1. The need to increase efficiency of container terminal operation
Large ships have continuously increased to reduce the cost per TEU and thereby enhance profitability by taking advantage of the economy of scale. Especially, as many containers have gotten larger, the multimodal transport of cargo by containers has increased the speed and lowered cost of maritime transport.
As ships are getting bigger, the shipping company’s strategy for operating a port of call focuses on the small number of hub ports, while for other areas, the emerging transport mode is linked to feeder service or land transport. It’s because companies operating large ships are bound to choose as their ports of call those ports that can smoothly handle arrival of ships and discharging with excellent size, facilities, and operating techniques.
Under such circumstances, terminals have found a great source of competitiveness in the efficiency of port operation in order to be a port of call serving big ships; especially, automated container terminals are looming as an important success factor in increasing the efficiency of a terminal.
Container terminal automation ensures comparative advantage over other ports in no-holds-barred competition by increasing yard efficiency compared to the existing container terminals, and through well-organized placement of devices in step with increasing cargo volume and advanced information change among equipment units. It saves labor cost and operating cost, improves productivity through reduced operational stoppage, greatly reduces occupational disasters, and enhances reliability of ports.
2. Increased investment in terminal facilities
The size of a container ship decides that of port facilities and discharging equipment. Also, the growing size of container ships makes it important how long a specific ship stays at a port. Worldwide increase in container cargo volume, increasing size and speed of ships, and growing operating costs for terminals are stirring up interest in automated container terminals.
As container ships are getting big, major port authorities are now involved in fierce competition for the status of a hub port. To win such competition, ports require additional investments as follows.
- Deep-water berthing facilities should be secured through massive investment in port facilities.
- Discharging equipment to be acquired must be appropriate for handling large ships.
- Automated information system must be upgraded to improve efficiency of port operation.
It takes a large quantity to develop a port and it takes a lot of money and time to remodel an existing terminal. Also, one should take into account the opportunity cost that is incurred from the long-time disuse of the existing facilities. Of the above three efforts, improving an automated information system brings in the greatest effect while requiring the smallest investment. The effect available from upgrading an automated information system not only increases efficiency of terminal operation but also secures stability in between sessions.
Posted by In-Chon Park, a Business Analyst who has investigated container terminal market for several years and conducted TOS projects recently.
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