MANAGING CONTAINER TERMINALS
INTRODUCTION
• It is regarded as a “mission impossible” to move a port to another location or correct wrong decisions of port
management after a port has been built…
• Port developments can be classified into four phases:
i. First Generation;
ii. Second Generation;
iii. Third Generation; and
iv. Fourth Generation port
In this chapter we will discuss the development of a global container terminal and the interorganizational
model to analyze the container terminal community. Studies have ascertained that efficient global terminal
operators are global stevedores, the purpose of this chapter is elaborate on the PROFIT framework, port
efficiency and terminal Management.
FOUR PHASES OF
PORT MANAGEMENT
• First generation: This is a cargo
interface location between sea and land
transport for cargo transfer from ship to
shore and from shore to ship. Port
operation is usually separated from
trade-related activities and different
port activities are isolated from one
another
• This is a Classical type of a Port, ONLY
cargo handling operations
• Second Generation: is a transport and commercial
service center. Port related activities are integrated to
enjoy a closer relationship with transport and trade
partners.
• This includes industry cluster within Port limits
• Third generation: Owing to containerization
and intermodals development, a port can be
seen as a hub of an international production
and distribution network. The port adds value
to primary products and is commercially
orientated
• This port operations includes logistics and
cargo distribution
• Fourth generation: This focuses on standardization
of information and procedures due to globalization
among global shipping and terminal operators. The
port also considers environmental protection as a
performance goal.
• The focus on advance technology, automation to
improve terminal efficiency and advocates for
environmental protection. Essentially, the
promotion of cargo specialization, containerization
and regionalization.
• Container terminals connects all role players within the terminal
community, such as shipping liners, intermodal transport and
international logistics chain.
• The difference between terminal container operators and shipping
liner operators is as follows
Terminal operators controls services like, yard planning, quay side
planning, vessel stowing plan etc. whilst
shipping lines offers door-to-door services, integrated services e.g.,
feeder operations, road and train carriers and terminal operations
DEVELOPMENT OF GLOBAL
CONTAINER TERMINAL
OPERATIONS
• Development of global container terminals has put pressure on ports terminals to invest on modernized
equipment that will improve efficiency and render shipping liners good services
• The innovation of container ships since Ideal X, first container ship built in 1956, has seen this sector grow
drastically. The impact of container ship innovation has changed ships routine, ship design, ship size,
handling facilities, port management, inland transportation and information systems
• To operate in a cost-effective manner sea-side and land-side operations must be well coordinated because all
activities with the transfer of containers through port facilities are interrelated and interdependent.
• To improve operational efficiency, container terminal operators have invested in state-of-the-art information
systems to link up sea-side and land-side activities within an integrated system.
• The interorganizational relationships of role players in the container transport chain is as follows:
Shipping line–inland transport operator: The relationship between the shipping line and road haulage has
become closer. To work with road operators closely, shipping lines often nominate a limited number of
truckers to handle their road transport. From the perspective of intermodal transport development, liner
oriented intermodalism has emerged as an extension of liner shipping with liner operators controlling the
cargo and rail operators, and coordinating their services with scheduled ship arrival time
DEVELOPMENT OF GLOBAL
CONTAINER TERMINAL
OPERATIONS
• Terminal operator–shipping line: The recent development of network-based management has contributed
to the development of closer relationships between terminal operators and shipping lines. However, from
the perspective of terminal operators, the purchase of terminal services is confined to a few large ocean
carriers, resulting in shipping lines wielding high bargaining power. Such a phenomenon is found to influence
the operations of all types of ports, including feeder ports, hub ports, and direct-call ports
• Shipping line–freight forwarder: As shipping lines may be in a conflicting position when they recommend
shipping services to their shippers, many shippers prefer an independent freight forwarder. As a result,
shipping lines need to treat freight forwarders as their customers and continue to be dependent on freight
forwarders and their relationships with shippers for continued growth.
• Competition is high in the terminal operations industry that all ports are doing their utmost best to market
and render best and quality services to shipping liners. Doing so, the three pattern of developments in the
terminal industry are prioritized:
THREE PATTERNS OF
DEVELOPMENTS IN THE
TERMINAL INDUSTRY
Terminal Networks Reginal coverage Internalization
• This is regarded as a strategic
initiative. By increasing scopes
• Global expansion of container trade.
• There`s an urgent need to
of services offered by facilities E.g. think of TNPA operating 10 or
work with other terminal e.g. Warehouse to include load, more different countries in the world
operators for improved unload, packaging, labelling &
efficiency Storage
MAJOR CONTAINER OPERATORS ARE
GROUPED – TOP port operators
• Global terminal operators can be categorized as global stevedores and global carriers.
• Global stevedores are companies whose primary business is port operations. These companies are pioneers
of international port development. Characteristics of global stevedores are:
i. Terminal operations is the primary focus;
ii. Terminals are regarded as profit centers;
iii. Efficiency is gained by implementing systems across the terminal network to improve productivity
iv. Intensive network spread investment risk;
• Global carriers are companies whose primary business is container shipping but uses terminal operations as a
supporting tool for their overall efficiency. Characteristics of global carriers are:
i. Container shipping is a prime business focus;
ii. Terminals are operated as cost center;
iii. Efficiency is gained by integrating the terminal with wider service networks
iv. Extensive network supports shipping strategy
PERFORMANCE OF CONTAINER
TERMINALS
• Terminal performance is determined by analyzing the operation costs,
total revenue generated and total earnings (PROFIT). This is done
through regressions analysis, which is the method that is applied by
Maritime economists.
• The throughput of the terminal is of significance as it determines the
total revenue, this can be achieved through a proper monitoring of
KPI`s.
PROFIT FRAMEWORK
• Productivity: Productivity measures the output from production processes per unit of input. Efficient container
terminal operations have a high level of terminal throughput with the same level of input.
• Regional coverage: Enhancing the coverage of container terminal operations in a region can be a strategy for
terminal operators to gain market power and serve markets more effectively
• Operating efficiency: Efficient container terminal operation aims to minimize input while satisfying the output
levels to achieve high operational efficiency.
• Focus of business: To improve efficiency, the primary business focus of the global container terminal
operators should be terminal operations instead of container shipping. These terminals are run as profit centers
instead of cost centers
• Internalization: The container terminal operators that have rich experience and expertise in managing
container terminals are in a competitive position to extend their container terminal operations internationally
• Terminal network: In the face of the increasing trend for mergers and alliances among shipping lines
and the requirements for greater investment in terminal facilities, container terminal operators develop an
extensive network to spread investment risk.
THE END!!!