Container Terminals and External Environments - Article Example

Container Terminals and external environments Factors in the external environment affecting the operation of Container Terminals: Political: Congestion in computer terminals may result due to delays caused by Government authorities, who require health and other inspections to be completed. Authorities may delay the entry of ships into the terminals due to the need to complete inspection checks and may not be concerned about how efficiently the terminal functions. .(Henesey et al, No date). Political processes and structures may impact upon container terminals. One example of this is that of Container Terminal no: 9 in Hong Kong. This is a large terminal with 6 berths and a capacity for 3 million TEUs. At the very outset, the terminal faced problems in commencing its operations because of a long standing dispute between PRC and the United Kingdom in the allocation of the tender, with the PRC accusing the British Government of favoring British interests in the allocation of the tender. (www.en.wikipedia.org). As a result of the dispute, there was a delay in the execution of the project which also delayed the opening of the terminal and caused losses in Hong Kong, while other terminals such as Kwai Chung Container port suffered from over congestion. As a result, many ships bypassed Hong Kong altogether and moved on to other ports. The different structure of political institutions may also impact upon terminal operations. A study was conducted by Wang and Cullinane (2006) on the relative efficiency of European container terminals and their impact upon supply chain management. They examined 104 of Europe’s terminals and found that in general, the terminals in the UK and Western Europe were most efficient, as compared to container terminals in Eastern Europe. Social: Changes in societal conditions can impact upon the working of computer terminals. For example, in the case of the Kelang Container Terminal in Malaysia, when Government control of the terminal was given up, there was a direct improvement in the domestic welfare of the local inhabitants. In the case of Container 9 in Hong Kong, the construction of the terminal was also delayed due to concerns from members of the public about pollution and a worsening of traffic conditions, hence social pressures can play a role in its operations. In the year 2005, there was heavy rain at Container Terminal 9 which caused a collapse of a stack of containers on a truck driver and resulted in further controversy. It also gave rise to more concern from members of the public about the safety and methods of stacking containers (www.en.wikipedia.org). Technological A centralized software control system for the container terminal which processes tasks sequentially limits its flexibility and ability to adapt to fast paced changes in the global environment. When these various sub systems are processed sequentially, then a failure at one point in the system can affect the functioning of the other sub systems and interfere with timely processing and turn around time of cargo ships. As a result, a coordinated, networked approach in which multi system technology and architecture are utilized is likely to improve the efficiency of operation of container terminals (Botti, no date). Ports are no longer merely handling large amounts of cargo; rather they are becoming handlers of information. A coordinated, multi agent approach in the handling of information is therefore likely to achieve a greater efficiency in operations with coordination between the various firms in order to achieve efficiency in operations. On this basis, Henesey et al (no date) have suggested that the automatic planning of computer terminal operations through a market based allocation of resources may prove to be more efficacious fore the terminal in terms of satisfying its objectives and ensuring that its goals are met. When various sub systems are processed sequentially, then a failure at one point in the system can affect the functioning of the other sub systems and interfere with timely processing and turn around time of cargo ships. As a result, a coordinated, networked approach in which multi system technology and architecture are utilized is likely to improve the efficiency of operation of container terminals (Botti, no date). Economic: According to Linn et al(2003) container terminals play a fundamental role in global trading in an international market, because the level of efficiency of a terminal is likely to have a direct impact upon the country’s competitiveness. The external environment of the port impacts upon the operations of container terminals, if the port functions efficiently, the cost of exports will be lower, which favors the position of the goods that are commercialized abroad. An average cargo liner spends 60% of its time in the port and incurs a cost of 1000 USD for each hour, hence it is of critical importance that the turn around time of a cargo ship should be as quick as possible in order to produce savings in costs (Botti, no date) The expansion of the global economy and the emergence of China as a major economic force has resulted in a rapid increase in containerization, which is also impacting upon the local economies. For example in Belfast, 17.5 million tons of goods were handled and most of it was accounted for by a 9% jump in containerized traffic, which resulted in an additional 200,000 tonnes of cargo being traded. Container terminals in Hong Kong have provided the main avenue for handling trade and container traffic to and from Mainland China, handling up to 90% of container traffic. However, the fact that Hong Kong charges very high terminal tariffs and the basis for this high charge has been that the port provides quality of service. But in recent years, the increasing congestion at Hong Kong, as well as the increased tariffs have impacted significantly on the port’s competitiveness, resulting in other ports in China such as Shenzen, opening up in competition to Hong Kong.(www.legco.gov.hk) Since most container traffic is conditioned around international trade, changes in interest rates, exchange variations as well as inflation can negatively impact upon the optimum functioning of the terminals and may increase the cost of daily operations taking place in the terminals and among the parties involved. Environmental: With increasing levels of pollution, congestion levels at container terminals may exacerbate the problem of environmental damage Adverse effects of container terminals may include vessel or vehicle emissions, wetland encroachment or problems in waste management. With congestion at ports increasing in recent times due to globalization and increased containerization, these issues have become important. References: Botti, Vincent J, No Date. “Multi-Agent system technology in a port container terminal automation”, Retrieved December 1, 2007 from: http://www.ercim.org/publication/Ercim_News/enw56/botti.html * Container Terminal 9. Retrieved December 1, 2007 from: http://en.wikipedia.org/wiki/Container_Terminal_9 * Cullinane, KPB. 2005: “The container shipping industry and the impact of Chinas accession to the WTO”. IN: Cullinane, KPB (ed). “Shipping Economics”, Research in Transportation Economics, Vol. XII, Available from Elsevier, pp. 221-245. * Development and competitiveness of the Hong Kong Container Port.1998. Retrieved December 5, 2007 from: http://legco.gov.hk/yr98-99/english/panels/es/papers/es2311_5.htm * Galal, Ahmed, 1994. “Welfare consequences of selling public enterprises: An empirical analysis”, Oxford. * Hensey, Larry, Wernstedt, Fredrick and Davidsson, Paul, No Date. “Market driven control in container terminal management”, Retrieved December 1, 2007 from: http://www.ide.hk-r.se/~pdv/Papers/COMPIT2003.pdf * Linn, R, Liu, J, Wan Y, Zhang, C and Murty, K.C., 2003. “Rubber tiered gantry crane deployment for container yard operation”, Computers and Industrial Engineering, 45:429-442. Read More