Thesis NiswariA

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

MSc in Maritime Economics and Logistics – Erasmus University Rotterdam ii

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.


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Abstract

Due to the predicted growth of the shipping industry for the coming years and the high utilization of the world’s 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.


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TABLE OF CONTENTS

Acknowledgements ii Abstract iii Table of Contents iv List of Figures vi List of Tables vii List of Abbreviations viii

CHAPTER 1. INTRODUCTION ..............................................................................................................................1 1.1. BACKGROUND............................................................................................................................................1 1.2. PROBLEM DESCRIPTION AND RESEARCH QUESTIONS .....................................................................2 1.3. METHODOLOGY .........................................................................................................................................2 1.4. STRUCTURE OF THESIS ...........................................................................................................................3 1.5. RESTRICTIONS ...........................................................................................................................................3

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

CHAPTER 3. FIELD RES EARCH.......................................................................................................................18

3.1. INITIAL CONDITION OF A CONTAINER TERMINAL..............................................................................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 EXPANSION PROJECT...........................................................................................................28 3.4. MAIN ASSUMPTIONS ...............................................................................................................................28 3.5. GENERAL DESCRIPTION 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


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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 SUM UP OF ALL SCENARIOS .......................................................................................................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 STATEMENT FOR HDS PERPENDICULAR ALTERNATIVE...........................................................................................................................................................73


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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


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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


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


MSc in Maritime Economics and Logistics – Erasmus University Rotterdam 1

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 in all over the world have become excessively

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



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.



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.



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.



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).

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

Container Handling Operation

Quay Transfer Operation Storage System

Ship Operation Loading

Operation Discharge Operation

Loading Export

Stacking Import

Gate Operation

Receipt Delivery



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 world’s 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 world’s 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 Out 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



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



especially because reefer stack requires larger spaces. During the last past years, more refrigerated products are shipped in containers4 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 terminal’s 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.

4 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)



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, rubber-tired 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.



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)



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 another’s 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

6 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).



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 SC’s, 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. In the strategic level, it is 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 segment is related to each other and, therefore, should be balanced in terms of capability and efficiency to



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



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 terminal’s 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 terminal’s 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



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.

1 (1 )

T

tt

XtNPV Y

WACC=

= −+∑

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.



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.

1

0(1 )

T

tt

XtNPV YIRR=

= − =+∑

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.

tt

t

NIROI

Inv=

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.

Cost of Investment

Payback period = 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



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 the terminal 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.



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 M2

Terrain A 374,460 Terrain B 141,311 Terrain C 168,927 Terrain D 192,479 Total 877,177

Source: Terminal Development Department, CT 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 CT’s operational areas is shown in Table 2.

Table 2. Total Expanded Land Areas Area M2

Terrain A 374,460 Terrain B 141,311 Terrain C 168,927 Terrain D per 1 September 2005 192,479 Terrain E per 2007 80,260 Additional gate area (per 1 June 2005) 20,000 Terrain F (pre-gate) 23,289 Total 1,000,726

Source: Terminal Development Department, CT



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 terminal’s volume during 2003-2004 was relatively stagnant, due to the high utilization of the terminal’s 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 TEU

2003 2004 2003 2004 Deep sea imp/exp 574,581 474,671 959,550 792,701 Transshipment 128,419 198,898 214,460 332,160 Road 239,742 265,036 400,369 442,610 Barge 175,538 178,089 293,148 297,409 Rail 102,767 109,824 171,621 183,406 ITT 10,862 9,432 18,140 15,751 Total 1,231,909 1,235,950 2,057,288 2,064,037 Growth 0.33% 0.33%

Source: Terminal Development Department, CT



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 container 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

Container

Moves

TEU9

% Total

% Deepsea-

Land

% Deepsea-

TS

% Land

Without

TS Deepsea imp/exp

474,671

792,701 38.4% 70%

Transship-ment

198,898 332,160 16.1%

54%

30%

-

474,671

Road 265,036 442,610 21.4% 47% Barge 178,089 297,409 14.4% 32% Rail 109,824 183,406 8.9% 20% ITT 9,432 15,751 0.8%

46%

-

2%

562,381

Percentage - - 100% 100% 100% 100% - Total 1,235,950 2,064,037 - 1,235,950 673,569 562,381 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



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 new berth. Hence, the quay length will 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 Measured in crane moves and later can be translated in TEU (Twenty-foot Equivalent Unit) 11 A crane move is assumed to be barge, feeder, or deep sea move



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 heavily 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 Capacity Stack height TEU visits TEU factor Cntr visitsMTY 910 7 300,006 174,422Reefer 1,128 5 1.24 80% 3 159,375 1.72 92,660DV 13,214 2.5 1,555,842 904,559Total 15,252 2,015,224 1,171,642



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 modality’s 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 3-

high 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.



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 terminal’s 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



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) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Deepsea total 784 882 1,014 1,166 1,341 1,542 1,774 2,040 2,346 2,697 CX 679 762 876 1,007 1,159 1,332 1,532 1,762 2,026 2,330

3rd party 105 120 138 159 183 210 241 278 319 367 Road 264 297 342 393 452 520 598 687 790 909 Barge 255 287 330 379 436 502 577 663 763 877 Rail 125 140 161 185 213 245 282 324 373 429

ITT 15 17 19 22 25 29 34 39 44 51

Total moves 1,443 1,623 1,866 2,146 2,468 2,838 3,264 3,753 4,316 4,964

Total TEU 2,481 2,791 3,210 3,691 4,245 4,881 5,614 6,456 7,424 8,537

Over quay 1,039 1,169 1,344 1,545 1,777 2,044 2,350 2,703 3,109 3,575 Over quay (TEU) 1,787 2,010 2,311 2,658 3,057 3,515 4,043 4,649 5,347 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 3rd 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



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 CT’s 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

50

55

60

65

70

75

80

85

90

95

100

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

Week

%

16,000

17,000

18,000

19,000

20,000

21,000

22,000

23,000

24,000

25,000

26,000

TEU

Yard Utilisation 2004 Yard Utilisation 2005 Total Available Slots 2004 Total Available Slots 2005

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



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

8,000

10,000

12,000

14,000

16,000

18,000

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 51Week

Move

s per

wee

k

Budget2005Volumes2005Volumes2004Volumes2003Volumes2002

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.



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, such 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



o TEU factor to be 1.72 o All housekeeping is performed outside peak hours o SC can be completely pooled o Fuel consumption is related to total volume o Power consumption is related to waterside moves o The empty stack is included in all scenarios o 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



- 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 4-high 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.



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 40’GS - 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.



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



higher, due to the higher stacking height that the container yard can have. Several 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:


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



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, the RMG being employed in this alternative can however be reused in 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).

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

Waterside Transfer Zone (SC – Cantilever RMG)

Landside Transfer Zone (Truck – Cantilever RMG)



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:


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.



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.



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. Operational Assessment 4.1.1. 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 3/4 H SC 3/4 H SC 4 H SC HDS Parallel HDS Perpendicular New Layout New Layout Empties 910 910 910 910 910 Reefers 1,508 1,508 1,508 1,508 1,508 Dry Vans 12,620 14,466 14,466 14,606 14,900

Total 15,038 16,884 16,884 17,024 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

5 days

Peak factor

1.24

Stacking density

80%



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 terminal’s 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 3/4 H SC 3/4 H SC 4 H SC RMG Parallel RMG Perpendicular New Layout New Layout

Empties 300,006 300,006 300,006 300,006 300,006 Reefers 213,066 213,066 213,066 213,066 213,066 Dry Vans 1,485,903 1,703,255 2,180,166 2,197,912 2,238,627 Total 1,998,975 2,216,327 2,693,238 2,710,985 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



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 3/4 H SC 3/4 H SC 4 H SC RMG Parallel RMG Perpendicular New Layout New Layout

Empties 174,422 174,422 174,422 174,422 174,422 Reefers 123,875 123,875 123,875 123,875 123,875 Dry Vans 863,897 990,264 1,267,538 1,277,856 1,301,528

Total 1,162,195 1,288,562 1,565,836 1,576,154 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

CX (15% growth) Third party (15% growth) Total deep sea moves Total quay moves 2005 679,180 104,803 783,983 1,038,777 2006 761,793 120,000 881,793 1,168,376 2007 876,062 138,000 1,014,062 1,343,632

2008 1,007,471 158,700 1,166,171 1,545,177 2009 1,158,592 182,505 1,341,097 1,776,953

2010 1,332,381 209,881 1,542,261 2,043,496 2011 1,532,238 241,363 1,773,601 2,350,021 2012 1,762,073 277,567 2,039,641 2,702,524

2013 2,026,385 319,202 2,345,587 3,107,903 2014 2,330,342 367,083 2,697,425 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 The annual growth is confirmed to be 15% for CX as well as the third party. 17 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.



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

1,674,137

3/4 H SC New Layout

1,856,168

4 H SC New Layout

2,255,580

HDS Parallel

2,270,443

HDS Perpendicular

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.

500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Th

ou

san

ds

3 RMGs perpendicular RMG paral lel 4H SC New Yard Layout 3/4 H SC New Yard Layout3/4H SC VolumeMax berth capacity - 33 mvs Max berth capacity - 30 mvsMax berth capacity - 27 mvs

Max

yar

d c

apac

ity

Mov

es

over

qu

ay

Max berth capacity - 33 mvs



3/4 H SC3/4 H SC New Layout

4 H SC New Layout

HDS ParallelHDS Perpendicular

Figure 15. Volumes Over Quay per Alternative



We can then make an estimation of the year, on which the annually demanded number of quay moves by CT’s 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

Second quarter of 2008

3/4 H SC New Layout

First quarter of 2009

4 H SC New Layout

Third quarter of 2010

HDS Parallel


HDS Perpendicular


Accordingly, the total moves –which are deep sea moves, rail, barge, road, and ITT moves18- 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

32.5%

Road

33.7%

Rail

15.9%

ITT

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%.



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

4 H SC

New Layout

RMG Parallel

RMG Perpendicular

Deep Sea

1,263,255

1,400,611

1,701,996

1,713,211

1,738,941

Barge

410,881

455,557

553,584

557,232

565,601

Road

425,717

472,006

573,573

577,352

586,023

Rail

200,768

222,598

270,497

272,279

276,369

ITT

23,944

26,547

32,260

32,472

32,960

Total Moves

2,324,566

2,577,320

3,131,910

3,152,546

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 needed 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.



Table 17. 3/4 H SC Investment Timeline

Investment Price per unit (€) 2007 2008 2009 2011Straddle carrier 4 high 730,000 3,650,000 (5x) 8,030,000 (11x)MTH 200,000 200,000 (1x) 200,000 (1x) 200,000 (1x)STS cranes 6,875,000 13,750,000 (2x) 13,750,000 (2x)Reefer racks (129 slots) 450,000 1,800,000 (4x)TOTAL INVESTMENT 43,659,000 1,800,000 200,000 17,600,000 21,980,000 Table 18. 3/4 H SC New Layout Investment Timeline

Equipment Price per unit (€) 2007 2008 2009 2010 2011Straddle carrier 4 high 730,000 3,650,000 (5x) 8,030,000 (11x)MTH 200,000 200,000 (1x) 200,000 (1x) 200,000 (1x)STS cranes 6,875,000 13,750,000 (2x) 13,750,000 (2x)2nd grid (lane) 15,000 30,000 (2x) 30,000 (2x)Reefer racks (129 slots) 450,000 1,800,000 (4x)TOTAL INVESTMENT 43,722,000 1,800,000 200,000 17,630,000 30,000 21,980,000 Table 19. 4 H SC New Layout Investment Timeline

Equipment Price per unit (€) 2007 2008 2009 2010 2011Straddle carrier 4 high 730,000 13,140,000 (18x) 1,460,000 (2x) 5,840,000 (8x) 8,030,000 (11x)MTH 200,000 200,000 (1x) 200,000 (1x) 200,000 (1x)STS cranes 6,875,000 13,750,000 (2x) 13,750,000 (2x)2nd grid (lane) 15,000 30,000 (2x) 75,000 (5x) 60,000 (4x)Reefer racks (129 slots) 450,000 1,800,000 (4x)TOTAL INVESTMENT 61,461,750 14,940,000 1,660,000 19,820,000 75,000 22,040,000 Table 20. HDS Parallel Investment Timeline

Equipment Price per unit 2007 2008 2009 2010 2011Straddle carrier 4 high 730,000 3,650,000 (5x) 8,030,000 (11x)MTH 200,000 200,000 (1x) 200,000 (1x) 200,000 (1x)STS cranes 6,875,000 13,750,000 (2x) 13,750,000 (2x)RMG Cantilever 3,700,000 33,300,000 (9x) 3,700,000 (1x)RMG Rail tracks + HDS (m) 9,600 7,200,000 (750m)2nd grid (lane) 15,000 105,000 (7x) 45,000 (3x) 60,000 (4x) 75,000 (5x) 60,000Reefer racks (129 slots) 450,000 1,800,000 (4x)TOTAL INVESTMENT 90,431,250 1,905,000 245,000 17,660,000 40,575,000 25,740,000 Table 21. HDS Perpendicular Investment Timeline

Equipment Price per unit (€) 2007 2008 2009 2010 2011Straddle carrier 4 high 730,000 3,650,000 (5x) 8,030,000 (11x)MTH 200,000 200,000 (1x) 200,000 (1x) 200,000 (1x0STS cranes 6,875,000 13,750,000 (2x) 13,750,000 (2x)RMG Cantilever 3,700,000 44,400,000 (12x) 3,700,000 (1x)RMG Rail tracks + HDS (m) 9,600 8,064,000 (840m)2nd grid (lane) 15,000 105,000 (7x) 45,000 (3x) 60,000 (4x) 75,000 (5x) 75,000 (5x)Reefer racks (129 slots) 450,000 1,800,000 (4x)TOTAL INVESTMENT 103,009,200 1,905,000 245,000 17,660,000 52,539,000 25,755,000 4.2. Financial Assessment 4.2.1. 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



(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 2006 2007 2008 2009 2010 2011 2012 2013 20143/4 high SC 46,548 52,694 57,584 65,452 64,313 60,670 60,233 59,696 59,052 3/4 high SC with new layout 46,572 52,721 57,616 64,010 72,871 71,296 71,068 70,744 70,316 4 high SC with new layout 46,548 51,862 57,292 63,510 74,249 84,672 84,302 83,792 83,006 3/4 high SC with HDS parallel 46,576 52,695 57,507 63,767 89,670 102,962 103,486 103,923 104,128 3/4 high SC with 3 HDS perpendicular 46,576 52,695 57,507 63,767 89,146 101,775 102,268 102,671 102,842 Table 23. Annual Investment per Alternative (€‘000) Alternative 2006 2007 2008 2009 2010 2011 2012 2013 20143/4 high SC 26,734 9,781 8,496 27,180 9,135 32,671 10,071 10,575 11,103 3/4 high SC with new layout 26,734 9,781 8,496 27,211 9,166 32,671 10,071 10,575 11,103 4 high SC with new layout 26,734 23,578 10,029 29,511 9,214 32,734 10,071 10,575 11,103 3/4 high SC with HDS parallel 26,734 9,891 8,543 27,243 51,739 36,619 10,071 10,575 11,103 3/4 high SC with 3 HDS perpendicular 26,734 9,891 8,543 27,243 64,301 36,634 10,071 10,575 11,103 Table 24. Accumulative Investment per Alternative (€‘000) Alternative 2006 2007 2008 2009 2010 2011 2012 2013 20143/4 high SC 157,820 167,601 176,097 203,277 212,412 245,082 255,153 265,728 276,832 3/4 high SC with new layout 157,820 167,601 176,097 203,308 212,475 245,145 255,216 265,791 276,895 4 high SC with new layout 157,820 181,398 191,427 220,938 230,151 262,885 272,956 283,531 294,634 3/4 high SC with HDS parallel 157,820 167,712 176,255 203,497 255,236 291,855 301,926 312,500 323,604 3/4 high SC with 3 HDS perpendicular 157,820 167,712 176,255 203,497 267,798 304,432 314,504 325,078 336,182

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 NPV

('000)3/4 high SC € 116,3873/4 high SC with new layout € 140,3704 high SC with new layout € 153,3933/4 high SC with HDS parallel € 187,9163/4 high SC with 3 HDS perpendicular € 177,357 20 EBITDA = Earnings Before Interest, Tax, Depreciation, and Amortization



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 2008 2009 2010 2011 2012 2013 20143/4 high SC 122,450 136,376 149,095 170,350 174,183 183,052 187,171 191,382 195,688 3/4 high SC with new layout 122,450 136,376 149,095 170,307 185,228 195,332 199,726 204,220 208,815 4 high SC with new layout 122,450 136,376 149,095 170,307 190,621 217,780 222,680 227,690 232,813 3/4 high SC with HDS parallel 122,450 136,376 149,095 170,307 190,621 217,780 222,680 227,690 232,813 3/4 high SC with 3 HDS perpendicular 122,450 136,376 149,095 170,307 190,621 217,780 222,680 227,690 232,813

The high revenue results in high EBITDA (EBITDA=Revenue–Operational 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

3/4 high SC 36.77%3/4 high SC with new layout 39.01%4 high SC with new layout 37.72%3/4 high SC with HDS parallel 42.68%3/4 high SC with 3 HDS perpendicular 41.25% 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).



Table 28. Net Income After Tax (€‘000) Alternative 2006 2007 2008 2009 2010 2011 2012 2013 20143/4 high SC 22,944 27,088 30,555 34,784 34,054 28,346 27,722 27,021 29,6543/4 high SC with new layout 22,961 27,108 30,577 33,770 40,034 35,772 35,295 34,743 37,5394 high SC with new layout 22,944 25,064 28,684 31,365 38,887 42,960 42,334 41,602 46,4213/4 high SC with HDS parallel 22,964 27,078 30,483 33,577 48,458 54,304 54,272 54,169 58,9923/4 high SC with 3 HDS perpendicular 22,964 27,078 30,483 33,577 47,158 52,534 52,475 52,345 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

3/4 high SC 13.83%3/4 high SC with new layout 15.13%4 high SC with new layout 15.19%3/4 high SC with HDS parallel 17.29%3/4 high SC with 3 HDS perpendicular 16.58% 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 investments 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 2010 2011 2012 2013 2014Investment (157,820) (9,781) (8,496) (27,180) (9,135) (32,671) (10,071) (10,575) (11,103) Ebitda 46,548 52,694 57,584 65,452 64,313 60,670 60,233 59,696 59,052 Investment+Ebitda (111,272) 42,913 49,088 38,272 55,178 28,000 50,162 49,121 47,949 Accumulative (68,359) (19,271) 19,001 74,179 102,179 152,341 201,462 249,411

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).



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 Payback period

(years)3/4 high SC 3.503/4 high SC with new layout 3.524 high SC with new layout 4.033/4 high SC with HDS parallel 3.533/4 high SC with 3 HDS perpendicular 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 2006 2007 2008 2009 2010 2011 2012 2013 2014Total crane moves 1,168,601 1,343,892 1,545,475 1,674,137 1,674,137 1,674,137 1,674,137 1,674,137 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 2006 2007 2008 2009 2010 2011 2012 2013 2014Labour (incl. Subcontracting) (42,253) (45,514) (49,566) (58,308) (61,057) (69,984) (73,309) (76,795) (80,453) Power supply (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) M&R (equipments) (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) 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) M&R (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) Depreciation (12,000) (12,552) (12,872) (15,098) (15,437) (20,177) (20,630) (21,095) (16,690) Total Cost (87,901) (96,235) (104,383) (119,995) (125,307) (142,559) (147,568) (152,781) (153,326)

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



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 2014Cost 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 Cost per move

(EUR)3/4 high SC 79.673/4 high SC with new layout 75.174 high SC with new layout 71.573/4 high SC with HDS parallel 66.613/4 high SC with 3 HDS perpendicular 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 to build capacity. The 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 Cost of Expansion

(EUR)3/4 high SC 43,659,000 3/4 high SC with new layout 43,722,000 4 high SC with new layout 61,461,750 3/4 high SC with HDS parallel 90,431,250 3/4 high SC with 3 HDS perpendicular 103,009,200



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. Pros and Cons 4.3.1. 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.



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 terminal’s 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 the 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 4-high SC under the same (new) terminal layout.



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 4-high 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.



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 4-high 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



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 operator. 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 before24.

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



500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Thousa

nd s

3 RMGs perpendicular RMG parallel 4H SC New Yard Layout3/4 H SC New Yard Layout 3/4H SC VolumeMax berth capacity - 33 mvs Max berth capacity - 30 mvs Max berth capacity - 27 mvs

Max

yard

capac

ity M

oves

ove

r qua

y




3/4 H SC

3/4 H SC New Layout

4 H SC New Layout


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 NPV

('000)3/4 high SC $118,4483/4 high SC with new layout $148,8194 high SC with new layout $171,7363/4 high SC with HDS parallel $204,4763/4 high SC with 3 HDS perpendicular $195,767 Table 38. IRR per Alternative (10% growth) Alternative IRR

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



Table 39. ROI per Alternative (10% growth) Alternative ROI

3/4 high SC 13.95%3/4 high SC with new layout 15.78%4 high SC with new layout 16.36%3/4 high SC with HDS parallel 18.39%3/4 high SC with 3 HDS perpendicular 17.81% Table 40. Payback Period per Alternative (10% growth) Alternative Payback period

(years)3/4 high SC 3.443/4 high SC with new layout 3.414 high SC with new layout 3.943/4 high SC with HDS parallel 3.423/4 high SC with 3 HDS perpendicular 3.42 Table 41. Cost per Move per Alternative (10% growth) Alternative Cost per move

(EUR)3/4 high SC 80.983/4 high SC with new layout 77.204 high SC with new layout 74.693/4 high SC with HDS parallel 69.593/4 high SC with 3 HDS perpendicular 69.88 Table 42. Cost of Expansion per Alternative (10% growth) Alternative Cost of Expansion

(EUR)3/4 high SC 43,659,000 3/4 high SC with new layout 43,722,000 4 high SC with new layout 50,410,500 3/4 high SC with HDS parallel 79,380,000 3/4 high SC with 3 HDS perpendicular 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 STS cranes are not dictated by the increasing 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



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.

500

1,000

1,500

2,000

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3,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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s


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ay




3/4 H SC

3/4 H SC New Layout

4 H SC New Layout


Figure 17. Volumes with Transshipment Ratio 6% In this case, the berth will not be the limitation of the terminal’s 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.



500

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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3/4 H SC

3/4 H SC New Layout

4 H SC New Layout


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



500

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Thousa

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3 RMGs perpendicular RMG parallel 4H SC New Yard Layout 3/4 H SC New Yard Layout3/4H SC VolumeMax berth capacity - 33 mvs Max berth capacity - 30 mvsMax berth capacity - 27 mvs Max berth capacity - 33 mvs with 2000 m

Max

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3/4 H SC

3/4 H SC New Layout

4 H SC New Layout

HDS Parallel

HDS Perpendicular

Max berth capacity - 33 mvswith 2000 meter berth

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.



500

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3 RMGs perpendicular RMG parallel 4H SC New Yard Layout

3/4 H SC New Yard Layout 3/4H SC Volume

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

Max

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acity

Mov

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Max berth capacity - 30 mvs3/4 H SC

3/4 H SC New Layout

4 H SC New Layout


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.

500

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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3 RMGs perpendicular RMG parallel 4H SC New Yard Layout 3/4 H SC New Yard Layout3/4H SC VolumeMax berth capacity - 33 mvs Max berth capacity - 30 mvsMax berth capacity - 27 mvs Max berth capacity - 33 mvs with 2000 m

Max

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Max berth capacity - 30 mvs3/4 H SC

3/4 H SC New Layout

4 H SC New Layout


Max berth capacity - 33 mvs with 2,000 meter berth

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 investing in the cheaper, full 4 H SC will provide enough capacity to cope with the growth of demand as well as the maximum berth capacity.



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 van’s (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.

500

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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3/4 H SC New Layout

4 H SC New Layout

HDS Parallel

HDS Perpendicular

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.



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%

- -

-

+

++

o

Growth 10%

- -

-

+

++

o

Transshipment 10% increase

- -

-

+ +

+

o

Transshipment 10% decrease

- -

-

o

+

+ +

Additional 400m Berth Length

- -

-

o

+

+ +

Less Dwell Time (4 days)

+

+ +

o

-

- -

Additional 400m Berth and Less Dwell Time

- -

-

+ +

+

o

Inland Empty Depot

- -

-

+ +

+

o

Note: - - not recommended + suitable - unsuitable + + optimal o fair 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.



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 terminal’s 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.



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.



Appendix 1. Pro-forma Berthing Schedule (27 moves/hour totaling 1,950,000 quay moves)

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126 041/0411 Vessel 305-01-04 03:00:00 / 05-01-04 14:51:07650/650

80R 010/011 Vessel 205-01-04 07:00:00 / 05-01-04 19:20:44600/400

5Ia 045/046 Vessel 105-01-04 12:00:00 / 07-01-04 01:02:132500/2500

187 0410/0411 Vessel 405-01-04 23:00:00 / 06-01-04 13:48:53500/700

97m 0405/0406 Vessel 707-01-04 15:00:00 / 08-01-04 02:51:07500/800

456 012/013 Vessel 506-01-04 12:00:00 / 07-01-04 00:20:44500/500

97m 0405/0407 Vessel 607-01-04 06:00:00 / 07-01-04 17:51:071000/600

326 012/014 Vessel 908-01-04 08:00:00 / 08-01-04 17:15:33700/300

125 0405/0406 Vessel 808-01-04 07:00:00 / 08-01-04 19:20:44200/800

452 0405/0406 Vessel 1309-01-04 15:00:00 / 10-01-04 03:20:44600/400

478 0307/0308 Vessel 1109-01-04 07:00:00 / 09-01-04 18:51:07950/650

97m 0405/0407 Vessel 1209-01-04 15:00:00 / 10-01-04 02:51:07700/600

125 0405/0406 Vessel 1811-01-04 10:00:00 / 12-01-04 00:48:53400/800

452 0405/0406 Vessel 1610-01-04 07:00:00 / 10-01-04 16:15:33100/700

785 0405/0406 Vessel 2011-01-04 07:00:00 / 11-01-04 21:48:53800/400

458 0405/0407 Vessel 1410-01-04 07:00:00 / 10-01-04 18:51:071300/0

785 0405/0408 Vessel 1008-01-04 21:00:00 / 09-01-04 08:51:071600/0

454 0405/0409 Vessel 1710-01-04 21:00:00 / 11-01-04 09:20:441000/0

457 0405/0410 Vessel 1510-01-04 07:00:00 / 10-01-04 19:20:441000/0

325 0405/0411 Vessel 1911-01-04 14:00:00 / 12-01-04 02:20:441000/0

FED1 010/020 FED1 AE2

FED2 011/020 FED2 SER








FED10 011/024 FED10 SER

FED11 010/025 FED11 SER

FED12 011/025 FED12 SER

FED13 010/026 FED13 SER

FED14 011/026 FED14 SER

FED15 010/027 FED15 SER

FED16 011/027 FED16 SER

FED17 010/028 FED17 SER

FED18 011/028 FED18 SER

FED19 010/029 FED19 SER

FED20 011/029 FED20 SER

FED21 010/030 FED21 SER

FED22 011/030 FED22 SER




05/01 Mon

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126 041/0411 Vessel 305-01-04 03:00:00 / 05-01-04 13:40:00800/800

80R 010/011 Vessel 205-01-04 07:00:00 / 05-01-04 18:06:40600/400

5Ia 045/046 Vessel 105-01-04 12:00:00 / 06-01-04 21:20:003000/3000

187 0410/0411 Vessel 405-01-04 23:00:00 / 06-01-04 12:20:00600/1000

97m 0405/0406 Vessel 707-01-04 15:00:00 / 08-01-04 01:40:00600/1000

456 012/013 Vessel 506-01-04 12:00:00 / 06-01-04 23:06:40500/500

97m 0405/0407 Vessel 607-01-04 06:00:00 / 07-01-04 16:40:001000/600

326 012/014 Vessel 1008-01-04 08:00:00 / 08-01-04 16:20:00700/300

785 0405/0406 Vessel 1510-01-04 07:00:00 / 11-01-04 16:20:003000/3000

125 0405/0406 Vessel 808-01-04 07:00:00 / 08-01-04 18:06:40200/800

452 0405/0406 Vessel 1409-01-04 15:00:00 / 10-01-04 02:06:40600/400

478 0307/0308 Vessel 1209-01-04 07:00:00 / 09-01-04 17:40:00950/650

97m 0405/0407 Vessel 1309-01-04 15:00:00 / 10-01-04 01:40:00900/700

125 0405/0406 Vessel 1811-01-04 15:00:00 / 12-01-04 04:20:00600/1000

452 0405/0406 Vessel 1610-01-04 07:00:00 / 10-01-04 15:20:00100/900

785 0405/0406 Vessel 1711-01-04 07:00:00 / 11-01-04 20:20:001000/600










FED10 011/024 FED10 SER

FED11 010/025 FED11 SER

FED12 011/025 FED12 SER

FED13 010/026 FED13 SER

FED14 011/026 FED14 SER

FED15 010/027 FED15 SER

FED16 011/027 FED16 SER

FED17 010/028 FED17 SER

FED18 011/028 FED18 SER

FED19 010/029 FED19 SER

FED20 011/029 FED20 SER

FED21 010/030 FED21 SER

FED22 011/030 FED22 SER

785 0405/0408 Vessel 1108-01-04 21:00:00 / 09-01-04 07:00:001600/0

457 0405/0410 Vessel 908-01-04 07:00:00 / 08-01-04 18:20:441000/0




05/01 MonBARGE

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126 041/0411 Vessel 305-01-04 03:00:00 / 05-01-04 12:41:49650/650

80R 010/011 Vessel 205-01-04 07:00:00 / 05-01-04 17:06:04600/400

5Ia 045/046 Vessel 105-01-04 12:00:00 / 06-01-04 18:18:112500/2500

187 0410/0411 Vessel 405-01-04 23:00:00 / 06-01-04 11:07:16500/700

97m 0405/0406 Vessel 707-01-04 17:00:00 / 08-01-04 02:41:49500/800

456 012/013 Vessel 506-01-04 12:00:00 / 06-01-04 22:06:04500/500

97m 0405/0407 Vessel 607-01-04 06:00:00 / 07-01-04 15:41:491000/600

326 012/014 Vessel 1008-01-04 08:00:00 / 08-01-04 15:34:33700/300

125 0405/0406 Vessel 908-01-04 07:00:00 / 08-01-04 17:06:04200/800

452 0405/0406 Vessel 1409-01-04 15:00:00 / 10-01-04 01:06:04600/400

478 0307/0308 Vessel 1209-01-04 07:00:00 / 09-01-04 16:41:49950/650

97m 0405/0407 Vessel 1309-01-04 15:00:00 / 10-01-04 00:41:49700/600

125 0405/0406 Vessel 1911-01-04 10:00:00 / 11-01-04 22:07:16400/800

452 0405/0406 Vessel 1710-01-04 07:00:00 / 10-01-04 14:34:33100/700

785 0405/0406 Vessel 2111-01-04 07:00:00 / 11-01-04 19:07:16800/400

458 0405/0407 Vessel 1510-01-04 07:00:00 / 10-01-04 16:41:491300/0

785 0405/0408 Vessel 1108-01-04 21:00:00 / 09-01-04 06:41:491600/0

454 0405/0409 Vessel 1810-01-04 21:00:00 / 11-01-04 07:06:041000/0

457 0405/0410 Vessel 1610-01-04 07:00:00 / 10-01-04 17:06:041000/0

325 0405/0411 Vessel 2011-01-04 14:00:00 / 12-01-04 00:06:041000/0

145 0405/0412 Vessel 807-01-04 10:00:00 / 08-01-04 01:09:05800/1200

FED1 010/020 FED1 AE205-01-04 03:00:00 / 05-01-04 09:03:380/200


FED3 010/021 FED3 SER05-01-04 21:00:00 / 06-01-04 03:03:380/200


FED5 010/022 FED5 SER06-01-04 17:00:00 / 06-01-04 23:03:380/200


FED7 010/023 FED7 SER07-01-04 01:00:00 / 07-01-04 07:03:380/200


FED9 010/024 FED9 SER07-01-04 20:00:00 / 08-01-04 02:03:380/200

FED10 011/024 FED10 SER

FED11 010/025 FED11 SER08-01-04 11:00:00 / 08-01-04 17:03:380/200

FED12 011/025 FED12 SER

FED13 010/026 FED13 SER09-01-04 03:00:00 / 09-01-04 09:03:380/200

FED14 011/026 FED14 SER

FED15 010/027 FED15 SER09-01-04 20:00:00 / 10-01-04 02:03:38200/0

FED16 011/027 FED16 SER

FED17 010/028 FED17 SER10-01-04 11:00:00 / 10-01-04 17:03:38200/0

FED18 011/028 FED18 SER10-01-04 21:00:00 /

FED19 010/029 FED19 SER

FED20 011/029 FED20 SER10-01-04 23:00:00 / 11-01-04 05:03:38200/0

FED21 010/030 FED21 SER

FED22 011/030 FED22 SER11-01-04 07:00:00 / 11-01-04 13:03:38200/0



Appendix 4. Berth Capacity based on 27 moves/hour

Settings Calculation

Quay

16

1600 m

27 Mvs/h

1:30

1:30

10%

15

Barges20 Mvs/h

25%

1

400 m130,000 mvs/yr

Statistics

25.00% 100% * m berth solely reserved for barge / total length of berth

46.10% 100% * m berthing hours per week/ ( 7 days * 24 h * length of berth)

71.10%17.60%

53.20%

70.80%7 ( 1 - crane utilization) * total number of cranes

4 total barge moves/ (barge productivity * 7 days * 24 h)

28,940 total discharge and load moves excluding barges per week

9,459 total discharge and load moves barges per week

38,399

1,996,754 total discharge and load moves (barge and deepsea) per week * 52 weeks

Number of post panamax cranes

Deep sea vessels

Length of berth

Idle time after end of ops / interchange time

Craneproductivity deep sea

Idle time before start of ops / interchange time

Extra berth length rel. to vessel used by ropes

Number of deep sea dedicated cranes

Craneproductivity barge

Number of dedicated barge cranes

Percentage barge/total volume (average 2004 = 19.65 %)

Berth reserved solely for bargeYearly capacity of barge crane (mvs/yr)

Berth utilization (barge)

Berth utilization (excl. barge)

Total berth utilization

Total crane utilizationCranes undeployed per week (excl. barge)

Crane utilization (barge) 100% * total barge moves / (productivity on barge * total cranes * 7 days * 24 h)

Crane utilization (excl. barge) 100% * sum operational time cranes on MV per week/ (7 days * 24 h * number of cranes)

(extra cranes required to service all barges)

(based on crane utilization)

Barge cranes per week

Moves/week (excl. barge)

Moves/week (barges)

Moves/year (incl. barge)

Total moves/week


Settings

Quay

16

1600 m

30 Mvs/h1:30

1:30

10%

12Barges

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

Calculation


Length of berth

Deep sea vessels

Craneproductivity deep seaIdle time before start of ops / interchange time





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)

Berth utilization (barge) 100% * m berth solely reserved for barge / total length of berthBerth utilization (excl. barge) 100% * m berthing hours per week/ ( 7 days * 24 h * length of berth)



Crane utilization (excl. barge) 100% * sum operational time cranes on MV per week/ (7 days * 24 h * number of cranes)Total crane utilization

Cranes undeployed per week (excl. barge) ( 1 - crane utilization) * total number of cranes


Barge cranes per week Total barge moves/ (barge productivity * 7 days * 24 h)(extra cranes required to service all barges)

Moves/week (excl. barge) total discharge and load moves excluding barges per week

Moves/week (barges) total discharge and load moves barges per week

Total moves/week

Moves/year (incl. barge) total discharge and load moves (barge and deepsea) per week * 52 weeks




Settings

Quay

16

1600 m

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

Calculation


Length of berth

Deep sea vessels

Craneproductivity deep sea

Idle time before start of ops / interchange time





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)

Berth utilization (barge) 100% * m berth solely reserved for barge / total length of berth

Berth utilization (excl. barge) 100% * m berthing hours per week/ ( 7 days * 24 h * length of berth)



Crane utilization (excl. barge) 100% * sum operational time cranes on MV per week/ (7 days * 24 h * number of cranes)

Total crane utilization

Cranes undeployed per week (excl. barge) ( 1 - crane utilization) * total number of cranes


Barge cranes per week Total barge moves/ (barge productivity * 7 days * 24 h)

(extra cranes required to service all barges)

Moves/week (excl. barge) total discharge and load moves excluding barges per week

Moves/week (barges) total discharge and load moves barges per week

Total moves/week

Moves/year (incl. barge) total discharge and load moves (barge and deepsea) per week * 52 weeks



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 2014Investments/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 2014Profit & 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 76,124Salaries (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 60,605Depreciation (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 43,916Financial expenses (1,771) (1,444) (1,062) (663) (227) 0 0 0 0Extra-ordinary expenses EBT 32,778 38,698 43,649 50,621 50,069 41,947 41,088 40,120 43,916Taxes (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

Various Key FiguresBudget 2006 Budget 2007 Budget 2008 Budget 2009 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014

Revenue per move - EUR 104.78 101.48 96.47 102.31 104.89 110.21 112.69 115.22 117.82Labour cost per move - EUR 36.16 33.87 32.07 34.83 36.47 41.80 43.79 45.87 48.06Maintenance and Repair Cost Equipment per move - EUR6.36 5.69 5.13 5.39 5.52 6.50 6.64 6.79 6.95Land lease and rent per move - EUR7.32 7.54 6.86 6.77 6.92 7.08 7.23 7.40 7.56Total Operational Cost per move - EUR58.02 55.47 52.61 55.74 57.85 64.52 67.02 69.63 72.35Salaries cost per move - EUR 1.00 1.02 0.93 0.99 1.04 1.14 1.20 1.26 1.32IT cost per move - EUR 1.62 1.44 1.28 1.21 1.24 1.26 1.29 1.32 1.35Maintenance and Repair Civil works per move - EUR0.43 0.38 0.34 0.32 0.33 0.33 0.34 0.35 0.36Other Non-Operational cost per move - EUR3.88 3.97 4.05 4.40 5.18 5.84 5.97 6.11 6.24Total Non-Operational cost per move - EUR6.93 6.80 6.60 6.92 7.78 8.58 8.80 9.03 9.27

Depreciation cost per move - EUR10.27 9.34 8.33 9.02 9.22 12.05 12.32 12.60 9.97EBIT per move - EUR 29.56 29.87 28.93 30.63 30.04 25.06 24.54 23.96 26.23Total Cost per move - EUR 75.22 71.61 67.54 71.68 74.85 85.15 88.15 91.26 91.59Staff blue collar (number) 449 453 461 533 533 606 606 606 606Staff white collar (number) 158 166 174 183 183 184 184 184 184Total staff 607 619 635 716 716 790 790 790 790Hectare (m2) 100 100 100 100 100 100 100 100 100Quay meter (m) 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600Ship-shore crane (number) 12 12 12 14 14 16 16 16 16Straddle carrier (number) 41 41 41 46 46 57 57 57 57Moves - Import/Export 740,706 851,812 979,584 1,061,135 1,061,135 1,061,135 1,061,135 1,061,135 1,061,135Moves - Barges 286,808 329,830 379,304 410,881 410,881 410,881 410,881 410,881 410,881Moves - Transshipment 141,087 162,250 186,587 202,121 202,121 202,121 202,121 202,121 202,121Moves - ShiftingsMoves - Total crane moves 1,168,601 1,343,892 1,545,475 1,674,137 1,674,137 1,674,137 1,674,137 1,674,137 1,674,137TEU - Total throughput *2 1,986,622 2,284,616 2,627,308 2,846,033 2,846,033 2,846,033 2,846,033 2,846,033 2,846,033TEU per hectare 19,866 22,846 26,273 28,460 28,460 28,460 28,460 28,460 28,460TEU per quay meter 1,242 1,428 1,642 1,779 1,779 1,779 1,779 1,779 1,779TEU per white collar staff 12,574 13,771 15,083 15,560 15,560 15,476 15,476 15,476 15,476TEU per blue collar staff 4,425 5,048 5,700 5,337 5,337 4,696 4,696 4,696 4,696TEU per staff 3,273 3,694 4,137 3,974 3,974 3,602 3,602 3,602 3,602Moves per ship-shore crane 97,383 111,991 128,790 119,581 119,581 104,634 104,634 104,634 104,634Moves per Straddle Carrier 28,502 32,778 37,695 36,474 36,474 29,631 29,631 29,631 29,631Contribution Margin % 44.6% 45.3% 45.5% 45.5% 44.8% 41.5% 40.5% 39.6% 38.6%EBITDA Margin % 38.0% 38.6% 38.6% 38.8% 37.4% 33.7% 32.7% 31.7% 30.7%EBIT Margin % 28.2% 29.4% 30.0% 29.9% 28.6% 22.7% 21.8% 20.8% 22.3%EBT Margin % 26.8% 28.4% 29.3% 29.6% 28.5% 22.7% 21.8% 20.8% 22.3%Net Income Margin % 18.7% 19.9% 20.5% 20.7% 20.0% 15.9% 15.2% 14.6% 15.6%Expected mvs/h per Barge Crane 21 22 23 24 25 25 25 25 25 Expected mvs/h per STS Crane 29 31 33 33 33 33 33 33 33 Moves - CX + 86% of barge 1,004,997 1,155,747 1,329,109 1,439,758 1,439,758 1,439,758 1,439,758 1,439,758 1,439,758Moves 3rd party + 14% of barge163,604 188,145 216,367 234,379 234,379 234,379 234,379 234,379 234,379Moves - Total 1,168,601 1,343,892 1,545,475 1,674,137 1,674,137 1,674,137 1,674,137 1,674,137 1,674,137

NPV € 116,387IRR 36.77%

Investment (157,820) (9,781) (8,496) (27,180) (9,135) (32,671) (10,071) (10,575) (11,103) Ebitda 46,548 52,694 57,584 66,382 65,734 62,123 61,719 61,215 60,605 Investment+Ebitda (111,272) 42,913 49,088 39,202 56,599 29,453 51,648 50,640 49,502 Accummulative (68,359) (19,271) 19,931 76,530 105,983 157,630 208,271 257,773

Payback period 3.50 years



Appendix 8. Profit and Loss Statement for 3 and 4-high SC New Layout Alternative


EUR '1,000 Budget 2006 Budget 2007 Budget 2008 Budget 2009 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014Profit & loss:Revenue 122,450 136,376 149,095 170,307 186,650 196,785 201,212 205,739 210,369 Labour (incl subcontracting) (42,253) (45,514) (49,566) (58,842) (62,750) (71,744) (75,137) (78,696) (82,428)Power (1,870) (2,199) (2,585) (3,040) (3,246) (3,319) (3,394) (3,470) (3,548)Fuel Consumption (3,968) (4,666) (5,487) (6,452) (6,889) (7,044) (7,203) (7,365) (7,531)Maintenance and repair Costs (operational equipt.)(7,432) (7,645) (7,922) (9,031) (9,235) (10,880) (11,125) (11,375) (11,631)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) (6,021) (6,430) (6,575) (6,723) (6,874) (7,029)Total Operational Costs (67,784) (74,515) (81,278) (94,716) (100,136) (111,408) (115,694) (120,165) (124,831)Contribution margin 54,666 61,861 67,817 75,592 86,514 85,376 85,518 85,574 85,538Salaries (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) (7,869) (8,046) (8,227) (8,412) (8,602)Total Non-Operational Costs (8,094) (9,140) (10,201) (11,581) (12,222) (12,627) (12,964) (13,311) (13,668)EBITDA 46,572 52,721 57,616 64,010 74,292 72,749 72,554 72,263 71,870Depreciation (12,000) (12,552) (12,872) (15,104) (15,453) (20,193) (20,647) (21,112) (16,690)EBIT 34,572 40,169 44,744 48,906 58,839 52,556 51,907 51,152 55,180Financial expenses (1,771) (1,444) (1,062) (663) (227) 0 0 0 0Extra-ordinary expenses 0EBT 32,801 38,725 43,682 48,243 58,612 52,556 51,907 51,152 55,180Taxes (9,840) (11,618) (13,105) (14,473) (17,584) (15,767) (15,572) (15,345) (16,554)Net income after tax 22,961 27,108 30,577 33,770 41,028 36,789 36,335 35,806 38,626


Revenue per move - EUR 104.78 101.48 96.47 95.82 100.56 106.02 108.40 110.84 113.33Labour cost per move - EUR 36.16 33.87 32.07 33.11 33.81 38.65 40.48 42.40 44.41Maintenance and Repair Cost Equipment per move - EUR6.36 5.69 5.13 5.08 4.98 5.86 5.99 6.13 6.27Land lease and rent per move - EUR7.32 7.54 6.86 6.37 6.24 6.38 6.53 6.67 6.82Total Operational Cost per move - EUR58.00 55.45 52.59 53.29 53.95 60.02 62.33 64.74 67.25Salaries cost per move - EUR 1.00 1.02 0.93 0.93 0.94 1.03 1.08 1.13 1.19IT cost per move - EUR 1.62 1.44 1.28 1.14 1.11 1.14 1.16 1.19 1.22Maintenance and Repair Civil works per move - EUR0.43 0.38 0.34 0.30 0.29 0.30 0.31 0.31 0.32Other Non-Operational cost per move - EUR3.88 3.97 4.05 4.15 4.24 4.33 4.43 4.53 4.63Total Non-Operational cost per move - EUR6.93 6.80 6.60 6.52 6.58 6.80 6.98 7.17 7.36Depreciation cost per move - EUR 10.27 9.34 8.33 8.50 8.33 10.88 11.12 11.37 8.99EBIT per move - EUR 29.58 29.89 28.95 27.52 31.70 28.31 27.96 27.56 29.73Total Cost per move - EUR 75.20 71.59 67.52 68.31 68.86 77.70 80.44 83.28 83.61Staff blue collar (number) 449 453 461 535 537 610 610 610 610Staff white collar (number) 158 166 174 183 192 193 193 193 193Total staff 607 619 635 718 729 803 803 803 803Hectare (m2) 92 100 100 100 100 100 100 100 100Quay meter (m) 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600Ship-shore crane (number) 12 12 12 14 14 16 16 16 16Straddle carrier (number) 41 41 41 46 46 57 57 57 57Moves - Import/Export 740,706 851,812 979,584 1,126,521 1,176,513 1,176,513 1,176,513 1,176,513 1,176,513Moves - Barges 286,808 329,830 379,304 436,200 455,557 455,557 455,557 455,557 455,557Moves - Transshipment 141,087 162,250 186,587 214,576 224,098 224,098 224,098 224,098 224,098Moves - ShiftingsMoves - Total crane moves 1,168,601 1,343,892 1,545,475 1,777,297 1,856,168 1,856,168 1,856,168 1,856,168 1,856,168TEU - Total throughput *2 1,986,622 2,284,616 2,627,308 3,021,404 3,155,486 3,155,486 3,155,486 3,155,486 3,155,486TEU per hectare 21,594 22,846 26,273 30,214 31,555 31,555 31,555 31,555 31,555TEU per quay meter 1,242 1,428 1,642 1,888 1,972 1,972 1,972 1,972 1,972TEU per white collar staff 12,574 13,771 15,083 16,519 16,431 16,345 16,345 16,345 16,345TEU per blue collar staff 4,425 5,048 5,700 5,644 5,876 5,174 5,174 5,174 5,174TEU per staff 3,273 3,694 4,137 4,207 4,328 3,930 3,930 3,930 3,930Moves per ship-shore crane 97,383 111,991 128,790 126,950 132,583 116,011 116,011 116,011 116,011Moves per Straddle Carrier 28,502 32,778 37,695 38,721 40,439 32,853 32,853 32,853 32,853Contribution Margin % 44.6% 45.4% 45.5% 44.4% 46.4% 43.4% 42.5% 41.6% 40.7%EBITDA Margin % 38.0% 38.7% 38.6% 37.6% 39.8% 37.0% 36.1% 35.1% 34.2%EBIT Margin % 28.2% 29.5% 30.0% 28.7% 31.5% 26.7% 25.8% 24.9% 26.2%EBT Margin % 26.8% 28.4% 29.3% 28.3% 31.4% 26.7% 25.8% 24.9% 26.2%Net Income Margin % 18.8% 19.9% 20.5% 19.8% 22.0% 18.7% 18.1% 17.4% 18.4%Expected mvs/h per Barge Crane 21 22 23 25 25 25 25 25 25 Expected mvs/h per STS Crane 29 31 33 35 35 35 35 35 35 Moves - CX + 86% of barge 1,004,997 1,155,747 1,329,109 1,528,475 1,596,305 1,596,305 1,596,305 1,596,305 1,596,305Moves 3rd party+ 14% of barge 163,604 188,145 216,367 248,822 259,864 259,864 259,864 259,864 259,864Moves - Total 1,168,601 1,343,892 1,545,475 1,777,297 1,856,168 1,856,168 1,856,168 1,856,168 1,856,168

NPV € 140,370IRR 39.01%

Investment (157,820.42) (9,781.02) (8,495.57) (27,211.35) (9,166.34) (32,670.59) (10,071.16) (10,574.72) (11,103.46) Ebitda 46,572 52,721 57,616 64,010 74,292 72,749 72,554 72,263 71,870Investment+Ebitda (111,248.62) 42,940.09 49,120.70 36,799.00 65,125.72 40,078.31 62,482.88 61,688.50 60,766.23 Accummulative (68,308.53) (19,187.83) 17,611.17 82,736.89 122,815.20 185,298.08 246,986.58 307,752.81




Appendix 9. Profit and Loss Statement for 4-high SC New Layout Alternative




Revenue per move - EUR 104.78 101.48 96.47 95.82 93.26 96.55 98.72 100.95 103.22Labour cost per move - EUR 36.16 34.48 32.12 33.26 31.19 33.13 34.69 36.31 38.02Maintenance and Repair Cost Equipment per move - EUR6.36 5.80 5.23 5.19 4.62 4.92 5.03 5.14 5.26Land lease and rent per move - EUR7.32 7.54 6.86 6.37 5.67 5.25 5.37 5.49 5.61Total Operational Cost per move - EUR58.02 56.19 52.77 53.58 50.42 52.45 54.44 56.51 58.67Salaries cost per move - EUR 1.00 0.91 0.93 0.85 0.85 0.81 0.89 0.93 0.98IT cost per move - EUR 1.62 1.44 1.31 1.22 1.16 1.17 1.34 1.56 1.87Maintenance and Repair Civil works per move - EUR0.43 0.38 0.34 0.30 0.27 0.25 0.25 0.26 0.26Other Non-Operational cost per move - EUR3.88 3.97 4.05 4.15 4.24 4.33 4.43 4.53 4.63Total Non-Operational cost per move - EUR6.93 6.70 6.63 6.51 6.51 6.56 6.91 7.29 7.75Depreciation cost per move - EUR 10.27 10.87 9.87 10.15 9.04 10.33 10.56 10.80 7.40EBIT per move - EUR 29.56 27.72 27.20 25.58 27.29 27.21 26.81 26.35 29.40Total Cost per move - EUR 75.22 73.76 69.27 70.24 65.97 69.34 71.91 74.60 73.82Staff blue collar (number) 449 463 462 537 541 618 618 618 618Staff white collar (number) 158 166 174 183 192 202 203 203 203Total staff 607 629 636 720 733 820 821 821 821Hectare (m2) 92 100 100 100 100 100 100 100 100Quay meter (m) 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600Ship-shore crane (number) 12 12 12 14 14 16 16 16 16Straddle carrier (number) 41 59 61 69 69 80 80 80 80Moves - Import/Export 740,706 851,812 979,584 1,126,521 1,295,500 1,429,677 1,429,677 1,429,677 1,429,677Moves - Barges 286,808 329,830 379,304 436,200 501,630 553,584 553,584 553,584 553,584Moves - Transshipment 141,087 162,250 186,587 214,576 246,762 272,319 272,319 272,319 272,319Moves - ShiftingsMoves - Total crane moves 1,168,601 1,343,892 1,545,475 1,777,297 2,043,891 2,255,580 2,255,580 2,255,580 2,255,580TEU - Total throughput *2 1,986,622 2,284,616 2,627,308 3,021,404 3,474,615 3,834,486 3,834,486 3,834,486 3,834,486TEU per hectare 21,594 22,846 26,273 30,214 34,746 38,345 38,345 38,345 38,345TEU per quay meter 1,242 1,428 1,642 1,888 2,172 2,397 2,397 2,397 2,397TEU per white collar staff 12,574 13,771 15,083 16,519 18,092 19,015 18,921 18,921 18,921TEU per blue collar staff 4,425 4,938 5,687 5,626 6,425 6,204 6,204 6,204 6,204TEU per staff 3,273 3,635 4,130 4,197 4,741 4,678 4,672 4,672 4,672Moves per ship-shore crane 97,383 111,991 128,790 126,950 145,992 140,974 140,974 140,974 140,974Moves per Straddle Carrier 28,502 22,778 25,336 25,795 29,665 28,372 28,372 28,372 28,372Contribution Margin % 44.6% 44.6% 45.3% 44.1% 45.9% 45.7% 44.9% 44.0% 43.2%EBITDA Margin % 38.0% 38.0% 38.4% 37.3% 39.0% 38.9% 37.9% 36.8% 35.7%EBIT Margin % 28.2% 27.3% 28.2% 26.7% 29.3% 28.2% 27.2% 26.1% 28.5%EBT Margin % 26.8% 26.3% 27.5% 26.3% 29.1% 28.2% 27.2% 26.1% 28.5%Net Income Margin % 18.7% 18.4% 19.2% 18.4% 20.4% 19.7% 19.0% 18.3% 19.9%Expected mvs/h per Barge Crane 21 22 23 25 25 25 25 25 25 Expected mvs/h per STS Crane 29 31 33 35 35 35 35 35 35 Moves - CX + 86% of barge 1,004,997 1,155,747 1,329,109 1,528,475 1,757,746 1,939,799 1,939,799 1,939,799 1,939,799Moves 3rd party + 14% of barge 163,604 188,145 216,367 248,822 286,145 315,781 315,781 315,781 315,781Moves - Total 1,168,601 1,343,892 1,545,475 1,777,297 2,043,891 2,255,580 2,255,580 2,255,580 2,255,580

NPV € 153,393IRR 37.72%

Investment (157,820.42) (23,578.02) (10,028.57) (29,510.85) (9,213.59) (32,733.59) (10,071.16) (10,574.72) (11,103.46) Ebitda 46,548 51,862 57,292 63,510 74,249 84,672 84,302 83,792 83,006Investment+Ebitda (111,271.99) 28,284.14 47,263.78 33,999.48 65,035.20 51,938.54 74,231.14 73,217.65 71,902.19 Accummulative (82,987.85) (35,724.08) (1,724.60) 63,310.60 115,249.14 189,480.28 262,697.94 334,600.13




Appendix 10. Profit and Loss Statement for HDS Parallel Alternative




Revenue per move - EUR 104.78 101.48 96.47 95.82 93.26 95.92 98.08 100.28 102.54Labour cost per move - EUR 36.16 33.97 32.07 33.19 23.04 24.14 25.24 26.40 27.61Maintenance and Repair Cost Equipment per move - EUR6.36 5.69 5.13 5.08 5.17 5.45 5.57 5.69 5.82Land lease and rent per move - EUR7.32 7.54 6.86 6.37 5.67 5.22 5.33 5.45 5.58Total Operational Cost per move - EUR58.00 55.55 52.59 53.38 42.80 43.93 45.48 47.09 48.76Salaries cost per move - EUR 1.00 0.93 0.97 0.91 0.93 0.90 1.01 1.08 1.16IT cost per move - EUR 1.62 1.44 1.31 1.22 1.16 1.16 1.33 1.55 1.86Maintenance and Repair Civil works per move - EUR0.43 0.38 0.34 0.30 0.27 0.25 0.25 0.26 0.26Other Non-Operational cost per move - EUR3.88 3.97 4.05 4.15 4.24 4.33 4.43 4.53 4.63Total Non-Operational cost per move - EUR6.93 6.72 6.67 6.57 6.59 6.64 7.02 7.43 7.92Depreciation cost per move - EUR 10.27 9.35 8.35 8.52 9.89 11.18 11.43 11.69 8.74EBIT per move - EUR 29.59 29.86 28.86 27.36 33.98 34.17 34.15 34.08 37.12Total Cost per move - EUR 75.20 71.62 67.61 68.46 59.28 61.75 63.93 66.20 65.42Staff blue collar (number) 449 453 461 535 330 377 377 377 377Staff white collar (number) 158 166 174 183 192 202 203 203 203Total staff 607 619 635 718 522 579 580 580 580Hectare (m2) 92 100 100 100 100 100 100 100 100Quay meter (m) 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600Ship-shore crane (number) 9 12 12 14 14 16 16 16 16Straddle carrier (number) 41 41 41 46 46 57 57 57 57Moves - Import/Export 740,706 851,812 979,584 1,126,521 1,295,500 1,439,097 1,439,097 1,439,097 1,439,097Moves - Barges 286,808 329,830 379,304 436,200 501,630 557,232 557,232 557,232 557,232Moves - Transshipment 141,087 162,250 186,587 214,576 246,762 274,114 274,114 274,114 274,114Moves - ShiftingsMoves - Total crane moves 1,168,601 1,343,892 1,545,475 1,777,297 2,043,891 2,270,443 2,270,443 2,270,443 2,270,443TEU - Total throughput *2 1,986,622 2,284,616 2,627,308 3,021,404 3,474,615 3,859,752 3,859,752 3,859,752 3,859,752TEU per hectare 21,594 22,846 26,273 30,214 34,746 38,598 38,598 38,598 38,598TEU per quay meter 1,242 1,428 1,642 1,888 2,172 2,412 2,412 2,412 2,412TEU per white collar staff 12,574 13,771 15,083 16,519 18,092 19,141 19,046 19,046 19,046TEU per blue collar staff 4,425 5,048 5,700 5,644 10,532 10,235 10,235 10,235 10,235TEU per staff 3,273 3,694 4,137 4,207 6,657 6,669 6,657 6,657 6,657Moves per ship-shore crane 129,845 111,991 128,790 126,950 145,992 141,903 141,903 141,903 141,903Moves per Straddle Carrier 28,502 32,778 37,695 38,721 44,529 40,185 40,185 40,185 40,185Contribution Margin % 44.6% 45.3% 45.5% 44.3% 54.1% 54.2% 53.6% 53.0% 52.4%EBITDA Margin % 38.0% 38.6% 38.6% 37.4% 47.0% 47.3% 46.5% 45.6% 44.7%EBIT Margin % 28.2% 29.4% 29.9% 28.6% 36.4% 35.6% 34.8% 34.0% 36.2%EBT Margin % 26.8% 28.4% 29.2% 28.2% 36.3% 35.6% 34.8% 34.0% 36.2%Net Income Margin % 18.8% 19.9% 20.4% 19.7% 25.4% 24.9% 24.4% 23.8% 25.3%Expected mvs/h per Barge Crane 21 22 23 25 25 25 25 25 25 Expected mvs/h per STS Crane 29 31 33 35 35 35 35 35 35 Moves - CX + 86% of barge 1,004,997 1,155,747 1,329,109 1,528,475 1,757,746 1,952,581 1,952,581 1,952,581 1,952,581Moves 3rd party + 14% of barge 163,604 188,145 216,367 248,822 286,145 317,862 317,862 317,862 317,862Moves - Total 1,168,601 1,343,892 1,545,475 1,777,297 2,043,891 2,270,443 2,270,443 2,270,443 2,270,443

NPV € 187,916IRR 42.68%





Appendix 11. Profit and Loss Statement for HDS Perpendicular Alternative


EUR '1,000 Budget 2006 Budget 2007 Budget 2008 Budget 2009 Budget 2010 Budget 2011 Budget 2012 Budget 2013 Budget 2014Profit & loss:Revenue 122,450 136,376 149,095 170,307 190,621 217,780 222,680 227,690 232,813 Labour (incl subcontracting) (42,253) (45,650) (49,566) (58,993) (47,218) (55,133) (57,649) (60,285) (63,048)Power (1,870) (2,199) (2,585) (3,040) (3,575) (4,121) (4,214) (4,309) (4,406)Fuel Consumption (3,968) (4,666) (5,487) (6,452) (7,586) (8,746) (8,943) (9,144) (9,350)Maintenance and repair Costs (operational equipt.)(7,427) (7,643) (7,921) (9,031) (10,957) (12,767) (13,054) (13,348) (13,648)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) (6,021) (7,080) (8,163) (8,347) (8,534) (8,727)Total Operational Costs (67,779) (74,650) (81,277) (94,866) (88,000) (100,775) (104,318) (108,005) (111,841)Contribution margin 54,670 61,727 67,818 75,441 102,621 117,005 118,362 119,685 120,972Salaries (1,170) (1,256) (1,498) (1,609) (1,900) (2,040) (2,290) (2,458) (2,639)IT Costs (1,892) (1,934) (2,022) (2,162) (2,363) (2,641) (3,018) (3,527) (4,214)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) (9,990) (10,215) (10,445) (10,680)Total Non-Operational Costs (8,094) (9,031) (10,310) (11,674) (13,475) (15,230) (16,094) (17,014) (18,130)EBITDA 46,576 52,695 57,507 63,767 89,146 101,775 102,268 102,671 102,842Depreciation (12,000) (12,569) (12,897) (15,137) (21,339) (26,537) (27,135) (27,745) (20,803)EBIT 34,576 40,127 44,610 48,630 67,807 75,238 75,133 74,926 82,038Financial expenses (1,771) (1,444) (1,062) (663) (438) (190) (169) (147) (126)Extra-ordinary expenses EBT 32,806 38,683 43,548 47,967 67,369 75,048 74,965 74,779 81,912

Taxes (9,842) (11,605) (13,064) (14,390) (20,211) (22,514) (22,489) (22,434) (24,574)Net income after tax 22,964 27,078 30,483 33,577 47,158 52,534 52,475 52,345 57,338


Revenue per move - EUR 104.78 101.48 96.47 95.82 93.26 94.50 96.63 98.80 101.02Labour cost per move - EUR 36.16 33.97 32.07 33.19 23.10 23.92 25.02 26.16 27.36Maintenance and Repair Cost Equipment per move - EUR6.36 5.69 5.13 5.08 5.36 5.54 5.66 5.79 5.92Land lease and rent per move - EUR7.32 7.54 6.86 6.37 5.67 5.14 5.26 5.37 5.49Total Operational Cost per move - EUR58.00 55.55 52.59 53.38 43.06 43.73 45.27 46.87 48.53Salaries cost per move - EUR 1.00 0.93 0.97 0.91 0.93 0.89 0.99 1.07 1.15IT cost per move - EUR 1.62 1.44 1.31 1.22 1.16 1.15 1.31 1.53 1.83Maintenance and Repair Civil works per move - EUR0.43 0.38 0.34 0.30 0.27 0.24 0.25 0.25 0.26Other Non-Operational cost per move - EUR3.88 3.97 4.05 4.15 4.24 4.33 4.43 4.53 4.63Total Non-Operational cost per move - EUR6.93 6.72 6.67 6.57 6.59 6.61 6.98 7.38 7.87Depreciation cost per move - EUR 10.27 9.35 8.35 8.52 10.44 11.52 11.77 12.04 9.03EBIT per move - EUR 29.59 29.86 28.86 27.36 33.18 32.65 32.60 32.51 35.60Total Cost per move - EUR 75.20 71.62 67.61 68.46 60.09 61.85 64.02 66.29 65.43Staff blue collar (number) 449 453 461 535 332 380 380 380 380Staff white collar (number) 158 166 174 183 192 202 203 203 203Total staff 607 619 635 718 524 581 582 582 582Hectare (m2) 92 100 100 100 100 100 100 100 100Quay meter (m) 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600Ship-shore crane (number) 12 12 12 14 14 16 16 16 16Straddle carrier (number) 41 41 41 46 46 57 57 57 57Moves - Import/Export 740,706 851,812 979,584 1,126,521 1,295,500 1,460,710 1,460,710 1,460,710 1,460,710Moves - Barges 286,808 329,830 379,304 436,200 501,630 565,601 565,601 565,601 565,601Moves - Transshipment 141,087 162,250 186,587 214,576 246,762 278,231 278,231 278,231 278,231Moves - ShiftingsMoves - Total crane moves 1,168,601 1,343,892 1,545,475 1,777,297 2,043,891 2,304,541 2,304,541 2,304,541 2,304,541TEU - Total throughput *2 1,986,622 2,284,616 2,627,308 3,021,404 3,474,615 3,917,720 3,917,720 3,917,720 3,917,720TEU per hectare 21,594 22,846 26,273 30,214 34,746 39,177 39,177 39,177 39,177TEU per quay meter 1,242 1,428 1,642 1,888 2,172 2,449 2,449 2,449 2,449TEU per white collar staff 12,574 13,771 15,083 16,519 18,092 19,428 19,332 19,332 19,332TEU per blue collar staff 4,425 5,048 5,700 5,644 10,479 10,323 10,323 10,323 10,323TEU per staff 3,273 3,694 4,137 4,207 6,636 6,741 6,730 6,730 6,730Moves per ship-shore crane 97,383 111,991 128,790 126,950 145,992 144,034 144,034 144,034 144,034Moves per Straddle Carrier 28,502 32,778 37,695 38,721 44,529 40,788 40,788 40,788 40,788Contribution Margin % 44.6% 45.3% 45.5% 44.3% 53.8% 53.7% 53.2% 52.6% 52.0%EBITDA Margin % 38.0% 38.6% 38.6% 37.4% 46.8% 46.7% 45.9% 45.1% 44.2%EBIT Margin % 28.2% 29.4% 29.9% 28.6% 35.6% 34.5% 33.7% 32.9% 35.2%EBT Margin % 26.8% 28.4% 29.2% 28.2% 35.3% 34.5% 33.7% 32.8% 35.2%Net Income Margin % 18.8% 19.9% 20.4% 19.7% 24.7% 24.1% 23.6% 23.0% 24.6%Expected mvs/h per Barge Crane 21 22 23 25 25 25 25 25 25 Expected mvs/h per STS Crane 29 31 33 35 35 35 35 35 35 Moves -CX + 86% of barge 1,004,997 1,155,747 1,329,109 1,528,475 1,757,746 1,981,906 1,981,906 1,981,906 1,981,906Moves 3rd party+ 14% of barge 163,604 188,145 216,367 248,822 286,145 322,636 322,636 322,636 322,636Moves - Total 1,168,601 1,343,892 1,545,475 1,777,297 2,043,891 2,304,541 2,304,541 2,304,541 2,304,541

NPV € 177,357IRR 41.25%



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Thesis NiswariA