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Erasmus University Rotterdam

MSc in Maritime Economics and Logistics 2004/2005

Container Terminal Expansion to Build Capacity: A Case Study

By

Astrini Niswari

Copyright MSc Maritime Economics and Logistics

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Acknowledgeme nts

I would like to thank Prof. dr. Rommert Dekker for all the times and guidance that he has given to me, from the start of this study, during the work, until the completion of this thesis. I appreciate the kindness of Mr. Nicholas Fisher, Mr. Jan Buijze, Mr. Lene Lindhout, Mr. Roel van de Weijer, Mr. Evon Case, and Mr. Christian Paus, who have given a lot of assistance during the research project. Last but not least, I would like to thank MEL office and lecturers for the guidance throughout the year, especially Prof. dr. Hercules Haralambides and Drs. Chantal Cheung Tam He.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Abstract

Due to the predicted growth of the shipping industry for the coming years and the high utilization of the worlds container terminals, expansion projects are considered to be the best way to build capacity. The capacity of container terminal is measured by the total quay moves, based on the number of container visits that can be handled each year, and this highly depends on the number of terminal ground slots (TGS) available, dwell time, peak factor and yard utilization. A change in terminal layout and equipments is normally the basic of any expansion project. There are however a lot of expansion alternatives that can be implemented in any given container terminal, each with all its pros and cons. This thesis presents a case study that assesses the operational and financial impacts of five possible expansion projects, which mainly include an operation of straddle carriers or combination of straddle carriers and Rail Mounted Gantry (RMG) cranes . The uncertainty in future operation will however have to be taken into consideration. As such, the recommendation taken in this stage should be further assessed in case the predictions might change. Several possible scenarios are presented to foresee the risks in investing in the expansion project. Keywords: expansion, capacity, container visits, TGS, dwell time, peak factor, yard utilization, layout, equipments, uncertainty, risks.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

TABLE OF CONTENTS

Acknowledgements Abstract Table of Contents List of Figures List of Tables List of Abbreviations
1.1. 1.2. 1.3. 1.4. 1.5.

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CHAPTER 1. INTRODUCTION ..............................................................................................................................1 BACKGROUND ............................................................................................................................................1 PROBLEM D ESCRIPTION AND RESEARCH QUESTIONS .....................................................................2 METHODOLOGY .........................................................................................................................................2 STRUCTURE OF T HESIS ...........................................................................................................................3 RESTRICTIONS ...........................................................................................................................................3

CHAPTER 2. LITERATURE REVIEW .................................................................................................................4 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. 2.8. CONTAINER TERMINAL OPERATION......................................................................................................4 LAY OUT .....................................................................................................................................................6 HINTERLAND...............................................................................................................................................8 EQUIPMENT .................................................................................................................................................8 PERSONNEL ..............................................................................................................................................11 TERMINAL EXPANSION ...........................................................................................................................12 OPERATIONAL CONSEQUENCES ..........................................................................................................14 FINANCIAL CONSIDERATIONS ...............................................................................................................15

CHAPTER 3. FIELD RES EARCH.......................................................................................................................18 3.1. I NITIAL CONDITION OF A CONTAINER T ERMINAL ..............................................................................18 3.1.1. Container Moves..................................................................................................................... 20 3.1.2. Berth Capacity ......................................................................................................................... 21 3.1.3. Yard Capacity ........................................................................................................................... 22 3.1.4. Equipment Capacity .............................................................................................................. 23 3.1.5. Labor ............................................................................................................................................ 23 3.1.6. Hinterland connection.......................................................................................................... 24 3.2. CHALLENGES IN OPERATION................................................................................................................24 3.2.1. Future Growth of Demand..................................................................................................24 3.2.2. High Utilization of the Future Operation...................................................................... 26 3.2.3. Fluctuation Rate in Operation .......................................................................................... 26 3.3. PLAN OF E XPANSION P ROJECT ...........................................................................................................28 3.4. MAIN ASSUMPTIONS ...............................................................................................................................28 3.5. GENERAL D ESCRIPTION OF EACH ALTERNATIVE............................................................................30 3.5.1. Mixed 3 and 4-high SC ......................................................................................................... 31 3.5.2. Mixed 3 and 4-high SC with New Layout ..................................................................... 31 3.5.3. Full 4-high SC with New Layout...................................................................................... 32 3.5.4. Mixed 3 and 4-high SC with HDS Parallel ...................................................................33 3.5.5. Mixed 3 and 4-high SC with HDS perpendicular...................................................... 35 3.6. RISK ANALYSIS........................................................................................................................................36 CHAPTER 4. RESULTS .........................................................................................................................................37 4.1. OPERATIONAL ASSESSMENT ................................................................................................................37 4.1.1. Capacity...................................................................................................................................... 37

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

4.1.2. Volume......................................................................................................................................... 39 4.1.3. Timeline....................................................................................................................................... 42 4.2. FINANCIAL ASSESSMENT ......................................................................................................................43 4.2.1. Net Present Value (NPV)...................................................................................................... 43 4.2.2. Internal Rate of Return (IRR) ............................................................................................. 45 4.2.3. Return on Investment (ROI) ............................................................................................... 45 4.2.4. Payback Period........................................................................................................................ 46 4.2.5. Cost per Move .......................................................................................................................... 47 4.2.6. Cost of Expansion .................................................................................................................. 48 4.3. PROS AND CONS .....................................................................................................................................49 4.3.1. Mixed 3 and 4-high SC ......................................................................................................... 49 4.3.2. Mixed 3 and 4-high SC with New Layout ..................................................................... 50 4.3.3. Full 4-high SC with New Layout...................................................................................... 50 4.3.4. Mixed 3 and 4-high SC with HDS Parallel ...................................................................51 4.3.5. Mixed 3 and 4-high SC with HDS Perpendicular...................................................... 52 4.4. LOW CASE SCENARIO ............................................................................................................................53 4.4.1. Lower Volume Growth (10%) ............................................................................................ 53 4.4.2. Lower Transshipment Ratio (6%) ................................................................................... 56 4.5. BEST CASE SCENARIO ..........................................................................................................................56 4.5.1. Higher Transshipment Ratio (26%) ................................................................................ 56 4.5.2. Extended Berth (2000 m)..................................................................................................... 57 4.5.3. Less Dwell Time (4 days) .................................................................................................... 58 4.5.4. Inland Empty Depot ............................................................................................................... 60 4.6. THE S UM UP OF ALL S CENARIOS .......................................................................................................61 CHAPTER 5. CONCLUSIONS AND RECOMMENDATIONS ...................................................................62 REFERENCES ...........................................................................................................................................................63 APPENDIXES APPENDIX 1. PRO-FORMA BERTHING SCHEDULE (27 MOVES/HOUR TOTALING 1,950,000 QUAY MOVES) .....................................................................................................................................64 APPENDIX 2. PRO-FORMA BERTHING SCHEDULE (30 MOVES/HOUR TOTALING 2,100,000 QUAY MOVES) .....................................................................................................................................65 APPENDIX 3. PRO-FORMA BERTHING SCHEDULE (33 MOVES/HOUR TOTALING 2,230,000 QUAY MOVES) .....................................................................................................................................66 APPENDIX 4. BERTH CAPACITY BASED ON 27 MOVES/HOUR.......................................................67 APPENDIX 5. BERTH CAPACITY BASED ON 30 MOVES/HOUR.......................................................67 APPENDIX 6. BERTH CAPACITY BASED ON 33 MOVES/HOUR.......................................................68 APPENDIX 7. PROFIT AND LOSS STATEMENT FOR 3 AND 4-HIGH SC ALTERNATIVE.......69 APPENDIX 8. PROFIT AND LOSS STATEMENT FOR 3 AND 4-HIGH SC NEW LAYOUT ALTERNATIVE...........................................................................................................................................................70 APPENDIX 9. PROFIT AND LOSS STATEMENT FOR 4 -HIGH SC NEW LAYOUT ALTERNATIVE...........................................................................................................................................................71 APPENDIX 10. PROFIT AND LOSS STATEMENT FOR HDS PARALLEL ALTERNATIVE.......72 APPENDIX 11. PROFIT AND LOSS STATE MENT FOR HDS PERPENDICULAR ALTERNATIVE...........................................................................................................................................................73

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

List of Figures Figure 1. Process of Loading and Unloading the Ship ...................................................... 4 Figure 2. Container Handling Operation ........................................................................... 5 Figure 3. Ship-to-Shore (STS) Crane................................................................................. 9 Figure 4. Straddle Carrier................................................................................................. 10 Figure 5. RTG Crane........................................................................................................ 10 Figure 6. Initial Terminal Layout..................................................................................... 22 Figure 7. Yard Utilization 2004-2005.............................................................................. 26 Figure 8. Terminal Volumes 2002-2005.......................................................................... 27 Figure 9. Layout of the Mixed 3 and 4-high SC Alternative ........................................... 31 Figure 10. Layout of the Mixed 3 and 4-high SC with New Layout Alternative ............ 32 Figure 11. Layout of the Full 4-high SC with New Layout Alternative .......................... 33 Figure 12. Layout of the Mixed 3 and 4-high SC with HDS Parallel Alternativ ............ 33 Figure 13. Cross section of HDS including RMG Cantilever and transfer zones ........... 34 Figure 14. Layout of the Mixed 3 and 4-high SC with HDS Perpendicular Alternative. 35 Figure 15. Volumes Over Quay per Alternative .............................................................. 40 Figure 16. Volumes in Low Case Scenario (10% growth) .............................................. 54 Figure 17. Volumes with Transshipment Ratio 6% ......................................................... 56 Figure 18. Volumes with Transshipment Ratio 26% ....................................................... 57 Figure 19. Volumes with 2000 m Berth Length .............................................................. 58 Figure 20. Volumes with 4 Days Dwell Time ................................................................. 59 Figure 21. Volumes with 4 Days Dwell Time and 2000 m Berth Length....................... 59 Figure 22. Volumes with the Allocation of an Inland Empty Depot ............................... 60

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

List of Tables Table 1. Land Areas......................................................................................................... 18 Table 2. Total Expanded Land Areas............................................................................... 18 Table 3. Growth in CT Volume Period 2003-2004 ......................................................... 19 Table 4. Container Moves in 2004................................................................................... 20 Table 5. Current Yard Capacity....................................................................................... 22 Table 6. Projected Volume Development 2005-2015 (15% increase) ............................ 25 Table 7. TGS Available per Alternative .......................................................................... 37 Table 8. Variables in Stacking Yard................................................................................ 37 Table 9. Maximum TEU Visits per Alternative............................................................... 38 Table 10. TEU Factor ....................................................................................................... 38 Table 11. Maximum Container Visits per Alternative ..................................................... 39 Table 12. Predicted Demand of the Terminal.................................................................. 39 Table 13. Maximum Quay Moves per Alternative .......................................................... 40 Table 14. Year on which Maximum Quay Moves is Reached per Alternative ............... 41 Table 15. Percentage of Modality Split to Deep Sea Moves ........................................... 41 Table 16. Maximum Total Moves per Alternative .......................................................... 42 Table 17. 3/4 H SC Investment Timeline ........................................................................ 43 Table 18. 3/4 H SC New Layout Investment Timeline ................................................... 43 Table 19. 4 H SC New Layout Investment Timeline....................................................... 43 Table 20. HDS Parallel Investment Timeline .................................................................. 43 Table 21. HDS Perpendicular Investment Timeline ........................................................ 43 Table 22. EBITDA per Alternative (000) ..................................................................... 44 Table 23. Annual Investment per Alternative (000) ..................................................... 44 Table 24. Accumulative Investment per Alternative (000) .......................................... 44 Table 25. NPV per Alternative ........................................................................................ 44 Table 26. Revenue per Alternative (000) ..................................................................... 45 Table 27. IRR per Alternative.......................................................................................... 45 Table 28. Net Income After Tax (000) ......................................................................... 46 Table 29. ROI per Alternative .......................................................................................... 46 Table 30. Payback Period Calculation Example .............................................................. 46 Table 31. Payback Period per Alternative ....................................................................... 47 Table 32. Crane Moves for 3/4 H SC Alternative ........................................................... 47 Table 33. Operational Cost, Non Operational Cost, and Depreciation for 3/4 H SC...... 47 Table 34. Cost per Move for 3/4 H SC Alternative ......................................................... 48 Table 35. Cost per Move per Alternative......................................................................... 48 Table 36. Cost of Expansion per Alternative ................................................................... 48 Table 37. NPV per Alternative (10% growth) ................................................................. 54 Table 38. IRR per Alternative (10% growth) .................................................................. 54 Table 39. ROI per Alternative (10% growth) .................................................................. 55 Table 40. Payback Period per Alternative (10% growth) ................................................ 55 Table 41. Cost per Move per Alternative (10% growth) ................................................. 55 Table 42. Cost of Expansion per Alternative (10% growth) ........................................... 55

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

vii

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

List of Abbreviations
CT CX Exp GS H HDS Imp LS MTH QC RMG RTG SC STS TAMS TEU TGS TS TZ WS Container Terminal Shipping Company Export Ground Slot High High Density Stack Import Landside Empty Handler Quay Crane Rail Mounted Gantry Rubber Tired Gantry Straddle Carrier Ship to Shore Truck Appointment Management System Twenty-foot Equivalent Unit Terminal Ground Slot Transshipment Transfer Zone Waterside

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

viii

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Chapter 1. INTRODUCTION
The trend of implementing a Greenfield project has lately taken quite some attention from many container terminal operators, in accordance with the need to expand the coverage area of operation as well as improving the overall productivity of the operator. However, in several cases some may think that building capacity on the existing operating area might be more suitable, in the sense that the operator has been used to the working condition needed to be sustained in the container terminal. Furthermore, they can minimize the risk of under or over-investment on the expansion project, due to the characteristics of the terminal which are most likely to remain the same, i.e. modality split, dwell time, TEU factor, transshipment ratio, container types, and peak factor. This thesis investigates some expansion options that might be feasible when one is to expand an existing manual-operated container terminal. There are several alternatives of the expansion itself and, therefore, a good assessment should be carried out through each proposal both from operational view as well as financial analysis. A cost analysis on a per move basis is an important part of this consideration1, as well as the predicted return for the terminal in future operation. A field research in a container terminal will be done to look closer at the realization and, accordingly, to predict the drawbacks which might occur from the expanded operation in the future.

1.1.

Background

Many container terminals i all over the world have become excessively n utilized, as a consequence of the ever increasing growth in container shipping industry during the last decade. The trend of increasing size of vessel and, consequently, call size in the terminal give a significant impact in the utilization of the container terminal. Of the major players in Europe, container terminals in Rotterdam, Antwerp, Hamburg, Bremerhaven, Southampton, and Le Havre have reached more than 80% utilization level as for 2004. The high utilization in container terminal has led to some negative implications in the operation, namely delays and congestions. Terminal expansion might be an option to add capacity and improve productivity of the terminal. Some key elements that play important roles in quay side, container yard, and hinterland connection can be upgraded in order to cope with the fast pace of containers flow in the terminal. A better design of cranes assignment, berth and yard capacity are of great paramount in planning some project alternatives. Not every expansion project, however, results in improvement of performance. Therefore, a thorough analysis should be performed to decide whether a cost-acceptable expansion would generate the highest reward to the company. A case study will be presented in this thesis, in which an anonymous container terminal in
1

Cost on a per move basis is assumed to be a measure of terminal efficiency

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Northern Europe tried to assess some possible expansion projects and, in the end, came up with the best solution.

1.2.

Problem Description and Research Questions

An insufficient capacity of a container terminal is a major drawback from the operation. The aim of this thesis is to answer the following question, what is the optimal expansion design to achieve a sufficient capacity with the most financially rewarding solution? To answer the general question, the following issues need to be investigated: - how is the current situation of the terminal - what challenges are found in the operation - what are the foreseen capacity requirements going forward - at what point is the current berth and yard capacity are fully utilized - what are the possible expansion alternatives - which equipments and layout to be used for each alternative - how much money should be drawn to support each alternative - how much capacity offered by each alternative - which alternative generates the most profitable return to the company - what are the upside and downside effects of each alternative - how suitable is the alternative for different scenarios

1.3.

Methodology

The assessment in the thesis will be started by reviewing some literature and main findings, concerning major elements that are of great importance in assessing the requirements for expanding the terminal, both in terms of capacity of the storage yard as well as the productivity of the terminal equipments. Subsequently, a field research will then be carried out to observe what options a terminal has in order to expand capacity, i.e. either to keep the current container handling equipment or purchase new type of equipments. The field research focus on the additional yard capacity that an expansion can provide to the terminal, under three scenarios of berth productivity. This field research is provided to decide which project should be implemented in order to give the highest reward to the terminal, in terms of future capacity and profits. The operational and financial views of each expansion plan are hence the basis of the assessment. The hypothetical case study is based on the real data provided by a conventional container terminal, which we will refer as CT through out this case study.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

The operational and financial analyses are based on the predetermined layout and container ground slots.

1.4.

Structure of Thesis

The thesis is initiated by literature reviews on key elements in operating a container terminal in Chapter 2, continued with the probable consequences brought up by the expansion. This chapter will later be looked upon on the following Chapter 3 when the field research is assessed. The initial situation in the container terminal cannot be neglected as this is the basis of what objectives the operator wants to achieve, taking into account some challenges they are facing in the current operation. The result of the assessment in the field research is presented in Chapter 4, focusing on what differences it would make on the operating of container terminal. The impacts of these on the whole performance of the terminal will also be analyzed, with a special attention to the operational and financial performance of the expansion project. Finally, brief conclusions and recommendations are to be suggested in Chapter 5.

1.5.

Restrictions

This thesis does not investigate any expansion project to a new terminal area. Instead, the main considerations, results and analysis provided are only valid for the existing container terminal and may subject to change in different area of operation. The observation in this thesis is restricted to the operational side in the berth and yard area. The Terminal Development Department firmly stated that the hinterland connection will be sufficient to accommodate the expanded capacity in the future. The reason behind this will be discussed in Section 3.1.6. Some improvements regarding to the hinterland connection, however, are being developed. The time horizon for each alternative which might be implemented in the terminal operation will only be stretched until 2014, with the assumption that the terminal will completely move to the new larger terminal area in 2014. Therefore all the calculations are based on the projected data from 2006 (the starting time of the project) to 2014. Due to the limitation of time, the case study is carried out without any simulation procedure. Therefore, the author does not take uncertainty in future demand and operation (measured in container moves) into account. In addition, other strategic decisions of the Board of CT regarding the use of other possible terminal area(s) at the same time in the future, as well as an allocation of inland empty depot, are beyond the coverage of this thesis.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Chapter 2. LITERATURE REVIEW


In this chapter, some literatures that support the decision making of this research project are provided in order to highlight the importance of previous findings in the field of container terminal operation and other important aspects, namely terminal lay out, equipments, personnel, and hinterland connectivity. Following, related findings in terminal expansion will be presented, as well as the operational consequences after implementation. In the end, we will provide some financial analyses that should be carried out in making decision of investing in an expansion project.

2.1.

Container Terminal Operation

Container terminal is an interface between sea and land, which is critical in allowing an efficient and productive flow of goods carried in containers. In export flow, containers will be transported into the terminal by trucks, railway and barges from inland, and further be stored in container yard temporarily before being loaded into a ship. For import flow, the process is reversed, but the time spent in the container yard is relatively longer due to the unpredictable schedule of the cargo receiver to pick up the container. Generally, one would prefer to store the containers in the terminal yard for cost reasons, as it is considered to be cheaper than building his own warehouse.

Figure 1. Process of Loading and Unloading the Ship


Source: Vis and Koster (2003)

According to Kozan (1997), a container terminal represents a point where containers are moved from one mode of transport to another. Vis and Koster (2003) added that in the container terminal, different types of container handling equipments are used to transship containers from ships to barges, trucks and train, or vice versa. Hence, basically large numbers of containers are to be loaded, discharged, and transshipped in a short time span, with as minimum use of equipment as possible to minimize costs. Transshipment process should normally take place in a short time; therefore, a thorough coordination within the terminal management has to be maintained in order to hinder delays and congestions in using equipments as well as occupying berth. Vis, et.al (2001) mentioned that waiting times of the cranes are much more expensive than waiting times of the vehicles; hence containers should be transported immediately.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Vis and Koster (2003) added that, in realization, containers can be transshipped directly from one mode of transport to another, or to be stored in the stacking yard before eventually transported to the next mode of transport. The layout and the handling equipments for the transshipment process should be well defined. As container inflow to the terminal grew significantly in the last past years while the handling and storage capacity at the terminal is restricted, high utilization of the container terminal has become a common issue for the terminal operator. For example, deep sea ports in Rotterdam, Bremerhaven, and Southampton have a utilization rate of 92.5%, 95.5%, and 99.3% respectively.2 Delays, bottlenecks and congestion problems are unavoidable in daily operation, especially during peak times. To encounter the above issues, an expansion of the terminal is considered to be important in order to add capacity, increase efficiency, and in the end, enable the terminal operator to optimize profitability. Depending on the restriction of the existing design of the terminal, expansion may focus on the change in layout, equipments, infrastructures, IT system, etc. The time lag between expansion project proposal and realization might, in fact, be quite significant. Several expansion projects planned by large deep sea terminals in Europe, i.e. Rotterdam and Antwerp, take more than 10 years to implement. Wiegmans (2003) added that, the efficiency in operating terminal facilities is the basis in realizing high productivity and, consequently, low costs per TEU. A container terminal is inefficient if it is not able to produce maximum possible output (or at the minimum possible cost). To obtain efficiency for the whole handling operations in the terminal, there are several sub processes that are needed to be investigated, namely gate efficiency (handling of trucks), stack efficiency, berth efficiency, container handling efficiency, and other forms of efficiency (for example train and barge handling efficiency).
Container Handling Operation

Quay Transfer Operation

Storage System

Gate Operation

Ship Operation

Loading Operation

Discharge Operation

Loading Export

Stacking Import

Receipt

Delivery

Figure 2. Container Handling Operation


Adapted from: Chen (1999)

In a more detailed point of view, Chen (1999) focused the study of terminal operations on the yard operations and management. The reason behind this is because
2

From a presentation by Dave Appleton in Terminal Operator Conference (TOC) 2005 in Antwerp, Belgium

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

operations and management strategies in the container yard require comprehensive management techniques, which influence the efficiency of container terminal operation and operating cost for the whole system. From the viewpoint of terminal management, the storage yard is the area where planning and control of containers moving in and out the terminal are concentrated. Chen (1999) added that storage yard is physically a buffer area for container transferred in the ship associated and land vehicles associated handling operations. Consequently, almost all the terminal operations are either originated or destined from/to the storage yard. The transport of containers in the container terminal can actually be done with or without using buffer areas (Vis et.al., 2001). The main objective to use buffer area is in fact to maintain the productivity of the quay cranes, in the sense that the quay cranes do not have to wait for the transporting vehicles, i.e. straddle carriers, before executing the next action (transporting the next container to and from the vessel) According to Mr. Frank Kho, on his presentation in the Terminal Operator Conference (TOC) 2005 in Antwerp, there are three measures to increase the existing terminal capacity: (1) influence demand, i.e. prioritize vessel calls and reschedule certain calls to off-peak period, (2) improve productivity, i.e. increase equipment productivity and explore flexible manpower arrangement, and (3) enhance capacity, i.e. increase container handling equipment as well as to increase yard capacity and space. The worlds container terminals have started to heavily expand their area and strengthening the infrastructures since early 1990s. In 1994, Bremerhaven expanded their operation to the new two berths with the Container Terminal III (CT III) project and, currently, they are planning to further expand CT IV with additional 4 berths to be completed by 2007 (Kaisen, 2004). They decided to keep investing in facilities and equipment, as the larger ships calling at the terminal need larger space of berth and yard, as well as more productive equipments. Nowadays, expansion is still the best solution for many container terminals that face problems in coping with the fast growth in shipping industry, especially as an impact of the Chinese boom to the worlds trade. In line with this, the Deltaport container terminal in Port of Vancouver, Canada, is expecting a triple growth of demand by 2020 due to the more and more exciting Asia-Pacific trade line. The expansion project in the existing area consists of a wharf construction to add a new berth, dredging to lengthen the channel, and expanding the container storage area (Port Vancouver, 2005).

2.2.

Lay O ut

A container terminal in general has two interface areas, heading to the land side and water side of the terminal. The waterside interface area connects the quay where vessels are berthed and the stacking area where containers are stored after

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

being discharged. The landside interface area accommodates the flow of containers from the stacking yard to the hinterland by road and rail. Some containers are transshipped; therefore, they are transported back to the waterside and being loaded to another vessel. Containers are stacked in the yard separately for each group, namely import, export, transshipped, reefer, and empty containers, in order to minimize the transport distances for the terminal equipment to carry containers from one stack location to and from waterside/landside interface area. Another reason will be to simplify the operation when one container has to be picked up, in the sense that reshuffling (moving containers on top of the required container) can be minimized. There are basically three common lay out that can be implemented in container terminals (Dekker, 2004): - long single container wide lanes for straddle carriers - long multiple containers wide lanes with cranes over them (exchange on top) - long multiple containers wide lanes with cranes over them (exchange on side ways) Additionally, the width and length of each lane, number of lanes, as well as the configuration/position of reefers, empty containers and dry vans should be determined as a basic consideration in deciding the best lay out of the terminal. Furthermore, location of the building, grid lanes for truck coming to and from the terminal, and rail infrastructure (if any), should be well defined. In his dissertation, Performance Conditions for Container Terminals, Wiegmans (2003) firmly stated, The terminal yard must be of a size that enables the handling of the anticipated throughput. The number of Terminal Ground Slots (TGS) which can be accommodated by such terminal yard is the basic consideration in this key point analysis. The TGS itself is defined as the area that is occupied by a standard 20-feet container. Wiegmans (2003) then added that the required terminal yard capacity is influenced by a number of factors: 1. ratio of loaded to empty containers: although loaded and empty containers take up the same surface space, loaded containers are heavier so that the underground carrying capacity is more important3; 2. average stacking period per container; 3. stacking height; 4. ratio of non refrigerated containers to refrigerated containers; 5. ratio of import to export containers; 6. planned utilization factor: for management reasons some spare capacity may be required The area for stacking empties, reefers and dry vans will eventually have trade off between each others. This means that, for example, if the terminal decided to store more reefers, some TGS for dry vans should be given away for exchange
3

Moreover, loaded containers cannot be stacked as high as empty containers

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

especially because reefer stack requires larger spaces. During the last past years, more refrigerated products are shipped in containers 4 and many terminals are expecting a high growth of reefer slots demand.

2.3.

Hinterland

Hinterland connection generally includes road, rail, and barge transportation. Not every terminal has its own rail infrastructure; therefore, there are some ITT (Inter Terminal Transport) from one terminal to make use of other terminals rail infrastructure as well as transporting containers which are to be loaded into vessels calling at that terminal. Terminals with their own rail infrastructures, however, are usually equipped with dedicated rail cranes. For trucks interchange, several grid lanes should be provided to allow many trucks to be served at the same time. According to Putten (2005), there will be congestion near the truck grid areas, for example, when the number of container moves per hour to and from the grid lane are approximately more than 80. Several attempts to make the truck operation faster in the terminal are being developed, for instance the biometric identification to save the operational time and the Truck Appointment Management System (TAMS). Barges are the cheapest way of hinterland transportation mode, although they are very slow. The barges will be berthed at the quayside of the terminal, integrated or separated from the deep-sea and feeder vessels operation. 5 The barges moves will, together with feeder and deep-sea vessels moves, be included in the total quay (crane) moves that a terminal can handle. This crane moves are basically the main indicator of the productivity of a container terminal, determining the largest volume a terminal can have.

2.4.

Equipment

The most commonly used terminal equipment at the berth to handle containers from the vessels is either quay crane or barge crane, depending on the load that should be lifted. In a discharging process, basically, cranes raise the container vertically from the vessel and move it horizontally to the shore, put it on the ground and vice versa for loading process. The performance of the cranes partly depends on the team working efficiency, but mostly is influenced by the effectiveness of the stowage planning, especially in the loading process where containers that are put into the vessel should be organized in such ways with regards to the weight of containers, sizes, and destination.

Refrigerated products were initially carried by conventional reefer ships, however, nowadays shipping lines play important roles in reefer business by deploying reefer containers. 5 Barges transport containers over inland waterways, i.e. rivers (Putten, 2005)

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Meersmans and Dekker (2001) describe the three commonly used handling systems for quay transport. The first alternative is to use stacking cranes for retrieval of containers from the stack. There are two main types of these stacking cranes, rubbertired cranes which can usually switch from one stacking lane to another and the less flexible rail-mounted cranes. The second alternative is to use straddle carriers with the ability of combining the properties of a crane and a vehicle. The last alternative is not used so often anymore, which is to stack all containers on chassis.

Figure 3. Ship-to-Shore (STS) Crane


Source: Peterlini (2001)

According to Wiegmans (2003), we can distinguish the following four forms of handling system: 1. mechanized systems, that use a wide range of manual handling equipments and, therefore, labor constitutes a high percentage of overall cost; 2. automated systems, which aims at minimizing labor as much as possible by substituting capital investment in handling equipment; 3. semi automated systems, which are systems that use automated equipments while the remainder of the handling is carried out mechanically (for example, a use of Automated Guided Vehicles (AGV) and Automated Stacking Crane (ASC) which are unmanned together with Quay Cranes (QC) which are manned; 4. information-directed systems, that use computers to maximize control over mechanized handling equipments An automated system is basically operating more precisely and, accordingly, faster than a mechanized system operation. This is why many experts think that automated terminals can operate more efficiently. Moreover, automation allows a safer operation and less damages (Dekker, 2004). The drawbacks of the automated system is that much higher capital investments required as well as much more complex application. Manually operating container terminal aims at keeping the flexibility of operation, for example when facing peak hours the containers can be loaded from the vessel and temporarily stored close to the quay, although they will normally be transported directly to the stacking yard. In an automated terminal, this is not possible as all operations taking place in the terminal area has been planned and therefore, changing a single action in the system can never be the case.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

Container Terminal Expansion to Build Capacity: A Case Study

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In terms of the type of equipment, most container terminals in the world make use of straddle carriers as their main equipment. The reason behind this is that straddle carriers can perform a fast handling of containers, both for transporting containers from Ship-to-Shore (STS) crane to container yard and for stacking them up to 3 to 4 containers high. Spasovic (1999) define a straddle carrier as an eight wheeled vehicle that straddles containers, grabs it using an overhead crane, lifts it to the desired height, and drives away with it in its belly.

Figure 4. Straddle Carrier


Source: Peterlini (2001)

Full operation of straddle carriers, however, has a major drawback in limited stacking density. This is because straddle carrier can only operate as a one-over-two or one-over-three stacker, this means that it can pass one container over two or three containers stacked on the ground only. Moreover, manually operated straddle carrier will also mean that the terminal is labor intensive and hence results in higher percentage of labor cost to the total cost of operating the terminal. A use of Rail-Mounted Gantry (RMG) crane might increase the capacity of the container yard, because such crane allows a much higher density of stacking. Compared to RTG (Rubber Tired Gantry), RMG is less flexible as RTG can switch from one stacking lane to another, however, changing from one stack lane to another is time consuming and, therefore, not done so often in practice (Meersmans and Dekker, 2001). Both gantry cranes, however, absorb much higher investment in terminal handling equipment due to the expensive cranes installation and civil works needed in the terminal area.

Figure 5. RTG Crane


Source: Peterlini (2001)

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

A combination between straddle carrier and RMG might be a good solution to the terminal, as some part of the terminal can be dedicated as high density stacks while the rest will be operated as straddle carrier stacks. The combination between the two, however, has to allow an independent operation of the equipment, so as to prevent blocking from one type of equipment on anothers operation. Transfer points, both on waterside (between straddle carriers to RMG) and landside (between RMG to trucks), must be located in such ways to give flexibility in handling containers. Containers that are stacked on the high density stack (HDS) are those which are likely to stay longer in the terminal (slow movers). The location of the HDS in the terminal, therefore, will be most suitable to be fixed at the further part from the quay. As another reason, the land closer to the quay is more valuable, hence it will be appropriate to locate straddle carriers stacks which offer fast handling on loading and discharging containers to and from the vessels. Due to the capability of RMG to stack containers higher, an additional yard capacity of the container terminal will be increased significantly. The berth capacity, on the other side of terminal, should also be adjusted to the incremental yard capacity. Quay crane productivity should be able to accommodate more crane moves, which are needed when more containers are to be handled in the terminal. The performance of berth capacity, usually measured in number of moves per year, is determining the productivity of the terminal or, in other words, limiting the number of containers that can be handled each year. Yard capacity is easier to be upgraded by increasing the number of terminal ground slots (TGS) and stacking height, but berth capacity has a stricter limitation. The number of moves that can be accommodated through the quay highly depends on the crane productivity, which normally ranges between 27 and 33 moves per hour. The berthing schedule of the terminal is also influencing the maximum berth capacity a terminal can have. 6 It is the call size of the vessels, both loading and discharging for deep sea vessels and barges, which eventually determine the highest quay moves possible to be handled with the maximum number of cranes in a limited length of quay. It is however believed that employing more than one crane per 100 meter will be inefficient for the operation, as two cranes side by side will overlap each other.

2.5.

Personnel

Dekker (2004) stated that dedicated personnel are vital for successful operations and therefore, the cooperation between terminal management and workers

A berthing schedule is basically a timely window schedule for vessels to be berthed on the quay, informing how many hours and how long of quay will be occupied in the loading and discharging process (usually a berthing schedule is planned in a weekly basis and measured in number of moves of loading and discharging).

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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is important. Strikes can be highly costly, which is why the trust between the two parties is invaluable. The number of personnel required for the whole process in the terminal operation will eventually sketch the amount of labor cost budgeted for the following years. Labor cost has always been one of the highest percentages of the total operating costs of the container terminal, and therefore, an optimization of the number of personnel should be configured to avoid low utilization of the personnel or, in other words, an over investment in labor cost. As a base for the calculation of the number of personnel needed in the terminal, a ratio between the number of equipment and personnel needed to operate the whole system, as well as for maintenance and repair processes, needs to be analyzed. Depending on the terminal management, the ratio can be made for each type of equipment or, instead, linked between the types of equipments. For example, one Ship-to-Shore (STS) crane needs two waterside straddle carriers (SC) and three landside SCs, etc. Furthermore, one STS crane can be associated to the employment of, for example, 40 personnel including the STS crane personnel, SC drivers, empty handler personnel, reefer mechanics, personnel in the control room, technical department, security, maintenance and repair, and white collars. In addition, scheduling a shift for the blue collar workers is important, since the container terminal is likely to be more efficient if it operates 24 hours a day, 7 days a week. A working time of 8 hours per day is considered to be the maximum one person can do, therefore, a 3-shift-per-day operation should be the optimal condition for labor allocation. Several break times should also be provided at regular times. However, scheduling personnel is not easy, as there are so many time varying and uncertain operations, during day and night time (Dekker, 2004). A computerized personnel rostering may allow flexibility for the personnel.

2.6.

Terminal Expansion

There are basically three stages of all decision processes taking place in a container terminal, namely strategic, tactical, and operational. I the strategic level, it is n generally more costly to modify and the consequences brought by the decision last for a longer term, i.e. choose the type of container handling equipment and deciding the terminal yard lay out. Terminal operator might, to some extent, gain flexibility from the operation in the tactical level, i.e. deciding how to store the containers in the stacking yard. In the operational level, however, one will have to foresee what are the actual daily requirements needed and, based on these, technical operation is to be planned, i.e. where to store a certain container. (Vis and Koster, 2003). Due to the limitation in financial power, terminal operator should prioritize the segment which is most importantly needed to be expanded. One segm ent is related to each other and, therefore, should be balanced in terms of capability and efficiency to

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

cope with the improved performance of the expanded segment. The most important three segments are berth, yard, and hinterland. The first two segments are researched by this thesis, while the latter is considered to be highly flexible to the performance of the terminal CT. As far as expansion is concerned, there is no exact solution for each container terminal, because the basic considerations can be different depending on the characteristics of the terminal and problems faced by the operator. The initial condition of the terminal is, therefore, important in assessing what expansion is needed the most. Subsequently, future performances should be predicted as an indicator of success. An idea to modify the terminal to improve the productivity is in fact a choice of investment. The Net Present Value (NPV) method is considered to be the best way to carry out such an assessment. According to this method, a project with the highest NPV is worth implementing to secure profitable return for the company, taking into consideration the initial cash outlay and a reasonable payback period. Several bases in deciding the best investment, however, can refer to different solution i.e. the one with the highest ROI might not be the project with the shortest payback period. Furthermore, we will analyze whether the alternative with the lowest cost of operating on a per move basis correspondingly offer the highest NPV, as this is not always the case. If the proposed alternative with the least cost of operating is not the one with the highest NPV, further assessment shall be taken based on the main objective of the terminal expansion, between the least cost of operating or the highest return it will achieve from the project. In Section II.6 a thorough financial analysis that is used in the thesis will be provided. On the operational side, modifying a container terminal may mean adding equipments and changing the terminal layout. Considerably, each alternative will require different sets of equipment and layout of the terminal. The additional investment on equipments and constructing infrastructure should then be taken into account. Furthermore, the lead time of implementing such project will have an impact on the terminal operation as the capacity of the terminal will be lowered during construction. A short lead time of the project is therefore more convenient for the existing terminal operation. Kozan (1997) added that there should be a balance between capital investment and operating costs in order to find the optimal investment program for a terminal. Choosing one type of equipment instead of the others, and determining the layout construction as well as the time phasing of the lead time, should aim at optimizing the use of expensive resources. The analysis for container terminal expansion in Australia was started by specifying a number of predetermined alternatives for expansion of the present terminal capacity, and further by identifying the alternative expansion plan which gives a fair trade off between the cost of investment and the operating cost of the terminal. Different alternative of investment decisions result in different amounts of costs, which will be needed to be drawn at different time periods during the planning

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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horizon. The best strategy will be the expansion alternative that provides either the highest present value of net benefits or the lowest present value of the total costs over the planning perspective (Kozan, 1997).

2.7.

Operational Consequences

Delays and congestions in the inflows and outflows of containers usually root from the insufficient productivity of the terminal, which is a result from several reasons. Accurate and reliable information from the carriers play important role in the configuration of terminals planning. This complete information, however, might not always be available. Terminal operator therefore has to have excess capacity to gain flexibility in stacking and, at the same time, facilitate a productive operation. Modifying a container terminal by expanding terminal area as well as adding equipments and changing the operation or the terminal lay out is likely to result in some positive implications to the performance of terminal operator. The main indicator for the improvement of the terminal is usually measured in terms of annual container moves that can be handled by the terminal operator. The most logical reason behind the increased capability of the terminal will certainly be the added capacity of the stacking area and the balance between yard and berth capacity, as far as container handling is concerned.7 An increased number of volumes that can be handled by the terminal are, by definition, the objective of any expansion project. Container terminals operation is highly expensive and one move done by the terminal equipment cost significantly, therefore, a low cost of operating on a per move basis is necessary. Modifying a container terminal, however, does not necessarily result in a cheaper cost per move. In addition, it might take some time for the workers to adapt to the changing operation of the terminal. A decision to expand the terminal must therefore favor all aspects, mostly that of the economical side. Each alternative that are considered to be implemented in the container terminal has to be investigated properly, between the upside and downside potential of such a change in operation. The likelihood of success, additionally, should be assessed so as to enable the decision maker to choose the best solution of the expansion project. The impacts of such an investment will normally be realized in the long term; therefore, every possibility that might happen in the operation should be taken into consideration. The literature review in the above operational aspects have provided a good structure to understand how a real container terminal should ideally be, in terms of designing the terminal layout and operating equipments especially under high pressure of estimated future demand. Several projected expansion alternatives that will be described later in the field research should have basically been carried out in line with what the literature review suggested. The terminology used in the CT real data and case study is however not completely the same with what most findings and previous
7

The maximum berth capacity has normally become a strict limitation to the terminal volume, and accordingly, this should be looked upon when one is to expand the yard capacity

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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researches use, i.e. instead of quay cranes (QC), CT uses the term Ship-to-Shore (STS) crane. Information about yard capacity is however restricted because it is mostly consultancy knowledge, which means it is highly dependent on a certain configuration and condition of the container terminal, especially that of the yard layout. Due to the limitation of time, it is not possible to run any simulation of the utilization of the stacking yard. Instead, the terminal utilization is calculated under several assumptions. In the next section, some financial theories about assessing investment possibilities will be provided in order to give the understanding of the financial basis calculations that are to be carried out of the field research. The financial theory will further explain which method that should be prioritized upon the others, since one financial method may refer to different solution with other methods recommendation.

2.8.

Financial Considerations

Terminal expansion usually requires a lumpy sum investment. A wrong investment decision may result in a disastrous outcome for the terminal operator. Hence, a proper cost and benefit analysis should be performed before the final decision is taken. Meersmans and Dekker (2001) added, due to the huge investment costs in terminal, increased productivity will lead to large cost savings for the terminal operator. There are some investment criteria that we can use when we are to implement a project, in order to ensure that the resources we are spending in investment will bring the best result in the future. The most commonly used Net Present Value (NPV) method is an investment criterion that predicts the value an investment will result in, by discounting the generated free cash flows with the cost of capital, taking into account the initial investment. A positive NPV is considered to be worth implementing (Brealey et.al., 2004). Mills (1994) added that the calculation of NPV is carried out by discounting future net cash inflows to a gross present value and then deducting the outlay.

NPV =
t =1

Xt Y (1+ WACC ) t

Where: T = time horizon (years) Xt = operating cash flow at year t Y = initial investment (capital outlay) WACC = Weighted Average Cost of Capital8 The Internal Rate of Return (IRR) method is often used together with NPV as both are based on the same principle. IRR is the rate which equates the gross
8

The WACC (Weighted Average Cost of Capital) is an appropriate discount rate for the cash flows and it is the required return of the terminal as a whole.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

present value of a project, with the capital outlay associated with the investment opportunity (Mills, 1994). According to Brealey et.al.(2004), IRR aims at investing in a project with a rate of return higher than the opportunity cost of capital. At the edge, IRR is the rate of return which results in a zero NPV. IRR may, however, refer to wrong decision when NPV increases as discount rate increases.

NPV =
t =1

Xt Y =0 (1 + IRR)t

Where: NPV = Net Present Value T = time horizon (years) Xt = operating cash flow at year t Y = initial investment (capital outlay) IRR = Internal Rate of Return Besides NPV and IRR, some other criteria have their own advantages. The ROI (Return on Investment) method is often favorable in managerial decision as it is easy to understand. Understandably, a high ROI means a high return the company will get by investing in a project. The net income of the company, however, is not always a reliable measure of financial performance. Therefore, ROI might fail in determining the success of an investment.

ROI t =

NIt Invt

Where: ROIt = Return on Investment on year -t NIt = Net Income after tax on year t Invt = Investment on year -t The last, but not least important, investment criterion is the payback period, during which the total investment is being paid back by the accumulating cash inflows of the company. A project with payback period below a certain cutoff period is considered to be a suitable investment of the company. Mills (1994) added that the payback period has an advantage over other methods because it is relatively simple to calculate, understand, and implement.

Payback period =

Cost of Investment Annual Cash Flow

There is however some weaknesses in using the payback period as an assessment tool for an appropriate investment project. Firstly, the analysis does not consider any cash flows that arrive after payback period (Brealey et.al., 2004). Secondly, it does not consider the time value of the money (it gives equal weight to all cash flows). As a result of these weaknesses, payback period method could lead to a

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

wrong investment decision. For example, a project with negative NPV can have the same (or shorter) payback period than a project with positive NPV. We can then conclude that several financial methods can be carried out to assess a good investment on the container terminal. The objective of t e terminal h management is by definition the key driver on deciding which financial aspect to prioritize. For example, if the terminal management mostly cares about when the investment will get paid back by the revenues, then the payback period should be prioritized. On the other hand, if we want to know how big the return of the investment is in terminal expansion, it is the ROI that should be prioritized. The same goes for IRR and NPV, which should be prioritized if the terminal management cares about the value of such an expansion project. If all financial methods mentioned above refer to different solution, however, it is the NPV that would normally be the safest method to choose the most profitable investment for CT.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Chapter 3. FIELD RESEARCH


In this chapter, the description for each alternative of the expansion project will be provided, after a brief explanation of the initial condition in CT and some challenges that CT faces in its current operation. Several assumptions regarding the operation, equipment, personnel, yard and financial figures have to be clarified because the dynamic situation in operating container terminal is likely to change throughout the year. However, these assumptions are considered to be the most representative of CT operation as per 1 January 2006.

3.1.

Initial Condition of a Container Terminal

CT is considered to be a conventional container terminal because it operates its equipments manually, namely Ship-to-Shore (STS) cranes, straddle carriers (SC), and empty handlers (MTH). The current area of CT is also called a straddle carrier operating terminal, because these equipments (SC) are dominantly used to transport containers between the STS cranes and container yard, as well as to stack the containers in the yard. Container terminal CT is located in Northern Europe and, as per 1 January 2006, its present terminal occupies 4 areas, denoted with area A, B, C, and D. The coverage of the current land areas is presented in Table 1.
Table 1. Land Areas
Area Terrain A Terrain B Terrain C Terrain D Total
Source: Terminal Development Department, CT

374,460 141,311 168,927 192,479 877,177

An option to expand the terminal yard can however be realized in 2007, after which CT will have an additional Area E. Together with the gate areas, the total expanded land coverage that can become CTs operational areas is shown in Table 2.
Table 2. Total Expanded Land Areas
Area Terrain A Terrain B Terrain C Terrain D per 1 September 2005 Terrain E per 2007 Additional gate area (per 1 June 2005) Terrain F (pre-gate) Total
Source: Terminal Development Department, CT

374,460 141,311 168,927 192,479 80,260 20,000 23,289 1,000,726

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Figure 6. Separation of CT Land Areas


Source: Terminal Development Department, CT

In 2014, however, CT is considering a complete move to a totally new area in the port. By that time, therefore, there is a possibility that all the equipments will be depreciated or reused for the new area. The new area might be a completely RMG operating terminal, hence, all straddle carriers are not likely to be reused. With regards to the operational point of view, CT has been serving important clients for five years. The growth of the terminals volume during 2003-2004 was relatively stagnant, due to the high utilization of the terminals yard, see Table 3 below. Any further growth of the volume might cause a serious gridlock of the operation.
Table 3. Growth in CT Volume Period 2003-2004
Container 2003 Deep sea imp/exp Transshipment Road Barge Rail ITT Total Growth 574,581 128,419 239,742 175,538 102,767 10,862 1,231,909 2004 474,671 198,898 265,036 178,089 109,824 9,432 1,235,950 2003 959,550 214,460 400,369 293,148 171,621 18,140 2,057,288 TEU 2004 792,701 332,160 442,610 297,409 183,406 15,751 2,064,037

0.33%

0.33%

Source: Terminal Development Department, CT

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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3.1.1.

Container Moves

The container moves split in CT that are used for the case study were based on the type of moves and container visits in the year 2004. One container has basically two moves, coming in and out of the terminal. The incoming and outgoing of containers to/from vessels are categorized to be deep sea import/export moves, excluding those import containers which are transported again by deep sea vessels (so called transshipment moves or TS). The total moves over quay then comprise deep sea import/export moves (by vessels and also short sea shipping by feeders), barge moves, and transshipment. The road, barge, rail and ITT moves are categorized as those moves which go into or leave the terminal by such means of transport. ITT is an abbreviation of Inter Terminal Transport, which are moves by internal transportation from one terminal to another when containers are loaded at one terminal and discharged at another. Rail moves are those transported to and from hinterland by rails which, in case of CT, are operated by a neighboring rail-operating c ontainer terminal. A simplified container flow to and from the terminal can be seen from the table below. From the terminal data collection for year 2004, the transshipment ratio is approximately 16% of the total moves. The transshipment moves are however calculated twice, one when containers are discharged from the vessel and the other when they are loaded to another vessel.
Table 4. Container Moves in 2004
Year 2004 Deepsea imp/exp Transshipment Road Barge Rail ITT Percentage Total Container Moves 474,671 198,898 265,036 178,089 109,824 9,432 1,235,950 TEU
9

% Total 38.4%

% DeepseaLand 54%

% DeepseaTS 70% 30%

% Land

Without TS 474,671

792,701 332,160 442,610 297,409 183,406 15,751 2,064,037

16.1% 21.4% 14.4% 8.9% 0.8% 100% -

46%

100% 1,235,950

100% 673,569

47% 32% 20% 2% 100% 562,381

562,381

1,037,052

Source: Terminal Development Department, CT

In addition, a significant percentage of the modality split can be seen in the road moves although this portion had been slightly decreasing during the first half year 2005. On the other hand, the amount of barge moves is predicted to be at least increasing by 10% in the next 5 years. A prediction of the increasing volume in barge operation has become a basic consideration of the terminal to expand the dedicated quay for barge services. Deep sea volume was normally the highest priority of the terminal; however, additional barge
9

TEU factor for 2004 figure is 1.67

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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capacity would be able to absorb the budgeted volume measured in barge moves. Together with deep sea moves, barge capacity constructs the volume growth of the terminal10.

3.1.2.

Berth Capacity

As per 1 January 2006, the terminal is operating with 11 ship-to-shore (STS) cranes and 1 barge crane. The productivity of the cranes influences how high the terminal can utilize the berth, hence affects the pro forma berthing schedule that the terminal can have. Three most realistic pro forma berthing schedules are presented on Appendix 1-3, based on the crane productivity of 27, 30, and 33 moves/hour. The maximum berth capacity for each scenario is basically calculated from the total discharge and load moves of all vessels that are served weekly under such schedule. For barge moves, according to the first half year 2005 data, it is estimated to be 32.5% of the total load and discharge moves (excluding barge). The total move per year, the so called maximum berth capacity of such berthing schedule, is then the sum of load and discharge moves including barge per week times 52. There are three main berth scenarios which might be sufficient in giving realistic performance of the cranes. In a conservative scenario, the ship-to-shore (STS) crane, together with the barge crane, allows a maximum berth capacity of 1,950,000 crane moves (2,100 TEU/m) based on the current gross productivity of 27 moves/h per crane.11 With the high, but realistic, scenario of 33 moves/h per crane, it allows a maximum berth capacity of 2,230,000 crane moves (2,400 TEU/m). The scenario based on a current productivity 30 moves/h per crane allows a berth capacity of 2,100,000 crane moves (2,250 TEU/m). The full calculations of the maximum berth capacity for each scenario are attached on the Appendix 4 up to Appendix 6. The berth capacity itself will be the most important limitation of the terminal capacity expansion. A crane per 100 meter is considered to be the largest number of quay crane that the terminal can have, otherwise there will be a risk that two units of side-by-side cranes collide each other. Therefore, a maximum of 16 cranes, both STS and barge cranes, can be implemented in the 1,600 meter quay of the existing terminal area, covering option A, B,C, and D. The new option E, which might be realized in 2007, will not be sufficient to accommodate n berth. Hence, the quay length will ew remain the same during the period 2006-2014. In Section 4.5, however, some analysis in operational impacts to the terminal will be presented, in case the Board of CT decided to build a berth for feeder and barge at option E which will therefore add an additional 430 meter of quay.

10 11

Measured in crane moves and later can be translated in TEU (Twenty-foot Equivalent Unit) A crane move is assumed to be barge, feeder, or deep sea move

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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3.1.3.

Yard Capacity

The yard capacity is measured as the total TEU visits that can be accommodated by the terminal, based on the available terminal ground slots (TGS), taking into account the average dwell time (the days within which containers are stored in the terminal), peak factor (a factor of which the highest volume of container moves might be realized by the terminal), stacking height (how high the containers are stacked for each type of container), and stacking density (how h eavily is the container yard being utilized).
TEU visits = TGS x Stacking Density x Stacking Height x 365 (days) Dwell Time (days) x Peak Factor

This TEU visits are not necessarily the amount of containers that can be handled by the terminal, because not all containers are 20 feet containers. Therefore, the TEU factor (the ratio between the number of box and the number of TEU) should be taken into account.
Container visits = TEU visits / TEU factor

Figure 6. Initial Terminal Layout


Source: Terminal Development Department, CT

Amount of ground slots: - Dry vans = 13214 TGS - Reefers = 564 40 GS (14 reefer racks @129 slots) - Empties = 910 TGS
Table 5. Current Yard Capacity TGS Dwelltime Peak MTY 910 Reefer 1,128 5 1.24 DV 13,214 Total 15,252

Capacity 80%

Stack height TEU visits TEU factor 7 300,006 3 159,375 1.72 2.5 1,555,842 2,015,224

Cntr visits 174,422 92,660 904,559 1,171,642

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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In terms of the number of container moves, with the current transshipment ratio of 16%, a maximum of 2,343,461 moves can be accommodated annually, which are the sum of maximum deep sea moves, barge, road, rail and ITT moves.
Max deep sea moves
12

= Max TEU visits x 2 (load and discharge for transshipment) ( 2 Transshipment ratio ) x TEU factor

The estimated barge, road, rail, and ITT moves, are calculated based on each modalitys percentage to the deep sea moves, for example, from first half 2005 data, the estimated barge moves are 32.5%, road 33.7%, rail 15.9%, and ITT 1.9% of total deep sea moves.

3.1.4.

Equipment Capacity

As per 1 January 2006, there are 1 barge crane, 11 STS cranes, 23 units 3high straddle carriers (SC), 41 units 4-high straddle carriers, 3 empty handlers (MTH), with no RMG as the terminal operates as a complete SC terminal. The 3-high straddle carriers can stack one over two containers and the 4-high ones stack one over three. The characteristics of the terminal equipments are discussed in the main assumptions in Section III.4. A use of RMG might become the best alternative to carry out the expansion project, in accordance with the employment of the HDS (High Density Stack) in container yard. The CT operator has decided, however, that the terminal will have 16 STS cranes in total, which will be gradually added two by two to minimize transport cost. As such, the investment on the additional STS cranes will not be influenced by the volume growth in the coming years. With regards to the straddle carriers, only for the full 4-high SC expansion alternative, the 3 H SC will be changed to 4 H SC when they are fully depreciated (7 years after the purchase date). In other alternatives, the 3 H SC will still be used because a mixed 3 and 4 H SC will be operated and therefore, no additional 4 H SC should be invested to change the 3 H SC after their full depreciation (the 3 H SC will still be used).

3.1.5.

Labor

As per 1 January 2006, the terminal is employing 370 stevedores, 11 empty handler drivers, 24 reefer personnel, 44 mechanics, and 158 white collar workers. With the expansion of the terminal, more workers might be needed to operate; with an exception for the two alternatives of using RMG cranes which will introduce automation to the terminal.

12

Maximum deep sea moves is including transshipment, calculated as two moves for transshipment, and once for deep sea import or export. Therefore the formula has to take the transshipment ratio into account.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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The number of blue collars required in the container terminal each year highly depends on the growth in volume, in line with the increasing number of equipment needed. An increase in salary of 5% annually should be taken into account when the terminal is to allocate the labor cost into the budget. The number of white collar increase with 5% annually until the number of personnel when maximum yard capacity of the terminal is reached.

3.1.6.

Hinterland connection

As per 1 January 2006, there are 30 grid lanes for trucks, which are currently added in order to prevent congestion in containers hinterland connection. A Truck Appointment Management System (TAMS) is also to be implemented in the near future. Furthermore, according to Spasovic (1999), automated terminal gates can be considered to alleviate truck congestion. Regarding the rail transportation, the terminal does not have its own infrastructure; therefore, containers that are to be transported by rail will be transferred to another terminal which has the access to rails. The construction of own rail infrastructure will be heavily costly, in addition, the Port Authority has appointed the existing rail operator to aggregate all rail moves to and from the terminal. As mentioned before, the barge capacity is being expanded although no additional barge crane will be included in the investment. Instead, any ship-to-shore (STS) crane can be allocated for serving barge if necessary. The berth length dedicated for barge is expanded up to 400 meter of the quay. The barges are operated outside the berthing schedule, in addition, it is utilized as high as 32.5% of the total loading and discharge moves.

3.2.

Challenges in Operation

With the current situation of the terminal, there are some challenges to be faced in the near future. The three main challenges are the future growth of demand for the container terminal, the sub optimal efficiency of the current operation, and the fluctuating rate of operation. Each aspect is very important and will be discussed below.

3.2.1.

Future Growth of Demand

The customers of the container terminal can basically be separated into two groups, the first one being a large shipping carrier CX who dominates 80% of the total terminals volume and the rest 20% are a joint of several carriers.13 CX has confirmed that they will continue to expand their operation with an estimated growth in volume of

13

CX is not the real name of shipping carrier mentioned

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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15% annually. During the first half year of 2005, the Terminal Development Department of CT also predicted an increase of 15% for the other group (third party). The expanding operation of shipping carrier implies a larger volume of containers loaded to or discharged from vessels calling at the terminal CT. A prediction of volume from 2006-2014, regarding number of moves which have to be handled as well as number of throughput in TEU is presented in the table below.
Table 6. Projected Volume Development 2005-2015 (15% increase)
(x 1,000) Deepsea total CX 3rd party Road Barge Rail ITT Total moves Total TEU Over quay Over quay (TEU) 2005 784 679 105 264 255 125 15 1,443 2,481 1,039 1,787 2006 882 762 120 297 287 140 17 1,623 2,791 1,169 2,010 2007 1,014 876 138 342 330 161 19 1,866 3,210 1,344 2,311 2008 1,166 1,007 159 393 379 185 22 2,146 3,691 1,545 2,658 2009 1,341 1,159 183 452 436 213 25 2,468 4,245 1,777 3,057 2010 1,542 1,332 210 520 502 245 29 2,838 4,881 2,044 3,515 2011 1,774 1,532 241 598 577 282 34 3,264 5,614 2,350 4,043 2012 2,040 1,762 278 687 663 324 39 3,753 6,456 2,703 4,649 2013 2,346 2,026 319 790 763 373 44 4,316 7,424 3,109 5,347 2014 2,697 2,330 367 909 877 429 51 4,964 8,537 3,575 6,149

Source: Terminal Development Department, CT

The 2005 and 2006 volumes above are the actual (budgeted) volumes, and are further increased by 15% to obtain the 2007 volume, and then 2008 volume, etc. CX dominates 80% of the total volume and the rest of 20% volume belongs to the 3r d party. The road, barge, rail and ITT moves are calculated based on the split between those modalities , which are 33.7%, 32.5%, 15.9%, and 1.9% to deep sea moves respectively. The total moves calculated at the table above are the sum of all moves, including deep sea, road, barge, rail, and ITT moves. The total TEU can then be calculated by multiplying the total moves with the TEU factor, which is 1.72. The term volume over quay, measured in moves, is however the most popular way to express volume in CT because the berth capacity is considered to be the strictest limitation of the terminal capacity. Volumes over quay (quay moves) are the sum between the deep sea moves and barge moves (which are then 1.325 x deep sea moves). From 2010, nevertheless, the quay moves will not be fully accommodated by the CT under low scenario where they can only perform a berth productivity of 27 moves/hour (a maximum of 1,950,000 moves annually). As such, the demanded TEU over quay of 3,5 million TEU cannot be fully met by the limited berth capacity. Under a current productivity of 30 moves/hour, or the aggressive scenario of 33 moves/hour, the demanded volume of CT can be accommodated only before year 2011, after which a total of 2,350,000 quay moves cannot be fully handled by CT. This

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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means, no matter what the expansion project brings to the yard capacity, the 1600 meter berth will always be the limitation of CT where, at latest, in 2011 the maximum terminal volume will be reached.

3.2.2.

High Utilization of the Future Operation

The utilization level of the yard had been heavily influenced by the yard (stacking) capacity of the terminal and the dwell times of the containers. As in 2004, the average yard utilization of the terminal had reached approximately 80%. Major problem would be faced under such high utilization, i.e. congestions, therefore, additional capacity has been provided in order to increase the number of available slots in the yard. In early 2005 the yard capacity has been improved further, however, an average of 73% utilization level during the first 27 weeks has been realized. Furthermore, with regards to the future predicted volume growth of CX, the CTs biggest client, an even higher yard utilization level is likely to be reached in the near future. The need to expand the terminal has been materialized accordingly, in order to put additional capacity to the yard and prevent congestions especially after foreseeing the fast pace of the terminal demand in the following years to come. The yard utilization of the terminal during the period 2004 up to mid 2005 can be seen in the graph below, being compared with the total available slots of the stacking yard, and measured in percentage.
Yard Utilisation 2004/2005
Yard Utilisation 2004 100 95 90 85 80 Yard Utilisation 2005 Total Available Slots 2004 Total Available Slots 2005 26,000 25,000 24,000 23,000

75 70 65 60 55 50 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53

21,000 20,000 19,000 18,000 17,000 16,000

Week

Figure 7. Yard Utilization 2004-2005


Source: Terminal Development Department, CT

3.2.3.

Fluctuation Rate in Operation

There are a lot of issues that can be the reason of the highly fluctuated rate of operation in the CT. The main issue is the fluctuated rate of operation of the shipping carriers who use the service of the terminal and automatically influence the stability of the terminal demand throughout the year. It is then the fluctuation volume, measured in

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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TEU

22,000

Container Terminal Expansion to Build Capacity: A Case Study

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load and discharge moves, which should be accommodated by the terminal every time the same vessel is served. During the last few years, the Chinese boom has become a main driver of the shipping industry and, therefore, the peak in the terminal is also influenced by the Chinese activity. There are, unavoidably, several times of the year when production level is high or surprisingly low, for example during the Chinese New Year where labors are having holiday. For example from the graph below we can see that every week 8-10 the volume drops to the lowest peak and then goes straight above when the Chinese factories have started operations again. In the graph we can also see that the rate of operation in CT during period 2002 to 2005 has fluctuated following an irregular pattern. Furthermore, CT, as well as other container terminal, experienced fluctuation throughout the day. The peak time for each terminal can be different, mostly influenced by the arrival pattern of trucks and other hinterland modalities. To cope with the fluctuation issue, an expansion project to add capacity aims at increasing the terminal available slots in such ways that even at the peak times of year, the demand of the terminal can be met as close as possible.
Volume comparison 2002-2003-2004-2005
18,000
Budget2005 Volumes2005 Volumes2004 Volumes2003 Volumes2002

16,000

M v sp rw e oe e ek

14,000

12,000

10,000

8,000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

Week

Figure 8. Terminal Volumes 2002-2005


Source: Terminal Development Department, CT

The three major challenges which have been discussed above have ensured the CT operator to implement a suitable expansion project as soon as possible, to absorb as much volume as the expected demand in the coming years. Accordingly, the plan of the expansion project has to be prepared carefully, namely the berth and yard capacity of the terminal. At the later stage, all the assessments regarding the expansion projects will have to be carried out according to some assumptions, although in fact these might not always be true, i.e. the price of a new STS crane might change. However, all the assumptions are made based on the latest data observation.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

3.3.

Plan of Expansion Project


The two main objectives are to:

a. maximize berth capacity, under three scenarios: - A conservative schedule, based on gross productivity of 27 moves per hour per crane, allowing a max berth capacity of 1.950.000 crane moves14 (2.100 TEU/meter per year). - A realistic schedule, based on the current and realistic 30 moves per hour per crane, allowing a max berth capacity of 2.100.000 crane moves (2.250 TEU/meter per year). - An aggressive schedule, based on a higher but achievable 33 moves per hour per crane, allowing a max berth capacity of 2.230.000 crane moves (2.400 TEU/meter per year). b. maximize yard capacity, under five alternatives: - Continuation of mixed 3 & 4 high straddle carriers (SC) operation - A mixed 3 & 4 high SC operation with a new yard layout - A full 4 high SC operation with a new yard layout - A mixed 3 & 4 high SC operation and a high density stack (HDS) parallel to quay side, with an expanded area E to be realized as a stacking yard - A mixed 3 & 4 high SC operation with up to three HDS perpendicular to quay side, with an expanded area E to be realized as a stacking yard

3.4.

Main Assumptions
The calculation in this thesis is based on the following assumptions:

- Operational o Full usage of the terminal capacity with a maximum berth length and container yard area o External factors, s uch as dwell times, transshipment ratio, external trucks arrival, berth planning, etc. will not change over the considered period o The conservative maximum berth capacity is 2.100 TEU/m/yr (1.950.000 moves/yr) o The realistic scenario for maximum berth capacity of 2.250 TEU/m/yr (2.100.000 moves/yr) o The aggressive maximum berth capacity is 2.400 TEU/m/yr (2.230.000 moves/yr) o Operational maximum crane is 16 (1 per 100 m berth), in any case additional cranes are included in the investment, 2 cranes each to safe transport cost o Peak factor of 1.24 o Average dwell time of the containers to be 5 days o Stacking yard capacity to be 80%
14

A crane move is defined as a barge, feeder or deep sea move

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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o o o o o o o

TEU factor to be 1.72 All housekeeping is performed outside peak hours SC can be completely pooled Fuel consumption is related to total volume Power consumption is related to waterside moves The empty stack is included in all scenarios Area Option E (if realized) will not be constructed as a berth and only used as stacking yard

- Equipment o Straddle Carrier (SC) Number of SC is determined by the number of STS crane used. For waterside a ratio of SC/QC of 3.3 is used, and a ratio of 2 for landside Investment per 3-high SC is 650.000 Investment per 4-high SC is 730.000 9.1 moves/hr for waterside 7.9 moves/hr for landside 10% inefficiency due to M&R (Maintenance and Repair) Depreciation time: 7 years o Ship-to-shore (STS) Crane Investment per STS crane 6.875.000 One STS crane handles 130.000 deep sea moves/yr Steady rise from 27 moves/hr (currently) up to 35 moves/hr in 2009 10% inefficiency due to M&R Depreciation time: 15 years o Barge Crane Investment per barge crane 4.500.000 One barge crane handles 130.000 barge moves/yr Steady rise from 20 moves/hr (currently) up to 25 moves/hr in 2009 10% inefficiency due to M&R Depreciation time: 15 years o Rail-Mounted Gantry (RMG) Crane Investment per RMG Cantilever 3.700.000 Number of RMG is based on the landside peak Investment RMG civil works is 9.600/m One RMG handles 14 moves/h Depreciation time: 15 years o Empty Handler (MTH) Investment per MTH 200.000 Number of MTH is increasing gradually up to a maximum of 6 in total 10% inefficiency due to M&R Depreciation time: 15 years

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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- Financial o Starting date of analyzed costs and profits is 1 January 2006 o The investments are not calculated separately, but as an integrated part of the terminal operations. As such, Return on Investment (ROI), net results, and investment/yr are calculated. o Cost and benefit of service, operations, equipment, and labor remain the same as end 2005 and will only be compensated for inflation o Continuation of straddle carrier operations, either by expanding the amount of SCs or combining SC and RMG, creates the best ROI o All investments are surcharged with 5% additional costs (i.e. adjustment infrastructure, power, etc.) o Total investments have been increased with 5% as reserve o Annually 5% of cumulative investments are invested to maintain business - Personnel o Blue collars staffing is determined by the number of cranes, 31 persons/crane, which is the ratio used in the budget 2006 o Mechanics staffing is related to the amount of equipment o Reefer mechanics is related to the volume of reefer o White collars staffing is budgeted to increase with 5% until the maximum yard capacity of each alternative is reached - Yard o Empty (MT) stack size is referring to 2004 situation: current MT volume / area used o Reefer racks are referring to 2004 situation: current reefer volume / number of racks (Depreciation time: 10 years) o 1 reefer rack is 3-container high and holds 129 reefer slots o Enhancement of the yard (driven piles of foundation) for RMG dense stacking will cost approximately 2,500,000 per 250 m or 1000 per m o Number of grid lanes is referring to 2004 situation: current truck volume / number of lanes (Depreciation time: 10 years)

3.5.

General Description of Each Alternative

As per 1 January 2006, the terminal CT is operating with a mixed 3 and 4high straddle carrier (SC). Each alternative for the expansion plan will be discussed below, which mainly differs in the use of terminal equipment and layout. These differences result in different number of TGS that the terminal can have. Furthermore, the amount of TGS will influence the number of container visits, together with the average dwell time of the containers, peak factor, stacking height and stacking density of the storage yard. Subsequently, the growth in volume each year will dictate the required additional equipments to provide productivity, coping with the predicted demand of the terminal services in the coming years.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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3.5.1.

Mixed 3 and 4-high SC

The first alternative is to keep the mixed 3 and 4-high straddle carrier (SC) operation, aiming at continuing the existing container handling system and keeping the productivity of the terminal by adding new, but similar type of equipment, which are 3 and 4-high straddle carriers. There will be little changes in the terminal layout from the current operation, as the stacking yard area in the western part of the terminal will be dedicated to reefers. The amount of terminal ground slot (TGS) for empties will remain the same as the initial layout. The dry vans TGS will be reduced as a consequence of the additional reefers slots, taking away some TGS for dry vans.

Figure 9. Layout of the Mixed 3 and 4-high SC Alternative


Source: Terminal Development Department, CT

Available ground slots - Dry vans: 12620 TGS - Reefers: 754 40GS - Empties: 910 TGS The slight difference in lay out mainly changes the number of TGS for reefers and dry vans, and consequently will alter the maximum yard capacity which can be accommodated by such a configuration. The average dwell time of the containers, peak factor, stacking height, and stacking capacity will, by definition, influence number of moves that can be handled by the terminal.

3.5.2.

Mixed 3 and 4-high SC with New Layout

The second alternative is to keep the existing SC operation with a mixed 3 and 4-high straddle carriers in order to maintain the operating system for the terminal. A change in the stacking yard is aiming at improving yard capacity which will be reached by a wider stacking lane. The four thin lanes will become three wider ones and, consequently, one horizontal street for SC between two lanes is to be diminished.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Some investment on quay and barge cranes will be taken into consideration, in order to maximize the berth capacity which can be handled by the container terminal. A maximum of 16 cranes along the 1600 meter quay, however, remains to be the limitation. The maximum yard capacity, measured in number of moves, will depend on the number of TGS available with such a lay out, as well as the stacking height of each type of container, average dwell time of the containers, peak factor, and storage capacity.

Figure 10. Layout of the Mixed 3 and 4-high SC with New Layout Alternative
Source: Terminal Development Department, CT

Available ground slots: - Dry vans: 14466 TGS - Reefers: 754 40 GS - Empties: 910 TGS

3.5.3.

Full 4-high SC with New Layout

The third alternative of the expansion project is to fully operate the terminal by a 4-high straddle carriers operation. All 3-high straddle carriers will be fully depreciated in 2007-2009. The new layout of the terminal will add the capacity of the stacking yard, because a wider area of each stacking block can store some additional containers. In addition, the stacking height will be higher due to the ability of the 4-high SC to pass a container over 3 containers stacked in one TGS. This alternative is considered to bring advantages in the implementation, in the sense that the 4-high straddle carriers operation does not change the main characteristic of the terminal, especially the container handling system for the stacking area. Investment on STS cranes, however, will still be allocated in the budget for the project in order to maximize the berth capacity. With the same lay out as the previous alternative (the mixed 3/4 high SC with the new lay out), the yard capacity for this full 4 high SC alternative will be much

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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higher, due to the higher stacking height t at the container yard can have. Several h unpaid moves (the housekeeping moves to reshuffle the containers) should however be taken into consideration because stacking higher gives less flexibility to the terminal operator.

Figure 11. Layout of the Full 4 -high SC with New Layout Alternative
Source: Terminal Development Department, CT

Available ground slots: - Dry vans: 13429 TGS - Reefers: 754 40 GS - Empties: 910 TGS

3.5.4.

Mixed 3 and 4-high SC with HDS Parallel

The fourth alternative for the project is a mixed 3 and 4-high straddle carriers and RMG operation, which will enable the terminal to operate a High Density Stack (HDS), located parallel to the quay side. The advantage of using a HDS in a part of the terminal is to allow a much higher stacking of containers, which in the end will add significant increase in capacity. A much larger amount of TGS by this configuration will be another reason for the increased yard capacity.

Figure 12. Layout of the Mixed 3 and 4-high SC with HDS Parallel Alternativ
Source: Terminal Development Department, CT

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Available ground slots: - Dry vans: 14606 TGS - Reefers: 754 40 GS - Empties: 910 TGS Additionally, option E as the expanded area will also be realized as a stacking yard, therefore, this alternative has been considered as a huge step in adding the yard capacity of the terminal. Considerably, the large amount in investment should also be taken into account, as well as the plan to move completely to the new terminal area. In 2014, t e RMG being employed in this alternative can however be reused in h the new terminal area as it is constructed to be a RMG operating terminal. The single, parallel HDS will handle 1 over 8 containers high and 20 containers wide, creating a stack of approximately 750 meters long and 65 meters wide. The HDS will store all full dry import containers and 20% of full dry export containers, being handled by RMG Cantilever interchanging with the SC on the waterside operation. 80% of full dry export containers and all reefers will be stored in the yard, being handled by SC in truck-SC interchange area on the landside (LS). After being discharged by QC, all import containers coming to the HDS stack are transported by SC directly to the waterside (WS) transfer zone (TZ) of the HDS. Transshipment containers will be directly placed in the SC yard, in an area closer to the quay. During the loading of these containers, both export and transshipment containers are transported by SC from SC yard to the QC. For the import containers going into hinterland by means of truck, after being stored at the HDS, they will be placed directly by the RMG Cantilever to the truck, without any SC needed. Several trucks can be served at the same time by the RMG and, therefore, the implementation of RMG decrease the required number of landside SC (and accordingly the labor needed to operate SC).

Waterside Transfer Zone (SC Cantilever RMG)

Landside Transfer Zone (Truck Cantilever RMG)

Figure 13. Cross section of HDS including RMG Cantilever and transfer zones
Source: Terminal Development Department, CT

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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3.5.5.

Mixed 3 and 4-high SC with HDS perpendicular

This alternative is based on a mixed 3 and 4-high SC operation, combined with RMG system to construct 3 High Density Stack (HDS) perpendicular to the quay side. The RMG operation will also be carried out by RMG Cantilever, stacking 1 over 5 containers and 26 containers wide. Compared to a parallel positioning of the HDS, these stacks are shorter (280 meters in length), but wider (95 meters). All full dry import containers and 49% of full dry export containers will be stored in the HDS, being handled by the Cantilever RMG interchanging with the SC on the waterside. 51% of full dry export containers and all reefers are to be stored in the yard, being handled by SC in truck-SC interchange area on the landside. Compared with the previous alternative where the HDS are to be constructed as one big pile parallel to the quay, these three smaller HDS perpendicular offer a higher flexibility to the terminal equipments both SC and RMG that are needed in such configuration. Within this layout, the RMG operating on each HDS can operate independently to each other, unlike the RMG operating in one HDS parallel. Due to the larger amount of TGS that this alternative offers, a significant increase in yard capacity will be clearly realized. Additionally, the achievement of the terminal operator to reduce the dwell time of the containers to an average 5 days has further expanded the amount of container visits that can be handled each year.

Figure 14. Layout of the Mixed 3 and 4-high SC with HDS Perpendicular Alternative

Available ground slots: - Dry vans: 14900 TGS - Reefers: 754 40 GS - Empties: 910 TGS Despite all assumptions and, especially, the expected growth of the terminal volume (the increase in terminal demand), there are some risks that the future operation will not be really in line with these predictions. Some risk analysis will then be provided in the next section, which briefly presents several scenarios of the future terminal operation.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

3.6.

Risk Analysis

There are some risks involved in the expansion project that the terminal has to take into consideration: a. Lower demand than expected (lower than 15%). This would cause an over capacity in the container yard. In other words, the terminal suffers an over investment, as the added capacity is not fully absorbed by the terminal users. b. The increase in berth productivity is lower than forecasted; therefore, the terminal cannot operate the total of 2,230,000 annual moves which is predicted as the maximum berth capacity with the 33 moves/hour productivity. As a result, there will also be an over capacity in the terminal yard. c. Higher demand than expected (higher than 15%). This would cause a sub optimum expansion, because the terminal should have provided higher capacity of the terminal yard. d. Higher costs than budgeted i.e. increase in equipment prices, land lease and operational costs could result in a lower return than calculated. e. Operational risks, i.e. strikes, power cut, and weather could result in interruption of the terminal operation.

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Chapter 4. RESULTS

This chapter presents both operational and financial results of the five expansion alternatives, as the basis in assessing the feasibility of each configuration. Several operational and financial calculations, done in Microsoft Excel files, are provided to make a comparison between one alternative to another. The pros and cons of each option are to be discussed subsequently. Last but not least, the dynamic characteristic of a container terminal has to acknowledge some low and best case scenarios in the operation, which are presented at the end of the section.

4.1. 4.1.1.

Operational Assessment Capacity

Each alternative of the expansion project has its own characteristics, mainly in terms of equipments employed and the layout of the stacking yard. The former influences the stacking height the container yard can have, while the latter determines the number of Terminal Ground Slots (TGS) a terminal can accommodate and for which type of containers being dry vans, reefers, or empties. For each alternative, TGS of all blocks in the storage yard are added per each container type. The total amount of TGS per alternative for each type of containers is presented in the Table 7 below.
Table 7. TGS Available per Alternative
TGS Empties Reefers Dry Vans Total 3/4 H SC 910 1,508 12,620 15,038 3/4 H SC New Layout 910 1,508 14,466 16,884 4 H SC New Layout 910 1,508 14,466 16,884 HDS Parallel 910 1,508 14,606 17,024 HDS Perpendicular 910 1,508 14,900 17,318

The amounts of TGS per alternative above are the basis to calculate how much containers can be handled annually, or in other words, the TEU visits to the terminal. Other variables that have to be taken into consideration are the average dwell time of the containers, peak factor, stacking density, and stacking height for each alternative. These variables, together with TGS, are the input of the calculation, and are important assumptions of the CT operator based on 2005 figure. The dwell time, peak factor, and stacking density are considered to be the same for all alternatives.
Table 8. Variables in Stacking Yard
Average dwell time Peak factor Stacking density 5 days 1.24 80%

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Container Terminal Expansion to Build Capacity: A Case Study

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The average dwell time of 5 days means that we assume all containers, of all types of containers, to be stored for average 5 days in the yard. The peak factor 1.24 means that we assume an additional 24% of the terminals average volume can be realized during the peak times, normally between 3 and 7 pm daily. An 80% stacking density means that the terminal yard is being utilized 80% of its total capacity, in order to allow flexibility in stacking and prevent too many reshuffles (shifters). The last variable to be taken into account in calculating the TEU visits is the stacking height, for empties they are stacked 7 high, while for reefer it is 3 high. For dry vans, it is different for each alternative, depending on the equipments/layout used in the operation. For the mixed 3 and 4 H SC, it is assumed to be 2.5 high and for full 4 H SC it is 3.2 high. For HDS parallel, dry vans are stacked 8 high, while for HDS perpendicular it is 5 high. The TEU visits per alternative are then presented in the Table 9. As the number of TGS for reefers and empties are the same for each alternative, the amount of TEU visits for both categories remains the same in all configurations. It is just the TGS of dry vans that are different in each alternative, due to different number of TGS. The formula that CT uses to calculate the number of TEU visits of the terminal is:
TEU visits = TGS x Stacking Density x Stacking Height x 365 days Dwell Time (days) x Peak Factor Table 9. Maximum TEU Visits per Alternative
TEU visits Empties Reefers Dry Vans Total 3/4 H SC 300,006 213,066 1,485,903 1,998,975 3/4 H SC New Layout 300,006 213,066 1,703,255 2,216,327 4 H SC New Layout 300,006 213,066 2,180,166 2,693,238 RMG Parallel 300,006 213,066 2,197,912 2,710,985 RMG Perpendicular 300,006 213,066 2,238,627 2,751,700

Moreover, the TEU factor is an important variable to predict the exact number of container boxes that can be handled in the terminal. For the business case, the Terminal Development Department of CT assumed that the TEU factor15 remains the same for each configuration.
Table 10. TEU Factor
TEU factor 1.72

With a predetermined TEU factor, the amount of TEU visits can be translated to the number of container visits of the terminal.
Container visits = TEU visits / TEU factor

15

TEU factor indicates the ratio between the container boxes and the number of TEU, ranges from 1 to 2. Ratio 1 means all containers are 20-feet containers, while ratio 2 indicates that all containers are 40 -feet containers. TEU factor = # of boxes / # of TEU

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Container visits are calculated with the consideration that not all containers in the terminal are 20 container. The numbers of container visits predicted to be the maximum yard capacity that can be handled by the terminal, on each alternative, are presented in Table 11.
Table 11. Maximum Container Visits per Alternative
Cont. visits Empties Reefers Dry Vans Total 3/4 H SC 174,422 123,875 863,897 1,162,195 3/4 H SC New Layout 174,422 123,875 990,264 1,288,562 4 H SC New Layout 174,422 123,875 1,267,538 1,565,836 RMG Parallel 174,422 123,875 1,2 77,856 1,576,154 RMG Perpendicular 174,422 123,875 1,301,528 1,599,825

4.1.2.

Volume

The predetermined growth of CX, which is the dominant client of CT, and the third party, measured in percentage, 16 has become the basis for the predicted demand of the terminal CT. The total deep sea moves from the two calculations can later be the foundation in measuring the total quay moves, which basically adds the barge moves into calculation. 17 Table 12 shows the predicted number of moves demanded during 2005 until 2014. The total quay moves are indeed the most important number that CT has to keep in mind, because then the best alternative of the expansion project should be able to cope with the demanded (total) quay moves as close as possible.
Table 12. Predicted Demand of the Terminal
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 CX (15% growth) 679,180 761,793 876,062 1,007,471 1,158,592 1,332,381 1,532,238 1,762,073 2,026,385 2,330,342 Third party (15% growth) 104,803 120,000 138,000 158,700 182,505 209,881 241,363 277,567 319,202 367,083 Total deep sea moves 783,983 881,793 1,014,062 1,166,171 1,341,097 1,542,261 1,773,601 2,039,641 2,345,587 2,697,425 Total quay moves 1,038,777 1,168,376 1,343,632 1,545,177 1,776,953 2,043,496 2,350,021 2,702,524 3,107,903 3,574,088

For each alternative, there will be a maximum number of quay moves that can be handled, taking into account the maximum number of deep sea and barge
16 17

The annual growth is confirmed to be 15% for CX as well as the third party. Based on CT data collection during the first half 2005, the b arge moves is assumed to be 32.5% of the total deep sea moves.

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Container Terminal Expansion to Build Capacity: A Case Study

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moves that can be accommodated. Table 13 lists the maximum volume, measured in quay moves, per alternative.
Table 13. Maximum Quay Moves per Alternative
Maximum number of quay moves 3/4 H SC 3/4 H SC New Layout 4 H SC New Layout HDS Parallel HDS Perpendicular 1,674,137 1,856,168 2,255,580 2,270,443 2,304,541

The maximum yard capacities measured by quay moves for each alternative are presented together in Figure 15, where the area below the slope is the expected terminal demand (15% increase annually). The berth capacity under the aggressive scenario of 33 moves/hour crane productivity will however be the limitation of the terminal volume. Therefore, we can predict that from 2011, the terminal will have reached the maximum capacity already, no matter which expansion to be implemented. Each expansion project offers different yard capacity, but the berth capacity will always be the same for all alternatives. Some additional years coping with the terminal demand will, however, be a significant profit to the terminal because they can maximize the revenue.
Thousands 3,000 2,500 2,000 HDS Parallel 4 H SC New Layout 3/4 H SC New Layout 3/4 H SC Max yard capacity HDS Perpendicular Max berth capacity - 33 mvs Max berth capacity - 30 mvs Max berth capacity - 27 mvs

Moves over quay

1,500 1,000 500

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

3 RMGs perpendicular 4H SC New Yard Layout 3/4H SC Max berth capacity - 33 mvs Max berth capacity - 27 mvs

RMG parallel 3/4 H SC New Yard Layout Volume Max berth capacity - 30 mvs

Figure 15. Volumes Over Quay per Alternative

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Container Terminal Expansion to Build Capacity: A Case Study

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We can then make an estimation of the year, on which the annually demanded number of quay moves by CTs clients cannot be met by the terminal capacity. Should the maximum quay moves of the terminal is reached, the terminal will not be able to serve the full demand on the following years. For each alternative, the years on which the maximum quay moves will be reached are presented in Table 14.
Table 14. Year on which Maximum Quay Moves is Reached per Alternative
Year on which maximum quay moves is reached 3/4 H SC 3/4 H SC New Layout 4 H SC New Layout HDS Parallel HDS Perpendicular Second quarter of 2008 First quarter of 2009 Third quarter of 2010 Third quarter of 2010 Third quarter of 2010

Accordingly, the total moves which are deep sea moves, rail, barge, road, and ITT moves 18- are limited, differently per each alternative. The percentage between rail, barge, road and ITT moves and the deep sea moves during the first half year 2005 is used as a basic consideration.19 For all alternatives, these percentages remain the same.
Table 15. Percentage of Modality Split to Deep Sea Moves
Modality Split Barge Road Rail ITT 32.5% 33.7% 15.9% 1.9%

The maximum barge, road, rail, and ITT moves that can be handled by each alternative are presented in Table 16. These numbers are basically rooted for the calculation which is based on the percentage of modality split to deep sea moves mentioned before. Together with the deep sea moves, the barge, road, rail, and ITT moves construct the total moves that the terminal can handle when implementing a certain alternative.

18

ITT moves are the container moves to and from other (neighboring) container terminal, because the containers are discharged at CT and will be loaded at the others, or the other way around. 19 Modality split is based on data of the first half year 2005, with an increase of 10% for barge due to a positive expectation over the demand of barge services in the following years. Accordingly, the percentages of other modalities are adjusted, i.e. truck percentage decreases from 37.4% to 33.7%.

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Container Terminal Expansion to Build Capacity: A Case Study

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These moves are then the measured volume of the terminal, and if we compare the number of moves that can be accommodated by each alternative there are some quite significant differences between each expansion project. Under the mixed 3 and 4 H SC, CT can only handle 2.3 million moves approximately, while under the RMG perpendicular project the terminal can accommodate almost 3.2 million moves per year.
Table 16. Maximum Total Moves per Alternative
3/4 H SC 3/4 H SC New Layout 1,400,611 455,557 472,006 222,598 26,547 2,577,320 4 H SC New Layout 1,701,996 553,584 573,573 270,497 32,260 3,131,910 RMG Parallel RMG Perpendicular

Deep Sea Barge Road Rail ITT Total Moves

1,263,255 410,881 425,717 200,768 23,944 2,324,566

1,713,211 557,232 577,352 272,279 32,472 3,152,546

1,738,941 565,601 586,023 276,369 32,960 3,199,893

4.1.3.

Timeline

In expectation of the volume growth of the terminal, mostly due to the increasing demand from CX and third party -the users of the terminal- in the coming years, there will be some additional equipment n eeded to be added annually to the operation to enable the CT terminal operating effectively. The main additional annual investment will be straddle carriers, STS cranes, reefer racks, and empty handlers (MTH). The timeline for each additional equipment and facilities will influence the annual investment which can differ on different year of operation, and different for each alternative of the expansion project. The maximum number of equipments will be reached when the terminal volume has reached the largest capacity, in terms of moves that can be accommodated by the CT. After this time, the number of equipment needed will be annually fixed and no further additional investment on these needed. With regards to the STS cranes, however, the first 2 cranes will be invested in 2009 and the other 2, which makes the total of 16, will be invested in 2011. Therefore, for all alternatives, the investment of STS cranes will then be done at the same time, and does not really depend on the volume growth. The below table 17 21 show the timeline of investment in equipments for each alternative. All expansion alternatives dictate the terminal operator to invest in equipments during the first 5 years of the implementation, heavily in straddle carriers, STS cranes, and RMG for the last two alternatives.

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Container Terminal Expansion to Build Capacity: A Case Study

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Table 17. 3/4 H SC Investment Timeline


Investment Straddle carrier 4 high MTH STS cranes Reefer racks (129 slots) TOTAL INVESTMENT Price per unit () 730,000 200,000 6,875,000 450,000 43,659,000 2007 2009 2011 3,650,000 (5x) 8,030,000 (11x) 200,000 (1x) 200,000 (1x) 200,000 (1x) 13,750,000 (2x) 13,750,000 (2x) 200,000 17,600,000 21,980,000 2008

1,800,000 (4x) 1,800,000

Table 18. 3/4 H SC New Layout Investment Timeline


Equipment Straddle carrier 4 high MTH STS cranes 2nd grid (lane) Reefer racks (129 slots) TOTAL INVESTMENT Price per unit () 730,000 200,000 6,875,000 15,000 450,000 43,722,000 2007 2009 3,650,000 (5x) 200,000 (1x) 200,000 (1x) 13,750,000 (2x) 30,000 (2x) 200,000 17,630,000 2008 2010 2011 8,030,000 (11x) 200,000 (1x) 13,750,000 (2x)

30,000 (2x) 30,000 21,980,000

1,800,000 (4x) 1,800,000

Table 19. 4 H SC New Layout Investment Timeline


Equipment Straddle carrier 4 high MTH STS cranes 2nd grid (lane) Reefer racks (129 slots) TOTAL INVESTMENT Price per unit ( ) 730,000 200,000 6,875,000 15,000 450,000 61,461,750 2007 13,140,000 (18x) 2008 2009 2010 2011 1,460,000 (2x) 5,840,000 (8x) 8,030,000 (11x) 200,000 (1x) 200,000 (1x) 200,000 (1x) 13,750,000 (2x) 13,750,000 (2x) 30,000 (2x) 75,000 (5x) 60,000 (4x) 1,660,000 19,820,000 75,000 22,040,000

1,800,000 (4x) 14,940,000

Table 20. HDS Parallel Investment Timeline


Equipment Straddle carrier 4 high MTH STS cranes RMG Cantilever RMG Rail tracks + HDS (m) 2nd grid (lane) Reefer racks (129 slots) TOTAL INVESTMENT Price per unit 730,000 200,000 6,875,000 3,700,000 9,600 15,000 450,000 90,431,250 2007 2008 200,000 (1x) 2009 3,650,000 (5x) 200,000 (1x) 13,750,000 (2x) 2010 2011 8,030,000 (11x) 200,000 (1x) 13,750,000 (2x) 3,700,000 (1x) 60,000 25,740,000

105,000 (7x) 1,800,000 (4x) 1,905,000

45,000 (3x) 245,000

60,000 (4x) 17,660,000

33,300,000 (9x) 7,200,000 (750m) 75,000 (5x) 40,575,000

Table 21. HDS Perpendicular Investment Timeline


Equipment Straddle carrier 4 high MTH STS cranes RMG Cantilever RMG Rail tracks + HDS (m) 2nd grid (lane) Reefer racks (129 slots) TOTAL INVESTMENT Price per unit ( ) 730,000 200,000 6,875,000 3,700,000 9,600 15,000 450,000 103,009,200 2007 2008 200,000 (1x) 2009 3,650,000 (5x) 200,000 (1x) 13,750,000 (2x) 2011 8,030,000 (11x) 200,000 (1x0 13,750,000 (2x) 44,400,000 (12x) 3,700,000 (1x) 8,064,000 (840m) 75,000 (5x) 75,000 (5x) 52,539,000 25,755,000 2010

105,000 (7x) 1,800,000 (4x) 1,905,000

45,000 (3x) 245,000

60,000 (4x) 17,660,000

4.2. 4.2.1.

Financial Assessment Net Present Value (NPV)

Calculation of NPV is performed in excel file, where the profit and loss statement for each alternative is presented (see Appendix 7-11). A 10% discount factor

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(estimated WACC) is applied in the formula, and NPV is calculated based on the yearly EBITDA (after investment) during 2006-2014.20
Table 22. EBITDA per Alternative (000)
Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular 2006 46,548 46,572 46,548 46,576 46,576 2007 52,694 52,721 51,862 52,695 52,695 2008 57,584 57,616 57,292 57,507 57,507 2009 65,452 64,010 63,510 63,767 63,767 2010 64,313 72,871 74,249 89,670 89,146 2011 60,670 71,296 84,672 102,962 101,775 2012 60,233 71,068 84,302 103,486 102,268 2013 59,696 70,744 83,792 103,923 102,671 2014 59,052 70,316 83,006 104,128 102,842

Table 23. Annual Investment per Alternative (000) Alternative 2006 2007 2008 3/4 high SC 26,734 9,781 8,496 3/4 high SC with new layout 26,734 9,781 8,496 4 high SC with new layout 26,734 23,578 10,029 3/4 high SC with HDS parallel 26,734 9,891 8,543 3/4 high SC with 3 HDS perpendicular 26,734 9,891 8,543

2009 27,180 27,211 29,511 27,243 27,243

2010 9,135 9,166 9,214 51,739 64,301

2011 32,671 32,671 32,734 36,619 36,634

2012 10,071 10,071 10,071 10,071 10,071

2013 10,575 10,575 10,575 10,575 10,575

2014 11,103 11,103 11,103 11,103 11,103

Table 24. Accumulative Investment per Alternative (000) Alternative 2006 2007 2008 2009 3/4 high SC 157,820 167,601 176,097 203,277 3/4 high SC with new layout 157,820 167,601 176,097 203,308 4 high SC with new layout 157,820 181,398 191,427 220,938 3/4 high SC with HDS parallel 157,820 167,712 176,255 203,497 3/4 high SC with 3 HDS perpendicular 157,820 167,712 176,255 203,497

2010 212,412 212,475 230,151 255,236 267,798

2011 245,082 245,145 262,885 291,855 304,432

2012 255,153 255,216 272,956 301,926 314,504

2013 265,728 265,791 283,531 312,500 325,078

2014 276,832 276,895 294,634 323,604 336,182

As far as NPV consideration is concerned, the best alternative to be carried out by the terminal is the mixed 3 and 4-high SC operation combined with the HDS parallel to the quay. The NPV of this fourth alternative is 187,916,000 which is the highest of all expansion alternatives. NPV method as a good assessment tool to choose an appropriate investment considers the 3/4 H SC operation with HDS parallel as the option that will provide CT with the highest return.
Table 25. NPV per Alternative
Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular NPV ('000) 116,387 140,370 153,393 187,916 177,357

20

EBITDA = Earnings Before Interest, Tax, Depreciation, and Amortization

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Container Terminal Expansion to Build Capacity: A Case Study

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4.2.2.

Internal Rate of Return (IRR)

IRR is calculated in excel file, where the investment and EBITDA per year for each alternative are taken into account in the formula. The annual and accumulative investments as well as its EBITDA for each alternative are presented in Table 22-24. Based on the IRR method, the terminal should consider implementing the fourth alternative, which is in line with the recommendation generated by the NPV method. However, the high values of IRR (see Table 27) are partly caused by the high revenues generated by the terminal as a whole (including existing capacity), not only revenues that are generated by the expansion (additional capacity).
Table 26. Revenue per Alternative (000) Alternative 2006 2007 3/4 high SC 122,450 136,376 3/4 high SC with new layout 122,450 136,376 4 high SC with new layout 122,450 136,376 3/4 high SC with HDS parallel 122,450 136,376 3/4 high SC with 3 HDS perpendicular 122,450 136,376

2008 149,095 149,095 149,095 149,095 149,095

2009 170,350 170,307 170,307 170,307 170,307

2010 174,183 185,228 190,621 190,621 190,621

2011 183,052 195,332 217,780 217,780 217,780

2012 187,171 199,726 222,680 222,680 222,680

2013 191,382 204,220 227,690 227,690 227,690

2014 195,688 208,815 232,813 232,813 232,813

The high revenue results in high EBITDA (EBITDA=RevenueOperational Costs-Non Operational Costs), which finally result in high IRR. In Table 27 below we can see that the 3/4 H SC operation with a HDS parallel results in 42.68% rate of return, the highest of all alternatives. Therefore, based on the IRR analysis, the fourth alternative is still the best solution for the terminal expansion.
Table 27. IRR per Alternative Alternative

IRR 36.77% 39.01% 37.72% 42.68% 41.25%

3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular

4.2.3.

Return on Investment (ROI)

ROI for each alternative is calculated in excel file, together with other financial methods to observe whether the solution recommended by one method is supported by other methods. To calculate the ROI per alternative of investment, the net income after tax from the profit and loss statement should be taken in percentage from the accumulative investment per year (see Table 24 above).

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Container Terminal Expansion to Build Capacity: A Case Study

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Table 28. Net Income After Tax (000) Alternative 2006 2007 3/4 high SC 22,944 27,088 3/4 high SC with new layout 22,961 27,108 4 high SC with new layout 22,944 25,064 3/4 high SC with HDS parallel 22,964 27,078 3/4 high SC with 3 HDS perpendicular 22,964 27,078

2008 30,555 30,577 28,684 30,483 30,483

2009 34,784 33,770 31,365 33,577 33,577

2010 34,054 40,034 38,887 48,458 47,158

2011 28,346 35,772 42,960 54,304 52,534

2012 27,722 35,295 42,334 54,272 52,475

2013 27,021 34,743 41,602 54,169 52,345

2014 29,654 37,539 46,421 58,992 57,338

Compared to the other options, the implementation of 3/4 H SC operation with HDS parallel is again the best alternative that gives the highest ROI to the terminal. The NPV and IRR methods have previously resulted in the same conclusion.
Table 29. ROI per Alternative Alternative

ROI 13.83% 15.13% 15.19% 17.29% 16.58%

3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular

4.2.4.

Payback Period

The payback period was calculated in excel file for each alternative. As mentioned before, the payback period is the number of years within which all investm ents can be fully recovered by EBITDA. As an example, Table 30 presents the calculation of payback period for the first alternative. After 2009 the accumulative investment-EBITDA has become positive, this means that after 3 years the investments have been recovered. 21
Table 30. Payback Period Calculation Example 3/4 H SC 2006 2007 2008 2009 Investment (157,820) (9,781) (8,496) (27,180) Ebitda 46,548 52,694 57,584 65,452 Investment+Ebitda (111,272) 42,913 49,088 38,272 Accumulative (68,359) (19,271) 19,001

2010 (9,135) 64,313 55,178 74,179

2011 (32,671) 60,670 28,000 102,179

2012 (10,071) 60,233 50,162 152,341

2013 (10,575) 59,696 49,121 201,462

2014 (11,103) 59,052 47,949 249,411

According to the payback period method, the alternative to continue the current mixed 3 and 4-high SC is the best solution for the terminal expansion project. Compared with all other alternatives, the payback period for this first alternative is the shortest, which is only 3.5 years. This means that, within only 3.5 years the terminal will have succeeded in recovering its investments.
21

The number of months in the payback period is calculated by dividing the last negative number (in this case 19,271) with the next year investment-EBITDA value (in this case 38,272), times 12 (months).

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Container Terminal Expansion to Build Capacity: A Case Study

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The recommendation referred by the payback period method is not in line with the previous three methods, which suggested 3/4 H SC with HDS parallel as the best solution. We would stress that the payback period has many weaknesses, namely that it does not take into account any cash flow realized after the payback period and, another weakness of this method, that it does not consider the time value of money.
Table 31. Payback Period per Alternative Alternative

3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular

Payback period (years) 3.50 3.52 4.03 3.53 3.53

4.2.5.

Cost per Move

Cost per move for each alternative is calculated in excel file, together with the profit and loss statement, where the total costs are divided by the volumes (measured in crane moves ). As an example, the cost per move method for the first alternative is initiated by creating a table of crane moves per year as presented by Table 32.22
Table 32. Crane Moves for 3/4 H SC Alternative
3/4 H SC Alternative Total crane moves 2006 1,168,601 2007 1,343,892 2008 1,545,475 2009 1,674,137 2010 1,674,137 2011 1,674,137 2012 1,674,137 2013 1,674,137 2014 1,674,137

The total costs which will be divided with the crane moves are the sum of operational costs; i.e. labor, power supply, M&R for equipments, land lease and rent, non operational costs; i.e. salaries, IT costs, M&R (civil works), and the depreciation (from additional equipment and annual cost for existing investments).
Table 33. Operational Cost, Non Operational Cost, and Depreciation for 3/4 H SC
3/4 H SC Alternative Labour (incl. Subcontracting) Power supply Fuel Consumption M&R (equipments) Land Lease & Rent Other Operational Costs Total Operational Costs Salaries IT Costs M&R (civil works) Other Non-Operational Costs Total Non-Operational Costs Depreciation Total Cost 2006 (42,253) (1,893) (3,968) (7,432) (8,558) (3,704) (67,807) (1,170) (1,892) (500) (4,532) (8,094) (12,000) (87,901) 2007 (45,514) (2,226) (4,666) (7,645) (10,137) (4,355) (74,542) (1,365) (1,934) (511) (5,330) (9,140) (12,552) (96,235) 2008 (49,566) (2,618) (5,487) (7,922) (10,598) (5,121) (81,310) (1,433) (1,978) (523) (6,267) (10,201) (12,872) (104,383) 2009 (58,308) (2,899) (6,077) (9,030) (11,330) (5,672) (93,317) (1,655) (2,022) (535) (7,369) (11,581) (15,098) (119,995) 2010 (61,057) (2,965) (6,214) (9,233) (11,585) (5,800) (96,853) (1,738) (2,068) (547) (8,665) (13,018) (15,437) (125,307) 2011 (69,984) (3,031) (6,354) (10,879) (11,845) (5,930) (108,023) (1,908) (2,114) (559) (9,778) (14,359) (20,177) (142,559) 2012 (73,309) (3,099) (6,497) (11,123) (12,112) (6,063) (112,204) (2,003) (2,162) (571) (9,998) (14,734) (20,630) (147,568) 2013 (76,795) (3,169) (6,643) (11,374) (12,385) (6,200) (116,565) (2,104) (2,210) (584) (10,223) (15,121) (21,095) (152,781) 2014 (80,453) (3,241) (6,792) (11,630) (12,663) (6,339) (121,117) (2,209) (2,260) (597) (10,453) (15,519) (16,690) (153,326)

22

The number of moves per alternative is different, depending on the maximum yard capacity of the terminal.

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Container Terminal Expansion to Build Capacity: A Case Study

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The cost per move in this case is then calculated by dividing the total cost from Table 33 above with the crane moves each year (see Table 32). The result for this first option is presented below.
Table 34. Cost per Move for 3/4 H SC Alternative
3/4 H SC Alternative 2006 2007 2008 2009 2010 2011 2012 2013 2014

Cost per move

75.22

71.61

67.54

71.68

74.85

85.15

88.15

91.26

91.59

The cost per move is calculated by taking the average of the annual costs per move as presented in Table 34 above, which results in 79.67. Applying the same approach for all other alternatives, we can derive the cost per move for each expansion option as presented in Table 35 below.
Table 35. Cost per Move per Alternative
Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular Cost per move (EUR) 79.67 75.17 71.57 66.61 66.73

An alternative with the lowest cost of operating on a per move basis is assumed to be the most important consideration for the terminal operator. According to this approach, the alternative to implement 3/4 H SC operation together with HDS parallel to the quay is the most suitable solution for the CT t build capacity. The o solution recommended by the cost per move basis is in line with the recommendation provided by the NPV, IRR, and ROI methods.

4.2.6.

Cost of Expansion

CT is also interested to consider the cost of expansion to determine the size of investment to be budgeted. Table 36 shows the amount of investments needed for the capacity expansion (additional equipments and facilities). The first alternative is by definition the cheapest project for the terminal with total investment of 43,659,139 during 2006-2014. The cost of expansion assessment is however not a leading method to determine the best solution. The main reason for this is that it does not take into account the future return of the investment.
Table 36. Cost of Expansion per Alternative
Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular Cost of Expansion (EUR) 43,659,000 43,722,000 61,461,750 90,431,250 103,009,200

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Container Terminal Expansion to Build Capacity: A Case Study

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The low cost of expansion for the first alternative is also one reason why this mixed 3/4 H SC operation has the shortest payback period compared to other alternatives.

4.3. 4.3.1.

Pros and Cons Mixed 3 and 4-high SC

The first alternative of the expansion project, which is to use the mixed 3 and 4-high SC has its own pros and cons. If we refer to the graph presented before in Section 4.1.2, the maximum yard capacity that this configuration may offer is below the maximum berth capacity which can be realized by a productivity of 27 moves/hour, which is the lowest case of the terminal productivity. The above phenomenon means that the terminal CT could have been more efficient, should it offers higher yard capacity because even with the low 27 moves/ hour of berth productivity, the maximum berth capacity of 1,950,000 moves per year will not be fully utilized. This is given by the very limited yard capacity that the terminal has, if the terminal is to continue the operation with the mixed 3 and 4-high SC under the same layout as what it is in January 2006. Rooted from the number of TEU visits that can be accommodated annually, the maximum quay moves that can be handled by the terminal -if it is to implement this alternative, will be reached in second quarter of 2008. The predicted demand of 15% growth annually will not fully met, where under this alternative, a growth of only 5.4% annually from 2006-2014 that can be accommodated by the mixed 3 and 4-high SC. The lead time of this project, however, is the shortest compared with other alternatives. Additional SC which are required to cope with the predicted demand of the coming years can become operational within approximately 6 months, and therefore the terminal can perform optimally under this alternative in a relatively short time. Additionally, the integration of the new SC into the existing operation will give minimal disturbances for the operation. It is likely that no additional training and other significant implementation costs are required. Looking at the financial consideration, the mixed 3 and 4-high SC operation has the shortest payback period (3.5 years), due to the low investment needed (43,659,139). The NPV, IRR and ROI, however, are the lowest compared to other four alternatives. This means, this expansion alternative is not financially feasible enough for the terminal to implement. In addition, the cost per move under this alternative is the highest, which is 79.67.

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Container Terminal Expansion to Build Capacity: A Case Study

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4.3.2.

Mixed 3 and 4-high SC with New Layout

The second alternative of the project, which is still to keep the current operation with the mixed 3 and 4-high SC, differs with the first alternative in the sense that a new layout will be introduced here. Instead of having 4 narrow horizontal blocks of stacking, the new layout allows the SC to operate in 3 wider lanes of the container yard. The downsides of this alternative is that changing the terminal layout might take quite some time, although it does not require any civil works. Secondly, the deletion of one street between two blocks of stacking might give less flexibility to the SC drivers in transporting the containers from and to the yard. This alternative has however a lot of advantages as far as operational considerations are concerned. Just by changing the width of the stacking blocks, this expansion alternative adds an extra 217,352 TEU visits to the terminals yard capacity. Expressed in the quay capacity, an additional 182,031 crane moves can be accommodated if the terminal implements this alternative. The maximum quay moves that the terminal can accommodate, however, will be reached in first quarter of 2009, taking into account the maximum berth capacity at the quay side without creating congestion in the yard. The demand of 15% growth in volume will not be fully met, as only a growth of 7.4% annually from 2006-2014 that can be accommodated by the alternative. Due to the similarities with the current terminal operation, which is to employ the mixed 3 and 4-high SC, this expansion alternative allows the continuation of the current strategic operation without any major change except for that related to the terminal layout. No significant training cost and an expensive change in strategic operation are needed under this alternative. The financial analysis dictates, however, that the NPV, IRR, ROI, and payback period of this alternative are not optimal compared to other 4 alternatives. Furthermore, the cost per move is also high and the total cost of expansion is not the cheapest either. This alternative is therefore not recommended by the financial analysis.

4.3.3.

Full 4-high SC with New Layout

Compared with the previous alternative, the third expansion possibility of th e terminal offers an even higher capacity of the terminal, both for yard in accordance to the maximum berth capacity that the terminal can handle. With the full 4-high SC, the CT operator can gain an additional 476,911 TEU visits compared to the mixed 3 and 4high SC under the same (new) terminal layout.

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In terms of number of quay moves, this alternative enables the CT operator to use the berth capacity optimally. With the expectation of the CT Terminal Development Department, a productivity of 30 moves/hour is the lowest that they want to reach. Under this scenario, the full 4 -high SC operation is very suitable to equalize the berth productivity into the terminal yard capacity. Rooted from the TEU visits per year of the terminal if it is to implement this expansion alternative, a (higher) maximum total quay move of this configuration has shifted the year -when the max is reached, to third quarter of 2010. 23 The estimated increase in demand by 15% cannot be fully met by the terminal capacity, as only a growth by 11.6% that can be accommodated with this alternative. Due to the similarities in operation with the current strategy, no significant cost in training and changing the strategic operation are needed. However, in case of high wind force, the stacking height should be reduced, especially if lighter containers are placed in the top layers. Additionally, the lead time of such an operation will also take a short period of time. The 4-high SC can be ordered 6 months in advance and, subsequently, after the new layout has been implemented, the full 4-high SC can become operational. As far as financial considerations are concerned, this project does not have any outstanding performance, looking at an ordinary level of NPV, IRR, ROI, and payback period. The cost per move is quite low (71.42), but not low enough to be the most suitable project to be implemented by the CT operator.

4.3.4.

Mixed 3 and 4-high SC with HDS Parallel

The fourth expansion alternative possibility is to employ the mixed 3 and 4high SC together with the introduction of a (semi) automation of the terminal with the use of RMG Cantilever. Reshuffling the containers which are stacked higher is considered to be inexpensive compared with the expensive labor cost in operating a full straddle carrier manual operation. In addition, the HDS located parallel to the quay side adds a significant increase of the terminal yard capacity. Implementation of RMG will however require an intensive investment, for instance civil works, rail works, and yard space needed for RMG installation works. During the construction of the RMG operation, the loss of yard capacity will have to be unavoidably realized. This will however not influence the revenue of the CT operator because the loss in volume in construction will be regained in the later years. The long lead time of the HDS parallel, which is estimated to be at least 1.5 year, including half year for engineering work and one year for construction, forces the

23

After 2011, the increasing demand of CX and third party cannot be fully accommodated by CT.

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terminal to start the project in 2008 at the latest. By doing so, the terminal will succeed in recovering all capacity needed by the second quarter of 2009. Although under the implementation of the mixed 3 and 4-high SC with RMG Cantilever, the HDS parallel adds significant capacity of the terminal yard, the CT operator will still have to face the maximum yard capacity in the third quarter of 2010, under a 15% growth. A sufficient capacity in prolonged 5 years from 2006 is however a significant advantage for the terminal operator. As far as the financial analysis is concerned, the alternative 3/4 H SC with HDS parallel has the best NPV, IRR, and ROI. In addition, the cost per crane move that will be generated under this alternative is the lowest of all others, which is 66.61. Although the cost of expansion mostly in adding equipments for this 3/4 H SC and HDS parallel is not the cheapest, this alternative is estimated to be the best solution in giving the CT operator a profitable return in the future. Compared with the previous alternative which also offers a significant increase in yard capacity, this 3/4 H SC with HDS parallel has a much cheaper cost per move, which is approximately 5 less. The higher investment needed is of course as a result of implementing the semi-automation RMG operation, however, a large saving in labor cost is also driving the decision making in such investment. An implementation of this alternative is then considered to be a good investment for expansion.

4.3.5.

Mixed 3 and 4-high SC with HDS Perpendicular

The last alternative of the expansion project is to employ the mixed 3 and 4high straddle carrier with combination of the operation of RMG Cantilever, supporting the HDS perpendicular to the quay side. The HDS perpendicular will fit the existing terminal operation, should the terminal decided to construct the three HDS gradually. In the previous case, the whole SC TGS for the HDS parallel should be emptied at once during the construction of HDS. In HDS perpendicular, the three HDS can be built one by one in order not to lose too much yard capacity during construction and to be able to adept in case of different growth scenario. This concept will however require significant changes of the existing operating procedures and thereby negatively affect the daily operation. In addition, the configuration of the separated Cantilever RMGs between the lanes does not enable the CT operator to reinforce one block if there is an unbalanced share of work in the HDS. Furthermore, it will consume more space of the RMG yard because the trucks need to be served perpendicular from main roads. The same goes for SC interchange zones. Similar to the previous alternative which is also using RMG Cantilever, this alternative has a quite long lead time, which is approximately 1.5 year including the engineering and civil works at the terminal. As such, the project should be implemented

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Container Terminal Expansion to Build Capacity: A Case Study

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at least before 2008 in order to meet the terminal (volume) demand fully by 2009. During the construction, unavoidably, some loss in yard capacity should be taken into account. The financial analysis which is done to assess the feasibility of this alternative, however, suggests that this 3/4 H SC operation combined with HDS perpendicular is not the best alternative to be implemented by the CT op erator. The NPV, IRR, and ROI for this option are the second highest of all 5 alternatives. In addition, the cost per move is also not the cheapest, which is 66.73. This alternative is considered to be a sub optimum solution for the terminal operator, especially because the additional capacity offered (around 34,098 crane moves compared to previous alternative) is not worth the huge additional investment needed (103,009,200).

4.4.

Low Case Scenario

In this section, some low case scenarios will be provided to assist the decision making of the CT management, with regards to the expansion project that should be implemented in coping with the growing demand of the terminal. Following the section, some best case scenarios will also be presented in case the terminal might gain more yard or berth capacity which will then also influence the consideration in keeping the current type of equipment (SC) or to purchase the RMG.

4.4.1.

Lower Volume Growth (10%)

As one of the risk mentioned in Section 3.5, a lower growth of the terminal demand may negatively affect the estimated return of the terminal brought by the expansion. In this section, we will analyze the investment should a lower growth of 10% be realized, instead of 15%, in the future operation between 2006 and 2014. With a growth scenario of 10%, the maximum yard capacities that are reached by the five possibilities of the expansion will, understandably, be reached at the later years, compared with the Figure 15 presented before 24. A growth of 10% does apparently give a better result to the expansion project, because with the additional capacity provided by the expansion, the CT can fully meet the demand in longer period of time. Therefore, the revenue of CT can be maximized in a longer period of time as well. We can then say that the low case scenario of growth will in fact give some positive impacts to the terminal condition, where the maximum berth and yard capacity will be more in line with the growth in terminal demand.
24

Figure 15 presented the volumes over quay with a 15% growth in terminal demand

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Container Terminal Expansion to Build Capacity: A Case Study

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3,000
T o s ns h ua d

HDS Perpendicular 2,500 HDS Parallel Max berth capacity - 33 mvs 4 H SC New Layout Max berth capacity - 30 mvs 2,000 3/4 H SC New Layout 3/4 H SC 1,500 Max berth capacity - 27 mvs

M v so eq a oe v r u y

1,000

500 2005 2006 2007 2008 2009 RMG parallel 3/4H SC Max berth capacity - 30 mvs 2010 2011 2012 2013 2014

3 RMGs perpendicular 3/4 H SC New Yard Layout Max berth capacity - 33 mvs

M x ad a a iy ayr cpc t

4H SC New Yard Layout Volume Max berth capacity - 27 mvs

Figure 16. Volumes in Low Case Scenario (10% growth)

In any case, with the growth of 15%, the terminal demand cannot be fully met after 2011 due to the limited capacity of yard and berth provided by the highest scenario of berth productivity (33 moves/hour). Understandably, if the growth of terminal demand is lower, the terminal can provide sufficient capacity for longer period of time. Comparing the two figures mentioned, with the same layout and, accordingly, number of TGS for each alternative, the terminal can have an additional 2 years during which it can fully serve the terminal demand with 10% growth. Only after 2013 the terminal will have maximum capacity and, therefore maximum terminal volumes. For the growth of 10%, a similar financial assessment is carried out, namely for calculating NPV, IRR, ROI, payback period, cost per move, and cost of expansion. The aim is to see whether the solution recommended in 15% growth scenario is also supported in case of 10% growth.
Table 37. NPV per Alternative (10% growth)
Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular NPV ('000) $118,448 $148,819 $171,736 $204,476 $195,767

Table 38. IRR per Alternative (10% growth)


Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular IRR 37.37% 41.29% 40.26% 45.16% 44.15%

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Container Terminal Expansion to Build Capacity: A Case Study

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Table 39. ROI per Alternative (10% growth)


Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular ROI 13.95% 15.78% 16.36% 18.39% 17.81%

Table 40. Payback Period per Alternative (10% growth)


Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular Payback period (years) 3.44 3.41 3.94 3.42 3.42

Table 41. Cost per Move per Alternative (10% growth)


Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular Cost per move (EUR) 80.98 77.20 74.69 69.59 69.88

Table 42. Cost of Expansion per Alternative (10% growth)


Alternative 3/4 high SC 3/4 high SC with new layout 4 high SC with new layout 3/4 high SC with HDS parallel 3/4 high SC with 3 HDS perpendicular Cost of Expansion (EUR) 43,659,000 43,722,000 50,410,500 79,380,000 91,957,950

Referring to the previous table, we can see that the costs of expansion for the first and second alternative are not cheaper than that of the 15% expected growth. This is because the investments on S cranes are not dictated by the increasing TS volume, instead the CT management has decided that they will optimize the 1,600 meter berth with 16 cranes in total. As such, the investment on SC will also remain the same because the STS crane/SC ratio is still as in the previous case25. All methods except the payback period refer to the same recommendation which is to choose the option to implement 3/4 H SC with HDS parallel. The payback period refers to the 3/4 H SC with new lay out, however, we consider this not to be a decisive method for reasons mentioned before (see also Section 4.2.4). We can then conclude that in both growth scenarios, our assessments show that the option to implement 3/4 H SC with HDS parallel is the best solution for CT, because it optimized the return of the company as well as providing sufficient yard capacity to cope with the demand and the maximum berth capacity.

25

3.3 units SC waterside and 2 units SC landside for 1 unit STS Crane

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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4.4.2. Lower Transshipment Ratio (6%)


A lower transshipment ratio, for example 10% less than the current ratio 16%, will result in a lower yard capacity offered by each alternative of expansion project. As a result, the aggressive scenario of berth capacity (33 moves/hour) cannot even be balanced by the yard capacity and therefore, the terminal will not operate efficiently.
3,000
Thousands

2,500 HDS Parallel

HDS Perpendicular Max berth capacity - 33 mvs Max berth capacity - 30 mvs Max berth capacity - 27 mvs

2,000

4 H SC New Layout

Moves over quay

3/4 H SC New Layout 1,500 3/4 H SC


Max yard capacity

1,000

500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3 RMGs perpendicular 3/4 H SC New Yard Layout Max berth capacity - 33 mvs

RMG parallel 3/4H SC Max berth capacity - 30 mvs

4H SC New Yard Layout Volume Max berth capacity - 27 mvs

Figure 17. Volumes with Transshipment Ratio 6%

In this case, the berth will not be the limitation of the terminals volume growth, instead it is the yard capacity that is restricted. No matter what alternative will be implemented, the yard capacity will not be in line with what the berth can accommodate, measured in quay moves. Under this scenario, it is advisable to invest in the HDS perpendicular as this alternative offers the highest yard capacity to get close to the maximum berth capacity of 2.23 million quay moves.

4.5.

Best Case Scenario

Some best case scenarios will also be provided, where either the yard capacity or berth capacity can be increased in order to match the expected annual demand as close as possible. If the best case scenarios happen in the future, there might be a quite significant difference with regards to the investment project of the expansion that is most suitable for CT.

4.5.1.

Higher Transshipment Ratio (26%)

As one of the best case scenario, we would like to see how the volume dictates if CT has a higher transshipment ratio in the future. An increase by 10% from the current ratio 16% results in higher yard capacity, measured in quay moves.

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Container Terminal Expansion to Build Capacity: A Case Study

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3,000
Thousands

HDS Perpendicular HDS Parallel 2,500 4 H SC New Layout Max berth capacity - 33 mvs Max berth capacity - 30 mvs 3/4 H SC New Layout 3/4 H SC Max berth capacity - 27 mvs

2,000

Moves over quay

1,500

1,000

500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3 RMGs perpendicular 3/4 H SC New Yard Layout Max berth capacity - 33 mvs

RMG parallel 3/4H SC Max berth capacity - 30 mvs

Max yard capacity

4H SC New Yard Layout Volume Max berth capacity - 27 mvs

Figure 18. Volumes with Transshipment Ratio 26%

In this case, CT should invest in the full 4 H SC with new layout because the yard capacity provided by such configuration is sufficient enough assuming that CT can operate under an aggressive schedule 33 moves/hour of crane productivity. It will be useless to invest in HDS parallel or HDS perpendicular, as the berth will once again be the strictest limitation of the volume growth of CT.

4.5.2.

Extended Berth (2000 m)

With a 70% berth occupancy and 70% net crane usage, operating 20 cranes in 2000 meter berth, under an aggressive schedule of 33 moves/hour crane productivity and a maximum working hours of 8640 (360 working days x 24 hours), will increase the maximum berth capacity from 2,230,000 to 2,790,000 quay moves. 26 The maximum terminal capacity will then be reached at the first quarter of 2012, almost two years later than the year when maximum capacity is to be reached with 1600 meter quay. The yard layout in each alternative will not be influenced by the decision of CT management to have 2000 meter quay. Therefore, the number of TGS will remain the same, and as such, the container visits does not differ.

26

Berth capacity = Berth occupancy x Net crane usage x # Cranes x Crane productivity x Max hours = 70% x 70% x 20 x 33 x 8640 = 2,794,176 quay moves

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Container Terminal Expansion to Build Capacity: A Case Study

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3,000 Tosns huad


Max berth capacity - 33 mvs with 2000 meter berth HDS Perpendicular

2,500

HDS Parallel Max berth capacity - 33 mvs 4 H SC New Layout

2,000
3/4 H SC New Layout M v so e q a oe v r u y

Max berth capacity - 30 mvs Max berth capacity - 27 mvs

1,500
3/4 H SC M xy r c p ct a a d a a iy

1,000

500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3 RMGs perpendicular 4H SC New Yard Layout 3/4H SC Max berth capacity - 33 mvs Max berth capacity - 27 mvs

RMG parallel 3/4 H SC New Yard Layout Volume Max berth capacity - 30 mvs Max berth capacity - 33 mvs with 2000 m

Figure 19. Volumes with 2000 m Berth Length

We can then see from the figure above, that the terminal will not be efficiently utilize the container yard if it keeps the old expansion projects, which can only offer a maximum of 2,3 million quay moves, much below the maximum berth capacity of almost 2,8 million quay moves (an increase of 25% berth capacity). Therefore, in case the terminal can have 2,000 meter berth, i.e. by dredging the quay side to have enough depth, CT has to consider a different expansion alternative in order to enhance the volume of the terminal. All terrain area A, B, C, D, and E will have to be used as a stacking area and a larger area of HDS should be considered, which allow a much higher stacking of containers.

4.5.3.

Less Dwell Time (4 days)

As another scenario of the expansion assessment, we will consider which alternative that suits the best if the average dwell time can be reduced to 4 days, instead of 5 days. From the calculation in excel file, it is believed that, under the same assumptions as before regarding the peak factor of 1.24, stacking height for each type of containers, TEU factor of 1.72, and stacking utilization of 80%, an increase of 25% in quay moves can be accommodated by the terminal yard capacity. The increase of quay moves, 25% for each maximum yard capacity reached by every expansion alternative, seems to be much higher, even for almost all alternatives surpasses the aggressive berth capacity 33 moves/hour. This means , the yard capacity will be useless because the limitation will be on the berth (quay side) and, therefore, the terminal can never reach that capacity.

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Container Terminal Expansion to Build Capacity: A Case Study

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3,000
HDS Parallel HDS Perpendicular

T o sn s h ua d

4 H SC New Layout

2,500
3/4 H SC New Layout 3/4 H SC Max berth capacity - 33 mvs

2,000

Max berth capacity - 30 mvs Max berth capacity - 27 mvs

M v so e q a oe v r u y

1,500

1,000

500 2005 2006 2007 2008 2009


RMG parallel 3/4H SC Max berth capacity - 30 mvs

2010

M xy r c p ct a a d a a iy

2011

2012

2013

2014

3 RMGs perpendicular 3/4 H SC New Yard Layout Max berth capacity - 33 mvs

4H SC New Yard Layout Volume Max berth capacity - 27 mvs

Figure 20. Volumes with 4 Days Dwell Time

As one of the solution regarding the previous cases that we might face, either the terminal will in the end have 2,000 meter berth or will be able to reduce the dwell time to 4 days, we might consider how the graph will look like when we combine both. This means, the terminal has in total 2,000 meter berth but at the same time the dwell time should be reduced to 4 days.
3,000
HDS Parallel HDS Perpendicular Max berth capacity - 33 mvs with 2,000 meter berth

T o sn s h ua d

4 H SC New Layout

2,500
3/4 H SC New Layout 3/4 H SC Max berth capacity - 33 mvs

2,000

Max berth capacity - 30 mvs Max berth capacity - 27 mvs

M v so e q a oe v r u y

1,500
M xy r c p ct a ad a a iy

1,000

500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3 RMGs perpendicular 4H SC New Yard Layout 3/4H SC Max berth capacity - 33 mvs Max berth capacity - 27 mvs

RMG parallel 3/4 H SC New Yard Layout Volume Max berth capacity - 30 mvs Max berth capacity - 33 mvs with 2000 m

Figure 21. Volumes with 4 Days Dwell Time and 2000 m Berth Length

From the figure above we can then see that the maximum berth capacity with 2,000 meter berth is quite in a balance with the yard capacity offered by the full 4 H SC, HDS parallel, and HDS perpendicular alternatives. Under this scenario, it will be wise to invest in the cheapest of all three, which is the full 4 H SC. If we keep the original recommendation, the HDS parallel, we would have invested too much money (approximately 29 million) while nvesting in the cheaper, full 4 H SC will provide i enough capacity to cope with the growth of demand as well as the maximum berth capacity.

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Container Terminal Expansion to Build Capacity: A Case Study

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4.5.4.

Inland Empty Depot

Based on the 2004 CT data collection regarding the empty flows (for dry vans and reefer boxes), approximately 14% of the empty containers that are stored in the yard are transported into the terminal and leave from the yard by the same landside modality, either by truck or rail. This means that these empty containers can actually be located in an inland depot as they do not have to be transported via quay, both for incoming and outgoing to/from the terminal. Should the ground slots for empties in the terminal be reduced by 14%, CT can gain some additional space for dry vans or reefer yard. In case the TGS for this 14% of empty TEU visits are then allocated to dry vans TGS, there will be a slight increase in the total volumes over quay, but less containers can be stored at the yard because the stacking height for empties (8 high) is much higher than dry vans (2.5 for 3/4 H SC or 3.2 for 4 H SC). The reason behind the slight increase of moves over quay is because the terminal can now handle more barge and ITT moves, as an exchange of the rail and truck moves that are reduced because it does not transport those 14% of empties to/from terminal by truck and rail modalities. As an assumption, the new modality split for barge is now 37%, for truck 31.2%, for rail 13.7%, and for ITT 2.1%. Accordingly, the split between dry vans, reefer, and empties is also changed, 78.5% for dry vans, 6% of reefer, and 15.5% of empties. The volumes over quay are then presented in the figure below.
3,000
T o sn s h ua d

HDS Perpendicular 2,500 HDS Parallel Max berth capacity - 33 mvs 4 H SC New Layout 2,000 3/4 H SC New Layout Max berth capacity - 30 mvs Max berth capacity - 27 mvs

M v so e q a oe vr uy

1,500 3/4 H SC
M xy r c p ct a a d a a iy

1,000

500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3 RMGs perpendicular 3/4 H SC New Yard Layout Max berth capacity - 33 mvs

RMG parallel 3/4H SC Max berth capacity - 30 mvs

4H SC New Yard Layout Volume Max berth capacity - 27 mvs

Figure 22. Volumes with the Allocation of an Inland Empty Depot

Once the terminal decided to have an inland empty depot in the future, it is advisable to invest in the full 4 high SC, as the additional capacity is sufficient enough to cope with the maximum berth capacity of 33 moves/hour crane productivity while the cost of expansion is much cheaper than that of HDS parallel and HDS perpendicular.

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Container Terminal Expansion to Build Capacity: A Case Study

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4.6.

The Sum Up of All Scenarios

The low and best case scenarios are presented above because the CT operator realize that they are operating under a very dynamic situation. The assessment of the expansion project are based on several assumptions, that might also change throughout the time, especially in these coming years where CT is considering to expand the capacity to other terminal area, and other reasons that cannot be stated here, mostly related to CT clients. With all considerations of the different scenarios that we have mentioned so far, however, we can sum up the feasibility study over those scenarios for each alternative. By doing so, we can observe how each alternative suits each situation.
Alternative Scenario Mixed 3/4 H SC Mixed 3/4 H SC New Layout Full 4 H SC New Layout Mixed 3/4 H SC with HDS Parallel Mixed 3/4 H SC with HDS Perpendicular

Growth 15% Growth 10% Transshipment 10% increase Transshipment 10% decrease Additional 400m Berth Length Less Dwell Time (4 days) Additional 400m Berth and Less Dwell Time Inland Empty Depot

-----+ ---

++ -

+ + ++ o o o ++ ++

++ ++ + + + + +

o o o ++ ++ -o o

Note:

-o

not recommended unsuitable fair

+ ++

suitable optimal

There is no alternative that is optimal in every situation, however, the HDS parallel alternative, which is already said before as the best recommendation, seems to fit relatively nicely in all scenarios. The full 4 H SC with new layout can then be considered as the second best alternative that can be very adaptive to the changing situation, because this alternative offers an adequate capacity (please refer to previous figures of volume) with a relatively cheap investment.

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Container Terminal Expansion to Build Capacity: A Case Study

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Chapter 5. CONCLUSIONS AND RECOMMENDATIONS


The best expansion project to be implemented in CT is likely to be the fourth alternative, which is the mixed 3 and 4 high straddle carriers (SC) operation combined with rail mounted gantry (RMG) cranes, constructing a high density stack (HDS) parallel to the quay side. This fourth alternative is assessed best, in terms of operational and financial performances. With regards to additional yard capacity, 596,306 additional quay moves can be accommodated by the mixed 3 and 4 high SC with HDS parallel. A total of 2.3 million quay moves, translated to more than 3.9 TEU over quay will be more or less in line with the maximum berth capacity that CT can have. By 2011, unavoidably, the maximum terminals volume will be reached by such configurations of yard and berth capacity. There are however several scenarios that might happen in the future and these will definitely change the situation, i.e. lower growth in terminal demand or extended berth length can shift the maximum capacity to be reached at a later year. As far as the financial consideration is concerned, investing in the mixed 3 and 4 high SC with HDS parallel will give the most profitable return to the company, shown by the high NPV, IRR, and ROI. This alternative is considered to be the best, again proven by the lowest cost per move. Nevertheless, the recommendation does not really consider more complex future scenarios, for example those related to the strategic decision regarding the possibility to use another terminal area at the same time, which will definitely add more yard and berth capacity to CT. Some low and best case scenarios were considered and these might change the recommendation under the previous assumptions. A recommendation to operate the mixed 3 and 4 high SC and HDS parallel cannot be always correct, as such, a further assessment should be carried out when a complete figure of the decision regarding CT future operation has been made. The second best recommendation, the full 4 high SC operation, can then become the best alternative under a more complex future scenario because it is much cheaper and more adaptive to a changing demand expectation.

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

REFERENCES
Brealey et.al (2004). Fundamentals of Corporate Finance, Fourth Ed. New York, US: Mc Graw-Hill. Chen, T (1999). Yard Operations in Container Terminals: A Study in Unproductive Moves. Maritime Policy and Management, vol. 26, No.1, 27-38. Dekker, R (2004). Optimizing Container Terminal Activities. Overview on Container Handling. Rotterdam, The Netherlands: Erasmus University Rotterdam. Kaisen, W (2004). A Container Terminal is Born. Container Terminal Bremerhaven. http://www.ct-bremerhaven.de/engl/content.aspx?ID=366&PID=216 (12 July 2005) Kozan, E (1997). Increasing the Operational Efficiency of Container Terminals in Australia. The Journal of the Operational Research Society, vol. 48, No.2 (Feb., 1997), 151 -161 Meersmans, P J M and Dekker, R (2001). Operations Research Supports Container Handling. Econometric Institute Report EI 2001-22. Rotterdam, The Netherlands: Erasmus University Rotterdam. Mills, R W (1994 ). Finance, Strategy and Strategic Value Analysis: Linking Two Key Business Issues. UK: Butler and Tanner Ltd. Peterlini, E (2001 ). Innovative Technologies for Inter-Modal Transfer Points. European Community under the Competitive and Sustainable Growth Programme (1998-2002). Port Vancouver (2005). Container Terminal Expansion. http://www.portvancouver.com/the_port/regulatory_process.html (14 July 2005) Putten, M V (2005). Increasing Yard Deployment Efficiency at APM Terminals Rotterdam . Master Thesis. Eindhoven, The Netherlands: Technische University Eindhoven. Spasovic, L N et.al. (1999). Increasing Productivity and Service Quality of the Straddle , Carrier Operations at a Container Port Terminal. New Jersey, US: New Jersey Institute of Technology. Vis, I F A, et.al. (2001). Minimum Vehicle Fleet Size at a Container Terminal. ERIM Report Series Research in Management. Rotterdam, The Ne therlands: Erasmus University Rotterdam. Vis, I F A and Koster, R (2003). Transshipment of Containers at a Terminal: An Overview. European Journal of Operational Research 147 (2003) 1-16. Rotterdam, The Netherlands: Erasmus University Rotterdam. Wiegma ns, B (2003). Performance Conditions for Container Terminals Dissertation. . Amsterdam, The Netherlands: Vrije University Amsterdam.

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Appendix 1. Pro-forma Berthing Schedule (27 moves/hour totaling 1,950,000 quay moves)
05/01 Mon 7 11 15 19 23 06/01 Tue 7 11 15 19 23 07/01 Wed 7 11 15 19 23 08/01 Thu 7 11 15 19 23 09/01 Fri 7 11 15 19 23 10/01 Sat 7 11 15 19 23 11/01 Sun 7 11 15 19 23
FED21 010/030 FED21 SER 125 0405/0406 Vessel 18 11-01-04 10:00:00 / 12-01-04 00:48:53 400/800 325 0405/0411 Vessel 19 11-01-04 14:00:00 / 12-01-04 02:20:44 1000/0 FED22 011/030 FED22 SER 454 0405/0409 Vessel 17 10-01-04 21:00:00 / 11-01-04 09:20:44 1000/0 FED20 011/029 FED20 SER FED18 011/028 FED18 SER 458 0405/0407 Vessel 14 10-01-04 07:00:00 / 10-01-04 18:51:07 1300/0 457 0405/0410 Vessel 15 10-01-04 07:00:00 / 10-01-04 19:20:44 1000/0 452 0405/0406 Vessel 16 10-01-04 07:00:00 / 10-01-04 16:15:33 100/700 FED16 011/027 FED16 SER FED14 011/026 FED14 SER 97m 0405/0407 Vessel 12 09-01-04 15:00:00 / 10-01-04 02:51:07 700/600 452 0405/0406 Vessel 13 09-01-04 15:00:00 / 10-01-04 03:20:44 600/400 FED15 010/027 FED15 SER FED13 010/026 FED13 SER 478 0307/0308 Vessel 11 09-01-04 07:00:00 / 09-01-04 18:51:07 950/650 785 0405/0408 Vessel 10 08-01-04 21:00:00 / 09-01-04 08:51:07 1600/0 FED12 011/025 FED12 SER 125 0405/0406 Vessel 8 08-01-04 07:00:00 / 08-01-04 19:20:44 200/800 326 012/014 Vessel 9 08-01-04 08:00:00 / 08-01-04 17:15:33 700/300 FED9 010/024 FED9 SER 97m 0405/0406 Vessel 7 07-01-04 15:00:00 / 08-01-04 02:51:07 500/800 97m 0405/0407 Vessel 6 07-01-04 06:00:00 / 07-01-04 17:51:07 1000/600 FED8 011/023 FED8 SER FED7 010/023 FED7 SER 456 012/013 Vessel 5 06-01-04 12:00:00 / 07-01-04 00:20:44 500/500 FED3 010/021 FED3 SER 5Ia 045/046 Vessel 1 05-01-04 12:00:00 / 07-01-04 01:02:13 2500/2500 FED2 011/020 FED2 SER FED1 010/020 FED1 AE2 80R 010/011 Vessel 2 05-01-04 07:00:00 / 05-01-04 19:20:44 600/400 126 041/0411 Vessel 3 05-01-04 03:00:00 / 05-01-04 14:51:07 650/650

BARGE

187 0410/0411 Vessel 4 05-01-04 23:00:00 / 06-01-04 13:48:53 500/700

FED4 011/021 FED4 SER

BARGE

FED5 010/022 FED5 SER FED6 011/022 FED6 SER

BARGE

FED10 011/024 FED10 SER

BARGE

FED11 010/025 FED11 SER

BARGE

BARGE

FED17 010/028 FED17 SER

FED19 010/029 FED19 SER 785 0405/0406 Vessel 20 11-01-04 07:00:00 / 11-01-04 21:48:53 800/400

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Appendix 2. Pro-forma Berthing Schedule (30 moves/hour totaling 2,100,000 quay moves)
05/01 Mon 7 11 15 19 23 06/01 Tue 7 11 15 19 23 07/01 Wed 7 11 15 19 23 08/01 Thu 7 11 15 19 23 09/01 Fri 7 11 15 19 23 10/01 Sat 7 11 15 19 23 11/01 Sun 7 11 15 19 23
FED21 010/030 FED21 SER FED22 011/030 FED22 SER FED20 011/029 FED20 SER 125 0405/0406 Vessel 18 11-01-04 15:00:00 / 12-01-04 04:20:00 600/1000 FED19 010/029 FED19 SER 785 0405/0406 Vessel 17 11-01-04 07:00:00 / 11-01-04 20:20:00 1000/600 FED18 011/028 FED18 SER 785 0405/0406 Vessel 15 10-01-04 07:00:00 / 11-01-04 16:20:00 3000/3000 FED17 010/028 FED17 SER FED16 011/027 FED16 SER 452 0405/0406 Vessel 16 10-01-04 07:00:00 / 10-01-04 15:20:00 100/900 FED14 011/026 FED14 SER 97m 0405/0407 Vessel 13 09-01-04 15:00:00 / 10-01-04 01:40:00 900/700 452 0405/0406 Vessel 14 09-01-04 15:00:00 / 10-01-04 02:06:40 600/400 FED15 010/027 FED15 SER FED13 010/026 FED13 SER 478 0307/0308 Vessel 12 09-01-04 07:00:00 / 09-01-04 17:40:00 950/650 785 0405/0408 Vessel 11 08-01-04 21:00:00 / 09-01-04 07:00:00 1600/0 FED12 011/025 FED12 SER 125 0405/0406 Vessel 8 08-01-04 07:00:00 / 08-01-04 18:06:40 200/800 457 0405/0410 Vessel 9 08-01-04 07:00:00 / 08-01-04 18:20:44 1000/0 FED10 011/024 FED10 SER 326 012/014 Vessel 10 08-01-04 08:00:00 / 08-01-04 16:20:00 700/300 FED9 010/024 FED9 SER 97m 0405/0406 Vessel 7 07-01-04 15:00:00 / 08-01-04 01:40:00 600/1000 97m 0405/0407 Vessel 6 07-01-04 06:00:00 / 07-01-04 16:40:00 1000/600 FED8 011/023 FED8 SER FED7 010/023 FED7 SER FED4 011/021 FED4 SER FED1 010/020 FED1 SER 80R 010/011 Vessel 2 05-01-04 07:00:00 / 05-01-04 18:06:40 600/400 5Ia 045/046 Vessel 1 05-01-04 12:00:00 / 06-01-04 21:20:00 3000/3000 126 041/0411 Vessel 3 05-01-04 03:00:00 / 05-01-04 13:40:00 800/800

FED2 011/020 FED2 SER FED3 010/021 FED3 SER 187 0410/0411 Vessel 4 05-01-04 23:00:00 / 06-01-04 12:20:00 600/1000

456 012/013 Vessel 5 06-01-04 12:00:00 / 06-01-04 23:06:40 500/500

FED5 010/022 FED5 SER FED6 011/022 FED6 SER

FED11 010/025 FED11 SER

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Appendix 3. Pro-forma Berthing Schedule (33 moves/hour totaling 2,230,000 quay moves)
05/01 Mon 7 11 15 19 23 06/01 Tue 7 11 15 19 23 07/01 Wed 7 11 15 19 23 08/01 Thu 7 11 15 19 23 09/01 Fri 7 11 15 19 23 10/01 Sat 7 11 15 19 23 11/01 Sun 7 11 15 19 23
FED21 010/030 FED21 SER 125 0405/0406 Vessel 19 11-01-04 10:00:00 / 11-01-04 22:07:16 400/800 454 0405/0409 Vessel 18 10-01-04 21:00:00 / 11-01-04 07:06:04 1000/0 FED20 011/029 FED20 SER 10-01-04 23:00:00 / 11-01-04 05:03:38 200/0 FED22 011/030 FED22 SER 11-01-04 07:00:00 / 11-01-04 13:03:38 200/0 325 0405/0411 Vessel 20 11-01-04 14:00:00 / 12-01-04 00:06:04 1000/0 FED18 011/028 FED18 SER 10-01-04 21:00:00 / FED19 010/029 FED19 SER 785 0405/0406 Vessel 21 11-01-04 07:00:00 / 11-01-04 19:07:16 800/400 458 0405/0407 Vessel 15 10-01-04 07:00:00 / 10-01-04 16:41:49 1300/0 457 0405/0410 Vessel 16 10-01-04 07:00:00 / 10-01-04 17:06:04 1000/0 452 0405/0406 Vessel 17 10-01-04 07:00:00 / 10-01-04 14:34:33 100/700 FED17 010/028 FED17 SER 10-01-04 11:00:00 / 10-01-04 17:03:38 200/0 FED14 011/026 FED14 SER 97m 0405/0407 Vessel 13 09-01-04 15:00:00 / 10-01-04 00:41:49 700/600 452 0405/0406 Vessel 14 09-01-04 15:00:00 / 10-01-04 01:06:04 600/400 FED15 010/027 FED15 SER 09-01-04 20:00:00 / 10-01-04 02:03:38 200/0 FED16 011/027 FED16 SER FED13 010/026 FED13 SER 09-01-04 03:00:00 / 09-01-04 09:03:38 0/200 785 0405/0408 Vessel 11 08-01-04 21:00:00 / 09-01-04 06:41:49 1600/0 125 0405/0406 Vessel 9 08-01-04 07:00:00 / 08-01-04 17:06:04 200/800 326 012/014 Vessel 10 08-01-04 08:00:00 / 08-01-04 15:34:33 700/300 FED9 010/024 FED9 SER 07-01-04 20:00:00 / 08-01-04 02:03:38 0/200 97m 0405/0406 Vessel 7 07-01-04 17:00:00 / 08-01-04 02:41:49 500/800 97m 0405/0407 Vessel 6 07-01-04 06:00:00 / 07-01-04 15:41:49 1000/600 FED7 010/023 FED7 SER 07-01-04 01:00:00 / 07-01-04 07:03:38 0/200 145 0405/0412 Vessel 8 07-01-04 10:00:00 / 08-01-04 01:09:05 800/1200 FED3 010/021 FED3 SER 05-01-04 21:00:00 / 06-01-04 03:03:38 0/200 FED4 011/021 FED4 SER 187 0410/0411 Vessel 4 05-01-04 23:00:00 / 06-01-04 11:07:16 500/700 FED1 010/020 FED1 AE2 05-01-04 03:00:00 / 05-01-04 09:03:38 0/200 5Ia 045/046 Vessel 1 05-01-04 12:00:00 / 06-01-04 18:18:11 2500/2500 FED2 011/020 FED2 SER 126 041/0411 Vessel 3 05-01-04 03:00:00 / 05-01-04 12:41:49 650/650 80R 010/011 Vessel 2 05-01-04 07:00:00 / 05-01-04 17:06:04 600/400

BARGE

BARGE

456 012/013 Vessel 5 06-01-04 12:00:00 / 06-01-04 22:06:04 500/500 FED5 010/022 FED5 SER 06-01-04 17:00:00 / 0601-04 23:03:38 0/200

FED6 011/022 FED6 SER

BARGE

FED8 011/023 FED8 SER

FED10 011/024 FED10 SER

BARGE

FED11 010/025 FED11 SER 08-01-04 11:00:00 / 0801-04 17:03:38 0/200 FED12 011/025 FED12 SER

BARGE
478 0307/0308 Vessel 12 09-01-04 07:00:00 / 09-01-04 16:41:49 950/650

BARGE

BARGE

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

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Appendix 4. Berth Capacity based on 27 moves/hour


Settings Quay 16 1600 m Deep sea vessels 27 Mvs/h 1:30 1:30 10% 15 Barges 20 Mvs/h 25% 1 400 m 130,000 mvs/yr Statistics 25.00% 46.10% 71.10% 17.60% 53.20% 70.80% 7 Berth utilization (barge) Berth utilization (excl. barge) Total berth utilization Crane utilization (barge) Crane utilization (excl. barge) Total crane utilization Cranes undeployed per week (excl. barge) (based on crane utilization) 4 Barge cranes per week (extra cranes required to service all barges) 28,940 9,459 38,399 1,996,754 Moves/week (excl. barge) Moves/week (barges) Total moves/week Moves/year (incl. barge) total discharge and load moves (barge and deepsea) per week * 52 weeks total discharge and load moves excluding barges per week total discharge and load moves barges per week total barge moves/ (barge productivity * 7 days * 24 h) 100% * m berth solely reserved for barge / total length of berth 100% * m berthing hours per week/ ( 7 days * 24 h * length of berth) 100% * total barge moves / (productivity on barge * total cranes * 7 days * 24 h) 100% * sum operational time cranes on MV per week/ (7 days * 24 h * number of cranes) ( 1 - crane utilization) * total number of cranes Craneproductivity barge Percentage barge/total volume (average 2004 = 19.65 %) Number of dedicated barge cranes Berth reserved solely for barge Yearly capacity of barge crane (mvs/yr) Number of post panamax cranes Length of berth Craneproductivity deep sea Idle time before start of ops / interchange time Idle time after end of ops / interchange time Extra berth length rel. to vessel used by ropes Number of deep sea dedicated cranes Calculation

Appendix 5. Berth Capacity based on 30 moves/hour


Settings Quay 16 1600 m Deep sea vessels 30 Mvs/h 1:30 1:30 10% 12 Barges 20 Mvs/h 25% 4 400 m 130,000 mvs/yr Statistics 25.00% 43.40% 68.40% 18.60% 50.70% 69.30% 8 3 30,640 10,015 40,655 2,114,048 Berth utilization (barge) Berth utilization (excl. barge) Total berth utilization Crane utilization (barge) Crane utilization (excl. barge) Total crane utilization Cranes undeployed per week (excl. barge) (based on crane utilization) Barge cranes per week (extra cranes required to service all barges) Moves/week (excl. barge) Moves/week (barges) Total moves/week Moves/year (incl. barge) total discharge and load moves (barge and deepsea) per week * 52 weeks total discharge and load moves excluding barges per week total discharge and load moves barges per week Total barge moves/ (barge productivity * 7 days * 24 h) ( 1 - crane utilization) * total number of cranes 100% * total barge moves / (productivity on barge * total cranes * 7 days * 24 h) 100% * sum operational time cranes on MV per week/ (7 days * 24 h * number of cranes) 100% * m berth solely reserved for barge / total length of berth 100% * m berthing hours per week/ ( 7 days * 24 h * length of berth) Craneproductivity barge Percentage barge/total volume (average 2004 = 19.65 %) Number of dedicated barge cranes Berth reserved solely for barge Yearly capacity of barge crane (mvs/yr) Craneproductivity deep sea Idle time before start of ops / interchange time Idle time after end of ops / interchange time Extra berth length rel. to vessel used by ropes Number of deep sea dedicated cranes Number of post panamax cranes Length of berth Calculation

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Appendix 6. Berth Capacity based on 33 moves/hour


Settings Quay 16 1600 m Deep sea vessels 30 Mvs/h 1:30 1:30 10% 12 Barges 20 Mvs/h 25% 4 400 m 130,000 mvs/yr Statistics 25.00% 44.00% 69.00% 19.70% 48.80% 68.50% 8 4 32,450 10,606 43,056 2,238,931 Berth utilization (barge) Berth utilization (excl. barge) Total berth utilization Crane utilization (barge) Crane utilization (excl. barge) Total crane utilization Cranes undeployed per week (excl. barge) (based on crane utilization) Barge cranes per week (extra cranes required to service all barges) Moves/week (excl. barge) Moves/week (barges) Total moves/week Moves/year (incl. barge) total discharge and load moves (barge and deepsea) per week * 52 weeks total discharge and load moves excluding barges per week total discharge and load moves barges per week Total barge moves/ (barge productivity * 7 days * 24 h) ( 1 - crane utilization) * total number of cranes 100% * total barge moves / (productivity on barge * total cranes * 7 days * 24 h) 100% * sum operational time cranes on MV per week/ (7 days * 24 h * number of cranes) 100% * m berth solely reserved for barge / total length of berth 100% * m berthing hours per week/ ( 7 days * 24 h * length of berth) Craneproductivity barge Percentage barge/total volume (average 2004 = 19.65 %) Number of dedicated barge cranes Berth reserved solely for barge Yearly capacity of barge crane (mvs/yr) Craneproductivity deep sea Idle time before start of ops / interchange time Idle time after end of ops / interchange time Extra berth length rel. to vessel used by ropes Number of deep sea dedicated cranes Number of post panamax cranes Length of berth Calculation

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

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Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Appendix 7. Profit and Loss Statement for 3 and 4-high SC Alternative


EUR '1,000 Budget 2006 Budget 2007 Budget 2008 Budget 2009 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014 Investments/yr 26,734 9,781 8,496 27,180 9,135 32,671 10,071 10,575 11,103 Cumulative investments 157,820 167,601 176,097 203,277 212,412 245,082 255,153 265,728 276,832 ROI 15% 16% 17% 17% 17% 12% 11% 11% 11% EUR '1,000 Budget 2006 Budget 2007 Budget 2008 Budget 2009 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014 Profit & loss: Revenue 122,450 136,376 149,095 171,280 175,604 184,505 188,657 192,902 197,242 Labour (incl subcontracting) (42,253) (45,514) (49,566) (58,308) (61,057) (69,984) (73,309) (76,795) (80,453) Power (1,893) (2,226) (2,618) (2,899) (2,965) (3,031) (3,099) (3,169) (3,241) Fuel Consumption (3,968) (4,666) (5,487) (6,077) (6,214) (6,354) (6,497) (6,643) (6,792) Maintenance and repair Costs (operational equipt.) (7,432) (7,645) (7,922) (9,030) (9,233) (10,879) (11,123) (11,374) (11,630) Land Lease & Rent (8,558) (10,137) (10,598) (11,330) (11,585) (11,845) (12,112) (12,385) (12,663) Other Operational Costs (3,704) (4,355) (5,121) (5,672) (5,800) (5,930) (6,063) (6,200) (6,339) Total Operational Costs (67,807) (74,542) (81,310) (93,317) (96,853) (108,023) (112,204) (116,565) (121,117) Contribution margin 54,642 61,834 67,785 77,963 78,751 76,482 76,453 76,336 76,124 Salaries (1,170) (1,365) (1,433) (1,655) (1,738) (1,908) (2,003) (2,104) (2,209) IT Costs (1,892) (1,934) (1,978) (2,022) (2,068) (2,114) (2,162) (2,210) (2,260) Maintenance and Repair Costs (civil works) (500) (511) (523) (535) (547) (559) (571) (584) (597) Other Non-Operational Costs (4,532) (5,330) (6,267) (7,369) (8,665) (9,778) (9,998) (10,223) (10,453) Total Non-Operational Costs (8,094) (9,140) (10,201) (11,581) (13,018) (14,359) (14,734) (15,121) (15,519) EBITDA 46,548 52,694 57,584 66,382 65,734 62,123 61,719 61,215 60,605 Depreciation (12,000) (12,552) (12,872) (15,098) (15,437) (20,177) (20,630) (21,095) (16,690) EBIT 34,548 40,141 44,712 51,284 50,296 41,947 41,088 40,120 43,916 Financial expenses (1,771) (1,444) (1,062) (663) (227) 0 0 0 0 Extra-ordinary expenses EBT 32,778 38,698 43,649 50,621 50,069 41,947 41,088 40,120 43,916 Taxes (9,833) (11,609) (13,095) (15,186) (15,021) (12,584) (12,326) (12,036) (13,175) Net income after tax 22,944 27,088 30,555 35,435 35,049 29,363 28,762 28,084 30,741

Budget 2006 Budget 2007 Budget 2008 Budget 2009 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014 Various Key Figures Revenue per move - EUR 104.78 101.48 96.47 102.31 104.89 110.21 112.69 115.22 117.82 Labour cost per move - EUR 36.16 33.87 32.07 34.83 36.47 41.80 43.79 45.87 48.06 Maintenance and Repair Cost Equipment per move - EUR 6.36 5.69 5.13 5.39 5.52 6.50 6.64 6.79 6.95 Land lease and rent per move - EUR 7.32 7.54 6.86 6.77 6.92 7.08 7.23 7.40 7.56 Total Operational Cost per move - EUR 58.02 55.47 52.61 55.74 57.85 64.52 67.02 69.63 72.35 Salaries cost per move - EUR 1.00 1.02 0.93 0.99 1.04 1.14 1.20 1.26 1.32 IT cost per move - EUR 1.62 1.44 1.28 1.21 1.24 1.26 1.29 1.32 1.35 Maintenance and Repair Civil works per move - EUR 0.43 0.38 0.34 0.32 0.33 0.33 0.34 0.35 0.36 Other Non-Operational cost per move - EUR 3.88 3.97 4.05 4.40 5.18 5.84 5.97 6.11 6.24 Total Non-Operational cost per move - EUR 6.93 6.80 6.60 6.92 7.78 8.58 8.80 9.03 9.27 Depreciation cost per move - EUR 10.27 EBIT per move - EUR 29.56 Total Cost per move - EUR 75.22 Staff blue collar (number) 449 Staff white collar (number) 158 Total staff 607 Hectare (m2) 100 Quay meter (m) 1,600 Ship-shore crane (number) 12 Straddle carrier (number) 41 Moves - Import/Export 740,706 Moves - Barges 286,808 Moves - Transshipment 141,087 Moves - Shiftings Moves - Total crane moves 1,168,601 TEU - Total throughput *2 1,986,622 TEU per hectare 19,866 TEU per quay meter 1,242 TEU per white collar staff 12,574 TEU per blue collar staff 4,425 TEU per staff 3,273 Moves per ship-shore crane 97,383 Moves per Straddle Carrier 28,502 Contribution Margin % 44.6% EBITDA Margin % 38.0% EBIT Margin % 28.2% EBT Margin % 26.8% Net Income Margin % 18.7% Expected mvs/h per Barge Crane 21 Expected mvs/h per STS Crane 29 Moves - CX + 86% of barge 1,004,997 Moves 3rd party + 14% of barge 163,604 Moves - Total 1,168,601 NPV IRR Investment Ebitda Investment+Ebitda Accummulative Payback period 116,387 36.77% (157,820) 46,548 (111,272) (9,781) 52,694 42,913 (68,359) (8,496) 57,584 49,088 (19,271) (27,180) 66,382 39,202 19,931 (9,135) 65,734 56,599 76,530 (32,671) 62,123 29,453 105,983 (10,071) 61,719 51,648 157,630 (10,575) 61,215 50,640 208,271 (11,103) 60,605 49,502 257,773 9.34 29.87 71.61 453 166 619 100 1,600 12 41 851,812 329,830 162,250 1,343,892 2,284,616 22,846 1,428 13,771 5,048 3,694 111,991 32,778 45.3% 38.6% 29.4% 28.4% 19.9% 22 31 1,155,747 188,145 1,343,892 8.33 28.93 67.54 461 174 635 100 1,600 12 41 979,584 379,304 186,587 1,545,475 2,627,308 26,273 1,642 15,083 5,700 4,137 128,790 37,695 45.5% 38.6% 30.0% 29.3% 20.5% 23 33 1,329,109 216,367 1,545,475 9.02 30.63 71.68 533 183 716 100 1,600 14 46 1,061,135 410,881 202,121 1,674,137 2,846,033 28,460 1,779 15,560 5,337 3,974 119,581 36,474 45.5% 38.8% 29.9% 29.6% 20.7% 24 33 1,439,758 234,379 1,674,137 9.22 30.04 74.85 533 183 716 100 1,600 14 46 1,061,135 410,881 202,121 1,674,137 2,846,033 28,460 1,779 15,560 5,337 3,974 119,581 36,474 44.8% 37.4% 28.6% 28.5% 20.0% 25 33 1,439,758 234,379 1,674,137 12.05 25.06 85.15 606 184 790 100 1,600 16 57 1,061,135 410,881 202,121 1,674,137 2,846,033 28,460 1,779 15,476 4,696 3,602 104,634 29,631 41.5% 33.7% 22.7% 22.7% 15.9% 25 33 1,439,758 234,379 1,674,137 12.32 24.54 88.15 606 184 790 100 1,600 16 57 1,061,135 410,881 202,121 1,674,137 2,846,033 28,460 1,779 15,476 4,696 3,602 104,634 29,631 40.5% 32.7% 21.8% 21.8% 15.2% 25 33 1,439,758 234,379 1,674,137 12.60 23.96 91.26 606 184 790 100 1,600 16 57 1,061,135 410,881 202,121 1,674,137 2,846,033 28,460 1,779 15,476 4,696 3,602 104,634 29,631 39.6% 31.7% 20.8% 20.8% 14.6% 25 33 1,439,758 234,379 1,674,137 9.97 26.23 91.59 606 184 790 100 1,600 16 57 1,061,135 410,881 202,121 1,674,137 2,846,033 28,460 1,779 15,476 4,696 3,602 104,634 29,631 38.6% 30.7% 22.3% 22.3% 15.6% 25 33 1,439,758 234,379 1,674,137

3.50 years

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

69

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Appendix 8. Profit and Loss Statement for 3 and 4-high SC New Layout Alternative
EUR '1,000 Budget 2006 Budget 2007 Investments/yr 26,734 9,781 Cumulative investments 157,820 167,601 ROI 15% 16% EUR '1,000 Budget 2006 Budget 2007 Profit & loss: Revenue 122,450 136,376 Labour (incl subcontracting) (42,253) (45,514) Power (1,870) (2,199) Fuel Consumption (3,968) (4,666) Maintenance and repair Costs (operational equipt.) (7,432) (7,645) Land Lease & Rent (8,558) (10,137) Other Operational Costs (3,704) (4,355) Total Operational Costs (67,784) (74,515) Contribution margin 54,666 61,861 Salaries (1,170) (1,365) IT Costs (1,892) (1,934) Maintenance and Repair Costs (civil works) (500) (511) Other Non-Operational Costs (4,532) (5,330) Total Non-Operational Costs (8,094) (9,140) EBITDA 46,572 52,721 Depreciation (12,000) (12,552) EBIT 34,572 40,169 Financial expenses (1,771) (1,444) Extra-ordinary expenses EBT 32,801 38,725 Taxes (9,840) (11,618) Net income after tax 22,961 27,108 Budget 2008 Budget 2009 8,496 27,211 176,097 203,308 17% 17% Budget 2008 Budget 2009 149,095 (49,566) (2,585) (5,487) (7,922) (10,598) (5,121) (81,278) 67,817 (1,433) (1,978) (523) (6,267) (10,201) 57,616 (12,872) 44,744 (1,062) 43,682 (13,105) 30,577 170,307 (58,842) (3,040) (6,452) (9,031) (11,330) (6,021) (94,716) 75,592 (1,655) (2,022) (535) (7,369) (11,581) 64,010 (15,104) 48,906 (663) 48,243 (14,473) 33,770 Budget 2010 9,166 212,475 19% Budget 2010 186,650 (62,750) (3,246) (6,889) (9,235) (11,585) (6,430) (100,136) 86,514 (1,738) (2,068) (547) (7,869) (12,222) 74,292 (15,453) 58,839 (227) 58,612 (17,584) 41,028 Budget 2011 32,671 245,145 15% Budget 2011 196,785 (71,744) (3,319) (7,044) (10,880) (11,845) (6,575) (111,408) 85,376 (1,908) (2,114) (559) (8,046) (12,627) 72,749 (20,193) 52,556 0 52,556 (15,767) 36,789 Budget 2012 10,071 255,216 14% Budget 2012 201,212 (75,137) (3,394) (7,203) (11,125) (12,112) (6,723) (115,694) 85,518 (2,003) (2,162) (571) (8,227) (12,964) 72,554 (20,647) 51,907 0 51,907 (15,572) 36,335 Budget 2013 10,575 265,791 13% Budget 2013 205,739 (78,696) (3,470) (7,365) (11,375) (12,385) (6,874) (120,165) 85,574 (2,104) (2,210) (584) (8,412) (13,311) 72,263 (21,112) 51,152 0 51,152 (15,345) 35,806 Budget 2014 11,103 276,895 14% Budget 2014 210,369 (82,428) (3,548) (7,531) (11,631) (12,663) (7,029) (124,831) 85,538 (2,209) (2,260) (597) (8,602) (13,668) 71,870 (16,690) 55,180 0 0 55,180 (16,554) 38,626

Budget 2006 Budget 2007 Budget 2008 Budget 2009 Various Key Figures Revenue per move - EUR 104.78 101.48 96.47 95.82 Labour cost per move - EUR 36.16 33.87 32.07 33.11 Maintenance and Repair Cost Equipment per move - EUR 6.36 5.69 5.13 5.08 Land lease and rent per move - EUR 7.32 7.54 6.86 6.37 Total Operational Cost per move 58.00 - EUR 55.45 52.59 53.29 Salaries cost per move - EUR 1.00 1.02 0.93 0.93 IT cost per move - EUR 1.62 1.44 1.28 1.14 Maintenance and Repair Civil works 0.43move - EUR per 0.38 0.34 0.30 Other Non-Operational cost per move - EUR 3.88 3.97 4.05 4.15 Total Non-Operational cost per move - EUR 6.93 6.80 6.60 6.52 Depreciation cost per move - EUR 10.27 9.34 8.33 8.50 EBIT per move - EUR 29.58 29.89 28.95 27.52 Total Cost per move - EUR 75.20 71.59 67.52 68.31 Staff blue collar (number) 449 453 461 535 Staff white collar (number) 158 166 174 183 Total staff 607 619 635 718 Hectare (m2) 92 100 100 100 Quay meter (m) 1,600 1,600 1,600 1,600 Ship-shore crane (number) 12 12 12 14 Straddle carrier (number) 41 41 41 46 Moves - Import/Export 740,706 851,812 979,584 1,126,521 Moves - Barges 286,808 329,830 379,304 436,200 Moves - Transshipment 141,087 162,250 186,587 214,576 Moves - Shiftings Moves - Total crane moves 1,168,601 1,343,892 1,545,475 1,777,297 TEU - Total throughput *2 1,986,622 2,284,616 2,627,308 3,021,404 TEU per hectare 21,594 22,846 26,273 30,214 TEU per quay meter 1,242 1,428 1,642 1,888 TEU per white collar staff 12,574 13,771 15,083 16,519 TEU per blue collar staff 4,425 5,048 5,700 5,644 TEU per staff 3,273 3,694 4,137 4,207 Moves per ship-shore crane 97,383 111,991 128,790 126,950 Moves per Straddle Carrier 28,502 32,778 37,695 38,721 Contribution Margin % 44.6% 45.4% 45.5% 44.4% EBITDA Margin % 38.0% 38.7% 38.6% 37.6% EBIT Margin % 28.2% 29.5% 30.0% 28.7% EBT Margin % 26.8% 28.4% 29.3% 28.3% Net Income Margin % 18.8% 19.9% 20.5% 19.8% Expected mvs/h per Barge Crane 21 22 23 25 Expected mvs/h per STS Crane 29 31 33 35 Moves - CX + 86% of barge 1,004,997 1,155,747 1,329,109 1,528,475 Moves 3rd party+ 14% of barge 163,604 188,145 216,367 248,822 Moves - Total 1,168,601 1,343,892 1,545,475 1,777,297 NPV IRR Investment Ebitda Investment+Ebitda Accummulative Payback period 140,370 39.01% (157,820.42) 46,572 (111,248.62) (9,781.02) 52,721 42,940.09 (68,308.53) (8,495.57) 57,616 49,120.70 (19,187.83) (27,211.35) 64,010 36,799.00 17,611.17

Budget 2010 100.56 33.81 4.98 6.24 53.95 0.94 1.11 0.29 4.24 6.58 8.33 31.70 68.86 537 192 729 100 1,600 14 46 1,176,513 455,557 224,098 1,856,168 3,155,486 31,555 1,972 16,431 5,876 4,328 132,583 40,439 46.4% 39.8% 31.5% 31.4% 22.0% 25 35 1,596,305 259,864 1,856,168

Budget 2011 106.02 38.65 5.86 6.38 60.02 1.03 1.14 0.30 4.33 6.80 10.88 28.31 77.70 610 193 803 100 1,600 16 57 1,176,513 455,557 224,098 1,856,168 3,155,486 31,555 1,972 16,345 5,174 3,930 116,011 32,853 43.4% 37.0% 26.7% 26.7% 18.7% 25 35 1,596,305 259,864 1,856,168

Budget 2012 108.40 40.48 5.99 6.53 62.33 1.08 1.16 0.31 4.43 6.98 11.12 27.96 80.44 610 193 803 100 1,600 16 57 1,176,513 455,557 224,098 1,856,168 3,155,486 31,555 1,972 16,345 5,174 3,930 116,011 32,853 42.5% 36.1% 25.8% 25.8% 18.1% 25 35 1,596,305 259,864 1,856,168

Budget 2013 110.84 42.40 6.13 6.67 64.74 1.13 1.19 0.31 4.53 7.17 11.37 27.56 83.28 610 193 803 100 1,600 16 57 1,176,513 455,557 224,098 1,856,168 3,155,486 31,555 1,972 16,345 5,174 3,930 116,011 32,853 41.6% 35.1% 24.9% 24.9% 17.4% 25 35 1,596,305 259,864 1,856,168

Budget 2014 113.33 44.41 6.27 6.82 67.25 1.19 1.22 0.32 4.63 7.36 8.99 29.73 83.61 610 193 803 100 1,600 16 57 1,176,513 455,557 224,098 1,856,168 3,155,486 31,555 1,972 16,345 5,174 3,930 116,011 32,853 40.7% 34.2% 26.2% 26.2% 18.4% 25 35 1,596,305 259,864 1,856,168

(9,166.34) 74,292 65,125.72 82,736.89

(32,670.59) 72,749 40,078.31 122,815.20

(10,071.16) 72,554 62,482.88 185,298.08

(10,574.72) 72,263 61,688.50 246,986.58

(11,103.46) 71,870 60,766.23 307,752.81

3.52 years

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

70

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Appendix 9. Profit and Loss Statement for 4-high SC New Layout Alternative
EUR '1,000 Budget 2006 Budget 2007 Investments/yr 26,734 23,578 Cumulative investments 157,820 181,398 15% 14% ROI EUR '1,000 Budget 2006 Budget 2007 Profit & loss: Revenue 122,450 136,376 Labour (incl subcontracting) (42,253) (46,334) Power (1,893) (2,226) Fuel Consumption (3,968) (4,666) Maintenance and repair Costs (operational equipt.) (7,432) (7,792) Land Lease & Rent (8,558) (10,137) Other Operational Costs (3,704) (4,355) Total Operational Costs (67,807) (75,510) Contribution margin 54,642 60,866 Salaries (1,170) (1,229) IT Costs (1,892) (1,934) Maintenance and Repair Costs (civil(500) works) (511) Other Non-Operational Costs (4,532) (5,330) Total Non-Operational Costs (8,094) (9,003) EBITDA 46,548 51,862 Depreciation (12,000) (14,613) EBIT 34,548 37,249 Financial expenses (1,771) (1,444) Extra-ordinary expenses EBT 32,778 35,805 Taxes (9,833) (10,742) Net income after tax 22,944 25,064 Budget 2008 10,029 191,427 15% Budget 2008 149,095 (49,645) (2,618) (5,487) (8,089) (10,598) (5,121) (81,558) 67,537 (1,433) (2,022) (523) (6,267) (10,245) 57,292 (15,252) 42,040 (1,062) 40,978 (12,293) 28,684 Budget 2009 29,511 220,938 14% Budget 2009 170,307 (59,118) (3,078) (6,452) (9,228) (11,330) (6,021) (95,227) 75,081 (1,505) (2,162) (535) (7,369) (11,570) 63,510 (18,041) 45,469 (663) 44,806 (13,442) 31,365 Budget 2010 9,214 230,151 17% Budget 2010 190,621 (63,752) (3,619) (7,586) (9,437) (11,585) (7,080) (103,060) 87,562 (1,738) (2,363) (547) (8,665) (13,313) 74,249 (18,469) 55,780 (227) 55,553 (16,666) 38,887 Budget 2011 32,734 262,885 16% Budget 2011 217,780 (74,737) (4,084) (8,560) (11,089) (11,845) (7,990) (118,305) 99,475 (1,825) (2,641) (559) (9,778) (14,803) 84,672 (23,300) 61,372 0 61,372 (18,412) 42,960 Budget 2012 10,071 272,956 16% Budget 2012 222,680 (78,238) (4,176) (8,753) (11,338) (12,112) (8,169) (122,787) 99,893 (2,003) (3,018) (571) (9,998) (15,591) 84,302 (23,825) 60,478 0 60,478 (18,143) 42,334 Budget 2013 10,575 283,531 15% Budget 2013 227,690 (81,909) (4,270) (8,950) (11,594) (12,385) (8,353) (127,460) 100,230 (2,104) (3,527) (584) (10,223) (16,438) 83,792 (24,361) 59,432 0 59,432 (17,830) 41,602 Budget 2014 11,103 294,634 16% Budget 2014 232,813 (85,759) (4,366) (9,151) (11,854) (12,663) (8,541) (132,335) 100,479 (2,209) (4,214) (597) (10,453) (17,473) 83,006 (16,690) 66,316 0 66,316 (19,895) 46,421

Budget 2006 Budget 2007 Various Key Figures Revenue per move - EUR 104.78 101.48 Labour cost per move - EUR 36.16 34.48 Maintenance and Repair Cost Equipment per move - EUR 5.80 6.36 Land lease and rent per move - EUR7.32 7.54 Total Operational Cost per move -58.02 EUR 56.19 Salaries cost per move - EUR 1.00 0.91 IT cost per move - EUR 1.62 1.44 Maintenance and Repair Civil works per move - EUR 0.43 0.38 Other Non-Operational cost per move - EUR 3.88 3.97 Total Non-Operational cost per move - EUR 6.93 6.70 Depreciation cost per move - EUR 10.27 10.87 EBIT per move - EUR 29.56 27.72 Total Cost per move - EUR 75.22 73.76 Staff blue collar (number) 449 463 Staff white collar (number) 158 166 Total staff 607 629 Hectare (m2) 92 100 Quay meter (m) 1,600 1,600 Ship-shore crane (number) 12 12 Straddle carrier (number) 41 59 Moves - Import/Export 740,706 851,812 Moves - Barges 286,808 329,830 Moves - Transshipment 141,087 162,250 Moves - Shiftings Moves - Total crane moves 1,168,601 1,343,892 TEU - Total throughput *2 1,986,622 2,284,616 TEU per hectare 21,594 22,846 TEU per quay meter 1,242 1,428 TEU per white collar staff 12,574 13,771 TEU per blue collar staff 4,425 4,938 TEU per staff 3,273 3,635 Moves per ship-shore crane 97,383 111,991 Moves per Straddle Carrier 28,502 22,778 Contribution Margin % 44.6% 44.6% EBITDA Margin % 38.0% 38.0% EBIT Margin % 28.2% 27.3% EBT Margin % 26.8% 26.3% Net Income Margin % 18.7% 18.4% Expected mvs/h per Barge Crane 21 22 Expected mvs/h per STS Crane 29 31 Moves - CX + 86% of barge 1,004,997 1,155,747 Moves 3rd party + 14% of barge 163,604 188,145 Moves - Total 1,168,601 1,343,892 NPV IRR Investment Ebitda Investment+Ebitda Accummulative Payback period 153,393 37.72% (157,820.42) 46,548 (111,271.99) (23,578.02) 51,862 28,284.14 (82,987.85)

Budget 2008 96.47 32.12 5.23 6.86 52.77 0.93 1.31 0.34 4.05 6.63 9.87 27.20 69.27 462 174 636 100 1,600 12 61 979,584 379,304 186,587 1,545,475 2,627,308 26,273 1,642 15,083 5,687 4,130 128,790 25,336 45.3% 38.4% 28.2% 27.5% 19.2% 23 33 1,329,109 216,367 1,545,475

Budget 2009 95.82 33.26 5.19 6.37 53.58 0.85 1.22 0.30 4.15 6.51 10.15 25.58 70.24 537 183 720 100 1,600 14 69 1,126,521 436,200 214,576 1,777,297 3,021,404 30,214 1,888 16,519 5,626 4,197 126,950 25,795 44.1% 37.3% 26.7% 26.3% 18.4% 25 35 1,528,475 248,822 1,777,297

Budget 2010 93.26 31.19 4.62 5.67 50.42 0.85 1.16 0.27 4.24 6.51 9.04 27.29 65.97 541 192 733 100 1,600 14 69 1,295,500 501,630 246,762 2,043,891 3,474,615 34,746 2,172 18,092 6,425 4,741 145,992 29,665 45.9% 39.0% 29.3% 29.1% 20.4% 25 35 1,757,746 286,145 2,043,891

Budget 2011 96.55 33.13 4.92 5.25 52.45 0.81 1.17 0.25 4.33 6.56 10.33 27.21 69.34 618 202 820 100 1,600 16 80 1,429,677 553,584 272,319 2,255,580 3,834,486 38,345 2,397 19,015 6,204 4,678 140,974 28,372 45.7% 38.9% 28.2% 28.2% 19.7% 25 35 1,939,799 315,781 2,255,580

Budget 2012 98.72 34.69 5.03 5.37 54.44 0.89 1.34 0.25 4.43 6.91 10.56 26.81 71.91 618 203 821 100 1,600 16 80 1,429,677 553,584 272,319 2,255,580 3,834,486 38,345 2,397 18,921 6,204 4,672 140,974 28,372 44.9% 37.9% 27.2% 27.2% 19.0% 25 35 1,939,799 315,781 2,255,580

Budget 2013 100.95 36.31 5.14 5.49 56.51 0.93 1.56 0.26 4.53 7.29 10.80 26.35 74.60 618 203 821 100 1,600 16 80 1,429,677 553,584 272,319 2,255,580 3,834,486 38,345 2,397 18,921 6,204 4,672 140,974 28,372 44.0% 36.8% 26.1% 26.1% 18.3% 25 35 1,939,799 315,781 2,255,580

Budget 2014 103.22 38.02 5.26 5.61 58.67 0.98 1.87 0.26 4.63 7.75 7.40 29.40 73.82 618 203 821 100 1,600 16 80 1,429,677 553,584 272,319 2,255,580 3,834,486 38,345 2,397 18,921 6,204 4,672 140,974 28,372 43.2% 35.7% 28.5% 28.5% 19.9% 25 35 1,939,799 315,781 2,255,580

(10,028.57) 57,292 47,263.78 (35,724.08)

(29,510.85) 63,510 33,999.48 (1,724.60)

(9,213.59) 74,249 65,035.20 63,310.60

(32,733.59) 84,672 51,938.54 115,249.14

(10,071.16) 84,302 74,231.14 189,480.28

(10,574.72) 83,792 73,217.65 262,697.94

(11,103.46) 83,006 71,902.19 334,600.13

4.03 years

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

71

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Appendix 10. Profit and Loss Statement for HDS Parallel Alternative
EUR '1,000 Budget 2006 Budget 2007 Investments/yr 26,734 9,891 Cumulative investments 157,820 167,712 15% 16% ROI EUR '1,000 Budget 2006 Budget 2007 Profit & loss: Revenue 122,450 136,376 Labour (incl subcontracting) (42,253) (45,650) Power (1,870) (2,199) Fuel Consumption (3,968) (4,666) Maintenance and repair Costs (operational equipt.) (7,427) (7,643) Land Lease & Rent (8,558) (10,137) Other Operational Costs (3,704) (4,355) Total Operational Costs (67,779) (74,650) Contribution margin 54,670 61,727 Salaries (1,170) (1,256) IT Costs (1,892) (1,934) Maintenance and Repair Costs (civil(500) works) (511) Other Non-Operational Costs (4,532) (5,330) Total Non-Operational Costs (8,094) (9,031) EBITDA 46,576 52,695 Depreciation (12,000) (12,569) EBIT 34,576 40,127 Financial expenses (1,771) (1,444) Extra-ordinary expenses EBT 32,806 38,683 Taxes (9,842) (11,605) Net income after tax 22,964 27,078 Budget 2008 8,543 176,255 17% Budget 2008 149,095 (49,566) (2,585) (5,487) (7,921) (10,598) (5,121) (81,277) 67,818 (1,498) (2,022) (523) (6,267) (10,310) 57,507 (12,897) 44,610 (1,062) 43,548 (13,064) 30,483 Budget 2009 27,243 203,497 16% Budget 2009 170,307 (58,993) (3,040) (6,452) (9,031) (11,330) (6,021) (94,866) 75,441 (1,609) (2,162) (535) (7,369) (11,674) 63,767 (15,137) 48,630 (663) 47,967 (14,390) 33,577 Budget 2010 51,739 255,236 19% Budget 2010 190,621 (47,086) (3,575) (7,586) (10,564) (11,585) (7,080) (87,476) 103,145 (1,900) (2,363) (547) (8,665) (13,475) 89,670 (20,218) 69,453 (227) 69,226 (20,768) 48,458 Budget 2011 36,619 291,855 19% Budget 2011 217,780 (54,806) (4,060) (8,617) (12,365) (11,845) (8,042) (99,736) 118,044 (2,040) (2,641) (559) (9,842) (15,082) 102,962 (25,384) 77,577 0 77,577 (23,273) 54,304 Budget 2012 10,071 301,926 18% Budget 2012 222,680 (57,310) (4,152) (8,811) (12,644) (12,112) (8,223) (103,251) 119,429 (2,290) (3,018) (571) (10,064) (15,943) 103,486 (25,955) 77,531 0 77,531 (23,259) 54,272 Budget 2013 10,575 312,500 17% Budget 2013 227,690 (59,933) (4,245) (9,009) (12,928) (12,385) (8,408) (106,907) 120,783 (2,458) (3,527) (584) (10,290) (16,859) 103,923 (26,539) 77,384 0 77,384 (23,215) 54,169 Budget 2014 11,103 323,604 18% Budget 2014 232,813 (62,682) (4,340) (9,211) (13,219) (12,663) (8,597) (110,713) 122,100 (2,639) (4,214) (597) (10,522) (17,972) 104,128 (19,854) 84,274 0 84,274 (25,282) 58,992

Budget 2006 Budget 2007 Budget 2008 Various Key Figures Revenue per move - EUR 104.78 101.48 96.47 Labour cost per move - EUR 36.16 33.97 32.07 Maintenance and Repair Cost Equipment per move -5.69 6.36 EUR 5.13 Land lease and rent per move - EUR7.32 7.54 6.86 Total Operational Cost per move 58.00 - EUR 55.55 52.59 Salaries cost per move - EUR 1.00 0.93 0.97 IT cost per move - EUR 1.62 1.44 1.31 Maintenance and Repair Civil works 0.43 per move - EUR0.38 0.34 Other Non-Operational cost per move - EUR 3.88 3.97 4.05 Total Non-Operational cost per move - EUR 6.93 6.72 6.67 Depreciation cost per move - EUR 10.27 9.35 8.35 EBIT per move - EUR 29.59 29.86 28.86 Total Cost per move - EUR 75.20 71.62 67.61 Staff blue collar (number) 449 453 461 Staff white collar (number) 158 166 174 Total staff 607 619 635 Hectare (m2) 92 100 100 Quay meter (m) 1,600 1,600 1,600 Ship-shore crane (number) 9 12 12 Straddle carrier (number) 41 41 41 Moves - Import/Export 740,706 851,812 979,584 Moves - Barges 286,808 329,830 379,304 Moves - Transshipment 141,087 162,250 186,587 Moves - Shiftings Moves - Total crane moves 1,168,601 1,343,892 1,545,475 TEU - Total throughput *2 1,986,622 2,284,616 2,627,308 TEU per hectare 21,594 22,846 26,273 TEU per quay meter 1,242 1,428 1,642 TEU per white collar staff 12,574 13,771 15,083 TEU per blue collar staff 4,425 5,048 5,700 TEU per staff 3,273 3,694 4,137 Moves per ship-shore crane 129,845 111,991 128,790 Moves per Straddle Carrier 28,502 32,778 37,695 Contribution Margin % 44.6% 45.3% 45.5% EBITDA Margin % 38.0% 38.6% 38.6% EBIT Margin % 28.2% 29.4% 29.9% EBT Margin % 26.8% 28.4% 29.2% Net Income Margin % 18.8% 19.9% 20.4% Expected mvs/h per Barge Crane 21 22 23 Expected mvs/h per STS Crane 29 31 33 Moves - CX + 86% of barge 1,004,997 1,155,747 1,329,109 Moves 3rd party + 14% of barge 163,604 188,145 216,367 Moves - Total 1,168,601 1,343,892 1,545,475 NPV IRR Investment Ebitda Investment+Ebitda Accummulative Payback period 187,916 42.68% (157,820.42) 46,576 (111,244.12) (9,891.27) 52,695 42,804.12 (68,440.01) (8,542.82) 57,507 48,964.51 (19,475.49)

Budget 2009 95.82 33.19 5.08 6.37 53.38 0.91 1.22 0.30 4.15 6.57 8.52 27.36 68.46 535 183 718 100 1,600 14 46 1,126,521 436,200 214,576 1,777,297 3,021,404 30,214 1,888 16,519 5,644 4,207 126,950 38,721 44.3% 37.4% 28.6% 28.2% 19.7% 25 35 1,528,475 248,822 1,777,297

Budget 2010 93.26 23.04 5.17 5.67 42.80 0.93 1.16 0.27 4.24 6.59 9.89 33.98 59.28 330 192 522 100 1,600 14 46 1,295,500 501,630 246,762 2,043,891 3,474,615 34,746 2,172 18,092 10,532 6,657 145,992 44,529 54.1% 47.0% 36.4% 36.3% 25.4% 25 35 1,757,746 286,145 2,043,891

Budget 2011 95.92 24.14 5.45 5.22 43.93 0.90 1.16 0.25 4.33 6.64 11.18 34.17 61.75 377 202 579 100 1,600 16 57 1,439,097 557,232 274,114 2,270,443 3,859,752 38,598 2,412 19,141 10,235 6,669 141,903 40,185 54.2% 47.3% 35.6% 35.6% 24.9% 25 35 1,952,581 317,862 2,270,443

Budget 2012 98.08 25.24 5.57 5.33 45.48 1.01 1.33 0.25 4.43 7.02 11.43 34.15 63.93 377 203 580 100 1,600 16 57 1,439,097 557,232 274,114 2,270,443 3,859,752 38,598 2,412 19,046 10,235 6,657 141,903 40,185 53.6% 46.5% 34.8% 34.8% 24.4% 25 35 1,952,581 317,862 2,270,443

Budget 2013 100.28 26.40 5.69 5.45 47.09 1.08 1.55 0.26 4.53 7.43 11.69 34.08 66.20 377 203 580 100 1,600 16 57 1,439,097 557,232 274,114 2,270,443 3,859,752 38,598 2,412 19,046 10,235 6,657 141,903 40,185 53.0% 45.6% 34.0% 34.0% 23.8% 25 35 1,952,581 317,862 2,270,443

Budget 2014 102.54 27.61 5.82 5.58 48.76 1.16 1.86 0.26 4.63 7.92 8.74 37.12 65.42 377 203 580 100 1,600 16 57 1,439,097 557,232 274,114 2,270,443 3,859,752 38,598 2,412 19,046 10,235 6,657 141,903 40,185 52.4% 44.7% 36.2% 36.2% 25.3% 25 35 1,952,581 317,862 2,270,443

(27,242.85) 63,767 36,524.02 17,048.53

(51,738.59) 89,670 37,931.83 54,980.36

(36,618.59) 102,962 66,343.08 121,323.45

(10,071.16) 103,486 93,415.30 214,738.75

(10,574.72) 103,923 93,348.61 308,087.36

(11,103.46) 104,128 93,024.24 401,111.60

3.53 years

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

72

Container Terminal Expansion to Build Capacity: A Case Study

Astrini Niswari

Appendix 11. Profit and Loss Statement for HDS Perpendicular Alternative
EUR '1,000 Budget 2006 Budget 2007 Investments/yr 26,734 9,891 Cumulative investments 157,820 167,712 ROI 15% 16% EUR '1,000 Budget 2006 Budget 2007 Profit & loss: Revenue 122,450 136,376 Labour (incl subcontracting) (42,253) (45,650) Power (1,870) (2,199) Fuel Consumption (3,968) (4,666) Maintenance and repair Costs (operational equipt.) (7,427) (7,643) Land Lease & Rent (8,558) (10,137) Other Operational Costs (3,704) (4,355) Total Operational Costs (67,779) (74,650) Contribution margin 54,670 61,727 Salaries (1,170) (1,256) IT Costs (1,892) (1,934) Maintenance and Repair Costs (civil(500) works) (511) Other Non-Operational Costs (4,532) (5,330) Total Non-Operational Costs (8,094) (9,031) EBITDA 46,576 52,695 Depreciation (12,000) (12,569) EBIT 34,576 40,127 Financial expenses (1,771) (1,444) Extra-ordinary expenses EBT 32,806 38,683 Taxes Net income after tax (9,842) 22,964 (11,605) 27,078 Budget 2008 8,543 176,255 17% Budget 2008 149,095 (49,566) (2,585) (5,487) (7,921) (10,598) (5,121) (81,277) 67,818 (1,498) (2,022) (523) (6,267) (10,310) 57,507 (12,897) 44,610 (1,062) 43,548 (13,064) 30,483 Budget 2009 27,243 203,497 16% Budget 2009 170,307 (58,993) (3,040) (6,452) (9,031) (11,330) (6,021) (94,866) 75,441 (1,609) (2,162) (535) (7,369) (11,674) 63,767 (15,137) 48,630 (663) 47,967 (14,390) 33,577 Budget 2010 64,301 267,798 18% Budget 2010 190,621 (47,218) (3,575) (7,586) (10,957) (11,585) (7,080) (88,000) 102,621 (1,900) (2,363) (547) (8,665) (13,475) 89,146 (21,339) 67,807 (438) 67,369 (20,211) 47,158 Budget 2011 36,634 304,432 17% Budget 2011 217,780 (55,133) (4,121) (8,746) (12,767) (11,845) (8,163) (100,775) 117,005 (2,040) (2,641) (559) (9,990) (15,230) 101,775 (26,537) 75,238 (190) 75,048 (22,514) 52,534 Budget 2012 10,071 314,504 17% Budget 2012 222,680 (57,649) (4,214) (8,943) (13,054) (12,112) (8,347) (104,318) 118,362 (2,290) (3,018) (571) (10,215) (16,094) 102,268 (27,135) 75,133 (169) 74,965 (22,489) 52,475 Budget 2013 10,575 325,078 16% Budget 2013 227,690 (60,285) (4,309) (9,144) (13,348) (12,385) (8,534) (108,005) 119,685 (2,458) (3,527) (584) (10,445) (17,014) 102,671 (27,745) 74,926 (147) 74,779 (22,434) 52,345 Budget 2014 11,103 336,182 17% Budget 2014 232,813 (63,048) (4,406) (9,350) (13,648) (12,663) (8,727) (111,841) 120,972 (2,639) (4,214) (597) (10,680) (18,130) 102,842 (20,803) 82,038 (126) 81,912 (24,574) 57,338

Budget 2006 Budget 2007 Various Key Figures Revenue per move - EUR 104.78 101.48 Labour cost per move - EUR 36.16 33.97 Maintenance and Repair Cost Equipment per move - EUR 5.69 6.36 Land lease and rent per move - EUR7.32 7.54 Total Operational Cost per move -58.00 EUR 55.55 Salaries cost per move - EUR 1.00 0.93 IT cost per move - EUR 1.62 1.44 Maintenance and Repair Civil works per move - EUR 0.43 0.38 Other Non-Operational cost per move - EUR 3.88 3.97 Total Non-Operational cost per move - EUR 6.93 6.72 Depreciation cost per move - EUR 10.27 9.35 EBIT per move - EUR 29.59 29.86 Total Cost per move - EUR 75.20 71.62 Staff blue collar (number) 449 453 Staff white collar (number) 158 166 Total staff 607 619 Hectare (m2) 92 100 Quay meter (m) 1,600 1,600 Ship-shore crane (number) 12 12 Straddle carrier (number) 41 41 Moves - Import/Export 740,706 851,812 Moves - Barges 286,808 329,830 Moves - Transshipment 141,087 162,250 Moves - Shiftings Moves - Total crane moves 1,168,601 1,343,892 TEU - Total throughput *2 1,986,622 2,284,616 TEU per hectare 21,594 22,846 TEU per quay meter 1,242 1,428 TEU per white collar staff 12,574 13,771 TEU per blue collar staff 4,425 5,048 TEU per staff 3,273 3,694 Moves per ship-shore crane 97,383 111,991 Moves per Straddle Carrier 28,502 32,778 Contribution Margin % 44.6% 45.3% EBITDA Margin % 38.0% 38.6% EBIT Margin % 28.2% 29.4% EBT Margin % 26.8% 28.4% Net Income Margin % 18.8% 19.9% Expected mvs/h per Barge Crane 21 22 Expected mvs/h per STS Crane 29 31 Moves -CX + 86% of barge 1,004,997 1,155,747 Moves 3rd party+ 14% of barge 163,604 188,145 Moves - Total 1,168,601 1,343,892 NPV IRR Investment Ebitda Investment+Ebitda Accummulative Payback period 177,357 41.25% (157,820.42) 46,576 (111,244.12) (9,891.27) 52,695 42,804.12 (68,440.01)

Budget 2008 96.47 32.07 5.13 6.86 52.59 0.97 1.31 0.34 4.05 6.67 8.35 28.86 67.61 461 174 635 100 1,600 12 41 979,584 379,304 186,587 1,545,475 2,627,308 26,273 1,642 15,083 5,700 4,137 128,790 37,695 45.5% 38.6% 29.9% 29.2% 20.4% 23 33 1,329,109 216,367 1,545,475

Budget 2009 95.82 33.19 5.08 6.37 53.38 0.91 1.22 0.30 4.15 6.57 8.52 27.36 68.46 535 183 718 100 1,600 14 46 1,126,521 436,200 214,576 1,777,297 3,021,404 30,214 1,888 16,519 5,644 4,207 126,950 38,721 44.3% 37.4% 28.6% 28.2% 19.7% 25 35 1,528,475 248,822 1,777,297

Budget 2010 93.26 23.10 5.36 5.67 43.06 0.93 1.16 0.27 4.24 6.59 10.44 33.18 60.09 332 192 524 100 1,600 14 46 1,295,500 501,630 246,762 2,043,891 3,474,615 34,746 2,172 18,092 10,479 6,636 145,992 44,529 53.8% 46.8% 35.6% 35.3% 24.7% 25 35 1,757,746 286,145 2,043,891

Budget 2011 94.50 23.92 5.54 5.14 43.73 0.89 1.15 0.24 4.33 6.61 11.52 32.65 61.85 380 202 581 100 1,600 16 57 1,460,710 565,601 278,231 2,304,541 3,917,720 39,177 2,449 19,428 10,323 6,741 144,034 40,788 53.7% 46.7% 34.5% 34.5% 24.1% 25 35 1,981,906 322,636 2,304,541

Budget 2012 96.63 25.02 5.66 5.26 45.27 0.99 1.31 0.25 4.43 6.98 11.77 32.60 64.02 380 203 582 100 1,600 16 57 1,460,710 565,601 278,231 2,304,541 3,917,720 39,177 2,449 19,332 10,323 6,730 144,034 40,788 53.2% 45.9% 33.7% 33.7% 23.6% 25 35 1,981,906 322,636 2,304,541

Budget 2013 98.80 26.16 5.79 5.37 46.87 1.07 1.53 0.25 4.53 7.38 12.04 32.51 66.29 380 203 582 100 1,600 16 57 1,460,710 565,601 278,231 2,304,541 3,917,720 39,177 2,449 19,332 10,323 6,730 144,034 40,788 52.6% 45.1% 32.9% 32.8% 23.0% 25 35 1,981,906 322,636 2,304,541

Budget 2014 101.02 27.36 5.92 5.49 48.53 1.15 1.83 0.26 4.63 7.87 9.03 35.60 65.43 380 203 582 100 1,600 16 57 1,460,710 565,601 278,231 2,304,541 3,917,720 39,177 2,449 19,332 10,323 6,730 144,034 40,788 52.0% 44.2% 35.2% 35.2% 24.6% 25 35 1,981,906 322,636 2,304,541

(8,542.82) 57,507 48,964.51 (19,475.49)

(27,242.85) 63,767 36,524.02 17,048.53

(64,300.79) 89,146 24,845.29 41,893.82

(36,634.34) 101,775 65,140.65 107,034.47

(10,071.16) 102,268 92,196.50 199,230.98

(10,574.72) 102,671 92,096.71 291,327.69

(11,103.46) 102,842 91,738.22 383,065.91

3.53 years

MSc in Maritime Economics and Logistics Erasmus University Rotterdam

73

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