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Service Levels at ECT

C O L U M N

FAST FORWARD SPRING 2006

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P.O. Box 73853000 HJ Rotterdam, the Netherlands T +31 (0) 181 278 278F +31 (0) 181 278 315E info@ect.nlW www.ect.nl

Colophon

This is an extra edition of Fast Forward, the business-to-business publication

of ECT, that appears three times a year. Please contact our Communications

Department with any questions or suggestions you may have regarding the

contents.

Copy: Rob Wilken (editor-in-chief)

Translation: Dean Harte

Photography: Eric Bakker

Layout: Ontwerpwerk, The Hague

Printing: Drukkerij De Longte, Dordrecht

External coordination: RWP, Voorburg

Chief editor ECT: Rose Wiggers

Europe Container Terminals (ECT)

ECT is the largest and most advanced container terminal operator in Europe,

handling almost three-quarters of all containers in the port of Rotterdam.

Twenty-four hours a day, seven days a week and 52 weeks a year, ECT

operates several container handling facilities on the ECT Delta Terminal at the

Maasvlakte along the North Sea and the ECT Home Terminal & ECT Hanno

Terminal in the Eemhaven/Waalhaven area, near the city centre. ECT has

developed a network of inland terminals to facilitate better intermodal trans-

port - barge, rail - between Rotterdam and the European hinterland.

Currently, ECT operates terminals in Venlo (in the southeast of the

Netherlands), Willebroek (Belgium) and Duisburg (Germany). All ECT’s termi-

nals inside and outside Rotterdam are at the crossroads of visible container

flows and invisible information flows. ECT’s highly skilled staff is on standby 24

hours a day for its customers. ECT is a member of the Hutchison Port Holdings

Group (HPH), the world’s leading port investor, developer and operator with

interests in twenty countries throughout Asia, the Middle East, Africa, Europe

and the Americas. Today, HPH operates a total of 247 berths in 42 ports

together with a number of transportation related service companies.

Photographer Eric Bakker visited the ECT Delta Terminal on the 9th and 10th of June. His photos only leave room for one conclusion: it is business as usual at the terminal.

Live Action

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FAST FORWARD C O N T E N T S I N T R O D U C T I O N

Special Edition Go-LiveThis special edition of Fast Forward is solely dedicated to the software renewal operation at the ECT Delta Terminal. The Go-Live of phase one of this Total System Solution (TSS) took place in the weekend of the 6th and 7th of May 2006. ECT president Jan Westerhoud on the next page sheds his light on the motivation for this operation, the Go-Live itself, all the preparations involved and the current state of affairs. In addition, we will in this magazine take a look at the IT backgrounds of the TSS and the daily operations following the Go-Live.

cause: the migration of the entire Delta complex to new software for container administration and planning. Despite our extremely careful and thorough preparations, we still encountered problems in the implementation phase of this highly challenging and complex project. We are glad to say though that our operations have returned to their regular levels and we are working hard to further improve our services.

What remains unchanged in spite of all the turmoil is the fact that the new computer system constitutes the indispensable foundation for a more flexible service and higher production levels in the future. In view of the requirements made by the market in this respect as well as the increasingly larger volumes that will be heading our way, replacing the existing software was simply essential in order to prepare ourselves for this.

For more than four years, we closely worked together with the most qualified market parties to thoroughly prepare phase one of the so-called Total System Solution(TSS). Accuracy always has been and still is our number one priority. We even postponed the introduction date because we did not want to make any concessions to quality. The Go-Live operation on the 6th and 7th of May wasmeticulously prepared right down to the last detail, in close cooperation with our customers and other parties involved.

But in spite of this - and many, perhaps even thousands of thorough tests - it still became apparent that practice cannot match theory for the full 100 percent. From the moment we ascertained this, all our available resources having been working round the clock to tackle any flaws.

A question that is often asked is whether ECT did not have a fallback system. Well, we did. We could have switched back to our old system. But such a decision is only taken as a final resort. We saw - and still see - the progress made with the new system each day, which is why we decided tocontinue.

The start-up problems with the computer system have bynow been solved for the better part and the instability is a thing of the past. The ‘Go-Live’ however proved to be a many-headed monster. More is involved than just the computer system. Both within and outside of ECT, we need to get used to a new way of working. The new computer system absolutely requires complete and correct container information. In addition, new information such as booking numbers is needed. An important factor in this is the new

customs status - the so-called RTO status - that was awarded to the ECT Delta Terminal with the Go-Live. This was a long-standing legal requirement. As a result, a container cannot leave the terminal without full and correct documentation. In the past, this was not always necessary in everyday practice. It is in the new situation, though. The customs system has been integrated into that of the ECT Delta Terminal.

No matter what: serious teething troubles, new customs requirements, the need for all people involved to get used to a new system… the cumulative effects have had quite an impact. Everyone here at ECT has been fully focussed on turning around this situation. Each day, we make headway: operations are (practically) up to par again, backlogs have been made up. We are now rapidly solving the last remaining issues. At the same time, we continue to intensively consult with customers and transporters about further improving the provision of advance information. Of course, something will occasionally go wrong somewhere. However, this was also the case in the past so e

ors are certainly not always directly related to the and erromputer system. Our goal is clear: ECT wants to give new comnt service to its customers.excellen

terhoudJan Wesnt of ECTPresiden

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The Road to Improvement

almost anywhere else in the world. ECT always used to be almost anywhere else in the world. ECT always used to bean exception, but from now on the booking number will constitute the red thread running through the entire container handling process at the ECT Delta.

A pre-condition for the new computer system functioning well is that ECT knows the correct booking numbers in time. Otherwise, the system will not know what to dowhen a container physically arrives at the terminal.Complete and correct information however is also important for other reasons. With the introduction of the new computer system, ECT was awarded the so-called RTO status by Customs. This more or less makes the terminal a no man’s land. The Netherlands does not start until the fence. One advantage this for example brings is that acontainer that arrives and leaves by sea no longer needs to be cleared by Customs and can be stored without documents. An outbound container on the landside however must always be accompanied by correct and complete documents. If this is not the case, the container - by order of Customs - will automatically be blocked in the ECT computer system. Minor details can already cause this. Due to the vast importance of proper and complete digital information, an intensive consultation process with customers and transport companies was already initiated in an early stage.

AdvantagesAs mentioned before, the new software allows for a more flexible service and creates the foundation for further boosting productivity at the ECT Delta Terminal. Thanks tothe central database, ECT among other things will have a far better overview of the containers at the terminal. The

quay planning can also be optimised due to the central quay planning can also be optimised due to the centralquay planning module. Automatic ITT transports will be generated when vessels moor at another terminal or containers are located at another terminal. Furthermore, the so-called process of ‘hoppen’ (switching) between terminals is supported in a more effective manner.

Go-LiveIn the weekend of the 6th and 7th of May, the newsoftware for the ECT Delta complex was actually implemented. Despite extensive and careful preparations, obviously not everything went as hoped for. Errors were among other things caused because after going live, the new computer system was overburdened for a short period. Because an overload of incoming EDI messages, reports and internet traffic was generated, orders could only be processed slowly. Despite the many testing, unforeseen problems also occurred. In addition, there were issues that were not related to the system, such as problems with incorrect and/or incomplete documents and the ensuing blockades. It was this combination of unforeseen system problems, customs requirements and user habituation that triggered a snowball effect.

All major problems have by now been tackled. In a special control room, extra staff are working round the clock to further optimize the system. Throughout the Delta Terminal complex, hotspots have in addition been set up where so-called super users offer round-the-clock assistance in solving exceptional situations that require additional knowledge of the new system. At ECT, every-thing and everyone is focused on one thing alone: offering customers the service that they have come to expect.

Back in 1993, the Delta/Sea Land Terminal nowadays Back in 1993, the Delta/Sea-Land Terminal - nowadaysknown as the Delta Dedicated North Terminal - was the world’s first automated container terminal. In anticipation of the explosive increase in container handling, the Delta Dedicated East Terminal and the Delta Dedicated West Terminal were realized at the Maasvlakte conform the same concept a couple of years later. Back then, the strong pressure to be operational as soon as possible led to the decision to equip each of these terminals with its own computer system. With the end of the life cycle of this software and hardware in sight, ECT was given theopportunity to make new choices some years ago. The decision was taken to no longer internally develop separate systems for each terminal, but to switch to one single software package in conformity with global standards for the entire Delta complex. In this way, the foundation could be laid for both a more flexible service and further performance improvement.

Total System Solution (TSS)ECT scoured the market to find the best partners for the realisation of this so-called Total System Solution. It quickly became apparent that an overall standard softwaresolution was not already available for ECT’s automated operations. A standard package however was suitable for the most part, especially as regards order processing,container, truck, barge and rail planning and handling. For the remainder, some customized software needed to be developed. The preparations for this were initiated more than four years ago together with the suppliers involved.At the same time, a start was made with the renewal of all hardware. Most of the hardware was already replaced last year.

Phased ApproachThe decision was made to carry out the migration to the new software in different phases. Phase one entails the introduction of new software for order processing and container planning, phase two the software for managing the operations. The Go-Live of phase one has been carefully prepared down to the smallest detail over the last couple of years. Its drastic character and sheer size have been fully acknowledged right from the start. Following a substantial building process, extensive testing has been taking place for the last 1.5 years. Experts who can often boast morethan ten years of experience in building and testing container terminals went through all scenarios imaginable. In some tests, a peak load of three to four times the regular container volume was unleashed on the new system. Lots of potential bugs were tackled on thesemoments. Each step in the development and testing process has been verified by all parties involved. The next phase was simply not embarked upon until everyone had given their approval. Quality and scrupulousness were always key. Parallel to this, some 1100 ECT employees were extensively trained to properly work with the new system.A well-renowned Dutch teaching institute (CITO) officially tested their knowledge.

The New SoftwareThe new administration software of the Delta Terminal allows for a central processing of orders and planning. Thisapplies to deep-sea, feeder, truck, rail and barge containers, but for example also to the internal terminal transport (ITT). An important difference to the outside world is thatthe ECT Delta Terminal will in the new system use booking numbers instead of container numbers - as is the case

ECT’s container handling complex at the Maasvlakte comprises three automated

terminals (Delta Dedicated North, Delta Dedicated East and Delta Dedicated

West) as well as the landside area where trucks, barges and trains are loaded

and discharged and order handling takes place. Each of these terminals until

recently had its own administrative computer system. With the life cycle of

this software and hardware coming to an end, ECT some years ago made the

decision to switch to one single standard software package for all terminals.

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Making Major HeadwayFollowing the Go-Live of phase one of the Total System Solution (TSS) on the 6th

and 7th of May, the operations at the ECT Delta Terminal were put to the test quite

extremely. Using all means available, ECT worked round the clock to boost

performance levels. Over the last four weeks, a lot of headway has been made. For

the most part, operations are up to par again. All efforts are now geared to quickly

tackling the last few remaining issues.

Daily Operations ECT Delta Terminal:

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Operations managers Michel Maas and Piet Hein Horstmeier are among those ECT employees who over the last couple of weeks only went home briefly for a quick couple of hours of sleep. Now that the operations are for the most part back to normal again, they can slowly return to a more normal life rhythm. “One by one, we found a solution for each problem. We have made major headwayover the last couple of weeks.”

Handling as UsualLooking at all the modalities, deep-sea, feeder, barge and truck operations are (virtually) back on target again. Due to the lead times often being short, a lot of extra effort however is still needed to guarantee the smooth handling of feeders. Significant progress has also been made in terms of train handling. But especially the exchange of data with the neighbouring APM Terminals - an importantcustomer of the rail terminal - still needs to be improved; this however is energetically being addressed. The same applies to the communication with empty depots.

System and PeopleMaas and Horstmeier mention two key elements that required attention following the Go-Live. On the one hand, the teething troubles of the system itself needed to be resolved; on the other hand, there was the habituation of the people who needed to work with the new system. In spite of intensive training sessions, it can sometimes still be difficult to change the attitude of someone who has worked in a certain manner for twenty years. “In the past,we for example explicitly did not allow our drivers to take

a multi trailer system from one side of the terminal complex to the other empty. This was considered ineffective. But now, the system may indicate that it is necessary. And if this is the case, it simply needs to be done.”

The new computer system in addition requires advance information to be 100 percent correct. And this is by far not always the case yet, with all the ensuing consequences. “With the quality team that we established last year, wewill continue to consult with our customers in order to further improve this information as soon as possible. Nomatter what, the booking number is essential. The system does not offer the possibility to work around it. The RTO status of Customs also means higher demands are made of the information.” The new software at the ECT Delta Terminal in this respect does what it should; it is up to the people (inside and outside of ECT) to use it properly.

Solving Problems 24/7The coming period, ECT will unabatedly continue its efforts to further improve service levels. The Gate and Admini -stration Department is fully operational 24 hours a day and 7 days a week. And it goes even further: “We are working round the clock with more staff than usual. Each week, we want to book better results. At the same time, we try to answer and solve the questions of customers. The last few remaining issues must also be solved.”