Achieving terminal management through stakeholder cooperation

Following is the keynote industry delivered by SLPA Chairman Dr. Priyath B. Wickrama at the Seatrade Middle East Maritime Conference recently in Dubai on the subject of ‘Modern Container Terminals’:

Efficient terminal management could be achieved with the co-operation of multiple stakeholders. Shipping lines, vessel operators, individual container terminals, freight forwarders, importers, exporters, share holders and investors of terminals are extremely important among them.

In addition to that, governments, customs, various other stakeholders such as coast guard service, navy, police etc. also contribute immensely in the maritime industry by ensuring efficiency, greater productivity, and security and safety aspects. We have been continuously dealing with these stakeholders in order to achieve best results.

All such stakeholders are concerned with the aspects pertaining to international trade such as quality of service, punctuality of sailing, the care with which cargo is carried and the higher productivity and efficiency.

Global economic crisis

The global economic crisis would invariably create numerous challenges to the terminal operators. The greatest challenge is the new wave of larger vessels. As shipping lines add larger vessels to their fleets and call only at limited number of terminals to keep down their transport cost, terminals are under pressure to provide deeper draught berthing facilities to accommodate larger vessels.

Terminal operators those manage to maintain higher productivity and high service levels could retain their existing business and attract new volumes. They have responsibility to take all efforts to protect the air and water along the shores and the health of people those using the port facilities with lower pollution levels.  It is the responsibility of the terminal operators to find solutions to these challenges, with minimum cost.

Mainline container services have been ramping up the size and capacity of container ships from cellular ships of around 1,500 TEUs to ultra large container ships of approximately 16,000 TEUs today. However, orders have been placed for more than 20,000 TEUs capacity VLCCs capable of stacking 24 containers across the deck. Such larger vessels will be used to achieve economies of scale.

Terminal operators have to invest colossal sum of money for the design, construction, operation and maintenance of deeper draught berths to accommodate larger vessels. Current infrastructure of most of the ports and terminals does not permit expansion of facilities due to heavy cost on dredging and modification of such existing facilities.

Since most of the terminals have physical constraints such as bearing capacities of quay walls, rail span and design specifications, terminals have no option rather than invest heavily on new terminals with necessary draught etc. to cater for the demand to accommodate larger vessels.

Overall efficiency of ships

It has been established that the overall efficiency of ships in performing any given service is closely related to the time spent in that service. The desirable cost of ship’s time could be quantified in economic terms by removing delays to ships. Such improvements could be achieved by minimising vessel turnaround time.

Terminal users expect greater productivity and efficiency with improved operational performance. Therefore, terminal operators have to equip their terminals with gantry cranes, transfer cranes, harbour cranes etc. with enhanced dimensions and new areas of applications to ensure higher crane productivity.

Terminals should be developed with adequate space with facilities to stack, import, export, transhipment, reefer and overweight containers separately to ensure minimum truck turnaround time.

In addition to all these huge investments to look after the interests of vessel operators, they now have another responsibility to protect the nature. Emission levels in ports are generally high. In order to reduce pollution levels in ports, terminal operators should be concerned with green aspects which reduces global imbalance for longer survival.

Challenges could be successfully faced with improvement of navigational facilities resulting improvement in berthing and sailing of vessels. Access channels should be adequately deepened to navigate any larger vessel to the terminals.

So far as vessels are concerned, aids to navigation are among the most important accessory facilities. Terminal operators have to invest on improving facilities such as vessel traffic management solutions and various other aids to navigation to manage effective vessel sailing and berthing arrangements.

The ports authorities have to increase width of the port entrances and maintain larger turning circle in the harbour basin to manure high LOA vessels. It will be a prerequisite to use high powered tugs to pull and push larger vessels.

Improved berth productivity

In addition to improving navigational facilities, terminal users expect improved berth productivity. Hence, terminal operating companies have to improve infrastructure facilities at the berths. Along with the deeper draught berths, cranes with longer outreach such as 24 across and high air draught, twin and tandem lift operation facilities should be deployed.

Allocation of specific time slots for regular callers with a view to manage optimum utilisation of berths will be another requirement which should be addressed by the terminal operators.

In this manner, deploying mega cranes, reducing non operational time, allocating dedicated berths are some of the steps those should be taken to improve berth productivity.

Terminals should be developed with facilities for effective yard allocation by introducing systems such as cargo segregation, expert decking tactics, yard marshalling etc. Ample yard space should be made available by moving local cargo to locations outside the terminal to create more capacity in the yard.

Of course, yards should be equipped with modern handling equipment such as RTGs with high stacking capacity, AGVS etc. Efficient gate operation systems minimise truck turnaround time and processing time which will help to improve yard productivity.

Pricing structure

Steps that should be taken as discussed up to now will have huge cost implications to every terminal operator. We do not have alternative course of action, other than providing those facilities if you really want to survive under current market scenario.

However, we do not have the flexibility which shipping community has on pricing structure. These circumstances bring terminal operators under pressure from two directions. They should facilitate customers in order to survive in the industry, with limitations to increase tariff to recover investment whilst being competitive in the market.

Terminal operators have to minimise cost of operations at this moment due to the prevailing situation. We have to be really innovative to find solutions and should deploy a team to address these issues on a continuous basis.

Some of the existing operations we have are prime route application, double dipping operation, twin tandem lift spreader operation, optimum utilisation of yard space, minimum route operation and optimum HR plans etc.

Port management and terminal operations are involved with various types of systems. Though most of these systems could be interconnected, they have been developed as isolated systems resulting in high level of installation and running cost and HR requirement.

A well developed single system where all processes could be run will minimise the cost, increase the efficiency, minimise delay and as well as reduce the involvement of HR. Therefore, it is time that terminal operators think innovatively to create a team to address all these challenges with the assistance of modern sophisticated technology.

Forward looking HR plan

Terminal operators expect optimum yield by utilising minimum HR involvement. Since terminals are not totally automated, a considerable labour force is still required to handle increasing throughput with higher level of berth, yard and vessel productivity.

There is a need for committed and skilled work force to face challenges of the terminal operators with the implicit technological changes.

A forward looking HR plan to give the employees the right skills, knowledge, positive attitudes through training and development is essential for the optimum utilisation of human resources. It is absolutely necessary to guide them to maintain the right mindset.

Whilst all steps are taken for the development of infrastructure facilities, terminal operators have to be mindful that human factor has been the decisive factor in achieving greater productivity and objectives and goals set by the maritime sector.

Port of Colombo

Let me briefly talk about the situation in Sri Lanka. Due to the strategic location, Sri Lanka has become the gateway to the Far East, the Middle East, Europe, Africa, the Oceania and the Indian subcontinent.

This has stimulated the development of relations between seaports and the rest of the country.

Let me now explain the steps taken by the Sri Lanka Ports Authority to address the challenges and opportunities facing the terminal operators.

We have been able to maintain higher productivity levels in all terminal activities with the added capacity and capabilities of current port of Colombo. Our fleet of equipment has been strengthened by adding modern equipment such as eight quay gantry cranes with four twin lift cranes, 30 new transfer cranes with high stacking capability, 50 terminal tractors and a new feeder berth to improve the feedering network via Colombo and also with the addition of new equipment and yard space, we have added close to 600,000 TEU annual capacity. We have spent approximately US$ 200 million only to upgrade these facilities.

Due to physical constraints in existing port, we cannot accommodate more than 10,000 TEU ships. To overcome this issue, we decided to construct a new port. The Colombo Port Expansion Project has been launched to develop Colombo South Harbour with infrastructure facilities to meet international standards, as a short term and medium term development program.

The new Port will consist of three 1,200 metre long container terminals with three main berths per each terminal to handle mega container carriers. The dredged depth up to -20 meters in the 265 hectare basin allows the turning +450 m LOA vessels.

The SLPA will add 7.5 M TEU capacity after completion of the third stage of the Colombo Port Expansion Project. The terminals will be operational by August 2013 with latest equipment. The East Container Terminal will be operated by Sri Lanka Ports Authority and the South Container Terminal is to be operated by Colombo International Container Terminals on BOT basis. We will call tenders for the West Container Terminal in the near future, depending on requirement.

Hambantota Port

Whilst the Colombo Port is being developed mainly with container terminals, a modern port has been constructed in Hambantota which is about 10 nautical miles away from the shipping route from the East to the West. The port will provide world class infrastructure facilities for break bulk, bulk and other service operations.

Conventional cargo presently handled at Colombo Port will be diverted to Phase I and II of the Mahinda Rajapaksa Port in Hambantota, with the conversion of some of the general cargo berths in Colombo as container feeder berths. Such diversion of other operations to Hambantota will create more facilities for container handling at the Colombo Port.

Sri Lanka Ports Authority has designed the third and fourth phases of the Hambantota Port with more than 20 million TEU annual capacity to handle containerised cargo with a view to cater for the growing demand in East-West main shipping route.

The Port development projects illustrated above will ensure Mahinda Rajapaksa Port in Hambantota to function as a service, naval and logistic hub with free port facilities. We hope to promote manufacturing, value addition, MCC etc. in this port.

With an investment of more than US$ 20 billion, innovative solutions and cost effective methods which are being taken by the Sri Lanka Ports Authority will ensure servicing our valued customers to their satisfaction with greater productivity and efficiency at container terminals in our seaports.

In addition to that, we have created many investment opportunities to attract investors to meet the growing demands of the Indian subcontinent with the best connectivity you can get. Therefore, we invite you to visit our terminals and experience modern facilities and effective methods available in Sri Lankan ports.