Maritime Transport CONTAINERS MOVEMENTS COST ANALYSIS IN A MARINE TERMINAL Antonio Isalgué Buxeda (1), Jesits E. Martinez M. (2), Maria de Lourdes Eguren M. (3) (1) Applied Physics Department. Universitat Politécnica de Catalunya, Pla del Palau, 18, 08003 Barcelona (Spain), aisalgue@ fib upe.edu, (2) Nautical Engineering and Science Department. Universitat Politécnica de Catalunya, Pla del Palau, 18. 08003 Barcelona (Spain). jemartinez@cen.upe.edu (3) Economy and Business Organization Department, Faculty of Business & Economy. Universitat de Barcelona. Calle Padilla 162, lero, 4ta., 08013 Barcelona (Spain), mleguren@gmail.com Abstract Ina marine terminal, logisties of container movements and arrangement can certainly affect the benefit that terminals, carriers and ship-owners can get. They may even lead 10 costs difficult to bear by the shipping companies. Container logistics management understood from the time that a container is discharged at a port, can be defined as a set of financial transactions, and based on the logistic principle that every movement generates a cost. Based on this principle, it arises the question if the cost of passage and stay of a container at a terminal can be reduced through an efficient allocation of space arises. Given the land's extension of a terminal, the costs of port land, the prices that placements and movements of containers involve, vertical positioning, this work seeks 10 make an analytical study to check whether the assumption of an efficient allocation is fulfilled. We are based on a specific case-study. From a given example, we consider the limit of practical resistance and safety, the ‘maximum height of stacks, the containers before their new settings, the terminal size, the movement cost, the cost of getting the container below if other above (swapping of containers), and the ratio ‘cost of movements and machinery / cost of space (ground)’. We try to find a reasonable optimum comparing several possible configurations. as well as their horizontal and Keywords Logistics, Logistic’s Management, Containers, Container’s Logistic, Container Cycle: Marine Terminal, Container’s Terminal. Acknowledgements Thanks are given to Prof. F.X. Martinez de Osés for encouragement. 514INTRODUCTION Nowadays over 60% of the world’s deep-sea general cargo is wansported in containers. Some routes, especially between economically strong and stable countries, are containerized to nearly 100%. Container handling is then a subject of recent research, because of the economic interest and environmental impact involved in the optimization of a large part of cargo transportation, Operating costs for ships, ‘erminals, and also capitalization of ships, containers and port equipment ask for a reduction of unproductive times (as waiting times) at a port, and also reduction of resources and energy (fuel) expenses, The potential for cost savings is high. The capacity of telecommunications, information processing, modem computers and computation algorithms, have allowed some insight into complex subjects .e the master bay plan problem by simulation techniques. Conceming the containers used, the “twenty-foot equivalent unit” (TEU) is a unit of cargo capacity often used to describe the capacity of container ships and container terminals. It is based on the volume of a 2(-foot-long (6.1 m) and 8 feet (2.44 m) wide intermodal container, a standard-sized metal box. This unit can be easily transferred between different modes of transportation, such as ships, trains and trucks. There is a lack of standardization in regards to height, ranging between 4 feet 3 inches (1.30 m) and 9 feet 6 inches (2.90 m), with the most common height being 8 feet 6 inches (2.59 m) Additionally there is a standard container with the same width but a doubled length of forty feet called a 40-foot container. To allow stacking of both types of container (20 and 40 foot) together, the accepted 20 foot container is slightly less than 20 foot, the exact length 1s 19 feet 10.5 mches (6.058 m) (see figure 1). The forty-foot containers have found wider acceptance as they can be pulled by semi- trailer trucks on the roads. The length of such a combination is within the limits of the national road regulations requiring no special permission. As some road regulations allow longer trucks, there are also variations of the standard forty-foot container - in Europe and most other countries a container of 45 feet (13.72 m) may be pulled as a trailer. Containers with a length of 48 feet (14 63 m) or 53 feet (16.15 m) are restricted to road transport in the USA. Referring to the load of the containers, near'y everything can be stored inside. There are also refrigerated units (reefers), equipped with a heat pump and being connected to electric power supply during transport. The maximum total mass of a | TEU container is accepted as 24000 kilograms. For a forty foot un ilograms. There are special designs for heavy loads (twenty foot units) with a maximum mass of 30500 kg. Containers are usually classified according to their mass, as empty, light, medium, or heavy, to facilitate the stowing plan on a ship. Container ships only take 40 and 20 foot containers below deck but in many cases it is possible to store 45 foot containers above deck. 90% of the containers that container ships carry are 40 foot units. As container ships carry near 90% of the world freight (excluded bulk cargos us ores and vil), some 80% of the world’s fieight moves via 40 foot containers. 518Marts Transpoet Figure 1 - 40 foot containers over 20-foot containers, starboard side ofa ship. Bays number 21 an¢ 23 are indicated on the beam, ‘numbering of bay 22, figures partially erased, on a steel pillar source: Torsten Batge, Hamburg The storage of containers in a ship has to fulfill stability requirements, and can be done inside (under deck hatch) and/or on the deck. They are usually located by means of: - bay number (from bow to stem: bays 01, 03, 05... of 20 foot equivalent, or 04 (=03+05), 08, 12... of 40 foot equivalent. In figure 1, bays number 21 and 23 are indicated on the beam) - row number (from the center of ship to starboard 01, 03, 05..., and to port 02, 04, 06..., center is 00 if any) - tier (height, from the bottom: under deck, 02, 04... over the deck, figures like 72, 74... of 82, 84... are used). The distribution of containers on loading ¢ ship to achieve maximum stability at sea, allowing also easy unloading of selected containers in multiple stops routes, and fulfilling resistance criteria about maximum weight on a tier, unloaded containers on top of heavy ones, etc, is known as the master bay pian problem, and has received attention [1-3], showing the complex mathematics 01 it due to the large number of possibilities for large containerships (more than 5000 TEU), The complete operation of transport at sea by containers might be divided in different phases, which can be summarized as: ~ filling of the container (packaging of goods in the containers) - arrival at a terminal (concentration of containers by road / train) ~ handling in the terminal (at the yard) -> modern machinery 516It is rarely known where inside a ship (bay, row, and tier) a given container would be transported, at the moment of arrival at the terminal. A management of this knowledge might imply a reduction in shifting containers to be loaded in a ship, and information available could be used to reduce movements and reordering of containers. Also, restrictions usually apply to requirements for the location of reefers (refrigerated containers), hazardons and over sized containers Nowadays technology comprises Gantry cranes at port (sea-side), straddle carriers (SCs), forklifts as top loaders, rubber-tyre gantries (RTG), rail-mounted gantries (RMG), and tractor-trailers for movements and stacking at the terminal yard. ~ the loading of a ship comprises what is called the master bay plan problem for stability and safety of the ship. This process involves information processing and computation technology (to evaluate etability), a well ac the use of modem machinery to move the containers, from the yard terminal (logistics). - the ship routes and alterations to avoid bad weather are also important, but are not considered here. - the unloading of a ship uses modern machinery, the same as the loading process, and is strongly conditioned by the previous loading process. = handling in the terminal (at the yard), which uses modern machinery (logistics), and is related to the intermodality (transport out of the port terminal, train and trucks) - distribution on land side (done with road and train - distribution of goods from the container (emptying the containers) A lot has been treated about the handling, ordering and loading of containers on a ship, mostly based on existing devices and container disposition, as a way to minimize ‘movements and time [1-3]. Maybe because the master bay plan problem has been presented as a mathematical problem, less related to the available machines and technology than the stacking process at the yard, for instance (existence, type and performance of Gantry cranes, straddle-carriers, trucks, and reinforced soil for the machinery...) On the other hand, storage and stacking of containers at the yard ie a much less studied topic, and the studies manly consider the convenience or not of high stacking, and the use of gantry cranes or straddle carriers [4, 5] Here we concentrate on the storage, movements, and stacking logistics at the container terminal. The analysis is sensitive to markets and prices of labor, availability, maintenance and cost of machinery, possibilities of automation, and land cost, and then only indicative values can be expected, because of changing conditions. STORAGE AND STACKING LOGISTICS Stacking logistics has become a field of increasing importance because more and more containers have to be stored in ports as container traffic grows, and space is becoming a scarce resource in many terminals. Generally containers are stacked on the ground in several levels or tiers and the whole storage area is separated into blocks. A container’s position in the storage area (yard) is then addressed by the block, the bay, the row and the tier. The maximum number of tiers depends on the stacking equipment, 517Maritime Transport either straddle carriers or gantry cranes, and the mechanical resistance and safety reasons. For loaded containers, the maximum number of tiers recommended is 5-6. According to operational needs the storage area is commonly separated into different areas, There are different areas for import and export containers, special areas for reefer, dangerous goods or damaged containers. The average daily yard utilization of large container terminals in Europe is about 10,000-20,000 containers resulting in about 15,000 movements per day. The dwell time of containers in the yard is in the range of 3-7 days at an average. A storage planning or stacking decision system has to decide which block and slot has to be selected for a container to be stored. Because containers are piled up, not every one is in direct access to the stacking equipment. Containers that are placed on top of the required one have to be removed firet, Rechufflee (or re-handles) may occur due to several reasons; the most important ones result if data of containers to be stacked are ‘wrong or incomplete, At European terminals 20-40% of the export containers arrive at the terminal lacking accurate data for the respective vessel, the discharge port, or container weight — data which are necessary to make a good storage decision. Even after arrival, vessel and discharge port can be changed by the shipping line. For import containers unloaded from ships the situation is even worse: the landside transport mode is known in at most 10-15% of all cases at the time of unloading a ship, e.g., when a location has to be selected in the yard. Different classes of storage logistics can be distinguished. In storage or yard planning systems, stack areas and storage capacities are allocated to a ship’s arrival in advance according to the number of import and export containers expected. An appropriate number of slots in blocks and rows are reserved for a given ship. Depending on the planning strategy, the reservation for export containers can be split for discharge port, container type/length, and container weight. A common strategy for export planning is to reserve slots within a row for containers of the same type and discharge port while heavier containers are stacked on lighter ones assuming that they are loaded first because of the ship stability. For import containers only a reservation of yard capacity of respective size is done without further differentiation. This is because data and transport means of delivery generally are unknown at the time of discharge. If the transport mode 1s known, import areas can be subdivided according to them, Common strategies for import containers are either selecting any location in the import area or piling containers of the same storage date, in the hope a “first in-first out” container ‘movement will allow lower number of reshuffles Yard or storage planning rarely matches the real delivery because container delivery is a process not exactly known at the time of arrival of the containers. Ihe quality of this yard concept mainly depends on the strategy how to determine a good stack configuration and a good forecast of the container delivery distribution. These factors are hard to solve, the result is a comparatively high amount of yard reshuffles, In addition, the reservation of yard locations occupies space, and the land cost tends to reduce reservation of yard locations, with a higher stacking and more cost of stacking and reshuffles, A key to further improvements on efficiency is the automation of in-yard transportation, storing and stacking to inerease the terminal throughput and decrease time of handling and ship turnaround time a: the terminal, In any operation, the costs involved are: (1) Cost of land; (2) cost of equipment; and (3) cost of labour. The costs have to be considered during some time interval, we take one 518year as a representative time, The cost of land represents the interest for the value of the land, equivalent to a mortgage or a rent. The cost of machinery comprises the acquisition and further depreciation of value, the maintenance, painting, and expenses as fuel, to achieve normal working. We decompose the cost in a similar way as depicted by [6], taking into account that technology has advanced, costs are now different than then, and while the machinery cost has increased, its performance has also increased, nearly compensating. The salaries cost has nearly doubled when considered in the same currency, and the cost of land has been multiplied by more than 10 if we compare the costs fiom [6] and the cost of land at Barcelona container terminals. We compare different cases. Wheeled containers on chassis, to give high mobility and no machinery to stack, expected favourable if land is available and land cost is low; Stacked containers, which need loaders and more labour to stack them, besides the trucks used in any case, uses much less land, depending on the used stacking (tier number used). The following variables are considered: - Cost of loader for stacking the containers: CT ~ Cost of chassis for containers, if wheeled: CC ~ Loader maintenance and operation, including energy/fuel; MTL - Chassis maintenance: MCC - Depreciation of chassis and loaders = 1/15 of their purchase value. (This assumes average 15 years of useful life) ~ Cost of labour for operating the loader: CW - Area required per container parked: AC ~ Area required per container stacked: AS. Depends on tier number The average stay of the containers in the terminal; AD = Interest rates: RI (in %) (This is applied for buying the machinery, CT ) - Cost of Land: CL (per unit area per yeer) ~ The terminal's daily volume: DV (containers a day) - The loader's efficiency: LM “The total cost for stacking operations (TCS) and the total cost for wheeled operations (TCC) were calculated according to the equations (quantities for a year): 'S=AD DV AS CL+(DV/LM)* (C1 Tec RI+ CT/IS + MTL+Cw) AD DV AC CL+AD DV(CC RI+CC/I5 + MCC) The ratio R = TCS/TCC was also calculated. If R > 1, then wheeled operations should be more economical while, if R < 1, then stacking is preferred. Ratios of TCS with different stacking (tier number) would give an indication of preferred stacking height. 519Maritime Transport It should be remembered that this is a simplified model: other costs, as licenses and customs procedures, are assumed constant, and then the results for different arrangements are only comparative. Also, as the two Barcelona container terminals have a total area of some 105.5 Ha, and move some 1.8 million containers (TEU) a year (near 5000 TEU, or around 2500 movements a day on average), the available area could only assume a less than two day stay at the terminal for containers if tried to he wheeled and not stacked. The average time a loaded concainer stays at the terminal is near 5 days on European ports (essentially, because of land cost and availability). The global cost of land for the Barcelona terminals is estimated at 470 MEuro, and this gives, at 6% ulerest rate, some 30 Euro/im2/year, Data used is shown in Table 1 and Table 2. ‘Table 1 - Data for the model. Arca in m2, costs in Euro, AC = AREA PER CONTAINER REQUIRED FOR PARKING; 87 ‘AD = average delay of a container in the terminal (number of days in 5 the terminal); ‘CC = chassis cost (purchase price); 7500 ‘CL= cost of land, per square meter per year, 30 ‘CT = cost of a loader 300000 ‘CT/IS = straight line depreciation over 15 yr, 20000 ‘CW — cost of personnel required for the operation of the loader, per 60000 ear DV = daily container volume in the terminal; ‘5000 LM = number of containers a loader can handle in a day 50 MCC = cost of chassis maintenance; 750 MIL = maintenance cost of a top loader, 30000 RI= interest rate in %; 6 Table 2 - Area per container occupied for stacking, including services and transport LEVELS (TIER NUMBER) = area per container required for stacki square meter A 437] 293] 22] 176] 145 Differently from [6], it should be noted taat the number of containers a loader can handle during a day, decreases as number of tier increases, but also there is more non- productive time (not loading or unloading a ship) because re-shuffling will be more extensive with higher number of tier. Then, the LM value depends on the number of, tier, because of time (and fuel) spent in moving vertically the containers, and more pronounced at high tier number, because of the increasing reshuffles needed. As a first approach, as an optimistic view, we assume at 6 tier, LM is 70% of the table value, at S tier, 80%; at 4 tier, 85%; at 3 tier, 90%, at 2 tier, 95%. The longer distances to be covered by horizontal displacement if a lower tier number is used, do not influence as soShipy strongly as the reshuffling problem, and, on the other hand, horizontal can be done at higher speeds than vertical movements. ‘placements. On the other hand, loaders with higher performance have a higher cost, and these tend to compensate each one referring the total cost of operation, The advantage of high performance loaders resides in the simplification of logistics and interaction among the different loaders working at a time. Different loading strategies and machinery could be used, but the actual results are not very sersitive to this, a doubling of machinery cost produces a near 25% cost increase on the 5 tier stacking (if keeping performance constant). In this case, if performance doubled with doubling machine cost, in fact cost reduced by near 20% because less machines are needed, meaning less labour cost. A Microsoft Excel worksheet was used in order to calculate the total cost of wheeled and of stacked container operations under a variety of conditions, The computed coste do not include customs revision, insurances, and repairing of damaged containers Figure 2 - Series 1: Cost stack to 6 tier div.ded by cost to wheel the containers (values under 1 favour the stacking). Series 2: Cost of stack to 5 tier divided by cost of wheel the containers. Series 3: Cost of stack to 3 tier divided by cost to wheel. Series 4: Cost of stack to 6 tier divided by cost to stack to 3 tier, Series 5: Cost to stack to 5 tier divided by cost to stack to 3 tier. Computations with 6% interest rate. The ratio Cost Stack/Cost roll ‘goes to low values after 3 days (near zero with longer time) because of the high cost of and use in the Cost of roll. 25 2 3 $15 seit g g — Boi esi & (Pee esis vs o Time in cays From figures 2 and 3, it can be seen that, for average stays of 2 days or more, the stacking of containers becomes economically favourable if interest rates are 6%, and stacking becomes favourable for average stays of 2.5 days or more if interest rates are 12%, showing relatively low dependency on interest rates. Changes in land prices and on interest rates had emall effect on this tendency. As the average stay of containers in a terminal is well over 2 days in Europe, stacking is nearly always favourable when compared to maintaining the containers in a wheeled chassis. If logistics allowed the containers to stay at the terminal for only about one day or less, it would be cheaper to suMaritime Transport store them on the wheeled truck chassis they would be transported later, and avoid the machinery and labour to stack them. Figure 3 - Series 1: Cost stack to 6 tier div.ded by cost to wheel the containers (values under 1 favour the stacking). Series 2: Cost of stack to 5 tier divided by cost of wheel the containers. Series 3: Cost of stack to 3 tier divided by cost to wheel. Series 4: Cost of stack to 6 tier divided by cost to stack to 3 tier, Series 5: Cost to stack to 5 tier divided by cost to stack to 3 tier. (Computation with 12% interest rate). The ratio Cost Stack/Cost roll goes to near zero with time because of the high cost of land use in the Cost roll 2s 2 & gis eet g aie 3 is cei We sit & esis os ° o 2 4 6 8 wo w Time indays Comparing the stacking with different tier number (different height), results that higher tier number (6 or 5) is favourable compared with stacking at 3 tier, for stays longer than some half day to two days, depending on interest rates. This is caused by the relatively igh land price. A higher tier number is not recommended because of safety reasons. Also, because of high land price, storing to 5 tier for average stay of 5 days produces a reduction of cost of some 15% respect stacking at 3 tier (see figs. 2 and 3). On the other hand, the consideration of the loaders’ decreased performance with higher tier, produces an increase of cost of some 25% for the higher tier considered (stacks of 6 containers). Then, stacking should be reduced to the minimum necessary to reduce costs. In fact, usually the nominal capacity of terminals is higher than that used, in order to attract more clients (sometimes, showing a part of yard empty). The best procedure should be to avoid empty or unoccupied spaces, reducing at the same time the stacking height. As commented by Martinez & Eguren [7], the container storage in the reservoir has a Uaily cost for each uni, and cost increases when # significant percemtage OF dual unit spends 30 days or more at the depot. Due to this reason the stock policy was set to FIFO (First In-First Out), which in most cases, due to the poor planning of the area, supported by the mismanagement of the tank, is not followed up, generating an excessive expense =that becomes a black hole in the finances of the ship-owners [7], according to this investigation, this consideration also applies to the containers at the yard. Also, some additional facts might deform the results, as for instance customs inspection, rejections, insurances inspection, and the “free pool” that the terminals offer to their clients, ie., the number of empty containers they can have stored at the terminal without paying for it (The terminals try to get clients that do not swap from terminal to terminal by this means), CONCLUSIONS To achieve low cost in container handling, it is needed to balance land use and machinery (energy-intensive) use. The high land cost and the available space force the stacking of containers. The model allows computation of preferred stacking conditions, the high land cost suggests the use of a high stacking ratio (i.e., to use a high tier number), but safety reasons limit the tier number ty 5 or 6, In the veal world it would be better to use all the available land, for instance in the case of Barcelona or other ports, and by means of logistics and conditions assumed by the clients, force a relatively short stay of containers at the terminal, to keep the stacking relatively low and uniform. Using all the available space to stock the containers might allow a non-maximum stacking height, and a reduced tier number would mean less reshufflings and less time and energy spent to stack the containers REFERENCES [1] Daniela Aubrosino, Auna Sciomachen, Elewa Taufani. Swowil ‘master bay plan problema. Transportation Research Part A 38 (2004) 81-99. [2] Daniela Ambrosino, Anna Sciomachen, Elena Tanfani. A decomposition heuristies for the container ship stowage problema. J Heuristics (2006) 12: 211-233 [3] Daniela Ambrosino, Davide Anghinolfi, Massimo Paolucci and Anna Sciomachena. ‘A new three-step heuristic for the Master Bay Plan Problem. Maritime Economics & Logistics (2009) 11, 98-120. doi:10.1057/mel.2008.19 [4] Wen-Chih Huang and Chin-Yuan Chu. A SELECTION MODEL FOR IN- 7 ‘MINAL CONTAINER HANDLING SYSTEMS. Journal of Marine Science and Technology, Vol. 12, No. 3, pp. 159-170 (2004) [5] Dirk Steenken, Stefan Vo8, and Robert Stahlbock. Container terminal operation and ‘operations research — a classification and literature review. OR Spectrum (2004) 26:3 19 [6] George Christou Hatzitheodorou. COST COMPARISON OF CONTAINER HANDLING TECHNIQUES. J. Waterway, Port, Coastal, Ocean Eng. (1983), 109:54-62. [7] Jess Martinez Marin & Maria de Lourdes Eguren Marti, ANALITICAL REVIEW OF THE MTY CONTAINER CYCLE, Proceeding of the Maritime Transport IV - 4th International Conference on Maritime Transport; Barcelona, Spain, sa