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Assuring Supply Chain Efficiency

AAPA Marine Terminal Management Training Program

AAPA Marine Terminal Management Training Program


Larry W. Nye, P.E.Moffatt & NicholOctober 16, 2007


Larry W. Nye, P.E.Moffatt & NicholOctober 16, 2007



Some Quotes:

“The real driving force behind globalization is….the declining cost of international transport.”

The Journal of Commerce“The Box That Changed the World”

“It is only recently and cautiously that we have moved far from the oceans to places like Siberia or Nebraska and it is by no means clear that places so far removed from the sea are viable in the long term.”

John Szarkowski

Some Quotes:

“The real driving force behind globalization is….the declining cost of international transport.”

The Journal of Commerce“The Box That Changed the World”

“It is only recently and cautiously that we have moved far from the oceans to places like Siberia or Nebraska and it is by no means clear that places so far removed from the sea are viable in the long term.”

John Szarkowski



• The “global” economy– Land masses

• People• Governments, religions,

economies • People like to define

themselves

– Oceans• Differentiator• Allow us to be different• Connector (highway)• Relatively maintenance

free

• The “global” economy– Land masses

• People• Governments, religions,

economies • People like to define

themselves

– Oceans• Differentiator• Allow us to be different• Connector (highway)• Relatively maintenance

free

– Trade• The common

denominator

• The economic connector

• Fosters interdependence =

• A good thing

– Trade• The common

denominator

• The economic connector

• Fosters interdependence =

• A good thing


• People need to move stuff

• The people of the world are connected

by very deep water

• Water is very strong

• Water is very slippery

• People need to move stuff

• The people of the world are connected

by very deep water

• Water is very strong

• Water is very slippery



Floatation is, always and

forever, the best way to

move stuff on this planet

Floatation is, always and Floatation is, always and

forever, the best way to forever, the best way to

move stuff on this planetmove stuff on this planet



What is Efficiency?

• Capacity– TEU’s per acre

• Speed– Moves per hour

• Reliability– On time

• Cost– $ per move

• Efficiency– Delivering capacity,

speed and reliability at the lowest possible cost

• Capacity– TEU’s per acre

• Speed– Moves per hour

• Reliability– On time

• Cost– $ per move

• Efficiency– Delivering capacity,

speed and reliability at the lowest possible cost

Speed / Reliability

Cost

Capacity

“The real driving force behind globalization is….the declining cost of international

transport.”

“The real driving force behind globalization is….the declining cost of international

transport.”


What is the Supply Chain?

1. Factory

2. Land Transport

3. Port4. Ocean Transport

5. Port

6. Land Transport

8. Land Transport

7. Distribution Center

9. Store / Factory

• Focus on the role of ports– Ships on one side

– Trucks and trains on the other side

• Focus on the role of ports– Ships on one side

– Trucks and trains on the other side



“The real driving force behind globalization is….the declining cost of

international transport.”

Tools of (the) Trade:

“The Container”“The Container Ship”

honorable mentions

“The Personal Computer”“The Internet”

“The real driving force behind globalization is….the declining cost of

international transport.”

Tools of (the) Trade:

“The Container”“The Container Ship”

honorable mentions

“The Personal Computer”“The Internet”


1110,000 TEU10,000 TEUContainer Container

ShipShip

18188,000 Foot8,000 Foot

DoubleDouble--StackStackTrainsTrains

(27 Miles)(27 Miles)(50 Acres)(50 Acres)

5,8005,800TrucksTrucks

(60 Miles)(60 Miles)(95 Acres)(95 Acres)

600600Boeing 747 Boeing 747

Cargo LinersCargo Liners

= ==

DISCHARGE OR LOAD ONLY !DISCHARGE DISCHARGE OROR LOAD ONLY !LOAD ONLY !

Container Vessels

• The modern container ship is certainly an example of “efficiency”

• The modern container ship is certainly an example of “efficiency”


The Container Ship

• 10,000 TEU vessel

• Equivalent of 5,000 – 40 foot containers

• 12,000 pairs of Nikes per container

• Equivalent of 60,000,000 pairs per vessel

• Value = $4,500,000,000.00 @ $75.00/pair

• Transportation cost = $0.30 / pair

• 10,000 TEU vessel

• Equivalent of 5,000 – 40 foot containers

• 12,000 pairs of Nikes per container

• Equivalent of 60,000,000 pairs per vessel

• Value = $4,500,000,000.00 @ $75.00/pair

• Transportation cost = $0.30 / pair


Eastbound12 Days Port 2

4.0 Days

Port 14.0 Days

Westbound12 Days

Example Container Service: Asia – North America

• 10,000 TEU Container Vessels• 32 day roundtrip voyage • 11 voyages per year per vessel • Five-vessel rotation provides weekly service• Average 85% full• 9,400 lifts per call • 5 cranes at 28 gmph• 50% berth occupancy• Throughput = 880,000 TEU’s per year• 135 acres required at 6,500 TEU’s per acre per year

• 10,000 TEU Container Vessels• 32 day roundtrip voyage • 11 voyages per year per vessel • Five-vessel rotation provides weekly service• Average 85% full• 9,400 lifts per call • 5 cranes at 28 gmph• 50% berth occupancy• Throughput = 880,000 TEU’s per year• 135 acres required at 6,500 TEU’s per acre per year

LA/LB


Port “Capacity”

• Berth– Vessel size & call frequency– Load and discharge per call– Cranes, assignment and productivity

• Storage Yard– Stacking system– Dwell time – Utilization

• Gate– Lanes– Transactions per hour per lane– Hours of operation

• Rail – Working track & turnover rate

• Berth– Vessel size & call frequency– Load and discharge per call– Cranes, assignment and productivity

• Storage Yard– Stacking system– Dwell time – Utilization

• Gate– Lanes– Transactions per hour per lane– Hours of operation

• Rail – Working track & turnover rate


Port “Efficiency”

• Berth– Reliability of vessel schedules

– Stevedoring productivity

– Berth – CY interface

– Data flow• OCR on dock cranes, yard cranes

• Berth– Reliability of vessel schedules

– Stevedoring productivity

– Berth – CY interface

– Data flow• OCR on dock cranes, yard cranes



• Yard– High stack utilization– Low container dwell time– Minimize false moves

• Digging• Repositioning

– Real time performance•Moves per hour

– Hours of operation– Gate scheduling system

• Yard– High stack utilization– Low container dwell time– Minimize false moves

• Digging• Repositioning

– Real time performance•Moves per hour

– Hours of operation– Gate scheduling system



• Gate– Integration of processes and

technologies• Security• Interchange• Inspection

– Data collection • Accuracy• Elimination of redundant data

input– Manning– Hours of operation– Scheduling system– Interface with container yard

• Gate– Integration of processes and

technologies• Security• Interchange• Inspection

– Data collection • Accuracy• Elimination of redundant data

input– Manning– Hours of operation– Scheduling system– Interface with container yard



• Rail– Train schedules &

reliability– Inbound-outbound balance– Working track length– Number and productivity

of lifting equipment– Storage track amount and

proximity– Switching availability

• Rail– Train schedules &

reliability– Inbound-outbound balance– Working track length– Number and productivity

of lifting equipment– Storage track amount and

proximity– Switching availability


Example – Prince Rupert

• Why is Prince Rupert a good example?– Directly hard wired into the supply chain– All intermodal (rail) cargo– Terminal situated between shipping lines and

railroad, both driven to minimize time and cost by maximizing asset utilization• Shipping line – vessels, crews

– Four-vessel rotation, three days maximum port time

• Railroad, engines, crews and cars– 12-hour engine, crew dwell– 24 hour maximum car dwell– Dedicated car fleet

– Both vessel and rail are optimized in a scheduled, steady-state system

– Limited terminal assets

• Why is Prince Rupert a good example?– Directly hard wired into the supply chain– All intermodal (rail) cargo– Terminal situated between shipping lines and

railroad, both driven to minimize time and cost by maximizing asset utilization• Shipping line – vessels, crews

– Four-vessel rotation, three days maximum port time

• Railroad, engines, crews and cars– 12-hour engine, crew dwell– 24 hour maximum car dwell– Dedicated car fleet

– Both vessel and rail are optimized in a scheduled, steady-state system

– Limited terminal assets


Prince Rupert

Los Angeles

Distance from Hong Kong (Nautical Miles) 5,285

5,7775,768

Houston – 11,100

Houston

New York

New York – 11,587

6,380

Prince Rupert

4 - vessel weekly rotation• 20 knots• 3 days port time

PNW Ports


Prince Rupert

Prince Rupert

Toronto – Montreal - Buffalo

Chicago

Memphis

CN Rail


Phase 1 – 500,000 TEU’s p.a.


Phase 2 – 1.5 Million TEUs p.a.


Prince Rupert

• Perfect steady state– Berth

• Two vessels per week• 3.5 days apart

– Rail• Four 10,000 foot trains

each way each day• Arrive - spot – strip – load

– depart

• Life is good• But what if;– Vessels are late– Trains are late

• Perfect steady state– Berth

• Two vessels per week• 3.5 days apart

– Rail• Four 10,000 foot trains

each way each day• Arrive - spot – strip – load

– depart

• Life is good• But what if;– Vessels are late– Trains are late

• Recoverability analysis

• Terminal capacity = Maximum throughput at which the terminal can recover from a scheduling event

• Recoverability analysis

• Terminal capacity = Maximum throughput at which the terminal can recover from a scheduling event


Test Phase 2 at Capacity

• Annual Throughput – 1,500,000 TEU’s– 830,000 Annual Lifts at 1.8 TEU/lift– All throughput Intermodal– 50% Import, 50% Export

• Weekly Vessel and Rail Lifts– Import 8,013 Lifts – Export 8,013 Lifts

• Two 8,000 TEU vessel Calls per week• Four cranes (30 box moves/hour) for

each vessel

• Annual Throughput – 1,500,000 TEU’s– 830,000 Annual Lifts at 1.8 TEU/lift– All throughput Intermodal– 50% Import, 50% Export

• Weekly Vessel and Rail Lifts– Import 8,013 Lifts – Export 8,013 Lifts

• Two 8,000 TEU vessel Calls per week• Four cranes (30 box moves/hour) for

each vessel


Test Phase 2 at Capacity

• Four 10,000 foot trains each way per day

• Eight inland destinations (a, b, …, h)

• Two train consists – Train A: 5 destinations (a, b, c, d and e);– Train B: 4 destinations (b, f, g and h);

• Steady state schedule for trains:– Train Arrival (WB): 12 AM, 4 AM, 12 PM & 4 PM– Train Departure (EB): 8 AM, 12 PM, 8 PM & 12

AM

• Four 10,000 foot trains each way per day

• Eight inland destinations (a, b, …, h)

• Two train consists – Train A: 5 destinations (a, b, c, d and e);– Train B: 4 destinations (b, f, g and h);

• Steady state schedule for trains:– Train Arrival (WB): 12 AM, 4 AM, 12 PM & 4 PM– Train Departure (EB): 8 AM, 12 PM, 8 PM & 12

AM


Variables for Analysis

• Vessel Schedules– “Good Vessel” – Steady state

• Two vessels arrive with 3.5 days apart. One 8:00Am Monday; The other 8:00PM Thursday

– “Bad Vessel” • Two 8,000 TEU vessels arrive at the same time,

8:00AM Monday

• Train Schedules– “Good Train” – Steady State

• Train A and B arrive and departure alternately each day

– “Bad Train” • Day 1 all Train A, Day 2 all Train B, Day 3 all Train A,

Day 4 all Train B, and so on

• Vessel Schedules– “Good Vessel” – Steady state

• Two vessels arrive with 3.5 days apart. One 8:00Am Monday; The other 8:00PM Thursday

– “Bad Vessel” • Two 8,000 TEU vessels arrive at the same time,

8:00AM Monday

• Train Schedules– “Good Train” – Steady State

• Train A and B arrive and departure alternately each day

– “Bad Train” • Day 1 all Train A, Day 2 all Train B, Day 3 all Train A,

Day 4 all Train B, and so on


Recoverability Analysis Scenarios

• Four combinations of the two variables;– Scenario 1: Bad Vessel, Good Train

– Scenario 2: Good Vessel, Good Train•Best Case

– Scenario 3: Bad Vessel, Bad Train•Worst Case

– Scenario 4: Good Vessel, Bad Train

• Four combinations of the two variables;– Scenario 1: Bad Vessel, Good Train

– Scenario 2: Good Vessel, Good Train•Best Case

– Scenario 3: Bad Vessel, Bad Train•Worst Case

– Scenario 4: Good Vessel, Bad Train


The Analysis Tool - Simulation Model

Colors Denote Representative Destination Blocks –Import & Export


The Analysis Tool - Simulation Model

• Model Resources– Vessels– Trains– Dock cranes– Yard cranes– Storage slots– Rail track– Switch engines

• Model Tracks– Containers– Rail cars– Equipment moves

• Model Resources– Vessels– Trains– Dock cranes– Yard cranes– Storage slots– Rail track– Switch engines

• Model Tracks– Containers– Rail cars– Equipment moves

Container Storage Population (TEU's)

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

1 3 5 7 9 11 13

Day

TEU

's

Import Population TEU's Export Population TEU's

Total Population, TEU's Minimum Storage Capacity Req'd

Prince Rupert Railcar Population

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1 3 5 7 9 11 13

Day

Rai

lcar

Fee

t

Rail Switching Activities per Shift

-

1

2

3

4

5

6

1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Day/Shift

Act

iviti

es


Scenario 1 : Bad Vessel Good Train

Max Import = 9,763 TEU’s

Max Export = 11,065 TEU’s

Hourly TEUs for a Week (All_Import)

0

2000

4000

6000

8000

10000

12000

Mon0:00

Tue0:00

Wed0:00

Thu0:00

Fri 0:00 Sat0:00

Sun0:00

Mon0:00

Time

TEU

MinAvgMax

Hourly TEUs for a Week (All_Export)

0

2000

4000

6000

8000

10000

12000

Mon0:00

Tue0:00

Wed0:00

Thu0:00

Fri 0:00 Sat0:00

Sun0:00

Mon0:00

Time

TEU

MinAvgMax


Scenario 1: Bad Vessel Good Train

Days

Prob

0 2 4 6 8

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

Average Dwell = 2.87 DaysAverage Inventory = 12,081 TEU’sMax Inventory = 14,209 TEU’s

Hourly TEUs for a Week (Yard)

02000400060008000

10000120001400016000

Mon0:00

Tue0:00

Wed0:00

Thu0:00

Fri 0:00 Sat0:00

Sun0:00

Mon0:00

Time

TEU

MinAvgMax

Total Storage Req’d.Shared Im/Ex = 20,800 TEU’sSegregated Im/Ex = 30,500 TEU’s


Hourly TEUs for a Week (All_Import)

0

500

1000

1500

2000

2500

3000

3500

Mon0:00

Tue0:00

Wed0:00

Thu0:00

Fri 0:00 Sat0:00

Sun0:00

Mon0:00

Time

TEU

MinAvgMax

Scenario 2 : Good Vessel Good Train

Max Import = 2,961 TEU’s

Max Export = 4,190 TEU’s

Hourly TEUs for a Week (All_Export)

0500

10001500200025003000350040004500

Mon0:00

Tue0:00

Wed0:00

Thu0:00

Fri 0:00 Sat0:00

Sun0:00

Mon0:00

Time

TEU

MinAvgMax


Scenario 2 : Good Vessel Good Train

Hourly TEUs for a Week (Yard)

0

1000

2000

30004000

5000

6000

7000

Mon0:00

Tue0:00

Wed0:00

Thu0:00

Fri 0:00 Sat0:00

Sun0:00

Mon0:00

Time

TEU

MinAvgMax

Max Import = 1961 TEUs

Max Export = 4190 TEUsDays

Pro

b

0 2 4 6 8

0.0

0.1

0.2

0.3

0.4

0.5

0.6

Average Dwell = 1.25 DaysAverage Inventory = 5,305 TEU’sMax Inventory = 6,064 TEU’s

Total Storage Req’d.Shared Im/Ex = 8,895 TEU’sSegregated Im/Ex =10,488 TEU’s


Container Dwell Time Comparison

Average Container Dwell Time

2.87

1.26

2.99

1.53

00.5

11.5

22.5

33.5

Bad VesselGood Train

Good VesselGood Train

Bad VesselBad Train

Good VesselBad Train

1 2 3 4

Vessel / Train Scenario

Dw

ell T

ime

Days


Days

Prob

0 2 4 6 8

0.00

0.05

0.10

0.15

0.20

0.25

Days

Prob

0 2 4 6 8

0.0

0.1

0.2

0.3

0.4

0.5

0.6

Days

Pro

b

0 2 4 6 8

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Days

Prob

0 2 4 6 8

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

1. Bad Vessel Good Train1. Bad Vessel Good Train 2. Good Vessel Good Train2. Good Vessel Good Train

4. Good Vessel Bad Train4. Good Vessel Bad Train3. Bad Vessel Bad Train3. Bad Vessel Bad Train

2.87

1.532.99

1.26



Findings

TEU - Storage Space Requirements

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Scenario 1 Scenario 2 (Best Case)

Scenario 3 (Worst Case)

Scenario 3 (5 Cranes)

Scenario 4

Scenario

TEU

's

Shared Inventory Shared Storage RequirementSeparate I/E Inventory Separate I/E Storage RequirementStorage Space Available at 5 high


Bad Vessel Bad Vessel



Some More Quotes:

“I have no need of ports, I get everything I need from the internet.”

Unidentified citizen at a port permit hearing

“The Dirty Truth About U. S. Ports…”

NRDC Report “Harboring Pollution”

Some More Quotes:

“I have no need of ports, I get everything I need from the internet.”

Unidentified citizen at a port permit hearing

“The Dirty Truth About U. S. Ports…”

NRDC Report “Harboring Pollution”



• Threats– Port capacity

– Intermodal lift capacity

– Highway & rail infrastructure

• Threats– Port capacity

– Intermodal lift capacity

– Highway & rail infrastructureU.S. Forecasts Versus Capacity

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

1996

2000

2004

2008

2012

2016

2020

2024

2028

Ann

ual T

EU's

U.S. Actual Growth to2005

U.S. Future Growth at4% CAGR

U.S. Future Growth at6% CAGR

Total U.S. Capacity ofExisting Port Land

Total U.S. Capacity ofPlanned Port Land

West Coast Intermodal Demand Forecast vs Intermodal Lift Capacity

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,00020

0520

0820

1120

1420

1720

2020

23

Ann

ual I

nter

mod

al T

EU's

MN Forecast(Intermodal TEU's)

UnconstrainedWest CoastIntermodal LiftCapacity

Shift-LimitedIntermodal LiftCapacity



• Threats– Public perception of the role of ports•“I have no need of ports…

•“The dirty truth…

•etc.

• Threats– Public perception of the role of ports•“I have no need of ports…

•“The dirty truth…

•etc.



• Hot topics– Air quality

• Global warming– CO2

• Local / regional smog– Standards / attainment– NOX– SO2– Diesel PM– Ozone

• Fuel switching• Cold ironing

• Hot topics– Air quality

• Global warming– CO2

• Local / regional smog– Standards / attainment– NOX– SO2– Diesel PM– Ozone

• Fuel switching• Cold ironing

CO2

SO2

NOXOzone



•Hot topics– Terminal automation•What does it mean?

– De-coupling people and machines

– Not elimination of people

•What are the benefits?– Capacity? Maybe

– Service speed? Probably not

– Cost? Maybe / hopefully

– Emissions Yes. Electric yard cranes

•Hot topics– Terminal automation•What does it mean?

– De-coupling people and machines

– Not elimination of people

•What are the benefits?– Capacity? Maybe

– Service speed? Probably not

– Cost? Maybe / hopefully

– Emissions Yes. Electric yard cranes


Thank You!Thank You!

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