at this terminal with the possibility of signing an in- dividual draft contract for each container line, which will result in the following advantages: an increase in the capacity and turnover of the port/ terminal; acceleration of ship handling; expan- sion of the range of export/import cargoes and goods; reduction in the risk of cargo downtime at the port, delays in ship handling and inappro- priate use of port facilities; reduction of the risk of financial indebtedness to the port/terminal, which would eliminate the potential situation of service delay in case of non-payment; and, finally, enhancement of the efficiency of container lines, created by accelerating the turnover of container equipment inside the cycle. 8 Port dues, charges and tariffs for service and regulations of their application in the sea port of Russian Federation (Black and Azov sea ports), (2014). LLC ‘MARITIME TARIFFS CEN- TER’. Saint-Petersburg: CNIMT Publisher. Thus, the use of PPPs may well prove to be a feasible solution to the above-described problems. Operation of a container terminal can be affected by unique configurations of internal and external factors. The regional feature allows you to debug the processes of port facilities depending on the cargo situation, weather conditions, tonnage and other features not applicable to ports and termi- nals in other regions. The world’s merchant fleet is characterized by the rapid growth of deadweight (cargo capac- ity) tonnage of container ships. This trend con- tributes to lower transport costs due to econo- mies of scale. However, the amount of container equipment is insufficient. The growth rate of con- tainer tonnage (2.1 million TEU) is higher than the growth rate of container equipment. 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Lebedeva – PhD student and Lecturer at “Admiral Ushakov State Maritime University” (93, Lenin’s avenue, Novorossiysk, 353918, Russia); Director of “Konstanta” LLC, e-mail: lebedeva. irene69@gmail.com. ARTICLE INFO: received June 25, 2019; accepted October 15, 2019 Информация об авторе Лебедева Ирина Константиновна – аспирант и преподаватель ГМУ им. Ф.Ф. Ушакова (353918, Россия, Новороссийск, проспект Ленина 93); Директор ООО «Константа», e-mail: lebedeva.irene69@gmail.com. ИНФОРМАЦИЯ О СТАТЬЕ: дата поступления 25 июня 2019 г.; дата принятия к печати 15 октября 2019 г. This work is licensed under a Creative Commons Attribution 4.0 International License Эта работа лицензируется в соответствии с Creative Commons Attribution 4.0 International License http://doi.org/10.15826/recon.2019.5.4.019 http://doi.org/10.4324/9780203891742 mailto:lebedeva.irene69@gmail.com mailto:lebedeva.irene69@gmail.com mailto:lebedeva.irene69@gmail.com