Introduction Of Container Terminal Business Essay

This chapter starts with the introduction of the current phenomena container terminal industry, followed by a review on the history of containerization and presentation of element of container. Backgrounds of the case study container terminal are presented next followed by discussion of the problem statement in the case study container terminal. Objective of the study also discussed followed by scope of this study and contribution of this study also presented. This chapter finally briefly summarizes the organization of this thesis.

Introduction of container terminal

A container terminal is a facility where containers are transhipped from one mode of transport to another. The transhipment can be between vessels or barges and land vehicle which is can be described as a maritime container terminal. Alternatively the transhipment between land vehicles for example wagon and truck described as an inland container terminal. Container terminal has gone forward from being a simple loading and unloading points to imperative hubs in an industrial. Nowadays, container terminals represent a key actor in the global shipping network (Vacca, Bierlaire and Salani, 2007). In addition, containers terminals are not only simply connect between transportation modes, also represent the site where several market players do trading by using maritime transportation for business.

According to Vacca et al. (2010) and Lee, Chew, Tan and Han (2006) a container terminal is the zone where vessels berth and containers are unloaded, loaded and stored in the yard. Figure 1.1 illustrates the main subsystems and operation in container terminal.

Figure 1.1.jpg

Figure 1.1: The main subsystems in a container terminal (Henesey, 2006).

Today’s world trading and transportation of goods makes the usage of containers becomes very importance. The increase in the trade volumes, containerized shipping is expected to increase its importance along the transport chains and will be the backbone of international trade (Shinas and Papadimitriou, 2003). The total number of full containers shipped internationally is expected to grow to 235.7 million TEU by 2015, up from 113.6 million TEU in 2005 (the base year for the cargo forecasts) and the compound growth rate between the period 2005 until 2015 is 7.6 per cent per annum, decreasing from 9.0 per cent per annum in the period of 1980 to 2005 (UNESCAP, 2007).

The increasing of containers movement was lead to the introduction of the large vessels where put a pressure on the container terminal. Larger vessels needs more deeper wharf, more larger container yard in order to store the containers temporarily and also need more equipment to load and unload the containers from the vessel. Without efficient services, it will induce the congestion and delay in the container terminal operations.

Congestion and delay will interrupt the overall terminal operations and will cause the inefficiencies of container terminal activities. From the perspective of an expert, in order to reduce the congestion and give the best services to huge vessels as well as give customer’s satisfaction, the container terminal must improve the effectiveness and efficiency of the container terminal. Investment on terminal expansion is very expensive and will be risky if detailed planning and understanding of the container terminal currently not done.

Congestion and delay gives a tremendous impact to the terminal operation and reduces the reputation if the terminal fails to give efficient and effective services. Congestion also will lead to the destruction of the terminal itself, if unable to serve the huge containers capacities and serving mega vessels but also will lose its customers.

History of containers

Since thousands of years before, mankind has shipped goods across the oceans, from one land to another. They brought home food, jewels and materials that their countrymen had never seen before. But, the process was never easy. The loading and unloading of individuals goods in barrels, sacks and wooden crates from land transport to ship and back again on arrival was slow and complicated. Even up to the second half of the 20th Century, this “break -bulk” system was still in use and cargo was often carried by passenger vessels as well as later by general cargo vessels.

Loading and unloading was very labour intensive: a vessel might easily spend more time in port than at sea while dockworkers manhandled cargo into and out of tight spaces below decks. There was also high risk of accident, loss and theft. There were some basic systems to make the process more efficient, such as the use rope for bundling timber, sacks for carrying coffee beans, and pallets for stacking and transporting bags or sacks. However, industrial and technological advances highlighted the inadequacies of the cargo shipping system. The transfer of cargo from trains to ships and vice versa became a real problem.

On 26 April 1956, Malcolm Mclean, an entrepreneur, converted Second World War tanker, Ideal X with fifty eight 35-foot containers (Kendall, 1986), made its maiden journey from Port Newark to Houston in the USA. The tanker arrives at Port of Houston six days later where the containers were off-loaded and hauled away by waiting trucks (The Economist, 2006). Thus, the era of ‘container revolution’ began (Kendall, 1986) and container shipping eventually replaced the traditional “break-bulk” method of handling crates, barrels and bags.

McLean’s concept of an integrated transportation system has dramatically reduced shipping cost, reinvigorated markets and fuelled the world economy (Raine, 2006). With the drop in the cost of transportation, containerization was able to transform global transportation, commerce and manufacturing (Donovan, 2004). Meersmans and Dekker (2001) also agreed that globalization would have been imposible without containers.

Element of Container Terminal

According to Zhang, Liu, Wan, Murty and Lim (2003) a container terminal can be divided into two main areas which is berth side and yard side. The activities at berth side are the berthing of vessels and quay crane responsible to unloading and loading containers into vessels. Meanwhile, yard site is the area where containers are temporarily stored before pickup.

Container Terminal

A container terminal is the place where vessels dock on a berth and containers are loaded and unloaded (Lee, Chew, Tan, and Han, 2006). A container terminal can be divided into two main areas, the berth side for berthing vessels and the yard site for storing containers (Lee et al., 2006 and Vacca, Salani, and Bierlaire., 2010). The berth side is build up with several berths for vessels to be moored. On the other hand, the yard side consist of several blocks which serve as the containers storage areas for import, export and transshipment activities. Besides the berth and yard side, there is also a gate side. The gate side is made up with several gate lanes where external trucks enter the container terminal to pick up the import containers and to deliver export containers to the yard blocks.

According to Lee et al. (2006) container activities can be categorized into three types which are import, export and transshipment activities. The import activity occurs when a vessel arrives at a container terminal and will be assigned to an empty berth. The quay cranes will unload or discharge the containers from the vessel and transfer it to the terminal by using prime movers. The prime movers are waiting under the quay cranes to receive the import containers. These prime movers will transfer the import containers to the container yard for temporary storage, and wait for incoming vessels or external trucks to collect them. The processes of export containers are similar but done in a reverse order. The export containers are brought in to the container terminal by trucks or wagon and will be stored temporarily in the container yard waiting for incoming vessels to retrieve them.

The process of transshipment containers activities is difference from the import and export activities. According to Vacca et al. (2007), recently, container transport tends to develop toward a single-mode transportation called transshipment, where containers are exchanged between ships commonly referred as mother vessels and feeders. Transshipment container activity starts when the containers stored in the storage yard after being unloaded or discharge from the vessel, and finally loaded onto other vessels (Lee et al., 2006). Therefore, most of the transshipment container activities will be done in the container terminal area and seldom make it to the gate area.

Berth Allocation

In the container terminal, berths are the most important and an effective berth allocation is critical to the efficient management of the container flow (Buhrkal, Zuglian, Ropke, Larsen and Lusby, 2011). According to Park and Kim (2003) cost for building a berth is very high compared to the investment costs for the other facilities in the container terminal, by utilizing it efficiently, capacity and productivity of the berth will increase. Efficient berth allocation also improves customers’ satisfaction and increase port throughput which lead to higher revenues for port itself (Kim and Moon, 2003).

There are many studies had been conducted on berth allocation problems for example Beirwirth and Meisel, 2010; Moorthy and Teo, 2006; Guan and Cheung, 2004; Dai, Lin, Moorthy and Teo, 2004; Imai, Nishimura and Papadimitriou, 2003; Kim and Moon, 2003 and Nishimura, Imai and Papadimitriou, 2001. They have the same aim to propose the best berth allocation model to maximize the utilization and at the same time to minimize the vessel turnaround time.

Yard Planning

The yard operation is the most complicated part at a terminal because it handles both incoming and outgoing container flows (Zhang, 2002). The container yard work as an interface for loading and unloading containers and to transship containers between vessels (Lee et al., 2006). Therefore, yard planner will assign optimal allocation of storage areas for import, export and transshipment containers (Yun and Choi, 1999). From the previous research, it can be seen that various problem associate with yard operation have been addressed. The most problem that is usually faced in the yard operation is the insufficient storage space in the yard to store all the containers. Therefore, it makes the duty of yard planners are more challenging if yard storage allocation problem is not handled properly the traffic congestion might arise.

Besides the yard utilization, yard crane assignment also influences the operation of the terminal. Legato, Canonaco and Mazza (2009) proposed optimisation model to determine which yard crane will be transferred in order to satisfy the crane capacity and minimize the total cost for block matching and crane activation. This paper using Ranking and Selection (R&S) techniques and later extend by includes simulation techniques which representing the main subsystems of a terminal.

Background of the Case Study Container Terminal

The case study container terminal is located along the Northwest coast of Peninsular Malaysia and it serves one of the busiest trade routes in the region and links Malaysia to more than 200 ports internationally. The case study container terminal is one of the trader’s choice ports because of its deepwater wharf and it has be the major shipping lanes in the Straits of Malacca. Furthermore, it is easy reach of all major economic regions in the country, linked directly to the east coast of Peninsular Malaysia through the East-West Highway.

The case study container terminal is in development of third phase. Currently, there are twenty hectares of container yard which is capable to store a total of two million TEUs annually. This container terminal was equipped with 15 gantry cranes, 32 transfer cranes, 93 prime movers, 127 trailers and 360 refer points.

Problem Statement

The case study container terminal handles the import and export activities around the Asia-Pacific region. To be a competitive port, the performance of the container terminal should be efficient and effective to make sure the container terminal can survive. Growth of water transportation services contribute to the congestion and delay in the container terminal operation. Congestion is cause by huge vessels which can bear a high volume of containers and eventually cause the loading and unloading activities to be slow hence contribute to the delay problem.

In order to make any experiment to the real system, it will cause very huge expenses and of course will disrupt the real system operation. By using the simulation model that mimic the real system, the management can investigate the flow of system run and can do any changes in the model without disrupt the real system operation.

Objectives of study

The main objective of this study is to develop simulation models of the case study container terminal, which can be used to improve the performance of the different activities at the container terminal. The focused activity starts from the arrival of vessels, containers unload from the vessel until the vessels depart from the port.

In order to achieve the stated main objective, the following objectives were identified and pursued:

Evaluate the performance of the current container terminal model, measured by waiting time of vessel in port, number of vessel in queue and utilization of berths and cranes.

Evaluate the proposed model to improve the container terminal performance.

Compare the performance of the proposed model with the current model.

Scope of study

This research focused on identified and developed a container terminal model for arrival of vessels and unloading container activities until vessels depart only. The developed system was tested by the data gathered from the case study container terminal. This study covered the vessel which is load with container only.

Contribution of the study

In this section, the implications of the study especially to the case study container terminal management and to the body of knowledge are discussed.

Managerial implications

The results of the study will beneficial to the managerial of container terminal to evaluate the decisions and actions proposed to improve container terminal performance. This study will help the container terminal to reduce the average waiting time of vessels, number of vessels in queue and increased the utilization of the berths and cranes. By using the right proposed model, the case study container terminal performance can be improved and customer satisfaction was increased.

Implication to the body of knowledge

This research will give benefit to body of knowledge of simulation because it would present on how the idea and concept of modelling in simulation can be applied in order to solve the real world problem. Related to this situation, we can conclude that simulation modelling is a discipline that shows the best approach to get the best solution of a problem.

Organization of the thesis

This thesis is divided into five chapters. Chapter one discusses the introduction of container terminal, background of case study container terminal, problem statement, objective of the study, scope of study an contribution of study. Chapter two presents the reviews of previous studies related to the container terminal. Methodology of this thesis are discusses in chapter three. Chapter four discusses the model constructions and implementation. This thesis ends with the conclusion and recommendation for future research extension in chapter five.