A queuing model analysis of the performance of the Hong Kong container terminals

The growth of container‐handling industry and its impact on Hong Kong's economy have aroused considerable attention in recent decades. Within the recent twenty years, the rapid growth of container‐handling industry has led Hong Kong to become one of the world's busiest container port with over 11 million T.E.U. s (Twenty Feet Equivalent Units) container throughput in one year period. Also the container throughput is expected to reach 15.5 million T.E.U. s by year 2004.

As the success of container‐handling industry is significant, many studies have been conducted relating to this subject. In this paper, an application of a queuing theory model to Kwai Chung Container Terminals is developed and described. Specifically, we consider seasonal changes at the Terminals and focus on their effects on inter‐arrival time and service time of container vessel.

A crucial component of the study relates to the empirical data collected. Besides verifying the validity of the model, those data provide guidelines for developing schemes to manage the seasonal fluctuation of container throughput of the Terminals.     

Container Terminal Development in Mainland China and Its Impact on the Competitiveness of the Port of Hong Kong

In recent years, China's container ports have experienced a significant expansion in throughput and capacity. This paper provides a review of the sector and analyses the recent development of container ports and terminals within Mainland China. It then focuses in more depth on the competition between the ports of Shenzhen and Hong Kong. In particular, the port of Shenzhen is analysed in the context of Robinson's criteria for hub port development to try to discern whether it will become the dominant regional hub. The discussion concludes that despite Shenzhen's current competitive advantages, Hong Kong will, in all probability, retain its dominant role.     

The Impact of Container Type Diversification on Regional British Port Development Strategies

Abstract

Despite a concentration of container traffic in the southeast of the UK over the last few decades, regional ports are attempting new development strategies to capture or retain specific traffic segments. These include intra-European short-sea traffic and a potentially increasing feeder market. These trends are reflected in the movement of different container types, which result in a number of planning challenges related to changing infrastructural and operational requirements. This paper uses highly disaggregated data on container type movements to address three issues that can inform these planning challenges. First, the imbalance of trade resulting in empty container repositioning; second, the requirement for gauge-cleared rail routes to cater for the increasing proportion of high-cube containers; and third, the specialisation of European short-sea traffic at secondary UK ports. The results reveal the disproportionate repositioning of empty containers at Scottish ports and the importance of 45?ft, high-cube and pallet-wide containers at regional ports, highlighting their focus on intra-European short-sea traffic and raising difficulties relating to their lower quality of landside infrastructure (particularly rail) in comparison to the large south-eastern ports. The potential repercussions on hinterland infrastructure development raise questions about both public and private sector responses to regional port development.     

Competitiveness prioritisation of container ports in Asia under the background of China’s Belt and Road initiative

ABSTRACT

The understanding of the competitiveness of different ports under the background of China’s “Belt and Road Initiative” (BRI) is critical for drafting appropriate plans and taking suitable actions to select the best port in the logistics supply chains. A novel Multi-Attribute Decision Analysis (MADA) was proposed for the evaluation of port competitiveness. In the developed MADA method, the interval Analytic Hierarchy Process and the projection method was combined for the evaluation of port competitiveness. Three container ports in Asia including Shanghai, Hong Kong, and Singapore were studied under the background of China’s BRI. The results demonstrate that the port of Singapore is the most competitive at the initial stage of China’s BRI, followed by Hong Kong and Shanghai in the descending order. The results were validated by sum weighted method and Technique for Order Preference by Similarity to an Ideal Solution method, and sensitivity analysis was also carried out. The competitiveness of the three ports in the next ten years were also studied with the consideration of the influences of China’s BRI, and the results reveal that Shanghai port can even exceed Hong Kong port and Singapore port if it can effectively take the advantage s of China’s BRI.     

From hierarchy to networking: the evolution of the “twenty-first-century Maritime Silk Road” container shipping system

ABSTRACT

Container shipping gives a rise of international trade since the 1960s. Based on navigation data start from the mid-1990s to 2016, this paper empirically analyses the spatial pattern of China’s international maritime linkages along the “twenty-first-century Maritime Silk Road”. We interpret such evolutionary dynamics in terms of growth, hierarchical diffusion and networking phases. Networking is a new stage of the evolution of the port system, which is approached based on the graph theory, complex network methods and geomatics, the paper discusses the networking’s basic characteristics: multi-hub spatial agglomeration, the connection of the network develops across space, functional differentiation and a division of labour appear among ports. Our results show that, while the scope of China’s maritime linkages had expanded overtime, more foreign ports become connected to the “Maritime Silk Road”. In addition, the external linkages of domestic ports tend to be dispersed, reflecting upon the decline of Pearl River Delta ports and the rise of Yangtze River Delta ports, with mixed evidence for the Bohai Rim region. Lastly, the analysis underlines the emergence of a polycentric shipping system, from the Hong Kong dominance to the more diversified Shanghai/Ningbo/Shenzhen configuration. Academic and managerial implications are included.     

Attitudes of Hong Kong residents to cars and public transport: Some policy implications

Hong Kong currently has low levels of car ownership and use due to a combination of good public transport, high population densities and high private transport costs. However, levels are rising, contributing to congestion and environmental problems. A major response by the government is to seek to increase rail's share of public transport journeys from its current level of 33% to 45% by 2016. After reviewing the transport situation in Hong Kong, the paper discusses the appropriateness of these targets as well as questioning whether they are achievable. The results of a questionnaire survey of 595 residents of Hong Kong, designed to elicit people's attitudes to cars and public transport, are analysed. It is concluded that unless the government does more to curb car ownership and use, rail targets will have little chance of being achieved.     

Deregulating direct flights across the Taiwan Strait: The transformation of Eastern Asian air transport market and network

Over the past decades Hong Kong has been successfully playing a role as a gateway to China. Since 1988, it has also been the most important hub between Taiwan and China. Over 5 million passengers travelled between Taipei and Hong Kong in 1997, making the link the busiest in the world's international air links and contributing one-sixth of the passengers to Hong Kong airport, which before 1997 had the most international passengers in Asia. In the foreseeable future Taiwan will possibly start some direct services to China; the air link between Hong Kong and Taipei will then compete with many links across Taiwan Strait. These changes may cause the transformation of the market and network structure in eastern Asia. Niches of specific airlines and airports will disappear. This paper examines the issues of possible changes in eastern Asian air transport market: the current market environment, the problems for direct flights across Taiwan Strait, the possible links between Taiwan and China, the future role of Hong Kong, and the market structure in the future.     

Competition dynamics between container ports in East Asia

This paper unveils the competitive dynamics between the major container ports in East Asia by analyzing their extent and intensity. Time series data, with the longest series dating back to 1970 ending 2001, on container throughput for the ports of Hong Kong, Kaohsiung, Keelung, Kobe, Nagoya, Osaka, Pusan, Taichung, Tokyo and Yokohama are computed. Cointegration tests are employed to determine the existence of long run relationship between various port pairs. Error correction models are constructed to determine short run inter-port dynamics. The results reveal that Hong Kong and Pusan are beneficiaries from inter-port competition in the region for the past three decades. The study suggests that inter-port competition in the region would intensify in the future as the centre of gravity of cargo volume shifts to mainland China. Moreover, concentration of services by shipping lines at the primary load centers might lead to intense competition between the primary load centers and ports located in close proximity that share their hinterlands.     

Shipping Lines and Logistics

Abstract

It has been acknowledged that logistics is a driving force that shapes the integration of the transport chain. This paper argues that while the liner shipping industry exhibits increased horizontal integration, its vertical integration remains limited. A clear distinction is drawn between freight logistics, container logistics and vessel logistics. Freight logistics is defined as part of the supply chain process, the focus of which is the goods being transported. The purpose of container logistics is to optimize the movements of the containers themselves, an operation that is directly related to vessel logistics which is concerned with maximizing vessel utilization. The paper demonstrates that shipping lines have to find the correct balance between these three types of logistics. Their interest in vertical integration is primarily because the management of container logistics provides direct support to vessel logistics. Their involvement in freight logistics remains unclear and uncertain.     

Planning and control of paratransit services in Hong Kong

As paratransit services, Hong Kong's taxis and public light buses (PLB) carried some 30% of the 9.7 million daily public transport boardings in Hong Kong in 1988. Most of the vehicles are individually owned, and services are operated as commercially viable concerns. While operators have a high degree of operational flexibility, taxis and PLBs are closely regulated by the Government. The fleet sizes are controlled by licensing. There is a system of zoning for taxis, and operational prohibitions and restrictions for PLBs. Over the years, Hong Kong has developed some practicable means of operational control on taxis and PLBs. It has been 20 years since PLBs were legalized in 1969. The transition experienced by this mode, from no control to regulated operations, signifies a major step forward from the point of view of transport administration. The Government's participation in the planning for PLB services has guided the development of this mode. In this paper, the planning and control mechanisms for Hong Kong's paratransit modes are introduced. Identified deficiencies are also discussed.     

Carbon dioxide emissions from port container distribution: Spatial characteristics and driving factors

Port carbon dioxide (CO₂) emissions in China have become an ever-increasing public concern due to their significant impacts on human health and the environment. However, existing studies focus mainly on CO₂ emissions from vessels calling at the ports and cargo handling within the ports, paying little attention to the inland distribution networks. To fill this gap, this paper proposes an easily implemented method for calculating CO₂ emissions from port container distribution (PCD) and investigates their spatial characteristics and driving factors. By analyzing 30 container ports in China, the main findings are as follows. First, road transportation is the major contributor of CO₂ emissions from PCD due to the lack of rail and inland water transportation. Second, PCD carbon emissions exhibit significant local spatial clustering. That is, ports with similar geographical locations tend to present a similar pattern of PCD carbon emissions. Third, as suggested by the spatial Durbin model, PCD carbon emissions are negatively determined by local gross domestic product, number of port berths, but are positively determined by local tertiary industry value and highway freight volume, and waterway freight volume in both local and neighboring ports. These results provide empirical insights into cross-port collaboration in reducing PCD carbon emissions.     

A frequency-based maritime container assignment model

This paper transfers the classic frequency-based transit assignment method of Spiess and Florian to containers demonstrating its promise as the basis for a global maritime container assignment model. In this model, containers are carried by shipping lines operating strings (or port rotations) with given service frequencies. An origin–destination matrix of full containers is assigned to these strings to minimize sailing time plus container dwell time at the origin port and any intermediate transhipment ports. This necessitated two significant model extensions. The first involves the repositioning of empty containers so that a net outflow of full containers from any port is balanced by a net inflow of empty containers, and vice versa. As with full containers, empty containers are repositioned to minimize the sum of sailing and dwell time, with a facility to discount the dwell time of empty containers in recognition of the absence of inventory. The second involves the inclusion of an upper limit to the maximum number of container moves per unit time at any port. The dual variable for this constraint provides a shadow price, or surcharge, for loading or unloading a container at a congested port. Insight into the interpretation of the dual variables is given by proposition and proof. Model behaviour is illustrated by a simple numerical example. The paper concludes by considering the next steps toward realising a container assignment model that can, amongst other things, support the assessment of supply chain vulnerability to maritime disruptions.     

The impact of terminal handling charges on overall shipping charges: an empirical study

Before the introduction of terminal handling charges (THCs), traditional freight rates included both ocean freight charges and terminal charges at ports. Since the introduction of THCs in 1991, the freight rate has become a “port-to-port” charge that covers only the sea leg, while the on-shore costs of using the container terminals are charged separately as THCs. Although both THCs and freight rates are collectively set by conferences, in this study we argue that the former are easier to enforce because they are invariant to other attributes such as haulage distance, inland transport services and types of commodity being shipped. This argument is consistent with the empirical findings from this study that suggest the separation of ocean freight rates from terminal charges has increased the overall shipping charges. In addition, we find that THCs affect the Hong Kong container handling industry by lowering its throughput.     

The Vehicle Routing Problem: The Case of the Hong Kong Postal Service

Abstract

With the growth in population and development of business activities in Hong Kong, the range and level of services provided by Hongkong Post have multiplied. However, the schedule of its postal vehicles, including mail collection and delivery, is still constructed manually on a daily basis, based on the experience of staff and transportation reviews. In this paper, the problem of scheduling a set of n collection points (District Post Offices) from a depot (General Post Office) in Hong Kong Island is addressed. The objectives pursued are the maximization of resource utilization and minimization of operation costs. In other words, the variable cost is expected to be reduced. To achieve these goals, an integer linear programming (IP) model of the vehicle routing problem (VRP) is developed in an effort to obtain optimal solutions. As the model involves computational complexity, a commercial software package CPLEX is used to solve the problems efficiently. The results show that the proposed model can produce optimal vehicle routes and schedules.     

In Search of the Link between Ship Size and Operations

Abstract

Since 1990s the liner shipping industry has faced a period of restructuring and consolidation, and been confronted with a continuing increase in container vessel scale. The impact of these changes is noticeable in trade patterns, cargo handling methods and shipping routes, in short ‘operations’. After listing factors influencing size, growth in container ship size is explained by economies of scale in deploying larger vessels. In order to quantify economies of scale, this paper uses the liner service cash flow model. A novelty in the model is the inclusion of +6000-20-foot Equivalent Unit (TEU) vessels and the distinction in costs between single and twin propeller units on ships. The results illustrate that scale economies have been – and will continue to be – the driving force behind the deployment of larger container vessels. The paper then assesses the link between ship size and operations, given current discussions about the increase in container vessel scale. It is found that (a) ship size and operations are linked; (b) optimal ship size depends on transport segment (deep-sea vs. short-sea shipping, SSS), terminal type (transhipment terminals vs. other terminals), trade lane (East-West vs. North-South trades) and technology; and (c) a ship optimal for one trade can be suboptimal for another.     

Traffic consolidation in East Asian container ports: A network flow analysis

The proliferation of hub-and-spoke operations in maritime container transportation has resulted in the widespread consolidation of traffic flows. Utilising liner shipping network configurations, this paper assesses the impact of freight traffic consolidation in the container port industry by exploring the spatial pattern of traffic flow movements and identifying the variety of roles that container ports play within this context. On the basis of the network concept, the spatial inequality of freight traffic consolidation is determined by the density and direction of all meaningful connections (i.e. significant flows) identified by applying Multiple Linkage Analysis (MLA) to an initial traffic flow matrix.The effectiveness of the chosen methodology is tested empirically using a sample comprising the 18 major container ports in East Asia, together with another 21 important container ports located on the East–West trading route. Based on this sample network, the spatial structure of traffic flow consolidation reveals the nature and structure of hub-and-spoke operations within a port system, the relative hub-dependence of ports, the variety of roles which individual ports play within the overall structure of inter-port interactions and the hierarchical configuration of the port industry structure. The paper concludes that MLA offers new insights into the distributional inequality of traffic flows, the spatial and economic interactions between ports and the extent to which hinterlands overlap. Furthermore, the analysis clearly shows that inter-port relationships can no longer be evaluated as isolated phenomena; any change in a specific port’s competitiveness will directly impact upon the structure of the whole maritime transportation system. Port authorities and terminal operators will need, therefore, to carefully analyse and disentangle specific inter-port relationships in order to provide the most appropriate basis for their decision making.     

Scheduling of Intelligent and Autonomous Vehicles under pairing/unpairing collaboration strategy in container terminals

A new class of Intelligent and Autonomous Vehicles (IAVs) has been designed in the framework of Intelligent Transportation for Dynamic Environment (InTraDE) project funded by European Union. This type of vehicles is technologically superior to the existing Automated Guided Vehicles (AGVs), in many respects. They offer more flexibility and intelligence in maneuvering within confined spaces where the logistic operations take place. This includes the ability of pairing/unpairing enabling a pair of 1-TEU (20-foot Equivalent Unit) IAVs dynamically to join, transport containers of any size between 1-TEU and 1-FFE (40-foot Equivalent) and disjoin again. Deploying IAVs helps port operators to remain efficient in coping with the ever increasing volume of container traffic at ports and eliminate the need for deploying more 40-ft transporters in the very confined area of ports. In order to accommodate this new feature of IAVs, we review and extend one of the existing mixed integer programming models of AGV scheduling in order to minimize the makespan of operations for transporting a set of containers of different sizes between quay cranes and yard cranes. In particular, we study the case of Dublin Ferryport Terminal. In order to deal with the complexity of the scheduling model, we develop a Lagrangian relaxation-based decomposition approach equipped with a variable fixing procedure and a primal heuristics to obtain high-quality solution of instances of the problem.     

Post-entry container port capacity expansion

Port capacity development is a critical strategy for the growth of a new port, as well as for the development of existing ones, when both new and existing ports serve the same hinterland but have different competitive conditions. To study this strategy, we develop a two-stage duopoly model that comprises the pricing and capacity decisions of two heterogeneous players serving an increasing market. We identify the necessary condition for a port to increase its profit through capacity expansion, and characterize the condition when preemptive pricing by the dominant player is neither credible nor effective in preventing the smaller player from gaining market share. We also find the pure-strategy Nash equilibrium in the capacity expansion game for two ports that have different price sensitivities, as well as different operation and capacity investment costs. We apply the model results to the container port competition between Hong Kong and Shenzhen after Shenzhen port started its container operation in 1991. Our analysis explains the transition of market power from monopoly to duopoly, the fast development of Shenzhen Port, and the possible market structure changes with the continuing increase in demand.     

Challenges in Managing Empty Container Movements at Multiple Planning Levels

Empty container management deals with repositioning empty containers at minimum costs while fulfilling empty container demands. Due to imbalances in trade, some areas have a surplus of empty containers, while others have a shortage. Therefore, empty containers need to be repositioned globally to make sure that sufficient empty containers are available everywhere. Besides, empty containers need to be repositioned regionally between shippers, consignees, inland depots, terminals and ports in order to fulfil demand. In this paper, the focus is on the empty container management problem at a regional level. The problem is described in detail and opportunities for reducing empty container movements are discussed. Decisions to be taken at each planning level (strategic, tactical and operational) are described, and for each planning level, a detailed overview of planning models proposed in the literature is presented. Planning models considering decisions at several planning levels are discussed as well. Finally, interesting opportunities for future research are identified.     

An Institutional Analysis of Coordination in Liberalized Port-related Railway Chains: An Application to the Port of Rotterdam

Abstract

The European railway market has gone through a period of liberalization over the last two decades. The liberalization of the railway market has also affected port-related railway transport. Efficient port-related transport chains are key in the competition among ports, however providing this efficiency is to a large extent a coordination challenge. Many forms of coordination are needed to ensure that the railway chain operates efficiently, including the bundling of cargo, and good organization between railway companies, terminal operators and the infrastructure managers to realize an efficient use of assets. From the literature, it appears that less attention has been paid to the economic organization of port-related railway transport in general, and specifically in the new liberalized institutional environment. The goal of this paper is to come up with a framework to better understand the issue of coordination in port-related railway chains in a liberalized institutional environment. This paper presents a conceptual framework rooted in Transaction Cost Economics (TCE). Based on an in-depth study into coordination in liberalized container railway market at the Port of Rotterdam, empirical illustrations are used to adjust the TCE approach toward a dynamic model influenced by Douglas North's theory on economic and institutional change. Empirics from the port of Rotterdam show that new players have entered the railway market and their role has changed. This paper shows that coordination of railway operations has become more complex after the regime change. From a port perspective, liberalization does not lead to an optimal allocation of resources in a process that is highly operationally interdependent. In the liberalized environment, coordination arrangements are necessary to enable efficient coordination of railway operations in Rotterdam.