Week 2 - Intermodal Ports

Foundations of Logistics Systems Engineering Dr. Evrim Ursavas

Logistics • Deals with the planning and control of :

– Material flows – Related information

• Mission is to get

– The right materials – To the right place – At the right time

while optimizing a performance measure and satisfying constraints

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Logistics system

• Includes not only all the functional activities determining the flow of materials and information, but also the infrastructures, means, equipment and resources that are indispensable to the execution of these activities;

• - made up of facilities, where one or more functional activities are carried out (e.g. storage and distribution).

Suppliers Manufacturers

Distributors

Flows of material

Flows of information Customers

Example of a logistics system

• manufacturing process of the finished goods divided into a transformation phase and an assembly phase, performed in different centres;

• - suppliers of materials and components which feed the final manufacturing process;

• - two-level distribution system with a tree structure; • - CDCs directly supplied by the production plants; • - each RDC connected to a single CDC which has the

task of serving the customer; • - customers: can also be dealers or retailers.

• At each facility the flow of materials is temporarily interrupted, generally in order to change their physical-chemical composition, ownership or appearance;

• - each logistic activity involves costs which affect the value of the product, constantly adding to it as it draws nearer the facilities closest to the final customer;

• - added value: spatial (following e.g. distribution activities);

• - added value: temporal (owing to storage activities).

Representation of logistics system

• Directed (multi)graph G = (V,A): • > V: set of facilities; • > A: set of links existing among the facilities

used for the flow of materials . • - Several arcs between a pair of facilities

(alternative forms of transport services, different routes, or different products).

Representation of a logistics system system by a directed graph.

Ports in supply chains

What is a transportation network?

• Different modalities: ▫ Rails (Train) ▫ Road (Truck) ▫ Water (Ship) ▫ Air (Plane) ▫ Pipeline

• In supply chains, loads can be transported by one or more modes of transport (intermodal transport)

Customer

Carrier

Local transport company

Local transport company

Terminal operator

Terminal operator

Ports in transportation networks • Ports as a hub in a logistics network • Ports as a location for industrial settlement • Port authorities

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Port life cycle model

Introduction • basic functions •No standardisation in freight •Hardly any suppliers and customers •Local focus

time

throughput

Growth • growth to private sector • Hinterland becomes important •Distribution and storage activities

Maturity • increase in the number of terminals •International competition •Port authority •Vision on land sales •Hinterland network

Introduction: packaging of products

• Containers are large boxes used to transport goods from one destination to another.

• Container creates a “bulk” unit out of the individual pieces of freight.

• Containerization: utilizing, grouping or consolidating of multiple units into a larger container for more efficient movement.

• Advantages: less product packaging, less damaging, standardization, higher productivity.

Introduction: containers

• Dimensions of containers have been standardized.

• TEU (twenty-feet equivalent unit) is used to refer to one container of twenty feet.

• 2 TEU: a container of 40 feet. • Reefer: container with electricity for products

that need cooling. • Containerized traffic introduced in the mid-

fifties.

Container shipping • History ▫ First containers ships in the 1950s ▫ 1960s container size standardized ▫ Number of containers handled worldwide 1972: 6.3 million 2006: about 400 million Current annual growth: about 10%

• Capacity of ships has been extended from 400 TEU to about 12,000 TEU…and now 18,000TEU

• According to calculations by Ocean Shipping Consultants, the cost per TEU of transport from Europe to the Far East is about 13% less when using a ship with a capacity of 8,800 TEU instead of one with only 6,800 TEU.

Container handling

• Containers are transported by ships, trucks or trains.

• Ports and terminals are used to transship containers from one mode of transportation to another.

• Within ports, containers are transshipped with material handling equipment like vehicles and cranes.

Container fleet

The worlds biggest container ports Shanghai 31.74

Singapore 29.94

Hong Kong 24.38

Shenzhen 22.57

Busan 16.17

Ningbo-Zhoushan 14.72

Guangzhou 14.26

Qingdao 13.02

Jebel Ali, Dubai 13.01

Rotterdam 11.88

Figures of 2011 (in million TEU)

http://www.worldshipping.org/about-the-industry/global-trade/top-50-world-container-ports

Trends noticed so far • Ships and ports have strongly increased in size • Number of containers transshipped continuously grows • Competition between ports increases • Focus more and more on customers’ service • Result: docking time at ports should be as short as

possible • Can be achieved by organizing logistics processes at

terminals well

An overview of logistics processes

Unl

oadi

ng p

lan

Arrival of the ship

(Un)loading of the ship

Transportation of containers Stack Internal

Transport other modalities

import containers

export containers load

pla

n

ROTTERDAM

Flow of containers

Flow of containers

Designing a container terminal

• choice of layout of the terminal. • choice of material handling equipment used (e.g.

manned or automated). • determination of which ways of operation are

used. • development of planning and control concepts

for material handling equipment. • Logistics processes can be addressed separately

or integrated.

and the other modes…

Modes of transport - - - -

Train; road vehicle (e.g. truck); aircraft; ship (for transport on oceans, seas, lakes, canals and rivers); pipeline. Differ with respect to cost and transit time.

-

Intermodal transport - some modes of transport do not allow a door-to-door

connection between any origin and destination and should be used jointly with other modes;

- the commodities can be stored temporarily and then consolidated into different bins.

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Rail transport - Inexpensive (especially for long-distance movements),

relatively slow, quite unreliable. Reasons: -

> convoys transporting freight have low priority compared to trains transporting passengers; direct train connections are quite rare; a convoy includes tens of cars to be worth operating.

> >

- Consequences: > railroad is a slow mover of raw materials (coal,

chemicals etc.) and of low-value finished products (steel, paper, sugar, tinned food etc.); with the aim of reducing the transfer cost, it is preferred to ship multiple loads of the wagon capacity (carload

>

transfers, or CL).

6 Managing freight transport Introduction

Road transport (1/3)

- - - -

TL -

Realized by using trucks; semi-finished and finished products; truckload (TL) or less-than-truckload (LTL); main inconvenience: limited capacity of the trucks.

TL service moves a full load directly from its origin to its destination in a single trip (see Figure 2).

LTL - if shipments add up to much less than the vehicle capacity,

it is more convenient to resort to several trucking services in conjunction with cross-docking terminals (see Figure 3); LTL trucking is slower than TL trucking. -



Redding

Phoenix

Figure 2: Example of TL transport.

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Reno Redding

Line E

Line C Line B

Stockton Palm Springs

Line D Line A

San Diego Phoenix

Figure 3: Example of LTL transport.

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Air transport

- Often used along with road transport in order to provide door-to-door services; very fast in principle (the cruise speed of commercial flights is from 0.75 to 0.86 Mach); slowed down in practice by freight handling at airports; not competitive for short- and medium-haul shipments; quite popular for the transport of high-value products over long distances (about 20%, in value, of the world trade uses air as the mode of transport); capacity (in terms of both weight and volume) of the aircrafts is relatively limited, compared to that of trains and ships.

-

- - -

-


Water transport

- Used mainly in international trade to send bulk materials (cereals, petroleum, coal; 99% (in weight) and 50% (in value) of international trade); significantly less costly than air transport for transcontinental shipping.

-

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Pipeline transport

- Used only for transporting some specific categories of goods (petroleum, its derivatives and gas); slowness of the transport (5–6 km/h); possibility of continuous provision (24 hours a day); reliability of the pipelines and pumps.

- - -

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Intermodal transport - -

Moving freight with more than one mode of transport; hybrid services, with a reasonable trade-off between cost and transit time; only few combinations of the five basic modes of transport are convenient; most frequent intermodal services: aircraft-truck (birdyback ) transport, train-truck (piggyback ) transport, ship-truck (fishyback ) transport; containers are the most common load units in intermodal transport and can be moved in two ways:

> loaded on a truck and the truck is then loaded onto a train, a ship or an aircraft (trailer-on-flatcar );

> loaded directly on a train, a ship or an aircraft

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-

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(container-on-flatcar ). 19 / 30

Week 2 - Intermodal Ports

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