Delft University of Technology
Faculty Mechanical, Maritime and Materials Engineering Transport Technology
R.E.M. Koenis Onderzoek naar de concurrentiepositie van een inlandterminal Masters thesis, Report 2003.TL.6762, Transport Engineering and Logistics.
The transportation in containers of all sorts of goods has expanded rapidly over the last decennia. This growth has been achieved because the container can use cheap and quick handling, making multimodal transport possible. There are many transporters who concentrate on the container flow between the seaport and the costumer in the hinterland. This container flow involves a complex chain of means of transportation: by truck, inland-ship and train. All of these links have their own advantages and limitations with are influenced by different factors. Having a good control and thorough knowledge of these factors will benefit the competitive position of transporters.
The container terminal Combi Terminal Twente (CTT) has been located in Hengelo, alongside the Twente canal, since 2001. CTT is a transporter that concentrates its business on the entire container flow between the seaport and the customer, with multimodal transport via the waterways, by road, and by truck. The main bottleneck of container transportation by water is the Twente canal. This has to do with the limited heights of the bridges over the canal, which make the navigation of container ships carrying 3 layers of containers difficult. This translates into a high cargo price, thus influencing negatively the competitive position of CTT compared to transportation by truck and other inland terminals.
The subject of this research is to find the most competitive transportation price, despite the bottlenecks just mentioned. Attention is paid to the following: Technical adjustment to container ships
Logistical adjustment to current ship planning
Incorporation of the container terminal Nijmegen to the route Rotterdam-Hengelo Potential advantages of collaboration with other inland terminals
This research has examined the entire transportation chain, given that CTT's work encompasses it as a whole. Following that, all the different types of container ships available in the market have been reviewed, including ships currently in development, and possible technical adjustments. It then continues with an analysis of the development and expansion of inland terminals, and of container flows in the Netherlands. A model was then created to
investigate the effects of the different factors that influence the competitive position of CTT.
Such analysis led to a number of findings that have been described in the chapters accordingly. This demonstrates the complexity of the research subject. Therefore, all the factors of influence have been made clear so that it is possible to see whether an adjustment of the current situation results in
improvement.
Out of this research, 11 situations have arisen, all of which require close investigation to identify whether they offer an improvement to the competitive position of CTT. All of these situations have been compared with the current one, and are as follows:
Recycling: With recycling, the container is stored in the depot on the terminal instead of bringing the container back to Rotterdam. Traveling time is therefore considerably shortened. The costs are also significantly reduced because both handling and transportation costs fall due.
Zutphen: An analysis of the transportation route over the waterways reveals the Twente canal as the main bottleneck. The question now is whether it would be more logical not to have the terminal at the end of the canal, but at the beginning instead. Analyzed this way, the competitive position of the recently started container terminal in Zutphen can be determined.
Big ships: Noted is the spectacular increase in scale in container shipping, as well as an overcapacity of the market for the next 10 years. A significant improvement could happen with the use of large ships carrying 2 layers of containers after the canal is broadened at the end of 2003. Small ships: Small ships do not have any problems carrying load through the Twente canal. With small ships, shorter loading and unloading times can be reached in Hengelo as well as in Rotterdam. In this way shorter traveling times can be achieved, however, personnel costs will increase heavily.
Push tugs: Three alternatives have been examined for a possible deployment of tugs: the couple tug, the tug with fixed bow, and the tug with unattached bow. For each variant, money has to be invested to develop and build this ship. There are possible advantages in the traveling times, because the tugs can be moored at a terminal while the ship proceeds with a new tug.
Ballast: The deployment of ballast depends a lot on the sink of the ship and the height of the stack of containers. An optimum can be reached by applying ballast blocks as well as ballast containers. The different costs have been analyzed and calculated.
Small trucks: An analysis of the costs of road transportation indicates that trucking around the terminal can be done at a lower cost. By deploying trucks with less engine power and no sleeping cabin, container transportation can be set up at lower costs.
Rail transportation: deployment of rail transportation can be carried out in two different ways. Either as a substitute for the ship or just for transporting containers with origin or destination Maasvlakte. The first one can be realized by chartering a complete train. For the second one an shuttle service can be set up.
Collaboration with Nijmegen: collaboration can be achieved in two ways. The first way is to transport containers as a third layer on the ships from Hengelo between Nijmegen en Rotterdam. The second one is to relocate containers between Nijmegen en Hengelo.
Hub: A network can be set up by installing a hub between the inland terminals and the seaport. The hub can provide shuttle services to all the terminals in Rotterdam, and can also be used for flows between the terminals.
Tour: A network can be set up by having a ship make a circuit along all the terminals and eventually also to the seaport. In between the terminals, container flows can be achieved. In the startup phase the empty slots can be filled up with the empty containers that have Rotterdam as the origin or destination point. This allows the ship to have a high occupancy rate.
For each of these situations, the service area is determined based on the factors of influence. The outcomes are then compared with the present situation. This results in the following conclusions:
CTT has a competitive position in its current situation with the transportation of 20 foot containers with road transportation from Rotterdam and the other inland terminals. This is not the case with 40 foot containers. The 20 foot containers have to compensate for the 40 foot containers. Recycling of empty containers enlarges significantly the service areas of CTT. As a result of this, CTT has a competitive position. Strengthening and expanding CTT as a depot is not only desirable but also necessary.
In the current situation and when recycling, in comparison with the other terminals, the road transportation from Rotterdam is the fastest. The difference with recycling is that with a good planning of the transportation orders, a competitive position can be reached. Thus, also here, strengthening and expanding CTT as a depot is not only desirable but even necessary.
The service area of CTT could be influenced by the container terminal in Zutphen if this terminal would operate on comparable costs for handling and transportation. The service area on the west of CTT decreases by transporting mostly 40 foot containers. The service area of Zutphen in comparison with the service areas of other terminals is rather small, which shows that Zutphen has no profitable location. On the contrary to Zutphen, CTT does have a big client right next to the terminal that takes care of the critical volume of the terminal. Besides that, CTT can reach most of its clients at a cheaper rate via Hengelo.
Table 1 gives an overview of the assessment on the effects of technical adjustments on the ships. The applicability shows how well this adjustment fits in the current situation. The flexibility shows how easy it is to change to another solution if the situation changes.
Table 1: Assessment on technical adjustments
Adjustment Version TEU-price Traveltime Investment Applicability Flexibility
Big ships - ++ +/- ++ -- +
Small ships regular + +/- + + +
short +/- + - + --Push tugs couple tug -- + - - --fixed bow -- +/- -- - --unattached bow +/- + -- -- --Ballast - ++ +/- -- + +
To reduce the transportation price, the big ships and the ballast are the best alternative. The disadvantage of deploying big ships with two layers of containers and 4 containers wide on them, is that it can not be done until the end of 2003 when the canal is widened. Until that time it can only be done with a license and with a restriction on the maximum cargo weight. From 2009 and on, 3 layers of containers are possible (if the containers are heavy enough) and 4 containers wide.
Ballast has the disadvantage of an initial substantial investment. This adjustment does maintain its value, since ships with 3 layers of containers and 4 containers wide will be allowed.
Lowering the transportation costs can be achieved by deploying trucks only between the terminal and the client. Deploying smaller trucks shows a clear improvement of the service area.
Utilizing rail transportation is only possible for containers with destination or origin Maasvlakte on a shuttle. This is an alternative when the ships can not set sail in the Twente canal, then it can be used for all containers only if the costs of the ships during that period can be cancelled. Initiating collaboration with Nijmegen is only profitable between Nijmegen and Rotterdam when using the 3rd layer. It is not profitable to relocate containers from Nijmegen to Hengelo. Relocating containers from Hengelo to Nijmegen can be rewarding, but the service area is then rather small. The establishment of a hub is not profitable for all container flows that go through this hub. Relocation for recycling does have a good service area. But these earnings are too small to support a whole terminal. Therefore, a hub in Lelystad is the easiest to realize.
The deployment of a tour can be profitable. In order to get a positive result, there should be relocation. In the startup, a small ship should be used, and in a later phase a bigger one. The total profit might be lower, but a considerably larger volume of containers is transported.
When relocating 40 foot containers from Meppel or from Nijmegen, a critical assessment needs to be taken at the location of the client. These two terminals have very large service areas from their own terminals. In that case it is often more rewarding not to relocate but to use road transportation from the terminal.
On the basis of the conclusions the following recommendations can be made:
When accepting transportation orders of containers, more attention should be paid to the type of containers. It is more profitable to accept orders for 20 foot containers then for 40 foot containers.
Since there is a terminal in Hengelo, road transportation from Hengelo can have a competitive position with the road transportation from Rotterdam for 20 foot containers as well as 40 foot containers. The transportation by ship can only be competitive for 20 foot containers. Therefore, it is important that there is a transition to the road transportation of the heaviest 20 foot containers. Revenue for transportation by water can be larger by shipping more 20 foot containers by ship.
In order to stimulate the recycling of empty containers, more contact needs to be made with carriers. In this way, CTT can function as a depot together with other terminals.
The establishment of a hub or tour can only be successful if relocation of empty containers, or of continental container flows, can be deployed in a successful way. Therefore, a unit that can oversee all the flows has to be put in charge.
The service area with a big potential value is continental flows. The future numbers of containers are unknown. Calculations for the hub and the tour are based on numbers taken for relocation of empty containers. A good estimate of continental flows is needed. Market research for that should be done among potential clients.
Quoting of tariffs for transportation is not simple. When cooperating and relocating it is even more complex. The software program created based on the model in this report can be very valuable in this process.
The container transportation model turned out to be a good instrument for trustworthy calculations of the service areas of the different inland terminals. If with the currently used software it is very laborious to make adjustments or to add an extra terminal, then the model should be expanded using a better software package. Many extensions are possible, such as links with demographic data. This model can give a better insight when making decisions with regard to (multimodal) transportation for companies and governmental institutions.
The container transport model can be used for sensitive analyses. In these analyses, diverse changes can be made at different parts of the transportation chain. This allows us to estimate the effects in the future if the current situation where to change.
Reports on Transport Engineering and Logistics (in Dutch)
