Task description & requirements
Length: 1500 words ± 10%
(include an accurate total word count on the title page. Excluded from the word count are the assignment question, title page, abstract, table of contents, end list of references and appendices)
Do not go under / over LENGTH by more than 10%.
Show how a commercial port’s profit may change, i.e. increase, or decrease, or remain the
same or depends another factor(s), when each of the following performance indicators is
improved? If it depends on another factor(s), what is (are) those factors? Make relevant
assumption as necessary.
- Yard equipment productivity (TEU/unit/hour)
- Vessel turnaround time (hours/vessel)
- Berth occupancy (percentage)
- Dwell time in yard (days)
- Vehicle turnaround time (minutes/vehicle)
Explain how useful each of the following performance indicators is for a port that is a public
- a) Annual throughput per profit dollar
- b) Loss or damage (per 1000 TEUs)
Attached is an article written by Baker, J 2018, ‘Inland ports help South Carolina move
trucks off the roads’, Lloyd’s List, viewed 20 June 2018
Based on the information provided in the article and relevant references, complete the
- a) Evaluate the impact of “moving containers by rail to inland ports” on the truck sector.
- b) Discuss the implications for port management.
Inland ports help South Carolina move trucks off the roads
SCPA chief executive says moving containers by rail to inland ports frees up expensive real estate at the seaport and improves efficiency in last-mile logistics
- 20 Jun 2018
South Carolina’s Inland Port Dillon will take 45,000 container moves from truck to rail in its
first year of operation.
SOUTH Carolina Port Authority’s (SCPA) two inland ports allows it to move containers off
its expensive seaport by rail to where they are needed.
SOUTH Carolina Port Authority celebrates the fifth anniversary of opening its Inland Port
Greer in October.
The inland terminal has been such a success that in April this year it opened a second one.
Inland Port Dillon, situated more than 100 miles from the state’s Charleston Port, is linked to
Charleston by rail.
It is rail’s ability to take many containers off the road that is one of the big advantages of
inland ports, according to SCPA chief executive Jim Newsome.
“It is a winning situation for everyone,” Mr Newsome said. “We make use of a more efficient
mode of transportation with rail and we get containers off our terminal in Charleston, which
is more expensive real estate on to cheaper real estate closer to the customer.”
At Dillon, the anchor customer is tool retailer Harbor Freight Tools, which has a 3m sq ft
distribution centre next to the terminal. The location provides reliability in the supply chain
for “last mile” delivery, Mr Newsome said.
“Supply chain is about reliability and if you can have an overnight rail service to a location
150-200 miles away from your port and be able to ground the containers so they do not have
to sit on a chassis, that is an important aspect of that reliability,” he said. “It makes the
carriers life a bit easier in that they do not have to search for truck capacity.”
The terminal is open 24 hours a day, so if BMW, the key customer at Greer, wants to pick up
a container at two in the morning it can. SCPA can also move a container to BMW’s door in
90 minutes, which would be impossible to do from the sea port.
The inland ports have also helped SCPA better match its import and export containers.
“That is one of the remaining low-hanging fruits in terms of efficiency in the southeast,” Mr
Newsome says. “How do you turn import containers into export containers? You need a
facility in between to do that.”
Import containers go from the inland port to customers then returned to the terminal. An
exporter will pick it up again, stuff it and send it back to the inland port, minimising the
movement of empties and helping with new rules on electronic logging of truck drivers’ work
“This is a way to leverage truck capacity,” Mr Newsome said. “Drivers can pick up the
containers with a prior rail move already done and get two or three turns in a day. If they had
to come down to the port to collect a container they may only get one turn a day.”
Container matching only works if imports and exports are at similar levels, but to date this
has proved to have been the case.
“When we opened Greer five years ago I thought imports would be dominant, but now it is
exports that are dominant,” he said. “That was a pleasant surprise.”
From truck to train
Inland Port Dillon uses an existing CSX intermodal train service to handle container
movement to and from the Port of Charleston’s seaport facilities. It is expected to convert an
estimated 45,000 container movements from truck to rail in the first year of operation.
The facility will handle the growing volume of container cargo travelling to and from the Port
of Charleston via intermodal rail, which has increased 180% increase since 2011. Today,
nearly 25% of the port’s container volume moves by rail.
This is becoming increasingly important in the US, where several factors have made moving
containers by truck both difficult and expensive.
“What we are facing is the culmination of many years of neglect in the trucking industry that
hauls containers,” according to Mr Newsom.
The trucking industry is not homogeneous and there is a specific segment that hauls
containers. About 70% of that is owner-operated, but an increasing share are company-owned
“Through the wonders of procurement and other short-sightedness, including not according
respect to the truckers, the industry has become increasingly challenged,” he said. “With the
economy being good, why should someone own a truck and take all that risk when they could
get paid just as well making cars or building houses?”
Container trucking should be a good business but everyone must play their part to make sure
truckers make a good living, he added.
“We are improving the quality of the chassis fleet here, which has an impact on the truckers.
They are going to have to be paid more, we are going to have to ensure the terminals work,
that the warehouses have the proper hours. I hope we are on the right track to do something
about it now.”
But trucking rates are rising and it is harder to arrange trucking on the spot market. It used to
be possible to get a truck on six to seven hours’ notice, but now, because of the restrictions
brought about by electronic logging of driver hours, more planning is required as a trucker
can easily run out of hours in any given day.
The beautiful south
The booming US economy with its low levels of unemployment may make obtaining a truck
and driver difficult, but in all other respects it is a benefit to South Carolina’s port industry.
SCPA’s fiscal year-to-date volumes are nearly 2% higher than last year, and it handled
record-breaking container volumes in April.
SCPA moved 1.8m teu since July 2017, compared with 1.78m during the same period last
fiscal year. In April, 196,439 teu were handled during the month.
“We have had a good year,” Mr Newsome says. “We are building a lot of infrastructure; that
is the name of the game in the ports business.”
April was also the first time that SCPA’s export volumes exceeded its import volumes,
reflecting the increased manufacturing capacity in its southeast US catchment area and the
presence of a large automotive sector.
“Automotive manufacturing has helped,” Mr Newsome says. “BMW exports around 70% of
what it makes. It also has semi-knocked down and completely knocked down programmes
where cars are exported as components in containers to countries such as Russia and China,
to be assembled there.”
Volvo is opening a factory close to Charleston that will open in the third quarter and
Samsung is making washing machines in the region.
The US economy is doing well but there are risks that the baby boomer generation has all the
flat screen TVs it needs already, however. Moreover, the emerging threat of an all-out trade
war could have an impact.
“There are certainly some clouds on the horizon in the US but right now the economy is
surprisingly strong and the tax cuts have provided a stimulus,” Mr Newsom said. “Our
growth projections are modest, 4% over time, and I think the southeast will grow faster than
the average, so our response is to focus on the infrastructure so we have the capacity.”
Big ship ready
Spurred on by the expansion of the Panama Canal and the raising of the Bayonne Bridge in
New York, SCPA has itself been investing in getting ready for the ever-larger ships that are
calling at US east coast ports.
“Last year we had one 13,000 teu sling on the east coast but this year we have four,” he said.
“What you are seeing during the past 10 years is an unwinding of longhaul rail from the west
coast. Very little is coming from the west coast to east of the Mississippi anymore. There has
also been a compression in rates between the east and west coasts because carriers need to fill
the big ships.”
And there could be more to come, he added.
“I think we’ll see an 18,000 teu ship come via Suez by next year,” Mr Newsome says.
“If you look at the emerging fleet, you have got 1.2m teu being delivered this year, most of
which is over 10,000 teu. By the end of 2020 there will be 52 loops of 14,000 teu and above
and only 35 of these will be on the Asia-Europe trade. The remaining 17 have got to go
SCPA has already simulated handling a 19,000 teu ship and having dredged its channels to
15.8 m and installed cranes with a lift height of 47 m, says it is ready for the largest of ultralarge
“Southeast ports are regional ports but this is a very good region,” Mr Newsome says. “The
US south, when you include Texas and Virginia, is the fourth-largest economy in the world.”
With that growth in mind, it is little surprise that there will likely be another inland port
coming to South Carolina soon.
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