Port Development

Introduction

Ports, most like other commercial activities, are constantly changing. Their design
and infrastructure change as the vehicle using them change and their function
develop and alter as the trade passing through them varies in type and quantity.
Cargo-handling technology and changes in labor requirements and culture has also
seen radical developments. In order to understand ports and to try to develop a
general conceptual model for ports, it is important to grasp the general pattern and
causes of these developments and the solutions, good or bad, attempted by various
port managers.

Within the broad national strategy, the development of ports must be

comprehensively planned. The development of a port consists of a combination of
medium-term and long-term planning of new facilities plus-in the case of existing port-
a program of short term action to improve the management, the present facilities and
their use.

2.1 Factors constraining port development

Land access

Interface Port
Infrastructure

Maritime access
access

Port location is constrained by two physical characteristics of the site. The first involves land
access and the second concerns maritime access. Both must be jointly satisfied as they are
crucial for port operations, which rely on a maritime / land interface. This interface takes the
form of a buffer along the coastline (or a river depending on the port site) that experiences,
due to an appropriate site, the accumulation of port infrastructures. Thus, both land and
maritime access can impair port operations and port development since a port benefiting from
good land access but from a poor maritime access will be facing difficulties as well as a port
that has a good maritime access but a poor land access. However, maritime access is the
attribute that can be mitigated the least. Activities such as dredging and the construction of
port facilities are very expensive, underlining the enduring importance of a good port site.
Such a site conveys the best marginal utility to port infrastructure investments.

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Many factors can cause ports to change, and evolve:

- Changes in inland transport infrastructure. For instance the coming of railways

tended to make large ports become larger, meanwhile road transport had the
opposite effect. However the development of large container ship has encouraged
the growth of large regional ports.
- Changes in trade pattern. Port analysis need to consider carefully the effect
which the current trend of regional co-operation in trade and industry will have on
port growth.
- Changes in financial and logistic thinking . In modern port the tendency is not
to store “things” but to use port as industrial areas, such as Rotterdam. More
recently the trend has been to develop “value-added-activities” and become a
sophisticated marketing and distribution center, such as for example Hamburg and
Bremen.
- Length of life. Unlike ships, ports often have to last a long time, sometimes for
centuries. They therefore have to adapt and change over the course of time. Many
of traditional ports were developed and built well over a century ago which means
that many are now faced with a legacy of small antiquated docks.

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2.2 . Phases of port development

The course of development of a port or port terminal usually undergoes phases,

which also indicate its age. Evolution from a traditional break-bulk cargo port to a
specialized unitized cargo port maybe gradual. However it is distinguishable into
qualitative changes that take place in specific periods throughout the overall life of the
port. These phases are as follows:

Phase 1.Traditional General Cargo Flow. A port with break-bulk or packaged bulk
cargo terminals such as for bagged grains or petroleum barrels.

Phase 2. Break-bulk cargoes. When break-bulk cargo flow exceeds an economically

acceptable limits, these cargoes are transported in bulk form and the ports develops a
special bulk cargo terminal. At the same time, the break bulk berths are increased to
accommodate the higher demand.

Phase 3. Unit loads. Unit loads start being carried on conventional vessels in small
quantities in units such as palletes, containers, or package lumber. At the same time,
break-bulk cargo flows, particularly those of bulked break-bulk cargoes, start
diminishing to levels that required separation of cargo terminals for various cargo
categories.

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 Phase 4. Multipurpose Terminal. Unitized cargoes on specialized vessels start
appearing in quantities that do not yet require development of specialized terminal.
Thus a multipurpose terminal is created in which break-bulk cargo traffic is
diminished, although unitized cargo is also handled. At the same time, the
specialization of dry bulk cargo terminals continues.

Phase 5. Specialized Terminal. With an increase in unit loads beyond certain levels,
specialized cargo terminal are created for handling containers, packaged lumber, and
Ro-Ro. The multipurpose terminal of phase 4 is converted into a specialized terminal,
with the addition of specialized cargo handling equipment. Break-bulk general cargo
is reduced further.

It should be noted that in normal situation, the transition from phase 3 to phase 5
should progress through phase 4. So as to provide an opportunity to the port to
increase unitized cargo traffic to volumes that will enable economically feasible
development of a specialized terminal in phase 5.
Moreover, in the event that the port has entered phase 3 of its development, cares
should be taken to avoid creating additional general cargo berth.

2.3 . SWOT Analysis (Strength, Weaknesses , Opportunities and Threats)

A SWOT analysis is a useful way of assessing the potential development concerning

a port’s competitive edge and threats from rival ports in the area. The elements to be
considered in such an analysis will vary but such a list should include:

Internal:

- Port facilities including information technology

- Port costs
- Output
- Value added services

External:

- Geographical position
- Nautical access
- Hinterland connections
- Labor force and social climate
- Institutional structure –Its efficiency and its flexibility to change.

Port Development phase

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First generation port

Up to 1960 a port is merely the cargo interface location between land and sea
transport and can usually be recognized by the following features:
- It is usually isolated from the transport and trade activities, and sees its function in
terms of cargo transfer from ship to shore. It may have an EDI system but this
may well be incompatible with port user system.
- It considers itself an “independent kingdom” with little or no co-operation with local
authorities.
- The different port activities are isolated from each other
- It is usually either a breakbulk or bulk port

Second generation port

This port has developed as a transport, industrial and commercial service center.
It can be recognized by the following features:

- It undertakes and offer industrial and commercial services to its users which are
not directly connected with their loading/discharging activity.
- Port policies and development strategies are based on broader concepts and
more sophisticated management attitudes.
- Industrial facilities are set up within the port area
- It enjoys a closer relationship with transport and trade partner who have built their
cargo transformation facilities in the port area. However, only big shippers benefit.
- It develops a closer relationship with locality
- Different activities become more integrated within the port organization.

Third generation port

This emerges in 1980s principally due to world-wide containerization and

intermodalism combined with the growing requirement of international trade. This port
type can be recognized by the following features:

- The port is seen as the hub of the international production and distribution
network. Management is proactive rather than reactive
- As well as traditional activities, activities are specialized, variable and integrated
- Port infrastructure is planned with equal consideration to structure and information
processing facilities.
- The port adds value to the primary product. As mentioned before, the term added
value signifies value newly added or created in the productive process of an
enterprise. Loading and discharging are certainly value-adding activities, so are
the industrial services of a port noted earlier. In a distribution center, added value
can take different forms such as cargo consolidation and deconsolidation-
providing up-to-date information on the inventory and cargo movements,
stuffing/unstuffing containers, crating, palletization, shrink-wraping, labeling,
weighing, repackaging, etc.

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- The port works towards environmental protection
- It works to user convenience rather than its own
- It tries to simplify customs procedures
- Organizational structures are integrated.

Fourth generation port

A development that appeared in the 1990s, especially among the large international
operating companies. This same globalization has seen a standardization of
information and procedures and a greater and more sophisticated use of automation
such as Automated Guided Vehicle(AGV)

2.4 . Impact of shipping to port development

The development of seaport to a greater extent have taken over the role of an
adapting factor rather than a moving one giving stimulus to development itself.
Technical and operational investments in port are resulting mainly from changes in
shipping, and not vice versa. Port themselves normally do not give incentives for the
introduction of new transportation system, but they have helped new system to
succeed by flexible adjustment adaptation to the system. However, the degree of
flexibility in adjustment parameters very often have been decisive for future port
development changes and even for regional development changes.

The elaboration of a general plan which is scaled for a longer period time proves to
be advantageous, provided that possibilities for alternative solutions are kept in mind.
The challenge of shipping to reactions of the sea ports principally resulted from:

1) Development of seaborne trade

With increasing trade volume the amount of cargo to be handled in ports also
growing, maybe even more than proportionate way. In the enlargement of
activities of existing ports these premises maybe generally fulfilled either in terms
of quantity or in terms of quantity.

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 Demand for cargo to be
handled

Quantitative Response Qualitative response

 Docks  Rationalization
 Quays  Increase
 Berths productivity
 Additional new  Shortening lay time
facilities

2) Development of ship size

The long term development of marine transport is showing continuous increase of

the average size of vessels. The main factors that have to be mentioned are the
increase in length, breadth, and draft of the vessel as well as the increase in the
average quantity of cargo per ship. This especially calls for:

- Deepening of the cargo berths as well as the approach to the ports;

- Increasing at the same time the length of the berths;
- Arranging for higher capacities of the loading and/or discharging facilities at
berth; and
- Increasing the efficiency of cargo handling equipment.

In order to overcome the limits (in depth of water) in ports situated on river
estuaries, the due action lies in the moving of loading and/or discharging berths to
new or extended outer harbors or even offshore facilities, which at the same time
may become the main areas of port development.

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 Increase of Size and cargo of vessel

Qualitative response

Quantitative Response

Move to outer ports

or Offshore structures

3) New transport system

Requirement for better facilities are arising from development of general cargo
transport like containers, Roll on-Roll off resulting in a reduction of time in port due
to their own service speed, which is higher than the average speed of
conventional liners. Besides of the possibility to switch over to outer harbors and
the possibility to install port extensions, ports have introduced the idea of
specialize terminal facilities. The largest demand is derived from the development
of container transport which in comparison to conventional transport is in need of
greater depth of water, container bridges of high capacity, large areas, and a
much shorter lay time in port. The Ro-Ro traffic needs facilities for loading and
discharging through stern of the ship, and the side gates, as well as for
transshipment and gathering of cargoes ashore. Quarter ramp door as having
been introduce since some years have ease the problems of port facility
adjustment.

4) Reduction of time in port

Possibilities of reaction to the demand for a reduction of time in port have already
been described directly or indirectly. Nearly the entire instrument named before, at
least an additional effect, have the purpose of reducing time in port, either lay time
or berth time. As stated above, scarcity of time plays an important role especially
in the container and Ro-Ro transport as well as in the ferry boat ad barge
transport. These system themselves are characterized by capital intensity.
In order to meet requirements concerning speed even some over-capacities in
port facilities, as compared with conventional output, are necessary. As a result,

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 facilities for container transport have to be arranged for the largest demand
expected, whilst facilities for conventional general cargo or calculated on the
average requirement with an often well-known risk of waiting time for ship during
shorter peak period. Ports are therefore interested in attaining a regular amount of
work with a narrow margin of unsteadiness, for corresponding to the limited
capacities for operating that special traffic.

5) Organization of Shipping

Moreover the organization of shipping and transport may force a port to become
active maybe even not only in reacting. There are great differences whether the
port has directly to cope with overseas lines or with feeder systems or whether
demand for port performance is regular or homogenous or not. The same is valid
regarding the organization of inland transport.
The following criteria have to be taken into account:
- Regularity of demand
- Direct calls for feeder systems
- Shares of local and hinterland destination respected generations of cargo
- International transit functions
- Homogeneity of cargo breakdown
- Share of manufacturing in port
- Having free port areas or not.

6) Fluctuations in demand

Only few remarks have to be added on fluctuations in demand for cargo handling
which is challenged indeed. Reactions will depend on the response to the
following questions:
- Port users will they accept at least short-term waiting times?
- Port users will they successful in adapting their periodicity or frequency of
calls?
- The port will it be obliged and willing to adjust its capacities in such a way that
it meets maximum demand?
- Or will the port be flexible enough to vary the capacity input?
- Port operation is it limited to workdays or to a limited number of shifts?

Certainly the reaction of the port very much will depend on the type of fluctuation
which is experienced, whether they are excessive or have to be considered
normal, whether capacities are concerned or demand. It certainly could not be
acceptable to have all risk of fluctuations in demand in the responsibilities of the
port only.

Aside from overseas traffic port has to provide an adequate infrastructure

especially with regard to the receiving capacities and distribution of cargo. The

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 duplication of sea transport volume normally requires a duplication of
inland transportation, both to and from the port area and to and from the region.

Finally, the development of the port when adjusting them to the development of
sea transport, may cover not only the enlargement of the port areas for
construction of new facilities. Often enough capacities being outdated from
technical point of view and without possibilities for modernization or enlargement
might be given up as they have no change for further development. On the other
hand, reconstruction of port facilities and storage spaces may lead to considerable
reserves which may become useful for operation. This is true also for instance
when substituting old sheds with loading platforms through modern sheds,
allowing a quick flow of goods and being suitable also for the use of floor
transportation and lifting gear. The loading capacity of these facilities directly is
influencing the time at berth.

Port Development phase

First generation port

Up to 1960 a port is merely the cargo interface location between land and sea
transport and can usually be recognized by the following features:
- It is usually isolated from the transport and trade activities, and sees its function in
terms of cargo transfer from ship to shore. It may have an EDI system but this
may well be incompatible with port user system.
- It considers itself an “independent kingdom” with little or no co-operation with local
authorities.
- The different port activities are isolated from each other
- It is usually either a breakbulk or bulk port

Second generation port

This port has developed as a transport, industrial and commercial service center.
It can be recognized by the following features:

- It undertakes and offer industrial and commercial services to its users which are
not directly connected with their loading/discharging activity.
- Port policies and development strategies are based on broader concepts and
more sophisticated management attitudes.
- Industrial facilities are set up within the port area
- It enjoys a closer relationship with transport and trade partner who have built their
cargo transformation facilities in the port area. However, only big shippers benefit.
- It develops a closer relationship with locality
- Different activities become more integrated within the port organization.

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Third generation port

This emerges in 1980s principally due to world-wide containerization and

intermodalism combined with the growing requirement of international trade. This port
type can be recognized by the following features:

- The port is seen as the hub of the international production and distribution
network. Management is proactive rather than reactive
- As well as traditional activities, activities are specialized, variable and integrated
- Port infrastructure is planned with equal consideration to structure and information
processing facilities.
- The port adds value to the primary product. As mentioned before, the term added
value signifies value newly added or created in the productive process of an
enterprise. Loading and discharging are certainly value-adding activities, so are
the industrial services of a port noted earlier. In a distribution center, added value
can take different forms such as cargo consolidation and deconsolidation-
providing up-to-date information on the inventory and cargo movements,
stuffing/unstuffing containers, crating, palletization, shrink-wraping, labeling,
weighing, repackaging, etc.
- The port works towards environmental protection
- It works to user convenience rather than its own
- It tries to simplify customs procedures
- Organizational structures are integrated.

Fourth generation port

A development that appeared in the 1990s, especially among the large international
operating companies. This same globalization has seen a standardization of
information and procedures and a greater and more sophisticated use of automation
such as Automated Guided Vehicle(AGV)

Competition between ports

Competition is an element that can be looked upon as a means of identifying seaports

as compared with those facilities that are only a link in a domestic transport system.
Competitions occurred when a given hinterland can be served by more than one port,
each port vying with the others, which may belong to different countries to offer and
cheaper services. In a somewhat different context competition occurs also when a
geographic area (the Carribean, Far East) can be served by more than one single
transshipment port.

The most important factors in the decision to select a port revolve round the various
aspects of Cost, Service, and Movement of goods.

- Cost, Competitive costs and low freight rates

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- Service. Reliable, fast, good communications, high number of sailings and low
congestion.
- Movement. Road and rail access with good intermodal links.

Port of Rotterdam and its hinterland

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