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Assuring Supply Chain Efficiency
AAPA Marine Terminal Management Training Program
AAPA Marine Terminal Management Training Program
Assuring Supply Chain Efficiency
Larry W. Nye, P.E.Moffatt & NicholOctober 16, 2007
Assuring Supply Chain Efficiency
Larry W. Nye, P.E.Moffatt & NicholOctober 16, 2007
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
Some Quotes:
“The real driving force behind globalization is….the declining cost of international transport.”
The Journal of Commerce“The Box That Changed the World”
“It is only recently and cautiously that we have moved far from the oceans to places like Siberia or Nebraska and it is by no means clear that places so far removed from the sea are viable in the long term.”
John Szarkowski
Some Quotes:
“The real driving force behind globalization is….the declining cost of international transport.”
The Journal of Commerce“The Box That Changed the World”
“It is only recently and cautiously that we have moved far from the oceans to places like Siberia or Nebraska and it is by no means clear that places so far removed from the sea are viable in the long term.”
John Szarkowski
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
• The “global” economy– Land masses
• People• Governments, religions,
economies • People like to define
themselves
– Oceans• Differentiator• Allow us to be different• Connector (highway)• Relatively maintenance
free
• The “global” economy– Land masses
• People• Governments, religions,
economies • People like to define
themselves
– Oceans• Differentiator• Allow us to be different• Connector (highway)• Relatively maintenance
free
– Trade• The common
denominator
• The economic connector
• Fosters interdependence =
• A good thing
– Trade• The common
denominator
• The economic connector
• Fosters interdependence =
• A good thing
Assuring Supply Chain Efficiency
• People need to move stuff
• The people of the world are connected
by very deep water
• Water is very strong
• Water is very slippery
• People need to move stuff
• The people of the world are connected
by very deep water
• Water is very strong
• Water is very slippery
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
Floatation is, always and
forever, the best way to
move stuff on this planet
Floatation is, always and Floatation is, always and
forever, the best way to forever, the best way to
move stuff on this planetmove stuff on this planet
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
What is Efficiency?
• Capacity– TEU’s per acre
• Speed– Moves per hour
• Reliability– On time
• Cost– $ per move
• Efficiency– Delivering capacity,
speed and reliability at the lowest possible cost
• Capacity– TEU’s per acre
• Speed– Moves per hour
• Reliability– On time
• Cost– $ per move
• Efficiency– Delivering capacity,
speed and reliability at the lowest possible cost
Speed / Reliability
Cost
Capacity
“The real driving force behind globalization is….the declining cost of international
transport.”
“The real driving force behind globalization is….the declining cost of international
transport.”
Assuring Supply Chain Efficiency
What is the Supply Chain?
1. Factory
2. Land Transport
3. Port4. Ocean Transport
5. Port
6. Land Transport
8. Land Transport
7. Distribution Center
9. Store / Factory
• Focus on the role of ports– Ships on one side
– Trucks and trains on the other side
• Focus on the role of ports– Ships on one side
– Trucks and trains on the other side
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
“The real driving force behind globalization is….the declining cost of
international transport.”
Tools of (the) Trade:
“The Container”“The Container Ship”
honorable mentions
“The Personal Computer”“The Internet”
“The real driving force behind globalization is….the declining cost of
international transport.”
Tools of (the) Trade:
“The Container”“The Container Ship”
honorable mentions
“The Personal Computer”“The Internet”
Assuring Supply Chain Efficiency
1110,000 TEU10,000 TEUContainer Container
ShipShip
18188,000 Foot8,000 Foot
DoubleDouble--StackStackTrainsTrains
(27 Miles)(27 Miles)(50 Acres)(50 Acres)
5,8005,800TrucksTrucks
(60 Miles)(60 Miles)(95 Acres)(95 Acres)
600600Boeing 747 Boeing 747
Cargo LinersCargo Liners
= ==
DISCHARGE OR LOAD ONLY !DISCHARGE DISCHARGE OROR LOAD ONLY !LOAD ONLY !
Container Vessels
• The modern container ship is certainly an example of “efficiency”
• The modern container ship is certainly an example of “efficiency”
Assuring Supply Chain Efficiency
The Container Ship
• 10,000 TEU vessel
• Equivalent of 5,000 – 40 foot containers
• 12,000 pairs of Nikes per container
• Equivalent of 60,000,000 pairs per vessel
• Value = $4,500,000,000.00 @ $75.00/pair
• Transportation cost = $0.30 / pair
• 10,000 TEU vessel
• Equivalent of 5,000 – 40 foot containers
• 12,000 pairs of Nikes per container
• Equivalent of 60,000,000 pairs per vessel
• Value = $4,500,000,000.00 @ $75.00/pair
• Transportation cost = $0.30 / pair
Assuring Supply Chain Efficiency
Eastbound12 Days Port 2
4.0 Days
Port 14.0 Days
Westbound12 Days
Example Container Service: Asia – North America
• 10,000 TEU Container Vessels• 32 day roundtrip voyage • 11 voyages per year per vessel • Five-vessel rotation provides weekly service• Average 85% full• 9,400 lifts per call • 5 cranes at 28 gmph• 50% berth occupancy• Throughput = 880,000 TEU’s per year• 135 acres required at 6,500 TEU’s per acre per year
• 10,000 TEU Container Vessels• 32 day roundtrip voyage • 11 voyages per year per vessel • Five-vessel rotation provides weekly service• Average 85% full• 9,400 lifts per call • 5 cranes at 28 gmph• 50% berth occupancy• Throughput = 880,000 TEU’s per year• 135 acres required at 6,500 TEU’s per acre per year
LA/LB
Assuring Supply Chain Efficiency
Port “Capacity”
• Berth– Vessel size & call frequency– Load and discharge per call– Cranes, assignment and productivity
• Storage Yard– Stacking system– Dwell time – Utilization
• Gate– Lanes– Transactions per hour per lane– Hours of operation
• Rail – Working track & turnover rate
• Berth– Vessel size & call frequency– Load and discharge per call– Cranes, assignment and productivity
• Storage Yard– Stacking system– Dwell time – Utilization
• Gate– Lanes– Transactions per hour per lane– Hours of operation
• Rail – Working track & turnover rate
Assuring Supply Chain Efficiency
Port “Efficiency”
• Berth– Reliability of vessel schedules
– Stevedoring productivity
– Berth – CY interface
– Data flow• OCR on dock cranes, yard cranes
• Berth– Reliability of vessel schedules
– Stevedoring productivity
– Berth – CY interface
– Data flow• OCR on dock cranes, yard cranes
Assuring Supply Chain Efficiency
Port “Efficiency”
• Yard– High stack utilization– Low container dwell time– Minimize false moves
• Digging• Repositioning
– Real time performance•Moves per hour
– Hours of operation– Gate scheduling system
• Yard– High stack utilization– Low container dwell time– Minimize false moves
• Digging• Repositioning
– Real time performance•Moves per hour
– Hours of operation– Gate scheduling system
Assuring Supply Chain Efficiency
Port “Efficiency”
• Gate– Integration of processes and
technologies• Security• Interchange• Inspection
– Data collection • Accuracy• Elimination of redundant data
input– Manning– Hours of operation– Scheduling system– Interface with container yard
• Gate– Integration of processes and
technologies• Security• Interchange• Inspection
– Data collection • Accuracy• Elimination of redundant data
input– Manning– Hours of operation– Scheduling system– Interface with container yard
Assuring Supply Chain Efficiency
Port “Efficiency”
• Rail– Train schedules &
reliability– Inbound-outbound balance– Working track length– Number and productivity
of lifting equipment– Storage track amount and
proximity– Switching availability
• Rail– Train schedules &
reliability– Inbound-outbound balance– Working track length– Number and productivity
of lifting equipment– Storage track amount and
proximity– Switching availability
Assuring Supply Chain Efficiency
Example – Prince Rupert
• Why is Prince Rupert a good example?– Directly hard wired into the supply chain– All intermodal (rail) cargo– Terminal situated between shipping lines and
railroad, both driven to minimize time and cost by maximizing asset utilization• Shipping line – vessels, crews
– Four-vessel rotation, three days maximum port time
• Railroad, engines, crews and cars– 12-hour engine, crew dwell– 24 hour maximum car dwell– Dedicated car fleet
– Both vessel and rail are optimized in a scheduled, steady-state system
– Limited terminal assets
• Why is Prince Rupert a good example?– Directly hard wired into the supply chain– All intermodal (rail) cargo– Terminal situated between shipping lines and
railroad, both driven to minimize time and cost by maximizing asset utilization• Shipping line – vessels, crews
– Four-vessel rotation, three days maximum port time
• Railroad, engines, crews and cars– 12-hour engine, crew dwell– 24 hour maximum car dwell– Dedicated car fleet
– Both vessel and rail are optimized in a scheduled, steady-state system
– Limited terminal assets
Assuring Supply Chain Efficiency
Prince Rupert
Los Angeles
Distance from Hong Kong (Nautical Miles) 5,285
5,7775,768
Houston – 11,100
Houston
New York
New York – 11,587
6,380
Prince Rupert
4 - vessel weekly rotation• 20 knots• 3 days port time
PNW Ports
Assuring Supply Chain Efficiency
Prince Rupert
Prince Rupert
Toronto – Montreal - Buffalo
Chicago
Memphis
CN Rail
Assuring Supply Chain Efficiency
Phase 1 – 500,000 TEU’s p.a.
Assuring Supply Chain Efficiency
Phase 2 – 1.5 Million TEUs p.a.
Assuring Supply Chain Efficiency
Prince Rupert
• Perfect steady state– Berth
• Two vessels per week• 3.5 days apart
– Rail• Four 10,000 foot trains
each way each day• Arrive - spot – strip – load
– depart
• Life is good• But what if;– Vessels are late– Trains are late
• Perfect steady state– Berth
• Two vessels per week• 3.5 days apart
– Rail• Four 10,000 foot trains
each way each day• Arrive - spot – strip – load
– depart
• Life is good• But what if;– Vessels are late– Trains are late
• Recoverability analysis
• Terminal capacity = Maximum throughput at which the terminal can recover from a scheduling event
• Recoverability analysis
• Terminal capacity = Maximum throughput at which the terminal can recover from a scheduling event
Assuring Supply Chain Efficiency
Test Phase 2 at Capacity
• Annual Throughput – 1,500,000 TEU’s– 830,000 Annual Lifts at 1.8 TEU/lift– All throughput Intermodal– 50% Import, 50% Export
• Weekly Vessel and Rail Lifts– Import 8,013 Lifts – Export 8,013 Lifts
• Two 8,000 TEU vessel Calls per week• Four cranes (30 box moves/hour) for
each vessel
• Annual Throughput – 1,500,000 TEU’s– 830,000 Annual Lifts at 1.8 TEU/lift– All throughput Intermodal– 50% Import, 50% Export
• Weekly Vessel and Rail Lifts– Import 8,013 Lifts – Export 8,013 Lifts
• Two 8,000 TEU vessel Calls per week• Four cranes (30 box moves/hour) for
each vessel
Assuring Supply Chain Efficiency
Test Phase 2 at Capacity
• Four 10,000 foot trains each way per day
• Eight inland destinations (a, b, …, h)
• Two train consists – Train A: 5 destinations (a, b, c, d and e);– Train B: 4 destinations (b, f, g and h);
• Steady state schedule for trains:– Train Arrival (WB): 12 AM, 4 AM, 12 PM & 4 PM– Train Departure (EB): 8 AM, 12 PM, 8 PM & 12
AM
• Four 10,000 foot trains each way per day
• Eight inland destinations (a, b, …, h)
• Two train consists – Train A: 5 destinations (a, b, c, d and e);– Train B: 4 destinations (b, f, g and h);
• Steady state schedule for trains:– Train Arrival (WB): 12 AM, 4 AM, 12 PM & 4 PM– Train Departure (EB): 8 AM, 12 PM, 8 PM & 12
AM
Assuring Supply Chain Efficiency
Variables for Analysis
• Vessel Schedules– “Good Vessel” – Steady state
• Two vessels arrive with 3.5 days apart. One 8:00Am Monday; The other 8:00PM Thursday
– “Bad Vessel” • Two 8,000 TEU vessels arrive at the same time,
8:00AM Monday
• Train Schedules– “Good Train” – Steady State
• Train A and B arrive and departure alternately each day
– “Bad Train” • Day 1 all Train A, Day 2 all Train B, Day 3 all Train A,
Day 4 all Train B, and so on
• Vessel Schedules– “Good Vessel” – Steady state
• Two vessels arrive with 3.5 days apart. One 8:00Am Monday; The other 8:00PM Thursday
– “Bad Vessel” • Two 8,000 TEU vessels arrive at the same time,
8:00AM Monday
• Train Schedules– “Good Train” – Steady State
• Train A and B arrive and departure alternately each day
– “Bad Train” • Day 1 all Train A, Day 2 all Train B, Day 3 all Train A,
Day 4 all Train B, and so on
Assuring Supply Chain Efficiency
Recoverability Analysis Scenarios
• Four combinations of the two variables;– Scenario 1: Bad Vessel, Good Train
– Scenario 2: Good Vessel, Good Train•Best Case
– Scenario 3: Bad Vessel, Bad Train•Worst Case
– Scenario 4: Good Vessel, Bad Train
• Four combinations of the two variables;– Scenario 1: Bad Vessel, Good Train
– Scenario 2: Good Vessel, Good Train•Best Case
– Scenario 3: Bad Vessel, Bad Train•Worst Case
– Scenario 4: Good Vessel, Bad Train
Assuring Supply Chain Efficiency
The Analysis Tool - Simulation Model
Colors Denote Representative Destination Blocks –Import & Export
Assuring Supply Chain Efficiency
The Analysis Tool - Simulation Model
• Model Resources– Vessels– Trains– Dock cranes– Yard cranes– Storage slots– Rail track– Switch engines
• Model Tracks– Containers– Rail cars– Equipment moves
• Model Resources– Vessels– Trains– Dock cranes– Yard cranes– Storage slots– Rail track– Switch engines
• Model Tracks– Containers– Rail cars– Equipment moves
Container Storage Population (TEU's)
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
1 3 5 7 9 11 13
Day
TEU
's
Import Population TEU's Export Population TEU's
Total Population, TEU's Minimum Storage Capacity Req'd
Prince Rupert Railcar Population
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1 3 5 7 9 11 13
Day
Rai
lcar
Fee
t
Rail Switching Activities per Shift
-
1
2
3
4
5
6
1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Day/Shift
Act
iviti
es
Assuring Supply Chain Efficiency
Scenario 1 : Bad Vessel Good Train
Max Import = 9,763 TEU’s
Max Export = 11,065 TEU’s
Hourly TEUs for a Week (All_Import)
0
2000
4000
6000
8000
10000
12000
Mon0:00
Tue0:00
Wed0:00
Thu0:00
Fri 0:00 Sat0:00
Sun0:00
Mon0:00
Time
TEU
MinAvgMax
Hourly TEUs for a Week (All_Export)
0
2000
4000
6000
8000
10000
12000
Mon0:00
Tue0:00
Wed0:00
Thu0:00
Fri 0:00 Sat0:00
Sun0:00
Mon0:00
Time
TEU
MinAvgMax
Assuring Supply Chain Efficiency
Scenario 1: Bad Vessel Good Train
Days
Prob
0 2 4 6 8
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
Average Dwell = 2.87 DaysAverage Inventory = 12,081 TEU’sMax Inventory = 14,209 TEU’s
Hourly TEUs for a Week (Yard)
02000400060008000
10000120001400016000
Mon0:00
Tue0:00
Wed0:00
Thu0:00
Fri 0:00 Sat0:00
Sun0:00
Mon0:00
Time
TEU
MinAvgMax
Total Storage Req’d.Shared Im/Ex = 20,800 TEU’sSegregated Im/Ex = 30,500 TEU’s
Assuring Supply Chain Efficiency
Hourly TEUs for a Week (All_Import)
0
500
1000
1500
2000
2500
3000
3500
Mon0:00
Tue0:00
Wed0:00
Thu0:00
Fri 0:00 Sat0:00
Sun0:00
Mon0:00
Time
TEU
MinAvgMax
Scenario 2 : Good Vessel Good Train
Max Import = 2,961 TEU’s
Max Export = 4,190 TEU’s
Hourly TEUs for a Week (All_Export)
0500
10001500200025003000350040004500
Mon0:00
Tue0:00
Wed0:00
Thu0:00
Fri 0:00 Sat0:00
Sun0:00
Mon0:00
Time
TEU
MinAvgMax
Assuring Supply Chain Efficiency
Scenario 2 : Good Vessel Good Train
Hourly TEUs for a Week (Yard)
0
1000
2000
30004000
5000
6000
7000
Mon0:00
Tue0:00
Wed0:00
Thu0:00
Fri 0:00 Sat0:00
Sun0:00
Mon0:00
Time
TEU
MinAvgMax
Max Import = 1961 TEUs
Max Export = 4190 TEUsDays
Pro
b
0 2 4 6 8
0.0
0.1
0.2
0.3
0.4
0.5
0.6
Average Dwell = 1.25 DaysAverage Inventory = 5,305 TEU’sMax Inventory = 6,064 TEU’s
Total Storage Req’d.Shared Im/Ex = 8,895 TEU’sSegregated Im/Ex =10,488 TEU’s
Assuring Supply Chain Efficiency
Container Dwell Time Comparison
Average Container Dwell Time
2.87
1.26
2.99
1.53
00.5
11.5
22.5
33.5
Bad VesselGood Train
Good VesselGood Train
Bad VesselBad Train
Good VesselBad Train
1 2 3 4
Vessel / Train Scenario
Dw
ell T
ime
Days
Assuring Supply Chain Efficiency
Days
Prob
0 2 4 6 8
0.00
0.05
0.10
0.15
0.20
0.25
Days
Prob
0 2 4 6 8
0.0
0.1
0.2
0.3
0.4
0.5
0.6
Days
Pro
b
0 2 4 6 8
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Days
Prob
0 2 4 6 8
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
1. Bad Vessel Good Train1. Bad Vessel Good Train 2. Good Vessel Good Train2. Good Vessel Good Train
4. Good Vessel Bad Train4. Good Vessel Bad Train3. Bad Vessel Bad Train3. Bad Vessel Bad Train
2.87
1.532.99
1.26
Container Dwell Time Comparison
Assuring Supply Chain Efficiency
Findings
TEU - Storage Space Requirements
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Scenario 1 Scenario 2 (Best Case)
Scenario 3 (Worst Case)
Scenario 3 (5 Cranes)
Scenario 4
Scenario
TEU
's
Shared Inventory Shared Storage RequirementSeparate I/E Inventory Separate I/E Storage RequirementStorage Space Available at 5 high
Container Dwell Time Comparison
Bad Vessel Bad Vessel
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
Some More Quotes:
“I have no need of ports, I get everything I need from the internet.”
Unidentified citizen at a port permit hearing
“The Dirty Truth About U. S. Ports…”
NRDC Report “Harboring Pollution”
Some More Quotes:
“I have no need of ports, I get everything I need from the internet.”
Unidentified citizen at a port permit hearing
“The Dirty Truth About U. S. Ports…”
NRDC Report “Harboring Pollution”
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
• Threats– Port capacity
– Intermodal lift capacity
– Highway & rail infrastructure
• Threats– Port capacity
– Intermodal lift capacity
– Highway & rail infrastructureU.S. Forecasts Versus Capacity
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
1996
2000
2004
2008
2012
2016
2020
2024
2028
Ann
ual T
EU's
U.S. Actual Growth to2005
U.S. Future Growth at4% CAGR
U.S. Future Growth at6% CAGR
Total U.S. Capacity ofExisting Port Land
Total U.S. Capacity ofPlanned Port Land
West Coast Intermodal Demand Forecast vs Intermodal Lift Capacity
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,00020
0520
0820
1120
1420
1720
2020
23
Ann
ual I
nter
mod
al T
EU's
MN Forecast(Intermodal TEU's)
UnconstrainedWest CoastIntermodal LiftCapacity
Shift-LimitedIntermodal LiftCapacity
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
• Threats– Public perception of the role of ports•“I have no need of ports…
•“The dirty truth…
•etc.
• Threats– Public perception of the role of ports•“I have no need of ports…
•“The dirty truth…
•etc.
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
• Hot topics– Air quality
• Global warming– CO2
• Local / regional smog– Standards / attainment– NOX– SO2– Diesel PM– Ozone
• Fuel switching• Cold ironing
• Hot topics– Air quality
• Global warming– CO2
• Local / regional smog– Standards / attainment– NOX– SO2– Diesel PM– Ozone
• Fuel switching• Cold ironing
CO2
SO2
NOXOzone
Assuring Supply Chain Efficiency
Assuring Supply Chain Efficiency
•Hot topics– Terminal automation•What does it mean?
– De-coupling people and machines
– Not elimination of people
•What are the benefits?– Capacity? Maybe
– Service speed? Probably not
– Cost? Maybe / hopefully
– Emissions Yes. Electric yard cranes
•Hot topics– Terminal automation•What does it mean?
– De-coupling people and machines
– Not elimination of people
•What are the benefits?– Capacity? Maybe
– Service speed? Probably not
– Cost? Maybe / hopefully
– Emissions Yes. Electric yard cranes
Assuring Supply Chain Efficiency
Thank You!Thank You!