The Role of the Entrepreneur in the Development of the Eritrean Shipping Industry
Endowed with a wealth of 1200 kilometers of coast line, Eritrea is a Maritime Nation. Itstwo ports of Massawa and Assab, strategically located, along the Red Sea lie in the busiest shipping lane in the world.
For millennium of years the ancient sea ports of Adulis and Zula were a hub for traders who were intersecting to the eastern part of Africa under the then great empires that have ruled this part of the world and the Middle East. Adulis and Zula reflect the glorious past in the annals of Eritreas Maritime history.
In the nineteenth century a British Military expedition led by General Napier used the port of Zula as its main logistics center where from his forces built a 21 kilometer railway through Kumaile enroute to the Magdala Campaign a 610 miles journey. The railway played significant role in transporting a huge cavaly, Elephants, donkeys, cache of arms and their armored personnel.
The Italians set foot at Assab port in 1869. In the next sixteen years they have to explore the rest of Eritrea using its sea waters. In 1885 they declared Eritrea as an Italian Colony. By the turn of the last century the Italians built the modern Port of Massawa. Earlier however the port of Massawa was used by the Turkish and the Egyptian conquerors, expressing the significant importance of sea ports.
The Italians turned Massawa into the busiest port in the early twentieth century until they were beaten out by the British Military Administration in 1941. Changing hands from colonyto another colony did not pay well to the beleaguered port. The British Military Administration stripped the port of its infrastructure including the sale of a floating dock to Pakistan.
The port as well as the rest of the country was subjected to a succession of colonialism when the Ethiopians succeeded the British Military administration in 1952. The maritime affairs of the country have to be overseen by the Ethiopian rulers. They had also perpetrated acommercial crime, like their predecessors, when they dismantled the longest cable car in the world in its time that stretched from Massawa to Asmara, However taking the role of the entrepreneur in its best sense of the word, the business of Shipping and Maritime affairs haveto be run by the Italians and other expatriate elements. The indigenous people were not privilaged to a decent scalar of formal education. Consequently there could not be, during those times, a learned Eritrean that did have the needed know-how to run the affairs of the port. It happened that the wealth of the port services has to be simply reaped off by the colonial masters. In spite of Eritrea being a maritime nation, it is sad to note that there was not even an establishment of the basic institution of maritime academy.
The need for Maritime transportation services is a derived demand. That is shipping, like anyother mode of transport, results from a requirement to move goods and services from one place to another. It is concerned with increasing human satisfaction by changing the geographical position of goods and people. It may bring raw materials to places where they can be manufactured more easily, or finished goods to places where consumers can make best use of them. The demand for maritime transport is affected by all the factors that influence international trade, such as economic booms and recessions.
More than ninety percent of the world trade is sea borne. As compared to other modes of transport it is cost effective, because it transports huge cargo at a relatively low cost. Therefore, it is important to note that reliable
means of transportation and widespread maritime connection with the outside world are among the essential prerequisites for economic progress and development.
The business of Maritime transport is multi faceted. It involves the ship-owner, the port authorities, the shipping agent, Customs clearing and forwarding agents. Dock laborers, Customs Authorities, Banks, Insurance companies, Supply of provisions and spare parts to the ship, bunkering services, maritime lawyers, truck transport companies, railways and inland water ways, if any.
As in any sector of the economy the Entrepreneur has to play a prominent role in the development of the Shipping industry. It would be wise to follow the world economic trends. The intricacies of the shipping business lie in the basic know-how of Maritime economics. Ultimately any service requires cost involvement. The entrepreneur should be prudent on how his staff members would have to calculate their cost elements and make it attractive to the service seeker. In most of the under developed countries little effort is shown to make changes on their cost factors corresponding to the prevailing economic trends. Their costs appear to remain static irrespective of the ups and down in economic situation. Global economic situation is a factor that affects the performance of the shipping community at
large. Market analysis in regard to the performance of domestic and international competitorsshould trigger the entrepreneur to make changes in line with the prevailing economic situation. In most cases the costs seem to simply build up irrespective to the changes in economic situation and remain there for years without any effort to revise them. Some may appear to be conditioned to a high price charges which will eventually lead them to gradual decline in business. The entrepreneur should have the courage to revise the service charges and when necessary it would be of a great advantage if the charges are brought down to attract more customers. The need for professional application of cost accounting should be considered absolutely necessary. A decade ago the port authorities in Singapore have to revise their service charges which were continuously escalating. After thorough financial studies they cut down their costs to a tune of One Billion Singaporean currency per year. Most of their operational performance was computerized so that the overhead costs have to be utterly minimized. In the final analysis the idea is to maintain the flow of ships, and customers on a sustainable trend. Singapore handles more than fourteen million containers per year. Statistics indicate that every seven minutes there is a ship that is docked and a ship that leaves the port.
As it was indicated in the above, Maritime transport specially ship owning is comparable to the aviation industry. It is managing an expensive ship and more expensive cargo, valued in millions of dollars. Such sophistication demands a know how of economics, management andaccounting. Basically marketing in any entrepreneurship plays a vital role.
Any entrepreneur of a high caliber holds a senior post in the economic status of the country and especially in the shipping business. Thus he should keep himself updated with the world maritime trend. If one would, every time, pursue routine activities it does not deservedly warrant him to be called an entrepreneur. He is simply considered as highly paid clerk. He is given the post not to toil on routine and trivial matters but on something that would lift up hisorganization to the highest level of economic degree. An entrepreneur should focus on leverage activities. An entrepreneur is in other words an executive officer. This implies that the entrepreneur holds the post in order to execute of matters that have significant importance. Not only should he lead his organization towards sustainable performance and good financial gains but also he has the obligation to cultivate his subordinates. Any staff member has a dream of improving ones career development. The vision of any staff member can only be fulfilled by the entrepreneur and his senior aids. It is incumbent upon the entrepreneur to show his subordinates a light at the end of the tunnel or contrarily he may innocently create a blurred vision. The latter will propel a huge labor turnover. There are some organizational leaders who simply sit behind the computer and would not be enthusiastic to know what the technology holds for quick communication processes and othermanagement, economic and accounting computations. In todays world a computer is a full fledged office. The main concern of the entrepreneur should be on the scale of the number of customers using his services. The more demand there is from existing and potential customers, the more will be the guarantee of the growth trend.
It is understandable that all economic sectors are interlinked. Shipping and tourism can make a good combination towards economic growth of the country assuming that there would be entrepreneurs who tirelessly think of a niche. Any business venture has to be realistic depending on the project costs and expected revenue and expense. It is highly probable that the Eritrean Tourism industry will have a leap frog in the year 2012 and beyond. Entrepreneurs in the area of tourism could join hands with entrepreneurs in the shipping industry for the purpose of the acquisition of Super Fast Ferries (SFF) as one of the most interesting transport facilities innovation in short sea shipping (SSS). In the not distant futurethe Eritrean coasts would be fully utilized when a sizeable number of such kind of ferries, whether for leisure and or for commercial transporting of people will ply from Ras Kassar in the north to Ras Dumeria in the south. The SFF innovation incorporates many types of innovations, but more interesting, it incorporates a systematic foresight, that would be attributed to the entrepreneur.
A highly respected entrepreneur would eventually have to ponder about self actualizing if weare to use Maslows need hierarchy. The efforts of the entrepreneur will generate the needed financial gains. In a similar case the entrepreneur will have to think how to train his staff members and ensures that all social obligations are strictly adhered to. For instance environmental protection and the respecting womens and labor rights are among the most important prerequisites in modern day business. The overseeing institutions have to design ayyearly award ceremony, where special prizes have to be conferred to those entrepreneurs with outstanding performance.
An entrepreneur is not expected to relax or sleep if his ship is in the high seas or his aircraft is flying amid the skies, to reach its scheduled destination. Entrepreneurs who exert less effort to keep track of their huge investment would eventually prepare themselves to the foreseeable doom to failures.
An entrepreneur in Maritime affairs should be well versed with basic shipping law. Importantdocuments such as the Bill of Lading, Bank Letter of Credit, INCO (International Commercial) terms, Charter parties and their regulations, international sales contract and ships declaration of General Average have significant role to play in the event of court litigation. At this juncture it is vital to know the role of Protection and Indemnity Associations (P&I) in Sea transport and Insurance as a protection for third party liability, andalso the intermission of Surveillance agents.
The entrepreneur should have adequate knowledge on the commercial and operational aspect of maritime transport. The economic theory of freight rates, containerization, Lash vessels, stowage and properties of cargo, Vessels daily running cost and the efficient preparation of relevant documentations such as cargo and freight manifest, Customs declaration, Mates receipt are essential for the smooth running of the ship under management.
In maritime transport we have several entrepreneurs with specialized services. This includes the ship-owner, The Port manager, the shipping Agents and the Clearing and forwarding agents. Although the intensity of responsibility varies according to the capital outlay, in this case the ship owner and the Port Manager, yet all entrepreneurs who are in any way involved in maritime affairs should have substantial know-how of the subtlety of the business of shipping. Port and Ship management is a huge scope of activity. However unless there is an efficient administrative and financial management approach, one would see its commercial venture gradually fading.
All entrepreneurs in the shipping industry have to realize that their services whatsoever shed a positive or negative image of the country in the eyes of the service seeker or the customers. Maritime transports involve international linkage and sever competition. It will be extremely important that an association of shipping entrepreneurs is formed and frequent discussions are held as regards to the prevailing maritime affairs and international trade. One of the agenda of discussion should be cost elements such as port finance and port dues. Such tireless efforts will keep the country at a competitive edge as compared to neighboring countries. Such move should be endorsed by the establishment of Research and Development. It will have a dual purpose: – a) it will help the members to scan the current market situation and will keep them abreast of world shipping in general. B) It would purposefully be instrumental in the process of cultivating the youth in the field. In the courseof time strategic plans can be designed to make the maritime locations as a hub of transshipment. The development of Free zones is a case in point.
Entrepreneurs should exert unreserved efforts to contribute articles in International Maritime journals, such as Lloyd?s weekly review. Such moves would continue to promote the countrywith International Maritime organization, other international shipping forums and world renowned shipping companies in general.
For millenniums Eritrea has been a Maritime nation. In the not distant promising future the country will produce professional sea farers, highly rated maritime managers, Maritime consultants, maritime Lawyers, in general great thinkers and an assortment of different kindsof maritime activity leaders so as to keep the name of the country in the apex of International Maritime management and International trade.