Port and Terminal Operations Management PPT

CHAPTER ONE
INTRODUCTION TO PORT

INTRODUCTION to Port
 Ports are critical infrastructure resources that
serve as a key role in the transportation of
freight and people.
 Ports are the critical nodal interfaces where
maritime transport connects with other modes
of transport and where trading, distribution
and logistics activities can take place.
 Ports also serve as economic catalysts for the
markets and regions they serve
2

 A port can range from a small quay/seafront for
berthing a ship to a very large-scale center with
many terminals and a cluster of industries and
services.
 Ports are dissimilar in their assets, operations,
roles and functions, and even within a single port
the activities and services performed are, or could
be, broad in scope and nature.
 This situation has led to a variety of operational,
management, organizational and institutional
approaches to ports, and it is almost impossible
to find a worldwide uniform definition for them.
3

 variety of terms describing ports such as:
 interfaces between sea and land,
 nodes in the multimodal and inter-modal
transport network,
 distribution and logistics centers,
 Maritime/sea gateways and corridors,
 Distribution parks and maritime clusters,
and
 free zones and trading hubs.
4

N.B. Ports are not just seaports.
 Today, ports are not only a transfer point
between sea and land but also serve as
distribution, logistics and production
centers.
 Ports can also serve leisure, fishing
military ships, thus deviating from
traditional commercial cargo-ship
5

Definition of port
 Ports defined as:
 “The interface between land and a sea or a
waterway connection providing facilities and
services to commercial ships and their cargo,
as well as the associated multimodal,
distribution and logistics activities.”
6

1.1 PORTS AND THE MARITIME BUSINESS
 ports have been regarded as a sub-system
of the shipping and maritime industry, with
their main roles being restricted to the
provision of services to ships and their
cargoes.
 Shipping or maritime business is mainly
concerned with the transport of goods by sea
and/or waterway connections.
7

Shipping markets classification
 Shipping markets may be divided into four main
segments:
1. the freight market: trades sea transport,
2. the new building market: trades new ships,
3. the sales and purchase market: trades second hand
ships, and
4. the demolition or scrap market: trades old and
obsolete ships.
 This has several implications on the
competitive, pricing and marketing strategies of
shipping and port services.
8

Ship classification
 Criteria for ship classification include:
a) Types of seaborne trade: bulk, break-bulk and general cargo
cargo trades
b) type of packaging (e.g. containers: containerships; trailers:
roll-on roll-off or Ro-Ro ships);
c) ship’s size (e.g. very large crude carriers versus ultra-large
crude carriers);
d) technological specifications (e.g. conventional versus
cellular containerships); and
e) safety and security records
READ YOUR HANDOUT
Table 1.1: International classification of ships
N.B. Seaports must not be confused with terminals; the latter
are specialized units within ports.
9

Shipping services
 Shipping services are usually
determined by the nature of trade,
or traffic, and more specifically by
the type of cargo or commodity
transported.
 When shippers (cargo owners,
senders or receivers) outsource the
transport of their cargo by sea or water,
shipping services are usually divided into
liner shipping and tramp shipping.
10

Shipping services
 Liner shipping: works regular routes
and ports according to published
marine schedules
 Tramp shipping: is irregular in both
time and space.
 Modern transport operators offer more
than just transport services and can
therefore be considered as third- party
logistics (3PL) providers. Ex, your
cafeteria service
11

Core activities of 3PL
 Core activities of 3PL, also called logistics out-
sourcing or contract logistics, include:
 transport,
 warehousing,
 inventory management,
 information systems,
 consolidation and distribution,
 freight management and
 consulting services.
 Other functions include value-added
capabilities such as labeling, packaging
and telemarketing. 12

Description of selected operational patterns
of liner shipping
13

Port classification
 As far as shipping services and trading
routes are concerned, ports may be
classified as:
a. network ports,
b. transshipment ports,
c. direct-call ports and/or
d. feeder ports.
14

a. Network ports
 provide high value-added services to
both ships and cargo and generate
traffic from/to the port and its hinterland
and foreland.
 Given their extensive channels of
distribution, network ports are
commercially attractive and offer low
unit cost per ship.
15

b. Transshipment ports ports
 provide high value-added services to
ships but low value-added services to
cargo(goods carried by a large vehicle).
 They are mainly dedicated to ship–shore
operations and provide fast turnaround
times for ships. They are also suitable
for cargo concentration and distribution.
16

c. Direct-call ports
 provide low value-added services to
ships but high value- added services to
cargo.
 They are particularly attractive to tramp
shipping and some forms of liner
shipping.
17

d. Feeder ports
 provide low value-added services to
ships but not necessarily to cargo.
 They are not physically, or possibly,
economically suitable for direct call
and need to be linked to network or
transshipment ports.
18

Other classification of port
 An alternative way to classify ports is to look at their
geographical and spatial markets
 Hinterland- the extent of the land area a
port can serve.
 Here ports can be classified as local, regional,
national or international.
 Foreland- Ports can serve a wider spatial
region beyond their immediate hinterland.
 It denotes the geographical area a hub or a network port
serves through networking with other feeder ports or
through an extended inland transport.
19

 From a spatial and geographical perspective, the
relationship between freight flows and port development is
better understood through the concepts of
 gate-ways,
 articulation points,
 freight corridors and
 distribution centers:
 Gateways are locations that bring together
different modes of transportation along with
warehousing, freight forwarding, customs
broking and other logistics services. Many
textbooks differentiate between transport
gateways as hubs for major regions and
freight gateways which serve cities and
regional areas
20

 Articulation points are nodal locations
interfacing several spatial systems and
serving as gateways between spheres of
production and consumption, and may
include terminal facilities, distribution,
warehousing and trading centers. The
difference between gateways and
articulation points is that the latter are
viewed from an urban perspective,
whereas gateways do not necessarily
need to be located at city interfaces.
21

 Freight corridors represent transport
links of freight transportation supported
by an accumulation of transport
infrastructures and activities servicing
these flows.
 Freight distribution centers serve as
locations for cargo transfer and
distribution to regional or extended
markets, depending on corridor capacity
and articulation point links.
22

1.2. POR T DEVELOPMENT
 Evolution of world ports and
terminals (READ IT)
 Bird’s (1980) ‘any-port model’
 UNCTAD’s ‘port generation model’
23

TO PORT OPERATIONS AND
MANAGEMENT
 Generally, the activities and operations of
ports have been studied from three main
perspectives:
 an economic approach,
 an engineering/operations approach,
and
 an evolving logistics and supply chain
management (SCM) approach.
24

1.3.1 The Economic Approach
 Key economic characteristics of the port
industry includes:
i. multi-product/multi-output system,
ii. multi-agent system,
iii. requirements for market, safety and
environmental regulation
iv. externalities, spillovers and wider effects,
v. natural monopoly and economies of scale and
scope,
vi. location and network structure, and
vii. Long-life assets and long lead times for planning
and project completion.
25

1.3.2 The Operations Approach
 From the engineering and operations approach, ports
are seen as fixed assets and operations systems.
 Engineering applications in ports are mainly associated
with the aspects of port design, construction,
modeling, planning, operations, maintenance,
optimization and performance measurement.
 The sub-branches of engineering that are mostly
concerned with port operations, planning and logistics
include transportation engineering, environmental
engineering and industrial engineering.
 The last sub-branch is often used to study ports using a
systems and process approach, and is therefore closely
related to the fields of logistics and SCM.
26

1.3.3The Logistics and Supply Chain
Management Approach
 Most concepts of logistics and SCM also apply to
ports. They include the following:
i. Customer service
ii. Value added
iii. Process and integrated approach
iv. Total costs and cost trade-off analysis
v. Ports as logistics systems
vi. Ports and international logistics
vii. Ports and supply chain management
27

Port and Terminal Operations Management PPT

1.3.4Marketing Channels and Port Management
 The marketing channel approach deals with the control
of the channel and focuses mainly on external
organizational arrangements.
 The SCM approach, on the other hand, seeks optimal
efficiency by focusing on organizational integration
including internal arrangements within a single
company.
29

1.4. PORT ROLES AND FUNCTIONS
30

1.5 PORT INSTITUTIONAL AND ORGANIZATIONAL
STRUCTURE
READ IT
32

1.6 VALUE –ADDED SERVICE OR VALUE-ADDED
LOGISTICS (VAL) IN PORT
33

CHAPTER 2
PORT PLANNING
2.1 Capacity planning
2.2 Capacity management
34

2. PORT PLANNING
 The core objective of port planning is to seek a
balance between shortages in capacity and
over-capacity at adequate cost, price and
service levels.
 This involves decisions related to:
 operational productivity and optimization,
 net-work and demand modeling,
 design and layout configuration,
 market research and development,
 project appraisal and economic valuation,
 investment financing and analysis,
 competition and pricing, and public policy
and development.
35

 Port planning is also about finding the
right balance between, on the one hand, the
business and economic drivers of port capacity,
and on the other, the constraints imposed by
spatial planning, land use, environmental
sustainability, and various policy and societal
factors.
 PORT Capacity is an important
characteristic of transport infrastructure.
 It indicates the capability of the infrastructure
system to accommodate transport modes and
vehicles and to provide associated services at
specific cost and service time levels.
36

 From an engineering perspective, PORT
Capacity is defined as the maximum
technically possible utilization rate that can be
achieved in the short-run with the existing port
facilities and resources: infrastructure,
equipment, labour, technology, etc.
 The study of port capacity involves both
capacity planning and capacity
management.
37

 Capacity planning is the techno-
economic process of predicting the required
additional capacity that matches the future
demand for port services, including the study
of engineering and financial options of
implementation.
 Capacity management refers to the
process of optimizing port operations for a
given capacity, while ensuring a balance
between cost-effectiveness and service
quality.
38

TYPES OF PORT PLANNING
 Based up on time horizons of port planning, there are three
different types of port planning:
1. operational planning,
2. strategic planning and
3. long-term planning
1. Operational planning deals with short-term (eg daily)
planning including allocation of port facilities and resources, and may
be implemented in terms of several detailed planning modules
such as berth planning (quay transfer), yard planning (transfer, stacking
and warehousing) and gate and inter-modal planning (cargo receipt and
delivery).
Berth planning
 Berth planning covers vessel and cargo data, berth
configuration and resource allocation.
 It includes both general and specific information about the
ship’s technical features, layout and shape, service
routes and cargo (number, type, size, class, etc).
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 Yard planning:-tasks cover the planning for
cargo transfer, congestion, and storage in the
yard, the allocation of yard space and the
assignment of pools (equipment and labour) to
points of work including such activities as
housekeeping/take care of all ship business
(overhead moves) and dispatching/shipping of
vehicles (internal and external) along defined
routes and pathways (path finding).
 Gate planning :-includes the planning of
rail/truck entry and exit (gate-in/ gate-out),
yard and warehouse dispatch, and sometimes
platform/program and freight arrangement.
41

2. Strategic planning is generally undertaken between
three and five years and emphasizes the use of existing port
capacity and resources, as well as those to be acquired in the
medium-term, with a particular focus on market planning and
corporate strategy.
 Examples of medium-term objectives include the reduction
of ship waiting time, the increase of container throughput,
and the introduction of new arrangements for resource
relocation (eg a 24-hour working pattern).
 A typical strategic or business plan would include the
following:
 a reminder of main objectives and strategies,
 a series of sequenced and clear actions to be undertaken,
 detailed job assignments,
 inventory of resources and their allocation,
 detailed budgets and financial projections,
 specific program targets,
 management structure, and
 Performance and evaluation procedures.
42

Process and elements of strategic port planning
43

3. Long-term planning involves the
production of a master plan for the development of
facilities and acquisition of heavy equipment in order to
meet the long-term (eg ≥10 years) demand for port
services.
To conclude
The objectives are of three kinds: long-term
objectives corresponding to the mission statement
at the corporate level, medium-term objectives
corresponding to strategic objectives at the
departmental level and short-term objectives
corresponding to targets at unit and operational
levels.
44

CHAPTER THREE
3. PORT INVESTMENT AND FINANCE
45

3.1 Port costs and costing
 3.1.1. Types of Port Costs
 The rationale behind port costing is that it
enables port management to control costs
and operations, and allocate resources
efficiently.
 Cost structures in transport and port operations
are generally perceived in terms of generic
categorizations such as
 direct versus indirect costs,
 internal versus external costs,
 capital versus operating costs,
 fixed versus variable costs,
 average versus marginal costs, etc.
46

Direct versus indirect costs
 Direct costs are the costs directly allocated to a
specific cost objective such as a product, an activity
or a customer.
 In ports, direct costs correspond to the capital
required
 for building and maintaining port infrastructures and
terminal superstructure, as well as
 for equipment and vehicles acquisition and repair.
 Indirect costs are the costs that cannot be
allocated to a particular cost objective and are often
classified as overheads/expenses or general costs.
47

Internal versus external costs
 Internal costs are the costs intrinsic/basic to an activity
of a port or a terminal while
 External costs are the costs associated with port
externalities such as congestion and deterioration of the
environment.
 Costs can also be categorized by functions or operations.
In ports, costs are usually broken down into four elements:
1. land costs,
2. capital and infrastructure costs,
3. equipment and superstructure costs, and
4. labour and running costs.
48

Capital versus operating costs
 Capital costs are the upfront costs of providing a capital
asset. It include the costs of
 design and construction,
 equipment and vehicle acquisition, and
 related tax and professional work.
 Operating costs are those associated with its daily
operation and maintenance. It include
 labour costs,
 maintenance costs, and
 expense costs (energy, administration, insurance and
 security, etc).
49

Fixed versus variable costs
 Fixed costs are costs that are independent of the quantity of
production. It include the costs of
 infrastructure and buildings,
 equipment and vehicles dredging and maintenance,
 interest and depreciation,
 insurance and security and
 salaries of permanent staff.
 Variable costs are those that vary with the throughput or volume of
the activity. It include costs related to
 the salaries for temporary staff,
 energy and utility expenses,
 taxes and administration,
 overheads and related costs.
 N.B. The cost structure of ports is marked by a large
fixed cost and a relatively low variable cost. 50

3.2 Economic versus commercial appraisal
of port investments
 Assessing the overall viability of port investments
requires a commercial and an economic evaluation.
 The investment cost and the service price, which
determines the financial revenues, are the inputs to the
commercial evaluation.
 In addition to the investment cost, the direct, indirect
and external effects are the main inputs to the economic
evaluation.
51

3.2.1. Economic Appraisal
 3.2.1.1 Port economic impact
 Port impacts on the economy are measured to assess the macro-
economic and social impacts of ports on their respective hinterlands or
forelands. In this approach, ports are seen as economic catalysts for the
regions they serve.
 3.2.1.2 Port trade efficiency
 Port trade efficiency assesses port efficiency in relation to maritime, transport
and/or trade costs.
 N.B. Port efficiency can have a major impact on the efficiency of the national
economy. This impact takes place on at least four major elements:
 impact on the competition between ports: share of hinterland and market leadership,
 impact on export/import trade competition: role of ports in international trade,
 impact on the price of imported/exported goods: port costs as proportion of total
price of the goods, and
 impact on the balance of payments: port as a source of foreign currency and
employment. 52

3.2.2 Commercial Appraisal of Port Investments
 The main commercial interest associated with port
projects is the recovery of the cost of investment.
 A financial evaluation is therefore required to
determine the financial viability of a port investment
and estimate the recovery period.
 Financial appraisal of investment decisions relies on
a number of methods the most common of which are:
the return on investment (ROI), the pay-back
method and the discounted cash-flow (DCF).
 READ IT THE DETAIL
53

3.3 Project Risks and Risk Analysis
 Risk is inherent in all projects and investments, and can be
defined as the chance or the probability of an unexpected
event occurring, or an expected outcome not taking place.
 The risks commonly identified in port projects include:
• Construction and operating risks-relate to project delays
caused by design changes, cost overruns due to
underestimation of operating costs, and/or the difficulty of
acquiring administrative and environmental clearance
• Financial risks-related to financial constraints such as
insufficient cash flows, lack of long-term debt capital, and
unsuitable financing structures and mechanisms.
• Economic risks-result from changes in economic policy
which can affect the normal progress and implementation of
investment and management decisions.
54

3.3 Project Risks and Risk Analysis
• Commercial (traffic and revenue) risks-stem from the uncertainty
of port demand, and are sometimes referred to as
commercial risk.
• Regulatory risks-include regulations that prevent port
access and investment opportunities, and actions that
terminate port contracts and concessions.
• Political risks-are non-commercial risks such as wars,
terrorism, political conflicts, bureaucracy, corruption, and
other illegal irregularities that arise from unstable
government systems, incoherent institutional frameworks,
and unfavorable government policy.
• Environmental risks-emanate from activities such as,
bunkering, pollution and contamination, disposals and cargo
spoillage, CO2 emission from ships and port vehicles and
equipment, noise, and any other factors that impact the
quality and sustainability of a port’s environment and eco-
55

All risks associated with a given
project or investment should be
identified, quantified, priced and
allocated and managed in effective
manner . Eg METAC
56

PORT PRICING
 4,2 MEANING OF PRICE
 Price is the amount of money charged for
a product or service or it is the sum of
the values that consumers exchange for
the benefit of using the product/service.
 Therefore pricing represents the value of
a good or service for both the seller and
buyers.
58

FACTORS TO CONSIDER WHEN SETTING PRICES
a) port Objectives
 The PORT objective has a great influence on
the pricing decision of the PORT. These
objectives might include
 Survival
 Current profit maximization
 Market share leadership
 Product quality leadership
b) the definition and structure of port
costs- Costs set the floor for the price that the
company can charge for its product. The price of the
product usually must cover cost of production,
promotion and distribution, plus a profit for the
offering to be of value to the firm.
59

 The elasticity and regulation of port
demand- The relationship between price and
consumer purchase decision can be
explained by the economist law of demand
which state that consumer usually buy more
units at lower price and less units at
higher prices.
Price elasticity can also be used to describe
the influence of demand on price decision.
Price elasticity of demand is a measure of
consumers’ price sensitivity and it is estimated
by dividing relative changes in the quantity sold
by the relative price change.
60

their is inversely proportional between
the demand for commodity and the price
of commodity.
 If the price increase the demand of the
customer for the commodity will be decreas
and if the price decrease the demand of the
customer will be increase.
61

 Competition;- Prices, the firm must consider
its competition and how competition will
react to the price of the PORT.
 Here emphasis must be given by the firm for
the following factors.
• Number and size of competitors
• Location of competitors.
• Number of products sold by competitors.
• Cost structure of competitors.
• Past/previous reaction of competitors to price
change.
62

Port pricing strategies
 There are three main approaches to
the determination of port charges:
1. cost-based pricing,
2. congestion (traffic
concentration)pricing and
3. strategic pricing.
63

1.1 Cost-Based Pricing
 the structure of port prices depends on
the cost classification which refers to
these activities, each with its own set of
cost components such as internal versus
external costs, fixed versus variable
costs, and average versus marginal
costs.
64

1.2 Congestion Pricing
 Congestion pricing consists of
levying(tax) a congestion surcharge to
users in order to reduce port congestion.
 Congestion pricing combines both
demand-based and variable-cost
strategies such as enargy,utility,tax,etc.
 Slot auction is a hybrid strategy which
combines congestion, multi-tariff and
value- based pricing.
65

1.3 Strategic Pricing
 Strategic pricing is based on the
premise that pricing can be used as a
tool to promote port competition.
 strategic pricing involves a certain degree
of price discrimination (counter-
discrimination), for instance by shipping
service (origin versus destination,
domestic versus foreign, feeder versus
mainline), by the type of traffic (import,
export, transit, transshipment), and
value of cargo (low-value versus high-
value commodities).
66

The calculation of user and service
charges depend on a number of
criteria such as:
 The ship: e.g. type, origin and
destination, range of operations, and
volume and dimension.
 The cargo: e.g. type of traffic, cargo
volume, weight, or tonnage, and/or
commodity classification.
 Passengers: e.g. number of crews and
passengers, age, nationality, vehicle type
and registration.
67

CHAPTER FIVE
PORT OPERATIONS
69

PORT OPERATIONS
 Modern port configurations and operating systems are
increasingly designed to serve a particular trade or ship’s
type, although many ports around the world still operate
multi-purpose facilities.
 The choice of the appropriate port layout
and configuration is a long-term and
strategic decision generally taken at the
early stages of port planning and design.
70

The relevant factors that can influence the layout and
configuration of ports and terminals
 Types, sizes and characteristics of ships calling at the
port,
 Traffic’s type and proportions,
 Physical topographic and engineering conditions,
 Type, weight and packaging dimensions of cargo
categories,
 Land and terminal’s area, capacity and cost constraints,
 Operating factors such as equipment and labor costs,
 The location and configuration of freight sites within or
outside the port or the terminal.
71

Different sites and equipment used in a typical
container terminal
 For efficient cargo handling and transfer three main operating
sites of terminal namely the quay site, the yard and the gate
must operate jointly.
72

5.1. The quay site
 The physical infrastructure of the quay site
includes berth’s length, draft and structure,
which may differ according to the type of ship
and cargo handled. In Ro-Ro and ferry ports,
ramps (shore or ship based) are used for cargo
and vehicle transfer between ship and quay.

73

Different infrastructurs and equipment in quay site
Terminal type Berth infrastructure Handling equipment
Liquid
Loading platforms, pipelines,
multi-boys, dolphins, single
point mooring
Pumps, loading arms,
hoses, etc
Dry bulk Quay and platforms Crane-mounted grabs, hoppers, belt
conveyors, excavators, bulldozers,
mobile hoppers, etc
Break
bulk
Quay and platforms, scour
protection
Ship ramps, shore ramps, roller and
spiral conveyors, multi-purpose
cranes
Container &
general cargo
Quay and apron Mobile cranes, jib/pull up
cranes, portainers
74

5.2.1 Yard System
 A terminal’s yard is the area where cargo
storage, stacking, transfer and
distribution take place.
 From an operational view, yard
operations may be categorized into
horizontal transport and storage/staking
modules
75

 the yard area in liquid bulk terminals
is used for intermediate and long-term
storage of oil and other liquefied cargo,
which is then transported by pipelines to
refineries and inland destinations
 For car terminals, the yard serves as a
warehousing and storage area for cars,
trucks and other automobile vehicles
before being sent to final customers.
76

 In dry bulk and liquid bulk terminals,
the yard’s transit and storage sheds are
used for cargo storage and warehousing.
 5.2.2 Gate System
 Gate operations are designed to
efficiently control access into and out of a
terminal or port facility through land
interfaces, which may be further sub-
divided into train and truck interfaces.
77

 Components of gate planning and
management include advance booking,
arrival schedule, pick-up and delivery,
cut-off times, validation check and
control, and gate-in/gate-out monitoring.
78

5.3 Model1ing terminal
operations
 5.3.1 Analytical Modeling
Analytical modeling describes the
system using mathematical relationships
which are used to derive formulas,
algorithms or computational procedures.
The thrust of network modeling is based on
representing a system as a network of
linked activities.
Since most network problems can be
converted into equations in an operations
research format, they constitute a special
sub-class of optimization modeling.
79

5.3.2 Simulation
 As an alternative to mathematical
optimization, simulation is used to
analyze models of real systems that are
too complex for direct mathematical
analysis.
 simulation can be applied to any type of
problem where there is no other
applicable quantitative method.
 main objective lies in testing and
comparing alternatives to be used for
decision making rather than finding the
best feasible solution.
80

5.3.3 Process Modeling
 A process can be loosely defined as any set
of interlinked tasks or activities. However,
processes can be analyzed from various
perspectives including functional,
behavioral, organizational and informational
views.
81

CHAPTER 7
SOFTWARE AND COMMUNICATION
PLATFORM
 7.1 SOFT WARE AND COMMUNICATION
PLATFORM
7.1.1 Electronic Data Interchange (EDI)
 EDI is essentially a computer-to-computer
exchange of business and administrative
documents in a standard electronic format
between two or several Organizations.
EDI is also used to refer to the standards used
for data interchange And to the operating
systems that create, transfer and receive these
data.
82

 Web-based EDI generally refers to the
use of XML (Extendable Markup Languag)
to deliver the EDI through the internet,
but information exchange Can also take
place using virtual private networks
(VPN).
 The main barrier to EDI is an agreement
on common global standards and
Protocols.
 The main global standard in use is the
UN/EDIFACT (the United Nations or
Electronic Data Interchange for
Administration, Commerce and
83

 Benefits of EDI
 • Quicker information processing and access
 • Reduced errors in data entry and transmission
 • Better customer services
 • Reduced clerical and paperwork costs
 • Improved communications and information
management
 • Increased productivity
 • Improved tracking, tracing and expediting
 • Improved billing
 • Reduce (or eliminate) corruption
Table 7.2: Benefits of EDI
84

7.2. Terminal Operating Systems
(TOS)
 Terminal operating systems (TOS) are
purpose-built software products used for
the planning, execution and control of
terminal operations.
 Most commercial TOS are organized in
terms of separate functional modules
such as yard and vessel planning, loading
and unloading operations, gate control
systems, and EDI systems for information
exchange with customers and outside
institutions.
85

7.1.2.Software and
Communication Platforms
 Data Communication) (UN/GTDI) standard which
is predominant in the UK retail industry.
 The main utilization of EDI in ports is Port
Community Systems (PCS), a system or an
entity that delivers relevant data and
information to port community stakeholders
(users and customers).
 most modern PCS use central databases which
store and structure messages (management
systems) from where users can access
information using authentication, authorization,
password-based and other security tools.
86

7.3 Enterprise Resource Planning
(ERP)
 ERP is basically a collection of
applications designed to process and
integrate operational and management
functions of a firm using a common
architecture that links the firm to both
customers and suppliers.
 The aim is to provide instant access to
timely information and better visibility
across operational areas, leading to
improved efficiency.
87

 ERP has evolved from earlier MRPI
(materials’ requirement planning) and
MRP II (manufacturing requirement
planning) applications for planning and
control to include non-operational
functions such as accounting and finance,
customer resource management(CRM),
and human resource management (HRM).
88

7.4.AUTOMATIC IDENTIFICATIONAND
DATA CAPTURE
 Automatic identification and data
capture (AIDC) is the broad term given
to a diverse family of technologies that
are used to help machines identify
objects, capture information about them
and store this information into a compute
without human involvement.
 Technologies under the umbrella of AIDC include
bar codes, card technologies, voice and vision
recognition, biometric technologies, optical
character recognition (OCR), optical mark
reading (OMR), and radio frequency
identification (RFID) systems.
89

A, Cameras and OCR
 The CCTV cameras installed in port and terminal
areas are probably the first and most widely
operated automated system aimed at the
efficient control and monitoring of terminal
assets and transaction processes, especially for
claim handling, safety and security purposes.
90

 Card technologies are mainly used to provide
access and may be categorized into magnetic
stripe, smart and optical cards. Common
applications in port and terminal management
include access control and identity checks for port
workers and truck drivers.
 RFID
 Radio frequency identification (RFID) is a
generic term that is used to describe a system that
transmits the identity of an object using radio
waves. An RFID system offers high-speed and
remote electronic identification of equipment.
91

CHAPTER 8
PORT LOGISTICS
8.1. Ports and logistics systems

8. 1.1. Ports as Nodal Systems and
Interchange Points
• Most transport and distribution systems are
composed of a link-node combination
although some distribution systems still use
direct transport-link structures with no
nodal connection.
• In a link-node distribution system, links
represent the transport system while nodes
are locations for cargo transfer, multimodal
interchange, storage and warehousing.

8.1.1.1 Road freight and road
terminals
• Trucking and road transport systems are
operated by smaller vehicles and a wide
variety of special equipment
8.1.1.2 Rail freight and rail terminals
• rail freight has a relatively longer transit
time than road services, it is suitable for
longer distance journeys in larger countries
such as the USA, Canada or Australia.

• The most common form of rail terminal is a
hump or marshalling yard.
• The hump is an artificial point that uses
gravity and readers to direct or reclassify
cars to a new train or a new track.

8.1.1.3 Water and sea terminals
• Commercial seaports are the predominant
category of water terminals and are
sometimes combined with other purpose-
built terminals (eg military ports, leisure
ports, and so on).
• composed of many berths, terminals are
usually treated as sub-units of the port
system (eg container terminals, bulk
terminals, multipurpose terminals, and so
on).

8.1.2 Ports as Inter-modal
Centers
• The combination of two or more transport
modes requires the use of terminals at one
point or another.
• we define inter-modalism as being the process
of moving goods by more than one transport
mode in a single loading unit such as
containers

8.1.3 Ports as Distribution and
Logistics Centers
• nowadays on the flow of products and
materials, modern production and distribution
systems rely more on inventory management
and less on traditional storage and
warehousing.
• This has led to the emergence of new type of
facilities such as regional logistics centers
which can perform a number of functions
including the activities related to materials
management, materials’ handling and
physical distribution

• Logistics centers are sometimes confused with
regional distribution centers (RDCs), but the
latter are more associated with physical
distribution systems for out- bound movements.
8,1.1.3 Logistics functions with in port
Storage management is the traditional function
of warehousing for managing physical stocks
(warehouse configuration, stock layout and
placement, space determination, cross-docking,
etc),

Cross docking is associated with product
assortment or product mixing in the required
combinations for shipment to customers.
Consolidation and break bulk, Smaller
consignments are consolidated (or concentrated)
and subsequently dispatched as a larger volume
shipment units. The reverse operation is called
break-bulk or dispersion and can be combined
with consolidation.

Value-added logistics (VAL)
• In the context of logistics management, added
value is being pursued in the post-
production/pre-distribution process, including,
but not limited to, the following activities:
• Postponement: This refers to the deliberate
delay of an activity until the last possible
moment, particularly when adopting a general
product to a customer or country-specific
product, for example labeling, ticketing, and
customization

• Reverse logistics: This is the process of
managing the movement and storage of returned
goods (eg damaged, used or outdated products).
• Packaging: Packaging is also associated with
postponement and breaking bulk, and is usually
discussed as an aspect of materials handling. It
is seen as a VAL when it adds value to the
transport and logistics attributes of a
commodity.

• • Information technology: Modern
logistics centers also offer information
management services to customers such as
real-time tracking and tracing for cargo
distribution and inventory levels, on-line
documentation and payment services, and
other information related to customs
clearance and administrative procedures.

8.1.4 Ports as Free Zones
• Free zones, also referred to as free trade zones
(FTZ) or export processing zones (EPZ), are
special areas offering a range of customs and tax
breaks and additional administrative incentives
with a view of attracting foreign investments.

Advantages of free zone port
Port (or host country) Users
Attract foreign investment
- Currency flows and trade
development
- Generate direct and indirect
jobs
- Transfer of know-how and
technology
- Opportunities for cargo
consolidation and hub services
- Competitiveness of local
industries
- Reduction of informal activities
Close to markets, shorter transit time
- Reduction of investment/project risk
- Minimum customs and procedural
bureaucracy
- Opportunities for relocation and
logistics outsourcing
- Reduction of warehousing and
inventory cost
- Lower exchange risks
- Economies of scale
- Wide range of services and facilities

Ports and supply chain
networks
• A supply chain is often described as the network
created from
• (i) the combination of a sequence of
organizations from production to consumption;
suppliers, manufacturers, distributors, retailers
and customers,
• the physical, information, and financial flows
that move within and between these
organisations.

• Successful models of supply chain collaboration
often incorporate several components of supply
chain planning and implementation such as
• Stakeholders refer to the primary participants in
a supply chain which usually include suppliers,
manufacturers, wholesalers, retailers and
customers.
• Topology refers to the way supply chain
processes are organized and linked to each other.

• Levels of collaboration refer to the degree (not the
type) of partnership among stakeholders and can be
strategic, managerial, operational, or any combination of
some or all of these.
• Processes often refer to cross-functional and inter-
organizational flows and interactions within a
collaborative supply chain.
• Enabling technology refers to the information systems
used to run and sup port collaborative supply chains.
• . Ports offer a unique location in which members
of different channels can meet and interact:

– From a logistics channel standpoint, the port is a
very important node since it serves as an inter-
modal/multimodal transport intersection and operates
as a logistics center for the flows of goods (cargo)
and people (passengers).
– From a trade channel perspective, the port is a key
location whereby channel control and ownership can
be identified and/or traded.
•
From a supply channel approach, the port not
only links outside flows and processes but also
creates patterns and processes of its own..

Level of channel an network analyses in port

CHAPTER 9
PORT SAFETY
• 9.1. SYSTEM’S SAFETY FOR RISK
ASSESSMENT AND MANAGEMENT
• Risk can be loosely defined as the exposure
to the chance of loss. In the context of port
safety, this corresponds to accident risk
defined here as the chance, in quantifiable
terms, of a hazard or an accident
occurrence.
• Risk= Probability∗ Impact

• The assessment of risk in terms of what
can go wrong, the probability of it going
wrong and the possible consequences.
• •The management of risk in terms of what
can be done, the options and trade-offs
available between the costs, the benefits and
the risks.
• •The impact of risk management
decisions and policies on future options
and undertakings.

• The empiricist approach regards accidents as random events
whose frequency is influenced by certain factors. Under this
approach, the immediate cause of an accident is known in the
system safety literature as a hazardous event. A hazardous event
has both causes and consequences. The sum of the consequences
constitutes the size of the accident. Hazardous events range in
frequency severity from
• 1,high-frequency/low-consequence events, such as road
accidents and machine failures, which tend to be routine and well
reported, to low-frequency/high-consequence events, such as
earthquakes and terrorist attacks, which tend to be rare
but more complex.

CHAPTER 10:Health, Safety,
Security and Environmental
Management
CLASS GIVEN TO STUDENTS
BY NEW INSTRUCTORS

117
Thank you for your
attention

Port and Terminal Operations Management PPT

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