The Oxford Dictionary (7th Edition, 1982) defines capacity as the maximum amount that can be contained, received, experienced or produced.
The Tioga Group (2010) study of U.S container ports is the most comprehensive analysis of container port productivity and capacity. The Tioga Group (2010), Merckx (2013) and UNCTAD (1999) outline that the capacity of a container terminal has the following constraints:
• Container yard area and stacking height – enough space and density is required to avoid congestion
• Operating hours – enough hours and labour hours are required to service the entire vessel
• Berth length and draft – berths need to be long and deep enough, with enough cranes to avoid vessels waiting for each other causing delays
Evaluation of the capacity of the container terminal using the above factors assumes that the berths and yard space are dedicated to container operations, as is the case in most large container terminals, rather than a mixture of container and bulk operations. The inputs to the terminal operations, which seek to maximise that productivity and utilisation of capacity in the five dimensions above, are labour, capital equipment (such as gantries, straddles or forklifts in the yard and the wharfside crane), land and systems and technology used in organising and optimising terminal
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infrastructure and labour.
There were three methods employed by the Tioga Group (2010) to calculate container terminal capacity. One was a calculation of the yard capacity, second was the wharf capacity and third was the vessel capacity. The yard capacity was completed through the calculation:
Total annual throughput capacity = the number of container slots available x the annual rate of slot turnover
The number of slots available is equal to the total area of the container terminal divided by the slots per acre and is dependent upon the equipment and the stacking technique employed. The slot turnover is dependent upon the throughput and average dwell time of the terminal. Dwell time is an important factor in the analysis, and is information not often published in New Zealand port statistics. Merckx (2013) suggests that a dwell time decrease of 50% (i.e. 6 days to 3 days) gives capacity increase of 100% across the six terminals within his analysis.
The Tioga Group (2010) suggests completing this yard capacity calculation under two scenarios, one at peak and one at a sustainable level, as it is unlikely that the maximum annual slot turnover is sustainable day in day out, although it is theoretically possible as a peak demand or loading on the system. Their study team assumed that the sustainable container yard capacity was 80% of the peak container yard capacity, following an industry rule of thumb.
The 1999 Port Master Plan for the Port of Anchorage, Alaska, United States of America10 uses the
phrases “maximum practical capacity” and ‘”sustainable practical capacity”. The Facilities Plan section outlines that the maximum practical capacity of a terminal is defined as the high end of a realistic operating scenario, representing the peak operation of a terminal. Sustained operation at this level for a significant period of time is generally uneconomical, impractical and unsafe. The section goes onto also suggest that prolonged operations at 100% of maximum practical capacity tend to drive up operating and maintenance costs and are considered unrealistic for long durations. Therefore a 75% to 85% capacity utilisation is assumed as a sustainable practical capacity for the basis of terminal and port planning and future facility demand analysis. This is a suggestion aligned with the Ports of Auckland 2008 Port Development Plan11 which suggested that “peak yard capacity is critical for
10
http://www.muni.org/Departments/port/Pages/MasterPlan.aspx retreved 4 October 2014 at
9:52am.
11
http://www.poal.co.nz/news_media/publications/POAL_port_development_plan_2008.pdf
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handling larger vessels, because of the larger container exchanges which need to be accommodated” (page 13).
Liu (2010) suggests that ports are required to keep operational levels well below capacity as a means of providing the platform for growth. He suggests that “productive headroom not only attracts more traffic to the port, but it is a signal of its reliability, a crucially important factor for port users” (page 86). Productive headroom is especially important in high growth or volatile markets.
Merckx (2013) suggests an alternative calculation of yard capacity being:
Total annual throughput capacity = [the number of ground slots available x maximum stack height x 365] / [average dwell time x peaking factor]
Where the peaking factor is the maximum stack height divided by the average stack height. This is a calculation method widely used in terminal capacity analysis, since the first being outlined by Dally and Maquire in their 1983 publication Container Handling and Terminal Capacity.
The information requirements are different for the two different yard capacity calculations. The most suitable calculation method will therefore require examination of the information available.
The wharf/crane capacity was completed through the calculation:
Total annual throughput capacity = the number of container cranes available x the number of crane hours available to each crane x average crane rate
The number of cranes available will depend upon the infrastructure availability of individual ports. The Drewry (2010) report concludes that the average annual volume handled per gantry crane across the industry is only around 55-65% of each crane's "real world" capacity (i.e. taking into account downtime for maintenance and typical maximum berth occupancy levels).
The analysis of maximum vessel capacity carried out by the Tioga Group (2010) evaluated the vessels calling at a port and examined the utilisation of slots on a vessel when entering and exiting a port. This method is not appropriate for New Zealand ports as the vessel call rotation which calls to multiple New Zealand ports in between entering and exiting New Zealand trade waters means that vessel utilisation would typically be low. Also, the utilisation of vessels is not something that the ports have great influence over.
Other academic research papers use simultaneous equations and mathematical models to model the capacity of each section of the container terminal and compute the capacity of the container terminal based on the model of each section and the relationship between each of the sections (Huang, Hsu,
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Chen, Ye and Nautiyal (2008)). Simultaneous equations and large mathematical models are difficult and timely to set up and provide very little benefit to the analysis of the individual equations outlined above. Simultaneous equations also present challenges when reporting the results of analysis due to the inherit detail and complexity.
Many of the largest international container terminals are currently reaching their maximum capacity. Henesey (2006) illustrates that this is the case at large North West European terminals such as Antwerpen, Bremerhaven, Hamburg, Rotterdam and Southampton with utilisation, in 2004, of 92.9%, 95.5%, 93.2%, 92.5% and 99.3% respectively. Even though these ports have a container throughput up to 5 times that of New Zealand ports, they are still struggling with the same problem of maintaining and growing capacity in the face of rapidly increasing throughput demand while maintaining productivity levels to shipping lines.
While these North West European terminals are operating at high levels of utilisation, Drewry (2010) suggest that Asian and Middle Eastern terminals generally achieve considerably more intensive use of their resources (quayline, cranes and land) than European ones and that North American terminals are generally at the lower end of the scale, particularly in terms of the intensity of land usage.
There are difficulties associated with operating at a high capacity utilisation and maintaining suitable levels of productivity to satisfy container shipping line customers. Haralambides (2012) outlines that once 70% port capacity utilization has been reached, congestion starts to set in. And, today, congestion is not an option given the supply chain pressures and dependencies. However, excess capacity is difficult to sell to the taxpayer or investor and many ports continue to operate effectively beyond this level of utilisation.