Intermodal Transportation and
Terminal Operations
Transportation Logistics
Spring 2009
Intermodal Transportation
• Includes more than one mode
– air, rail, road, water
– only truck is only practical single mode trip
• Typically refers to containerized goods
– as opposed to bulk or general cargo
– requires containers
– less labor than traditional freight handling
• The majority of the costs are incurred between
modes (in terminals)
Bulk Cargo
Wet bulk cargo refers to fluids like oil
Dry bulk cargo refers to non-fluids such
as grain, coal, etc..
Many goods that used to be shipped as
bulk cargo (grain, bananas, coffee beans)
are now shipped in containers (IP grain)
Historically well developed commodities
General Cargo
• Whatever needs moving
• Flatbed trucks for odd-shapes
• General cargo vessels
Intermodal Containers
Primarily International
There are many varieties of
containers….
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Standard containers (20’, 40’, 45’ height 8’6’’)
Hard top containers (removable steel roof)
Open top containers
Flat racks
Domestic containers (53’)
Refrigerated containers (require clear space)
Tank containers
High cube container (9’6’’ tall)
• One 20’ container is a Twenty foot Equivalent Unit (TEU)
Marine Terminal Actors
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Steamship lines (APL, Cosco)
Terminal Operators (MTC, SSA)
Port Authorities (Port of Seattle)
County Governments (Pierce County Terminal)
City Governments (City of Seattle, Seattle DOT, WSDOT)
Security agencies (DHS)
Drayage drivers and Licensed Motor Carriers
Importers or Shippers (WalMart)
Freight forwarders and expeditors
3PLs or Logistics providers
Customs brokers
CBP
Labor Unions (ILWU, Teamsters)
Interest Groups (Waterfront Coallition)
EPA
Railroads
Own objectives and remuneration or incentive schemes
Intermodal issues
• Transportation agencies are still structured around
modes
• Transportation companies are still structured around
modes, in fact they had to be during regulation
• There has been much growth in intermodal
transportation companies since deregulation (3PLs,
IMCs, and to some extent Steamship lines)
• Transportation infrastructure is build by modal agencies
that historically did not interact
Terminal
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A station where freight is received or discharged
Situated at the end
Placed at a boundary
A point or part that forms the end
From terminus (end)
• The name reflects their historic role
• In the intermodal world we usually refer to
intermodal yards rather than terminals
Terminals or interchanges occur in
all modes
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Airports
Bus terminals
Marine terminal or port
Ferry terminal
Train station
Rail yard or terminal
Cross-dock facility
Distribution center
Intermodal yard
• They have common characteristics, I’ll focus today on
marine ports and intermodal yards
Characteristics of Freight Terminals
Infrastructure
Modal access (dock, siding, road), unloading areas
Equipment
Intermodal lifting equipment, storing equipment
Storage
Yard for empty and loaded containers
Management
Administration, maintenance, access (gates), information
systems
Trade
facilitation
Free trade zone, logistical services
Distribution
centers
Transloading, cross-docking, warehousing, temperature
controlled (cold chain)
Storage depot
Container depot, bulk storage
Container
services
Washing, preparation, repair
Core
Ancillary
Container Handling
Cause
Outcome
Consolidation
Transferring the contents of smaller containers into larger containers (e.g.
three maritime 40 foot containers into two 53 foot domestic containers).
Cost savings (number of lifts). Time delays.
Weight compliance
Transferring the contents of heavy containers into loads meeting national or
regional road weight limits.
Palletizing
Placing loose (floor loaded) containerized cargo unto pallets. Adapting to
local load units (e.g. europallet).
Demurrage
Handing back containers to owner (maritime shipping or leasing company) by
transferring its contents into another load unit (e.g. domestic container).
Equipment availability
Making maritime containers available for exports and domestic containers
available for imports. Trade facilitation.
Supply chain
management
Terminal and transloading facility as a buffer. Delay decision to route freight
to better fulfill regional demands. Perform some added value activities
(packaging, labeling, final assembly, etc.)
Shipping Lines and Importers have different
goals for container management
Advantages
Disadvantages
Importers
Reduction of unit transport costs (three
maritime 40 footer containers into two
domestic 53 footers).
Added-value activities (sorting,
packing, labeling, etc.).
Routing flexibility through
postponement.
Transloading costs.
Loss of at least one day
of inland transit time.
Possible shortage of
domestic containers.
Not all cargo suitable.
Reconciling different
container loads
(additional delays).
Risk of damage or theft
of cargo during
transloading.
Maritime
shipping
Limit repositioning of empty containers.
Risk of container damage.
Higher asset utilization (faster container
Less equipment available
turnover).
inland for exports.
Port Operations
Quay Crane
Vessel
Chassis
Local Storage Gate
Discharging container flow
Loading container flow
Wheeled versus Grounded
Port productivity metrics
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TEUs per hectare
TEUs per annum
Dwell time
Terminal time
Crane productivity
– Crane cycle time
– Lifts per hour
– Moves per hour
Port Characteristics
• Hong Kong and Singapore, the traditional
Asian hubs are trans-shipment facilities
• New Asian ports in China are export
facilities
• US Ports have historically served as
storage facilities, storage has been cheap
(sometimes free)
• Land has historically been inexpensive in
the US but labor has been costly
While throughput has increased
dramatically density has not
P roductivity ofw estcoastports during the years 1985-2005
5
4
Throughput
G ross Term inalA rea
3
D ensity
B erth utilisation
2
B erth length
1
Years
05
20
03
20
01
20
99
19
97
19
95
19
93
19
.0
91
19
89
19
87
19
85
0
19
P roductivity for differentm easures
6
West Coast Terminal Area has
increased
Term inalgrow th over the period 1985-2005
35000.0
25000.0
Term inalarea
20000.0
B erth Length
15000.0
10000.0
5000.0
Years
05
20
04
20
03
20
02
20
01
20
00
20
98
19
97
19
96
19
94
19
89
19
88
19
85
0.0
19
T erm inalarea(acres)
30000.0
Primarily at California ports
T erm inalarea variation at the w est coast ports
6,000
Long B each
4,000
Los A ngeles
O akland
3,000
S eattle
T acom a
2,000
V ancouver
1,000
years
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
0
1985
T erm inalarea(acres)
5,000
Similarly with berth length
B erth length variation atthe w estcoastports
120,000
Long B each
Los A ngeles
80,000
O akland
S eattle
Tacom a
60,000
V ancouver
40,000
20,000
Years
05
20
03
20
01
20
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
0
19
B erth length(feet)
100,000
Throughput density (TEUs/acre)
variation across west coast ports
Throughput density(TEUs/acre)
Throughput density variation across west coast ports during 1985-2005
7000
6000
5000
Long Beach
Los Angeles
Oakland
Seattle
Tacoma
Vancouver (BC)
4000
3000
2000
1000
0
85
19
86
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87
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88
19
89
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90
19
0
1.
9
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2
99
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1
93
19
94
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95
19
Year
96
19
97
19
98
19
99
19
00
20
01
20
02
20
03
20
04
20
05
20
Berth length (TEUs/ft) utilisation at
west coast ports
350
300
250
Long Beach
Los Angeles
Oakland
Seattle
Tacoma
Vancouver (BC)
200
150
100
50
Year
20
05
20
04
20
03
20
02
20
01
20
00
19
99
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98
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97
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96
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95
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94
19
93
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99
2
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91
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19
90
19
89
19
88
19
87
19
86
0
19
85
Berth length utilisation(TEUs/ft)
Berth length utilisation across west coast ports during 1985-2005
Operational Improvements
• Technology implementations
– RFID, GPS, OCR, automation
• Land area utilization (stacking)
– Rail mounted gantry cranes
• Extended gate hours
• Truck appointment systems
• Crane Utilization
– Double cycling
• Increase Intermodal Percentage
– containers typically have shorter dwell times
Productivity Improvements
• As is true across the board in
transportation, infrastructure is expensive
to build, or impossible to build
• Solutions must be found to manage
demand and utilize infrastructure better
• There is evidence our ports are
“unproductive” and that we can expect
better utilization of the infrastructure
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P roductivity values
Global Comparison
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Average crane productivity at
different container ports
Average crane productivity
50
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40
35
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Moves/hr
Transhipment percentages at Asian
ports
Facility Location
Prof. Anne Goodchild
Spring 2009
Facility Location
• Locating a facility
– Distribution center
– Store
– Factory
– City
• Why is there a city in Seattle, San
Francisco, New York…….?
• Why is there a warehousing district in the
Kent Valley?
What about inventory cost?
• With same operational practice inventory
cost is the same.
• Not comparing different logistical
structures or inventory management
strategies.
Facility location problem solution
approach
• Minimize distance traveled:
– Between customers and facility
– Between suppliers and facility
– both
• Discrete locations to consider
– With locations of customers and suppliers known we
can use numerical optimization methods
– As with some of the other optimization problems, the
problem can get very large very quickly so there are
heuristic methods for solving the problem reasonably
well in a short amount of time
Single Facility Location Problem
• A facility can be a machine, factory, retail
outlet, etc.
• For each customer
– Calculate frequency of visits
– Calculate cost of visit
– Minimize total distance traveled by all
customers
• Distance Metrics
– L1: Manhattan distance: X+Y
– L2: Euclidean distance: sqrt(X2+Y2)
Solution Methods
• Brute Force: calculate the cost from every origin
to every possible location
– Quickly becomes infeasible
– Possible locations are typically limited and the
problem is solve using optimization software
• Assume demand can be described by a
mathematical function, f(x), where x may be a
vector, and use an approximation
Example 1
• Freight is to be exported from a region of
variable width, lying on one side of a
transportation artery that is 1000 miles long.
• Use the L1 distance metric
• Demand density is 5 units per mile for the first
300 miles, and last 300 miles, but 1 for the
middle 400 miles.
• What is the optimal location of one terminal?
• Cost of travel is $1/mile/unit
Multiple Facility Location Problem
• Locate more than one facility
• The problem quickly gets very large with
multiple locations and customers, so the
brute force method is not recommended
• Many heuristic methods exist that lead to
optimal or near optimal results with fewer
computations
Example 2
• Freight is to be exported from a region of
variable width, lying on one side of a
transportation artery that is 1000 miles long.
• Use the L1 distance metric
• Demand density is 5 units per mile for the first
300 miles, and last 300 miles, but 1 for the
middle 400 miles.
• What is the optimal location of two terminals?
• Cost of travel is $1/mile/unit
Facility selection
• Xij=1 if the demand from source i is assigned to
location j, 0 otherwise
• Cij=cost of assigning a unit of demand from
source i to location j, i=1..n, j=1..m
• di=demand from source I
• K=number of facilities available for placement
• Ij=1 if the facility is assigned to location j, 0
otherwise
• Minimize total cost (TC)
Mathematical Formulation
• Minimize TC=∑i∑jXijCijdi
• Subject to:
– Demand for each source must be assigned to at least
one location: ∑jXij≥1
– Only K locations are to be selected, and only Xij
variables assigning these demand to locations can be
positive so: ∑iXij≤nIj for each j, and ∑jIj=K
• Can be solved by integer programming
Complexities
• Capacity constraints
• Fixed Costs
• Some locations cannot be served by some
facilities
• Continuous location availability
– Single facility
– Multiple facility
• Determining the number of facilities required
• Weights for different customers
Realities
• Typically we don’t need to know with great
precision where to locate a facility
• It is an interplay of availability of land, the
existing transportation network
• Special deals
• Reliability of travel times
• Scale
Transportation Perspective
• Access to mainline transportation routes
that connect origins and destinations
– Highways
– Grades
– Intersections
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Zoning rules
Taxation
Rent or acquisition cost
Incentives
Warehouse or DC Transportation
• Typically used for imports rather than
exports
• Handle primarily containers from the ports
of Seattle and Tacoma
• Also receive deliveries from domestic
moves or land borders
• Provide tax revenue and jobs