On or Off-Dock?

Nick Elliott seeks the views of experts on the thorny question: what to do with the empties?

Whilst liner operators have long realised that costeffectively repositioning empty equipment to the demand area in an imbalanced trade can make the critical difference between profit and loss, terminal operators have struggled with the problem of storing and handling large volumes of empties over their busy terminals.

Richard Clarke, market sector director, containers at Halcrow, says: "Most European ports have a reasonably balanced empties flow but somewhere like Dubai is almost entirely fulls in, empties out. You have to take each case as it comes. The biggest single thing is to stop your port just being an empties store. In Dublin they used to have fulls come in, go inland, come back as an empty, sit around in the port, go back inland as an empty, come back as a full and then get shipped. This is why Dublin built new depots out by the motorway."

And this is the nub of the issue: storing them on or off-dock. Clarke continues: "One interesting variant I have worked with is an empties store about a mile from the port with a small buffer store on the port.

This buffer store was along the back fence and basically had 10 containers of each type/owner in it. This meant that when some boxes had not arrived, the ship could load say eight extra GE Leasing 40' boxes at the last moment. The buffer was then made up from the main empties store."

As to future developments, Clarke says: "The only innovative handling I have seen is the wide span very high RMGs in Colombo.

Every one else uses top or side lifts. Of course a very large percentage of ports just put empties into their main stacks and certainly this seems to be the case with most automated terminals.

"I think there is a need for very much more careful study of empties operations, " he concludes. "For many ports they are just a nuisance but looking at the stay patterns of containers associated with particular shipping routes can allow much more careful control of empties, particularly in terms of what is stored on terminal and what is put out to remote sites."

Harvey Bauer, marketing manager at TOS provider, Tideworks concurs: " There are really only two broad strategies: one, manage surplus empties on-dock at the marine terminal, or two, stockpile and manage empties at off-dock facilities. One isn't better than the other;

it really depends upon the availability (and cost) of land within the port.

I think that for the most part, from the terminal operator's perspective, the ideal situation, given the availability of land, would be to manage empties on dock."

PROS AND CONS He lists the pros and cons of the on-dock solution as:

1. facilitates and expedites vessel load-out when empties are finally repositioned. They're on hand and don't need to be drayed to the terminal during or just prior to vessel operations 2. reduces/eliminates the additional cost of drayage to the marine facility 3. can potentially provide the terminal operator with additional storage revenues 4. gives the terminal operator the opportunity to provide value-added container services to its customers, such as Container Equipment Maintenance (CEM), reefer pre-tripping, etc. that might otherwise be performed off-dock by other service providers 5. great from a marketing/customer service standpoint 6. Also, from an environmental and traffic standpoint, stockpiling empties on-dock eliminates at least one "unnecessary" truck trip.

And the cons:

1. given the 'peaks' in shipping, on-dock empty storage represents an inefficient utilisation of what is typically expensive land 2. even where on-dock space may be considered 'available' or even 'abundant', stockpiling empties on dock - during peaks - can quickly eat up that surplus space causing terminal congestion 3. in the worst case, stockpiling empties on dock can lead to lost terminal and vessel productivity as the terminal begins to 'choke' with empties.

"The economics of utilising off-dock empty depots start to make sense quickly if port land is at such a premium or so expensive as to outweigh the additional costs associated with draying to the marine terminal.

As to innovation, Tideworks has just launched a new product together with Vantage OPS which can be applied to the management of empties and termed the integration of Vantage performance management software with Mainsail terminal management system to provide real-time visibility and management of marine terminal performance.

Vantage provides Mainsail users with operations dashboards and key performance indicators to sharpen decision-making, communication and optimise operations and financial predictability. Specifically, terminal managers can monitor real-time performance of different production functions over specified periods of time and alert specific personnel when predetermined levels of productivity are not being achieved.

Inventory for various types of equipment, including empties, and space allocations for specific customers can be managed more efficiently. Automatic threshold alerts can be generated to the terminal operator and customer when pre-established thresholds are exceeded. Trucking throughput is now enhanced as Vantage maintains a real-time count of truck moves and can alert personnel to excessive truck dwell time.

A SINGLE INTEGRATED TERMINAL Fellow TOS provider Navis, is also at the vanguard of helping terminals manage the empties. Robert Inchausti on SPARCS N4 product management, had this to say: "We see two trends with respect to managing empties off-terminal: first, that of empty terminal operations becoming more integrated with nearby marine terminals so what was previously managed as two separate terminals using separate systems will in fact act as a single integrated terminal from the customer (shipping line or shipper) perspective. This can be achieved through sophisticated terminal systems which can seamlessly host satellite operations sharing and using critical data across terminals (bookings, vessel schedules, etc. ) or through higher interoperability between terminals systems.

"Today, we see the former as the most likely scenario for productivity increases and total customer visibility since new terminals systems, such as Navis' upcoming SPARCS N4, can integrate multiple operations seamlessly ensuring that data is appropriately shared between operations and facilities. Ultimately it's a matter of achieving visibility and integration at the lowest possible total cost of ownership, something that our upcoming Navis products are very much focused on.

"The latter scenario, where a depot system communicates with a marine terminal system, is unfortunately not very likely due to the lack of sophistication of existing depot systems and the lack of IT resources available at most independent depot operations."

With respect to future trends, specifically for independent empty depot operations dealing with multiple port terminals, Inchausti says: "We believe that the adoption of hosted terminal solutions, also referred to as ASP or Applications Service Provider solutions, is inevitable. We have all the ingredients to make such a system successful, namely, empty terminal operations which are not overly complex from an operational perspective; operations ranging from very small to medium with respect to the volume of activity each handles; a lack of sophisticated IT knowledge or in-house resources, mostly associated with cost constraints faced by most depot operations; a small and IT savvy group of depot customers, specifically the shipping lines and leasing companies, looking for a consistent and predictable source of operational data to manage their downstream operations.

"With respect to managing empties within marine terminals, we see this as a dying proposition over the long term. Two factors drive this: 1. Increasing volumes at marine terminals are making yard space too valuable to devote to empty operations; thus only the required number of empties to meet their vessel and rail activities will ultimately be held on site and even these operations will adopt a JIT (Just-In-Time) management approach with nearby off-dock empty terminals as systems are better able to integrate and 2. Minimising road congestion near marine terminals since empty deliveries to customers can best be managed using empty containers from off-dock empty terminals, which typically also happen to be closer to the users of those empties."


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