INTRODUCTION TO THE CONTAINER SHIPPING INDUSTRY

INTRODUCTION TO THE CONTAINER SHIPPING INDUSTRY University of Wisconsin Milwaukee Paper No. 11-1 National Center for Freight & Infrastructure Research & Education College of Engineering Department of Civil and Environmental Engineering University of Wisconsin, Madison Author: Matthew E. H. Petering Department of Industrial and Manufacturing Engineering University of Wisconsin Milwaukee Principal Investigator: Alan J. Horowitz Professor, Civil Engineering and Mechanics Department, University of Wisconsin Milwaukee January 6, 2011

Introduction to the Container Shipping Industry INTRODUCTION This document contains images of all slides in a course module about the container shipping industry and container port operations. Sources and additional content are found on the note pages of the original slide presentation. The full presentation contains videos. This presentation is available upon request to Alan Horowitz, horowitz@uwm.edu.

Introduction to the Container Shipping Industry Matthew E. H. Petering Assistant Professor Department of Industrial and Manufacturing Engineering University of Wisconsin Milwaukee mattpete@uwm.edu 2010 Matthew E. H. Petering 1 Outline 1. Introduction to maritime shipping 2. Introduction to container shipping 3. Container vessels and shipping lines 4. Seaports 5. Railway container transportation / facilities 6. Conclusion 2

Outline 1. Introduction to maritime shipping 2. Introduction to container shipping 3. Container vessels and shipping lines 4. Seaports 5. Railway container transportation / facilities 6. Conclusion 3 Introduction to Maritime Shipping Ships carry 99% of overseas trade in volume terms and 62% in value terms, the remainder being conveyed by air. 90% of all international trade moves by sea Globally, the ton-miles of freight moved by water are more than twice the total ton-miles moved by road, railway, and air put together. Water transportation is less costly and more energy efficient than other modes of transport: http://www.greatlakes-seaway.com/en/aboutus/competitiveness.html 4

Maritime Shipping: Cargo Types Dry Bulk (salt, grain, minerals, cement/gypsum, coal byproducts) Liquid Bulk (crude oil, gasoline, chemicals, liquefied natural gas) Break Bulk (steel, lumber, heavy machinery) Automobile Containerized (finished consumer goods) 5 Maritime Shipping: Major Players Shippers (importers/exporters) (Nike, Wal-Mart, ExxonMobil, Toyota) Shipping lines (ocean carriers, vessel operators) (Maersk Sealand, MSC, CMA CGM, Evergreen, Hapag Lloyd) Seaport terminal operators Morton Salt (dry bulk) Shell Oil (liquid bulk) Toyota (automobile) Containerized cargo: PSA Corporation (Singapore) Hutchison Port Holdings (Hong Kong) Dubai Ports World (United Arab Emirates) APM Terminals (Netherlands, Denmark) Railway operators (Union Pacific, BNSF, CSX, Norfolk Southern, CN, CP) Trucking companies (motor vehicle carriers) 6

Outline 1. Introduction to maritime shipping 2. Introduction to container shipping 3. Container vessels and shipping lines 4. Seaports 5. Railway container transportation / facilities 6. Conclusion 7 Container Shipping World fleet, Feb 2004: 3167 vessels, capacity = 6.5 million 20-ft conts. (TEU) World fleet, Dec 2008: 4661 vessels, capacity = 12.1 million 20-ft conts. (TEU) Port of Long Beach Port of Long Beach 8

Container Shipping Port of Long Beach Frankfurt am Main East 9 Port of Singapore Vessels 10

Containers Contents furniture, toys, footware, clothing, auto parts, electronics, computers, bananas, pineapples, foodstuffs, meat, fish Sizes 20' x 8' x 8.5' high (TEU) 40' x 8' x 8.5' high (FEU) 45' x 8' x 8.5' high Capacity 30 tons Where are they manufactured? China Types standard dry, high cube (9.5' high) (90%) refrigerated ("reefer") (5%) other: ventilated, open top, adjustable height (5%) Quantity Global stock = 35 million (10 mill leased); 3.5 million produced in 2008 Cost New: $2000 - $20,000; lease rate $1 - $6 per day (5 year term) 11 Containers Hoisted, lowered, and secured at the corners 12

Containers Hoisted, lowered, and secured at the corners Secured aboard vessels, trains, truck chassies using (1) twist locks for securing adjacent containers in the same stack (2) lashing rods (vessels only) for securing containers in high tiers directly to the deck 13 Containers Hoisted, lowered, and secured at the corners Secured aboard vessels, trains, truck chassies using (1) twist locks for securing adjacent containers in the same stack (2) lashing rods (vessels only) for securing containers in high tiers directly to the deck 14

Containers Hoisted, lowered, and secured at the corners Secured aboard vessels, trains, truck chassies using (1) twist locks for securing adjacent containers in the same stack (2) lashing rods (vessels only) for securing containers in high tiers directly to the deck 15 Containers Hoisted, lowered, and secured at the corners Secured aboard vessels, trains, truck chassies using (1) twist locks for securing adjacent containers in the same stack (2) lashing rods (vessels only) for securing containers in high tiers directly to the deck 16

Import cargo generally starts at an overseas manufacturer, supplier or consolidation facility. The US buyer may contact an industry professional known as a Freight forwarder or logistics company. 7- Unloading the ship: As the ship is arriving, the terminal operator will contact the local union hall and arrange for unionized longshore workers to unload the container (using a giant, electric gantry crane) and place it onto a truck, a rail car or temporary storage area on the terminal property. Unloading an 8,000 TEU ship takes about three days. 9- Radiation detection: As a final security safeguard, containers pass through large portals that detect radiation. 1- Product Ordered: A typical import transaction starts when a U.S. wholesaler, retailer or other buyer orders products from an overseas manufactures 5- Coast Guard review: The U.S. Coast Guard reviews crew and cargo manifest information, which must be delivered at least three days before any ship arrives at U.S. shores. 8- Security Checks: U.S. Customs officials conduct further analysis and determine which containers warrant further inspection. 4- All abroad: When the container is cleared by security it will be placed on a ship along with as many as 8,000 TEU (twenty-foot equivalent) containers. 3- Security checks: A U.S. Customs official based at the port receives information from a U.S.-based command center about which containers may be a security risk. 2- To port: Once the product has been ordered and packaged, the buyer or freight forwarder will arrange for a local trucking company to move the container to seaport, and then for a ship to transport the container oversea. 6- Vessel docked: As the ship nears the harbor it will be boarded by a port pilot, maritime specialists with expert knowledge of the harbor waters. Port of Long Beach Website 17 As with imported goods, exported cargo may require several intermediate stops between the producer or manufacturer of the cargo and the Port. 5- Near-dock railyards: Export deliveries are also made to to near-dock railyards, where the cargo is picked up by truck for a short trip to the marine terminal.. 1- Direct Delivery: In the most straightforward route, a single container from a local exporting company, produce grower or manufacturer would be delivered by truck directly to the marine terminal. 4- On-dock railyards: Cargo bound for export can be delivered by train directly to 3- Off-dock railyards: Some export cargo containers are on-dock railyards, where it delivered by train to off-dock railyards, where they are is loaded onto an ocean placed onto trucks for final delivery to marine terminals. vessel. On-dock delivery requires no local truck trips. 2- Warehouse/consolidator: Cargo delivered from local or nonlocal destinations may be stored temporarily at a warehouse or consolidated with other cargo bound for export. Cargo may also be transferred from domestic truck trailers to marine shipping containers at this facility. 6- Vessel loading: Outbound cargo is loaded onto an ocean vessel headed for an overseas port. Port of Long Beach Website 18

From the port of Long Beach, containers are either transported by train or by truck to their final destination, or to one of several intermediate destinations such as a railyard, warehouse, distribution center, or transload facility ( a sorting, routing and short-term storage building). A container s final destination determine exactly what path it will take once it leaves the dock. 2- Freight forwarder: A container s movements are determined by the 5- Off-dock railyards: Off-dock railyards are used to coordinate rail deliveries to cargo s owner, or an industry non-local destinations. Containers are delivered here by truck, then sorted and professional known as a freight grouped by final destination. These railyards handle Port cargo as well as domestic forwarder or logistics provider. cargo from other sources. 4- Near-dock railyards: Cargo is often transported by truck to larger near-dock railyards close to the Port. 3- On-dock railyard: Cargo can be placed directly onto trains at the marine terminals on-dock railyards. 1- Unloading the ship: When a ship arrives at the Port, the marine terminal operator will arrange for unionized longshore workers to unload the vessel. The terminal operator directs the longshore workers to place the cargo containers where they belong: on trains, trucks or on terminal property for temporary storage. 7- Direct delivery: In the simplest transportation plan, a single container imported by a company for its own use would be delivered by truck directly from the marine terminal to a local store or factory. 6- Transload or storage yard: Shipping containers are often moved initially to a transload facility where workers unload the cargo fromthe marine container, sort it and repackage it into larger-sized truck trailers. The larger trailers are used to transport the cargo from the transload facility to regional distribution centers, local stores or off-dock railyards. Port of Long Beach Website 19 Outline 1. Introduction to maritime shipping 2. Introduction to container shipping 3. Container vessels and shipping lines 4. Seaports 5. Railway container transportation / facilities 6. Conclusion 20

Vessels Capacity from 100 to 14,000 TEU Divided into 45 sections called bays ship length can be from 3 to 25 bays Newbuild cost $1 million per 100 TEU capacity Speed 20-25 knots Fuel Marine diesel oil; efficiency ~ 500 ton-miles/gal 20 crew members captain/master, 3 deck officers, chief engineer w/ 3 assistants, radio operator, cooks, qualified members of the engine department (QMEDs), etc. Fully cellular or geared Geared vessels can unload and load themselves Itineraries are cyclical Every 4 weeks: Naples-Genoa-Barcelona-New York-Norfolk-Charleston-Naples Where are they built? Korea: Hyundai, Samsung, Daewoo, Hanjin China: Jiangsu, Shanghai, Xiamen, Dalian 21 The Shipping Line Business 2007 TEU deployed Revenue Ocean Carrier Country in 2006 (billion $) 1. A.P. Moller-Maersk Denmark 1,600,012 2. Mediterranean Shipping Co Switzerland 937,145 3. CMA CGM France 597,677 11.8 4. Evergreen Taiwan 539,801 5. Hapag-Lloyd Germany 448,840 8.8 6. Cosco China 385,368 6.5 7. China Shipping Cont. Lines China 339,545 5.3 8. Hanjin South Korea 328,327 7.4 9. American President Lines Singapore 323,319 8.2 10. NYK Japan 313,049 25.8 11. Mitsui OSK Lines Japan 284,848 19.4 12. OOCL China (HK) 268,502 5.2 13. CSAV Chile 249,885 4.1 14. K Line Japan 241,772 13.3 15. Yang Ming Taiwan 223,192 4.1 22

The Shipping Line Business Number of Vessels Operated Mediterranean Shipping Co. Website 23 The Shipping Line Business Port to Port Freight Rates ($ per TEU, Sept 2008): Asia N. America $1800 Europe Asia$1100 Asia N. America $1000 Europe Asia$1900 N. America Europe $1300 N. America Europe $1700 Mediterranean Shipping Co. Website 24

The Shipping Line Business: Planning Decisions Decision. 1. When to purchase/charter additional vessels? 2. What kind of vessels to purchase/charter? 3. When to sell/scrap old vessels? 4. Which vessels to sell/scrap? 5. Which ports should be served? 6. Which routes should be served? 7. Which vessels should be assigned to which routes? ( fleet deployment ) 8. Scheduling the vessels assigned to each route. At what times will they arrive/depart from each port in the route sequence? 9. Determine performance requirements for each vessel at each port. How fast must each vessel be served at each port it visits? 10. Negotiating vessel service agreements with seaport facilities (container terminals). 11. Hiring crew members 25 The Shipping Line Business: Operational Decisions Decision. 1. What should the freight rates be? 2. When to cancel a vessel call at a port? 3. Which containers should be loaded onto which vessel? (applies to large shipping lines or lines belonging to an alliance) 4. How many empty containers should be loaded onto each vessel at each port? ( empty container repositioning ) 5. Where should individual containers be placed on the vessel? ( vessel stowage ) 6. Assigning crew members to vessels. 26

Because the United States imports more goods than it exports, many empty containers are sent overseas to be refilled with goods. Typically, about a third of the containers loaded onto a ship at the Port of Long Beach will be filled with cargo, while about two-thirds will be empty. 1- Delivery to local exporter : A local exporter who needs to fill empty containers may arrange to receive them by truck directly from a marine terminal, from an empty container storage yard or from a local importer. Direct delivery between importers and exporters is encouraged because it eliminates an additional truck trip to a storage yard or marine terminal. 4- Ocean Vessel: Empty containers are loaded onto an ocean vessel, along with containers filled with export goods, bound for an overseas port. 2- Empty container storage yard: Empty containers are often transported by truck from a transload facility or local importer to an empty container storage yard. From the storage yard, the empty containers can be transported to a marine terminal for export, or to a local exporter to be filled with cargo. Empty containers are also transported from marine terminals to storage yards, usually when the terminal needs more space for full, incoming containers. 3- Direct Delivery: The simplest route for an empty cargo container would be a return trip to the Port from a transload facility or local importer after its imported goods had been unloaded. Port of Long Beach Website 27 The Shipping Line Business 28

Outline 1. Introduction to maritime shipping 2. Introduction to container shipping 3. Container vessels and shipping lines 4. Seaports 5. Railway container transportation / facilities 6. Conclusion 29 Introduction to Container Terminals Aerial view of Northport's container terminal Port of Hong Kong Unloading and loading of containerships Temporary storage of containers Port of Singapore 30

The Container Port Business World s Busiest Million TEU Container Ports Country handled in 2007 1. Singapore Singapore 27.9 2. Shanghai China 26.2 3. Hong Kong China (HK) 24.0 4. Shenzhen China 21.1 5. Busan South Korea 13.3 6. Rotterdam Netherlands 10.8 7. Dubai UAE 10.7 8. Kaohsiung Taiwan 10.3 9. Hamburg Germany 9.9 10. Qingdao China 9.5 11. Ningbo-Zhoushan China 9.4 12. Guangzhou China 9.3 13. Los Angeles USA 8.4 14. Antwerp Belgium 8.2 15. Long Beach USA 7.3 Globally, 474 million TEU worth of (empty and loaded) containers were transferred between ships and shore in 2007. 31 The Container Port Business Million 2007 TEU handled Revenue Terminal Operator Country in 2007 (billion $) 1. Hutchison Port Holdings China (Hong Kong) 66.3 4.9 2. PSA Corp. Singapore 58.9 3.0 3. DP World UAE 43.3 2.7 4. Cosco Pacific China 39.8 0.1 5. APM Terminals Netherlands 31.4 2.5 6. HHLA Germany 7.2 1.9 Globally, 474 million TEU worth of (empty and loaded) containers were transferred between ships and shore in 2007. The DP World controversy began in February 2006 and rose to prominence as a national security debate in the United States. At issue was the sale of port management businesses in six major U.S. seaports to DP World, and whether such a sale would compromise 32 port security.

Container Terminals import export transshipment Typically a 24-hour operation Terminal-owned equipment performs 3 kinds of tasks: 1. Unloading and 2. 3. loading of vessels Horizontal Container lifting & transport stacking of cargo quay to yard Trains XTs Gate Trains External trucks (XTs) Vessels yard to quay Storage yard On-dock rail yard 33 Land-Scarce Container Terminals 1. Quay cranes (QCs) Rubber-tired gantry cranes (RTGCs) 3. Rail-mounted gantry cranes (RMGCs) Gate Yard trucks (YTs) 2. Port of Singapore External trucks (XTs) 34

Land-Scarce Container Terminals Cargo stacked up to 7 tiers high in large blocks Quay cranes (QCs) 0-3 truck traffic lanes between blocks Storage density: 1000-1200 TEU per hectare Manually operated trucks and cranes No on-dock rail yard Cargo throughput: 2000-2500 TEU per meter of wharf line per year Port of Singapore Rubber-tired gantry cranes (RTGCs) 35 Land-Scarce Container Terminals Port of Hong Kong 36

Straddle Carrier-Based Container Terminals Common on U.S. East Coast and in Europe Cargo stacked 3 tiers high in lanes that are 1 container wide Spaces between lanes very narrow Storage density: 750 TEU per hectare Manually operated straddle carriers perform operations 2 and 3 On-dock rail yard a possibility: RMGCs may be needed Cargo throughput: 1500 TEU per meter of wharf line per year 1. Quay cranes (QC) 2. 3. Straddle carriers (SCs) Port of Hamburg 37 Straddle Carrier-Based Container Terminals Common on the U.S. East Coast and in Europe Cargo stacked 3 tiers high in lanes that are 1 container wide Spaces between lanes very narrow Storage density: 750 TEU per hectare Manual/automated straddle carriers perform operations 2 and 3 On-dock rail yard a possibility: RMGCs may be needed Cargo throughput: 1500 TEU per meter of wharf line per year 1. Quay cranes (QC) 2. 3. Straddle carriers (SCs) Port of Hamburg 38

Straddle Carrier-Based Container Terminals Port of Bremerhaven (Germany) Aerial view of Northport's container terminal 39 Straddle Carrier-Based Container Terminals Simulation of a terminal in which SCs used in quay and storage yard areas RMGCs used at on-dock rail yard to load trains Source: HHLA website (http://hhla.de) 40

YC/SC-Free, Ground-Based Terminals 1. Common on U.S. West Coast Large forklifts called top-handlers and reach-stackers stack containers up to 4 tiers high in blocks Large spaces needed between blocks Storage density: 500 TEU per hectare Manually operated reach-stackers, top-handlers, side-picks, and tractor-trailers On-dock rail yard a possibility Cargo throughput: 1000 TEU per meter of wharf line per year Quay cranes (QCs) 3. Reach-stackers Top- handlers 2. Yard trucks TTI/Hanjin Terminal (Seattle) 41 Wheel-Based Container Terminals Common on U.S. West Coast Loaded containers sitting on trailers (chassies) parked in storage yard (stacking height = 1 tier) Empty containers stacked up to 4 tiers high by side-picks Storage density: 250 TEU per hectare Manually operated equipment On-dock rail yard a possibility Cargo throughput: 500 TEU per meter of wharf line per year 1. Quay cranes (QCs) Top-handlers 3. Side-picks 2. Yard trucks Reach-stackers On-dock rail yard Global Gateway North Terminal (Seattle) 42

Automated Container Terminals I Ports of Rotterdam and Hamburg Cargo stacked up to 5 tiers high in large blocks Spaces between blocks very narrow Automated guided vehicles (AGVs) perform operation 2 Automated stacking cranes (ASCs) perform operation 3 in yard On-dock rail yard a possibility: RMGCs may be needed RMGCs ASCs 3. www.hhla.de www.hhla.de 1. QCs 2. AGVs Container Terminal Altenwerder (Hamburg) 43 Automated Container Terminals II Patrick Terminal at Port of Brisbane Only automated SC-based terminal in the world Cargo stacked 2 tiers high in lanes Automated straddle carriers perform operations 2 and 3 1. Quay cranes (QC) 2. 3. Automated straddle carriers Patrick Terminal (Brisbane, Australia) 44

Other Possibilities Straddle carriers and ASCs used in storage yard RMGCs used in on-dock rail yard Source: HHLA website (http://hhla.de) 45 Container Terminal Characteristics Most terminals never close workload processed continuously: 24 hours per day, 365 days per year uneven distribution of workload over time (late vessel arrivals, cust. requests) Highly uncertain equipment processing times truck travel times affected by road traffic conditions inside terminal crane handling times are variable 10,000+ decisions made per day equipment dispatching, container storage location assignment, etc. decision opportunities come with no prior warning decisions made immediately, usually one at a time inter-decision time highly stochastic, avg. as low as 1 sec. Quay, yard, and gate operations highly interconnected bottlenecks in yard late vessel departures few or no inter-equipment buffers 46

Measures of Terminal Performance Gross crane rate (GCR) Also known as the quay crane work rate Avg. # QC lifts made per QC hour beside a vessel that is being worked Average vessel turnaround time Avg. time it takes to fully process a vessel From time of berthing to time of un-berthing Average external truck (XT) turnaround time Avg. time it takes for external truck to be serviced at the terminal Drop-off or pick-up From time of gate entry to time of gate departure Ability to keep vessels and trains on schedule Consistency in performance more important than maximizing avg. performance Another goal: keep operations on-time at minimum cost Cost per TEU moved between ship and shore USD $150 at U.S. ports 47 Container Terminal Planning and Design Decision. 1. Where should the terminal be located? 2. What kind of cargo will be handled (import, export, transshipment)? 3. What is the planned throughput capacity? 4. How much cargo storage capacity is needed in the yard? 5. Will there be an on-dock rail yard? A large empty container yard? 6. How much land area will the terminal occupy? What is its shape? 7. What type of container handling equipment will be used? Specs? 8. How many work shifts will there be per day? 9. Should the yard layout be parallel or perpendicular? 10. How many storage blocks should there be? What are their dimensions? 11. How many vehicle lanes should there be between the blocks? 12. How much equipment should be deployed on an average day? Quay Cranes (QCs) Yard Trucks (YTs) unloading Yard Cranes (YCs) Vessels loading Yard 48

Design Issue #7: Equipment Selection and Specification 2. 3. 3. Yard Equipment Type Horizontal Lifting Stacking Transport 1. Tractor-trailers (YTs) X 2. Automated guided vehicles (AGVs) X 3. Rubber-tired gantry cranes (RTGCs) X X 4. Rail-mounted gantry cranes (RMGCs) X X 5. Automated stacking cranes (ASCs) X X 6. Bridge cranes X X 7. Top-handlers X X 8. Reach-stackers X X 9. Side-picks X X 10. Straddle carriers (SCs) X X X 11. Shuttle carriers X X 12. Automated lifting vehicles (ALVs) X X 49 Specification issues for Quay Cranes container-terminal of Bremerhaven Port of Long Beach Single trolley quay crane handles one cont. at a time 50

QC Issue A: The Double Trolley Quay Crane 51 The Double Trolley Quay Crane www.hhla.de Double Trolley QCs and Straddle Carriers at Port of Hamburg 52

QC Issue B: Twin-lift (two 20 conts) and tandem (two 40 conts) spreaders 53 Design Issue #10.1: Block Width What is the optimal width for the storage blocks? (storage capacity is unchanged) 54

Block Width: Tradeoffs 3 rows per block (10 zones) 5 rows per block (6 zones) 6 rows per block (5 zones)? 10 rows per block (3 zones) 55 Gross crane rate (QC lifts/hr) 38 33 28 23 18 Block Width: Results Group 2: scenarios 3-4 Most Oblong Less equip More equip Gross crane rate (QC lifts/hr) 38 33 28 23 18 From: M.E.H. Petering, Effect of block width and storage yard layout on marine container terminal performance, Transportation Research E, doi: 10.1016/j.tre.2008.11.004, accepted Nov 2008. Group 5: scenario 11 Less equip More equip 13 13 1 3 5 7 9 11 13 15 1 3 5 7 9 11 13 15 Rows per block (block width) Rows per block (block width) Group 3: scenarios 5-7 Group 6: scenario 12 38 38 Gross crane rate (QC lifts/hr) 33 28 23 18 Less equip More equip Gross crane rate (QC lifts/hr) 33 28 23 18 Less equip More equip 13 13 1 3 5 7 9 11 13 15 1 3 5 7 9 11 13 15 Rows per block (block width) Rows per block (block width) 38 Group 4: scenarios 8-10 38 Group 7: scenarios 13-14 Most Square Gross crane rate (QC lifts/hr) 33 28 23 18 Less equip More equip Gross crane rate (QC lifts/hr) 33 28 23 18 Less equip More equip 13 1 3 5 7 9 11 13 15 Rows per block (block width) 13 1 3 5 7 9 11 13 15 Rows per block (block width) 56

Design Issue #10.2: Block Length What is the optimal length for the storage blocks? (storage capacity is unchanged) 57 Block Length: Tradeoffs Longer blocks Fewer vertical traffic lanes Less land area More congestion Shorter blocks More vertical traffic lanes More land area Less congestion 58

Design Issue #11: Vehicle Lanes 59 Container Terminal Operations Management Decision 1. Allocation of berths to arriving vessels 000010 2. Allocation of QCs to docked vessels 000010 3. QC scheduling and job sequencing 10 (off-line) or 10,000 (real-time) 4. Container storage location assignment 010,000 5. Container retrieval location assignment 010,000 6. YC job assignment 010,000 7. Inter-zone YC deployment 010,000 8. YT job assignment 010,000 9. YT routing 100,000 10. Selecting appointment times for external trucks 010,000 Land-scarce terminal: Quay Cranes (QCs) Yard Trucks (YTs) unloading Yard Cranes (YCs) Frequency (decs/day) Vessels loading Yard 60

Terminal Manager s s Goal: Find solutions for operations management (OM) issues that (1) are viable in a real-time setting (2) maximize performance (e.g. gross crane rate) GCR = total # QC lifts made total hours of QC time beside a busy berth 61 Terminal Operating System (TOS) storage YC YC YT locations disp deploy disp TOS deciding next activity for a particular QC/YC/YT/container TOS receiving input: - QC/YC/YT task completed - Vessel arrives (new jobs added to system) - XT arrives (new job added to system) To be viable, a TOS must: Use less than 1 second of CPU time per decision on 100% of occasions Avoid deadlocks on 100% of occasions TOS is idle TOS manipulating data internally 62

OM Issues #1 and #2: Terminal, Berth, and Quay Crane Allocation to Arriving Vessels Where should an arriving vessel be berthed? (Which terminal, which berth?) Which quay cranes should work on the vessel? 63 Terminal, Berth, and Quay Crane Allocation: A Multi-objective Problem Objectives: (1) Minimize vessel turnaround times (2) Maximize berth utilization and terminal throughput (3) Maximize satisfaction of customer shipping lines (4) Minimize cost (labor and equipment used) when processing vessels (5) Maximize efficiency of vessel-to-vessel transshipment operations Constraints: Water depth Berth and vessel lengths Quay crane availability and specs Vessel schedules Transshipment requests 64

OM Issue #3: QC Scheduling and Job Sequencing Once a vessel is secured alongside the terminal, (A) Which containers are moved by which QC? (B) What is the sequence of moves for each QC? Objectives: Minimize vessel turnaround time Unload hot containers quickly Minimize cost of unloading and loading vessel 65 OM Issue #3: QC Scheduling and Job Sequencing Constraints: 1. Ship balance must be maintained 2. Stress on vessel may not exceed certain limits 3. Precedence constraints due to container stacks 4. QCs must remain a minimum distance apart to avoid collisions 5. Visibility: crane operators must be able to easily see containers 6. Stability of above-deck stacks: no chimneys (stacks jutting out vertically by more than 2 tiers) 66

OM Issue #3: QC Scheduling and Job Sequencing Further complexity: 1. Some cargo booked for a vessel arrives after loading has begun 2. Cranes may work at different speeds 3. Not all container moves are loads or unloads there are also repositioning moves! 67 QC Scheduling: Current Practice Perform a Crane Split: (a set partitioning problem) Vessel bays are partitioned into contiguous areas Each area is served by one crane Partitioning done so that the time when last QC finishes is minimized Each QC works the bays in its area from L to R 68

QC Scheduling: The Crane Split (Equal Crane Speeds) 69 QC Scheduling: The Crane Split (Unequal Crane Speeds) Containers to be moved Time required (min) Bay # Unloading Loading Total QC1 QC2 QC3 QC4 2 15 19 34 82 102 102 136 3 9 8 17 41 51 51 68 4 66 52 118 283 354 354 472 7 35 35 70 168 210 210 280 10 26 24 50 120 150 150 200 11 40 43 83 199 249 249 332 14 72 76 148 355 444 444 592 18 55 45 100 240 300 300 400 Total 318 302 620 70

QC Scheduling: The Crane Split (Unequal Crane Speeds) Optimal solution: 574 minutes is the minimum vessel turnaround time Containers to be moved Time required (min) Bay # Unloading Loading Total QC1 QC2 QC3 QC4 2 15 19 34 82 102 102 136 3 9 8 17 41 51 51 68 4 66 52 118 283 354 354 472 7 35 35 70 168 210 210 280 10 26 24 50 120 150 150 200 11 40 43 83 199 249 249 332 14 72 76 148 355 444 444 592 18 55 45 100 240 300 300 400 Total 318 302 620 574 399 444 400 71 Yard Control Issues????? Quay crane: 1 2 3 4 5 6 7 8 9 Vessel 2 Vessel 1 Vessel 3????????? Block 1 Bk 2 Bk 3 Zone 1 1 2 3 4 5 6 Bk 4 Bk 5 Bk 6 Zone 2 7 8 9 10 11 12 Bk 7 Bk 8 Bk 9 Zone 3 13 14 15 16 17 18 19 Bk 10 Bk 11 Bk 12 Zone 4 20 21? 22 23 24?????? cross-gantry Yard Crane Yard Truck linear gantry 72?

OM Issue #4: Selection of Cargo Storage Locations Where should containers be placed in the yard upon their arrival? (e.g. after being unloaded from a vessel) 73 Container Storage Strategies I. Re-marshalling strategy Containers have multiple places of rest II. Sort and store strategy Containers have a single place of rest Containers stored based on attributes (e.g. length, height, weight class, loading vessel, destination port) Containers with similar attributes stored in same stack Two versions: 1) Storage locations determined off-line in advance 2) Storage locations determined in real-time immediately after container is discharged 74

Container Storage: Competing Objectives Possible objectives to pursue 1. Minimize container travel distance 2. Minimize congestion in vicinity of storage locations 3. Minimize number of times each container is touched Not all objectives can be pursued simultaneously. Thus, managers need to determine which objectives are most important!! This is not easy! 75 OM Issue #5: Container Retrieval Location Assignment Which stack in the yard, among those which are eligible,? should provide the container(s) loaded by a QC? Quay crane: 1 2 3 4 5 6 7 8 9 Vessel 2 Vessel 1 Vessel 3 Zone 1 Zone 2 Zone 3 Zone 4???? Block 1 Bk 2 Bk 3 1 2 3 4 5 6 Bk 4 Bk 5 Bk 6 7 8 9 10 11 12 Bk 7 Bk 8 Bk 9 13 14 15 16 17 18 19 Bk 10 Bk 11 Bk 12 20 21 22 23 24 76

OM Issue #6: Yard Crane Job Assignment? (1) When a YC becomes free, which YT does it serve next? Vessel 1 Vessel 2 Vessel 3 Zone 1 Zone 2 Zone 3 Zone 4 Block 1 Bk 2 Bk 3 7 1 2 Bk 4 Bk 5 Bk 6 13 8 20 21 14 3 4 5 6 9 10 11 12 Bk 7 Bk 8 Bk 9 15 16 17 18 19 Bk 10 Bk 11 Bk 12 22 23? 24???? (2) How to avoid deadlocks when YCs are working in close proximity and containers halfway between them need to be moved? 77 OM Issue #8: YT Job Assignment? (1) When a YT becomes free, what should it do next? (2) When to carry two 20 containers? (3) Should YTs be pooled at the QC, vessel, or terminal level? Pending QC jobs Vessel 1 QC: 1 2 3 4 5 6 7 8 9 Vessel 2 Vessel 3 Zone 1 Zone 2 Zone 3 Zone 4 Q1:24U Block 1 Q2:22U Q3:25U Q4:89L Bk 2 Q5:89L Q6:88L Q7:90L Q8:75U Bk 3 Q9:71U Q1:25U Q2:23U Q3:26U Q4:90L Q5:90L Q6:89L Q7:91L Q8:76U Q9:72U 1 Q1:26U Q2:24U 2 Q3:27U Q4:91L Q5:91L 3 Q6:90L 4 Q7:92L Q8:77U 5 Q9:73U 6 Bk Q1:27U 4 Q2:25U Q3:28U Q4:92L Bk 5 Q5:92L Q6:91L Q7:93L Bk Q8:78U 6 Q9:74U... 7...... 8...... 9...... 10... 11... 12 Bk 7 Bk 8 Bk 9 13 14 15 16 17 18 19 QC Bk jobs 10 Bk 11 Bk 12 already assigned? 20 21 22 23 24 to YTs 78?

OM Issue #10: Appointment System for External Trucks What kind of truck appointment system best serves the interests of the terminal, trucking industry, neighboring community, and environment? What should the appointment date and time be for a specific truck? Global Gateway North Terminal, Seattle 79 OM Issue #10: XT Appointment System Appointment system should: automatically generate appointment times for customers who call the terminal or log onto the internet determine the number of appointments to be made for a given region of the container yard for a given time period minimize average truck service time at the terminal minimize truck congestion overflow into local highway system maximize gate throughput enhance yard and vessel operations in the container terminal 80

Other Container Terminal Issues Issue. 1. Labor (union or non-union) 2. Container identification and tracking (OCR, RFID) 3. Equipment identification and tracking (GPS, local radar, RFID) 4. Customs 5. Security (scanning equipment, manual inspections) 6. Negotiating service agreements with shipping lines 7. Negotiating lease rates with public municipalities 8. Purchasing/developing a terminal operating system (TOS) 9. Tactical issues: when to purchase more equipment (QCs, YCs, YTs) Quay Cranes (QCs) Yard Trucks (YTs) unloading Yard Cranes (YCs) Vessels loading Yard 81 Outline 1. Introduction to maritime shipping 2. Introduction to container shipping 3. Container vessels and shipping lines 4. Seaports 5. Railway container transportation / facilities 6. Conclusion 82

Railway Container Transportation 83 Railway Container Transportation 2007 North American TEU moved Revenue Railway Operator Country in 2007 (billion $) 1. BNSF USA 5,065,005 2. Union Pacific USA 3,453,000 3. Norfolk Southern USA 3,120,000 4. CSX Corp. USA 2,111,000 5. Canadian National Canada 1,324,000 6. Canadian Pacific Canada 1,238,100 7. Kansas City Southern USA 526,370 84

Railway Container Transportation BNSF Intermodal Network 85 Railway Container Transportation Union Pacific s intermodal lanes, 2009 86

Railway Container Transportation Union Pacific Intermodal Network, 2008 87 Inland (Rail) Container Terminals Transferring containers between trains and trucks Unloading and loading of intermodal trains Temporary storage of containers Port of Long Beach Frankfurt am Main East Rochelle, Illinois 88

Outline 1. Introduction to maritime shipping 2. Introduction to container shipping 3. Container vessels and shipping lines 4. Seaports 5. Railway container transportation / facilities 6. Conclusion 89 Containerization Impact on Cities Container shipping supplies cities and their inhabitants with finished consumer goods Chicago: inland container shipping hub of the USA Milwaukee: CP Canadian Pacific rail facility at the Port of Milwaukee Congestion Pollution Maritime shipping constitutes 4.5% of global CO2 emissions 90

Containerization Impact on Cities Inspired architectural innovation 91 Literature on Container Terminal Ops. Briskorn, D., Drexl, A. and Hartmann, S. (2006) Inventory-based dispatching of automated guided vehicles on container terminals. OR Spectrum, 28, 611-630. Dekker, R., P. Voogd, van Asperen, E. (2006). "Advanced methods for container stacking." OR Spectrum V28(4). Grunow, M., Günther, H.-O. and Lehmann, M. (2004). Dispatching multi-load AGVs in highly automated seaport container terminals. OR Spectrum, 26, 211-235. Grunow, M., Günther, H.-O. and Lehmann, M. (2006). Strategies for dispatching AGVs at automated seaport container terminals. OR Spectrum, 28, 587-610 Hussein, M. (2010). Efficient container handling systems and crane scheduling algorithms for seaport container terminal. Industrial and Manufacturing Engineering Department. University of Wisconsin-Milwaukee Kim, K. H., and Bae, J. W. (2004). "A Look-Ahead Dispatching Method for Automated Guided Vehicles in Automated Port Container Terminals." Transportation Science, 38(2), 224-234. Kim, K. H., and Bae, J. W. (1998). "Re-marshaling export containers in port container terminals." Computers & Industrial Engineering, 35(3-4), 655-658. Kim, K. H., Jeon, S. M., and Ryu, K. R. (2006). "Deadlock prevention for automated guided vehicles in automated container terminals." OR Spectrum, V28(4), 659-679. Kim, K. H., Kang, J. S., and Ryu, K. R. (2004). "A beam search algorithm for the load sequencing of outbound containers in port container terminals." OR Spectrum, V26(1), 93-116. Kim, K. H., and Kim, H. B. (1998). "The optimal determination of the space requirement and the number of transfer cranes for import containers." Computers & Industrial Engineering, 35(3-4), 427-430. Kim, K. H., and Kim, H. B. (2002). "The optimal sizing of the storage space and handling facilities for import containers." Transportation Research Part B: Methodological, 36(9), 821-835. Kim, K. H., and Kim, H. B. (1999). "Segregating space allocation models for container inventories in port container terminals." International Journal of Production Economics, 59(1-3), 415-423. Murty, K. G., J. Liu, et al. (2005). "A decision support system for operations in a container terminal." Decision Murty, K. G., Y.-W. Wan, et al. (2005). "Hongkong International Terminals gains elastic capacity using a data-i Petering, M. E. H. (2009). Effect of block width and storage yard layout on marine container terminal performa Stahlbock, R. and Voß, S. (2008) Operations research at container terminals: a literature update. OR Spectrum, 30, 1-52. Steenken, D., Voß, S. and Stahlbock, R. (2004) Container terminal operation and operations research - a classification and literature review. OR Spectrum, 26, 3-49. Vis, I. F. A. and de Koster, R. (2003). Transshipment of containers at a container terminal: an overview. European Journal of Operational Research, 147, 1-16. 92

Acknowledgment Editor : Mazen I. Hussein, Industrial and Manufacturing Engineering Department, University of Wisconsin-Milwaukee. Grateful acknowledgment is herewith made for the cooperation and permission to us the materials and photos from the following personnel/websites/institutes: Alex Klein / www.renaissanceronin.wordpress.com American President Lines Ltd / www.apl.com Burlington Northern Santa Fe Railway / www.bnsf.com Center for Disease Control and Prevention / www.cdc.gov containershipping.nl / www.containershipping.nl Danny Cornelissen-Maritime Photographer/ www.portpictures.nl FRANCETRUCK / og@francetruck.com Great Lakes St. Lawrence Seaway System / www.greatlakes-seaway.com Hamburger Hafen und Logistik AG / www.hhla.de Hapag-Lloyd / www.hapag-lloyd.com KOCKS / www.kockskrane.de Mediterranean Shipping Company MSC / www.mscgva.ch merriam-webster / www.visualdictionaryonline.com Port of Brisbane Pty Ltd / www.portbris.com.au Port of Long Beach/ www.polb.com/default.asp Robert West Milwaukee School of Engineering / westr@msoe.edu Swedish Timars group / www.timars.se VDL Containersystemen / www.vdlcontainersystemen.com Webmaster / www.infovisual.info Wikimedia Wikipedia Union Pacific / www.up.com 93 The End! 94