introduction to the container shipping industry

INTRODUCTION TO THE CONTAINER SHIPPING INDUSTRY University of Wisconsin – Milwaukee Paper No. 11-1

National Center for Freight & Infrastructure Research & Education College of Engineering Department of Civil and Environmental Engineering University of Wisconsin, Madison

Author: Matthew E. H. Petering Department of Industrial and Manufacturing Engineering University of Wisconsin – Milwaukee Principal Investigator: Alan J. Horowitz Professor, Civil Engineering and Mechanics Department, University of Wisconsin – Milwaukee January 6, 2011

Introduction to the Container Shipping Industry

INTRODUCTION This document contains images of all slides in a course module about the container

shipping industry and container port operations. Sources and additional content are found on the “note pages” of the original slide presentation. The full presentation contains videos. This presentation is available upon request to Alan Horowitz, [email protected].

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Introduction to the Introduction to the Container Shipping IndustryContainer Shipping Industry

Matthew E. H. Petering

Assistant ProfessorDepartment of Industrial and Manufacturing Engineering

University of Wisconsin—[email protected]

© 2010 Matthew E. H. Petering

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OutlineOutline1. Introduction to maritime shipping2. Introduction to container shipping3. Container vessels and shipping lines4. Seaports5. Railway container transportation / facilities6. Conclusion

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Introduction to Maritime ShippingIntroduction to Maritime ShippingShips carry 99% of overseas trade in volume terms and 62% in value terms, the remainder being conveyed by air.

90% of all international trade moves by sea

Globally, the ton-miles of freight moved by water are more than twice the total ton-miles moved by road, railway, and air put together.

http://www.greatlakes-seaway.com/en/aboutus/competitiveness.html

Water transportation is less costly and more energy efficient than other modes of transport:

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Maritime Shipping: Cargo TypesMaritime Shipping: Cargo Types

• Dry Bulk(salt, grain, minerals, cement/gypsum, coal byproducts)

• Liquid Bulk(crude oil, gasoline, chemicals, liquefied natural gas)

• Break Bulk(steel, lumber, heavy machinery)

• Automobile

• Containerized(finished consumer goods)

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• Shippers (importers/exporters)(Nike, Wal-Mart, ExxonMobil, Toyota)

• Shipping lines (ocean carriers, vessel operators)(Maersk Sealand, MSC, CMA CGM, Evergreen, Hapag Lloyd)

• Seaport terminal operatorsMorton Salt (dry bulk)Shell Oil (liquid bulk)Toyota (automobile)Containerized cargo:

PSA Corporation (Singapore)Hutchison Port Holdings (Hong Kong)Dubai Ports World (United Arab Emirates)APM Terminals (Netherlands, Denmark)

• Railway operators(Union Pacific, BNSF, CSX, Norfolk Southern, CN, CP)

• Trucking companies (motor vehicle carriers)

Maritime Shipping: Major PlayersMaritime Shipping: Major Players

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Container ShippingContainer Shipping

World fleet, Feb 2004: 3167 vessels, capacity = 6.5 million 20-ft conts. (TEU)

World fleet, Dec 2008: 4661 vessels, capacity = 12.1 million 20-ft conts. (TEU)

Port of Long Beach

Port of Long Beach

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Container ShippingContainer Shipping

Port of Long Beach Frankfurt am Main East

Port of Singapore

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VesselsVessels

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ContainersContainersContents

furniture, toys, footware, clothing, auto parts, electronics, computers, bananas, pineapples, foodstuffs, meat, fish

Sizes20' x 8' x 8.5' high (TEU)40' x 8' x 8.5' high (FEU)45' x 8' x 8.5' high

Capacity30 tons

Where are they manufactured?China

Typesstandard dry, high cube (9.5' high) (90%)refrigerated ("reefer") (5%)other: ventilated, open top, adjustable height (5%)

QuantityGlobal stock = 35 million (10 mill leased); 3.5 million produced in 2008

CostNew: $2000 - $20,000; lease rate $1 - $6 per day (5 year term)

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ContainersContainersHoisted, lowered, and secured at the corners

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ContainersContainersHoisted, lowered, and secured at the cornersSecured aboard vessels, trains, truck chassies using

(1) twist locksfor securing adjacent containers in the same stack

(2) lashing rods (vessels only)for securing containers in high tiers directly to the deck

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17Port of Long Beach Website

•Import cargo generally starts at an overseas manufacturer, supplier or consolidation facility.•The US buyer may contact an industry professional known as a “Freight forwarder” or logistics company.

•Import cargo generally starts at an overseas manufacturer, supplier or consolidation facility.•The US buyer may contact an industry professional known as a “Freight forwarder” or logistics company.

1- Product Ordered: A typical import transaction starts when a U.S. wholesaler, retailer or other buyer orders products from an overseas manufactures

1- Product Ordered: A typical import transaction starts when a U.S. wholesaler, retailer or other buyer orders products from an overseas manufactures

2- To port: Once the product has been ordered and packaged, the buyer or freight forwarder will arrange for a local trucking company to move the container to seaport, and then for a ship to transport the container oversea.

2- To port: Once the product has been ordered and packaged, the buyer or freight forwarder will arrange for a local trucking company to move the container to seaport, and then for a ship to transport the container oversea.

3- Security checks: A U.S. Customs official based at the port receives information from a U.S.-based command center about which containers may be a security risk. 3- Security checks: A U.S. Customs official based at the port receives information from a U.S.-based command center about which containers may be a security risk.

4- All abroad: When the container is cleared by security it will be placed on a ship along with as many as 8,000 TEU (twenty-foot equivalent) containers. 4- All abroad: When the container is cleared by security it will be placed on a ship along with as many as 8,000 TEU (twenty-foot equivalent) containers.

5- Coast Guard review: The U.S. Coast Guard reviews crew and cargo manifestinformation, which must be delivered at least three days before any ship arrives at U.S. shores.

5- Coast Guard review: The U.S. Coast Guard reviews crew and cargo manifestinformation, which must be delivered at least three days before any ship arrives at U.S. shores.

6- Vessel docked: As the ship nears the harbor it will be boarded by a port pilot, maritime specialists with expert knowledge of the harbor waters.

6- Vessel docked: As the ship nears the harbor it will be boarded by a port pilot, maritime specialists with expert knowledge of the harbor waters.

7- Unloading the ship: As the ship is arriving, the terminal operator will contact the local union hall and arrange for unionized longshore workers to unload the container (using a giant, electric gantry crane) and place it onto a truck, a rail car or temporary storage area on the terminal property. Unloading an 8,000 TEU ship takes about three days.

7- Unloading the ship: As the ship is arriving, the terminal operator will contact the local union hall and arrange for unionized longshore workers to unload the container (using a giant, electric gantry crane) and place it onto a truck, a rail car or temporary storage area on the terminal property. Unloading an 8,000 TEU ship takes about three days.

8- Security Checks: U.S. Customs officials conduct further analysis and determine which containers warrant further inspection.8- Security Checks: U.S. Customs officials conduct further analysis and determine which containers warrant further inspection.

9- Radiation detection: As a final security safeguard, containers pass through large portals that detect radiation.9- Radiation detection: As a final security safeguard, containers pass through large portals that detect radiation.


•As with imported goods, exported cargo may require several intermediate stops between the producer or manufacturer of the cargo and the Port.

•As with imported goods, exported cargo may require several intermediate stops between the producer or manufacturer of the cargo and the Port.

1- Direct Delivery: In the most straightforward route, asingle container from a local exporting company, produce grower or manufacturer would be delivered bytruck directly to the marine terminal.

1- Direct Delivery: In the most straightforward route, asingle container from a local exporting company, produce grower or manufacturer would be delivered bytruck directly to the marine terminal.

2- Warehouse/consolidator: Cargo delivered from local or nonlocal destinations may be stored temporarily at a warehouse or consolidated with other cargo bound for export. Cargo may also be transferred from domestic truck trailers to marine shipping containers at this facility.

2- Warehouse/consolidator: Cargo delivered from local or nonlocal destinations may be stored temporarily at a warehouse or consolidated with other cargo bound for export. Cargo may also be transferred from domestic truck trailers to marine shipping containers at this facility.

3- Off-dock railyards: Some export cargo containers aredelivered by train to off-dock railyards, where they are placed onto trucks for final delivery to marine terminals.

3- Off-dock railyards: Some export cargo containers aredelivered by train to off-dock railyards, where they are placed onto trucks for final delivery to marine terminals.

4- On-dock railyards: Cargo bound for export can bedelivered by train directly to on-dock railyards, where it is loaded onto an ocean vessel. On-dock delivery requires no local truck trips.

4- On-dock railyards: Cargo bound for export can bedelivered by train directly to on-dock railyards, where it is loaded onto an ocean vessel. On-dock delivery requires no local truck trips.

5- Near-dock railyards: Export deliveries are also made to near-dock railyards, where the cargo is picked up by truck for a short trip to the marine terminal..5- Near-dock railyards: Export deliveries are also made to near-dock railyards, where the cargo is picked up by truck for a short trip to the marine terminal..

6- Vessel loading: Outbound cargo is loaded ontoan ocean vessel headed for an overseas port.6- Vessel loading: Outbound cargo is loaded ontoan ocean vessel headed for an overseas port.


•From the port “of Long Beach”, containers are either transported by train or by truck to their final destination, or to one of several intermediate destinations such as a railyard, warehouse, distribution center, or “transload” facility ( a sorting, routing and short-term storage building). A container’s final destination determine exactly what path it will take once it leaves the dock.

•From the port “of Long Beach”, containers are either transported by train or by truck to their final destination, or to one of several intermediate destinations such as a railyard, warehouse, distribution center, or “transload” facility ( a sorting, routing and short-term storage building). A container’s final destination determine exactly what path it will take once it leaves the dock.

1- Unloading the ship: When a ship arrives at the Port, the marine terminal operator will arrange for unionized longshore workers to unload the vessel. The terminal operator directs the longshore workers to place the cargo containers where they belong:on trains, trucks or on terminalproperty for temporary storage.

1- Unloading the ship: When a ship arrives at the Port, the marine terminal operator will arrange for unionized longshore workers to unload the vessel. The terminal operator directs the longshore workers to place the cargo containers where they belong:on trains, trucks or on terminalproperty for temporary storage.

2- Freight forwarder: A container’s movements are determined by the cargo’s owner, or an industry professional known as a freight forwarder or “logistics provider”.

2- Freight forwarder: A container’s movements are determined by the cargo’s owner, or an industry professional known as a freight forwarder or “logistics provider”.

3- On-dock railyard: Cargo can be placed directly onto trains at the marine terminals’ “on-dock” railyards. 3- On-dock railyard: Cargo can be placed directly onto trains at the marine terminals’ “on-dock” railyards.

4- Near-dock railyards: Cargo is often transported by truck to larger “near-dock” railyards close to the Port.

4- Near-dock railyards: Cargo is often transported by truck to larger “near-dock” railyards close to the Port.

5- Off-dock railyards: Off-dock railyards are used to coordinate rail deliveries to non-local destinations. Containers are delivered here by truck, then sorted and grouped by final destination. These railyards handle Port cargo as well as domestic cargo from other sources.

5- Off-dock railyards: Off-dock railyards are used to coordinate rail deliveries to non-local destinations. Containers are delivered here by truck, then sorted and grouped by final destination. These railyards handle Port cargo as well as domestic cargo from other sources.

6- Transload or storage yard: Shipping containers are often moved initially to a “transload” facility where workers unload the cargo fromthe marine container, sort it and repackage it into larger-sized truck trailers. The larger trailers are used to transport the cargo from the transload facility to regional distribution centers, local stores or off-dock railyards.

6- Transload or storage yard: Shipping containers are often moved initially to a “transload” facility where workers unload the cargo fromthe marine container, sort it and repackage it into larger-sized truck trailers. The larger trailers are used to transport the cargo from the transload facility to regional distribution centers, local stores or off-dock railyards.

7- Direct delivery: In the simplest transportation plan, a single container imported by a company for its own use would bedelivered by truck directly from the marine terminal to a local storeor factory.

7- Direct delivery: In the simplest transportation plan, a single container imported by a company for its own use would bedelivered by truck directly from the marine terminal to a local storeor factory.

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VesselsVesselsCapacity

from 100 to 14,000 TEU

Divided into 45’ sections called baysship length can be from 3 to 25 bays

Newbuild cost$1 million per 100 TEU capacity

Speed20 - 25 knots

FuelMarine diesel oil; efficiency ~ 500 ton-miles/gal

20 crew memberscaptain/master, 3 deck officers, chief engineer w/ 3 assistants,

radio operator, cooks, qualified members of the engine department (QMEDs), etc.

Fully cellular or gearedGeared vessels can unload and load themselves

Itineraries are cyclicalEvery 4 weeks: Naples-Genoa-Barcelona-New York-Norfolk-Charleston-Naples

Where are they built?Korea: Hyundai, Samsung, Daewoo, HanjinChina: Jiangsu, Shanghai, Xiamen, Dalian

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2007TEU deployed Revenue

Ocean Carrier Country in 2006 (billion $)

1. A.P. Moller-Maersk Denmark 1,600,0122. Mediterranean Shipping Co Switzerland 937,1453. CMA CGM France 597,677 11.84. Evergreen Taiwan 539,8015. Hapag-Lloyd Germany 448,840 8.86. Cosco China 385,368 6.57. China Shipping Cont. Lines China 339,545 5.38. Hanjin South Korea 328,327 7.49. American President Lines Singapore 323,319 8.210. NYK Japan 313,049 25.811. Mitsui OSK Lines Japan 284,848 19.412. OOCL China (HK) 268,502 5.213. CSAV Chile 249,885 4.114. K Line Japan 241,772 13.315. Yang Ming Taiwan 223,192 4.1

The Shipping Line BusinessThe Shipping Line Business

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Mediterranean Shipping Co. Website

Number of Vessels Operated

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The Shipping Line BusinessThe Shipping Line BusinessPort to Port Freight Rates ($ per TEU, Sept 2008):Asia N. America $1800 Europe Asia$1100Asia N. America $1000 Europe Asia$1900

N. America Europe $1300N. America Europe $1700

Mediterranean Shipping Co. Website

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The Shipping Line Business: The Shipping Line Business: Planning DecisionsPlanning Decisions

1. When to purchase/charter additional vessels?2. What kind of vessels to purchase/charter?3. When to sell/scrap old vessels?4. Which vessels to sell/scrap?5. Which ports should be served?6. Which routes should be served?7. Which vessels should be assigned to which routes? (“fleet deployment”)8. Scheduling the vessels assigned to each route. At what times will they

arrive/depart from each port in the route sequence?9. Determine performance requirements for each vessel at each port.

How fast must each vessel be served at each port it visits?10. Negotiating vessel service agreements with seaport facilities (container

terminals).11. Hiring crew members

Decision .

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The Shipping Line Business: The Shipping Line Business: Operational DecisionsOperational Decisions

1. What should the freight rates be?2. When to cancel a vessel call at a port?3. Which containers should be loaded onto which vessel?

(applies to large shipping lines or lines belonging to an alliance)4. How many empty containers should be loaded onto each vessel at each

port? (“empty container repositioning”)5. Where should individual containers be placed on the vessel?

(“vessel stowage”)6. Assigning crew members to vessels.

Decision .


Because the United States imports more goods than it exports, many empty containers are sent overseas to be refilled with goods. Typically, about a third of the containers loaded onto a ship at the Port of Long Beach will be filled with cargo, while about two-thirds will be empty.Because the United States imports more goods than it exports, many empty containers are sent overseas to be refilled with goods. Typically, about a third of the containers loaded onto a ship at the Port of Long Beach will be filled with cargo, while about two-thirds will be empty.

1- Delivery to local exporter : A local exporter who needs to fill empty containers may arrange to receive them by truck directly from a marine terminal, from an empty container storage yard or from a local importer. Direct delivery between importers and exporters is encouraged because it eliminates an additional truck trip to a storage yard or marine terminal.

1- Delivery to local exporter : A local exporter who needs to fill empty containers may arrange to receive them by truck directly from a marine terminal, from an empty container storage yard or from a local importer. Direct delivery between importers and exporters is encouraged because it eliminates an additional truck trip to a storage yard or marine terminal.

2- Empty container storage yard: Empty containers are often transported by truck from a transloadfacility or local importer to an emptycontainer storage yard. From thestorage yard, the empty containerscan be transported to a marineterminal for export, or to a localexporter to be filled with cargo.Empty containers are alsotransported from marine terminalsto storage yards, usually when theterminal needs more space for full,incoming containers.

2- Empty container storage yard: Empty containers are often transported by truck from a transloadfacility or local importer to an emptycontainer storage yard. From thestorage yard, the empty containerscan be transported to a marineterminal for export, or to a localexporter to be filled with cargo.Empty containers are alsotransported from marine terminalsto storage yards, usually when theterminal needs more space for full,incoming containers.

3- Direct Delivery: The simplest route for an emptycargo container would be a returntrip to the Port from a transloadfacility or local importer after itsimported goods had been unloaded.

3- Direct Delivery: The simplest route for an emptycargo container would be a returntrip to the Port from a transloadfacility or local importer after itsimported goods had been unloaded.

4- Ocean Vessel: Empty containers are loaded onto an ocean vessel, along with containers filled with export goods, bound for an overseas port.

4- Ocean Vessel: Empty containers are loaded onto an ocean vessel, along with containers filled with export goods, bound for an overseas port.

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Introduction to Container TerminalsIntroduction to Container Terminals

• Unloading and loading of containerships• Temporary storage of containers

Port of Hong Kong

Port of Singapore

Aerial view of Northport's containerterminal

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The Container Port BusinessThe Container Port Business

Globally, 474 million TEU worth of (empty and loaded) containerswere transferred between ships and shore in 2007.

World’s Busiest Million TEU Container Ports Country handled in 2007

1. Singapore Singapore 27.92. Shanghai China 26.23. Hong Kong China (HK) 24.04. Shenzhen China 21.15. Busan South Korea 13.36. Rotterdam Netherlands 10.87. Dubai UAE 10.78. Kaohsiung Taiwan 10.39. Hamburg Germany 9.910. Qingdao China 9.511. Ningbo-Zhoushan China 9.412. Guangzhou China 9.313. Los Angeles USA 8.414. Antwerp Belgium 8.215. Long Beach USA 7.3

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The Container Port BusinessThe Container Port BusinessMillion 2007

TEU handled RevenueTerminal Operator Country in 2007 (billion $)

1. Hutchison Port Holdings China (Hong Kong) 66.3 4.92. PSA Corp. Singapore 58.9 3.03. DP World UAE 43.3 2.74. Cosco Pacific China 39.8 0.15. APM Terminals Netherlands 31.4 2.56. HHLA Germany 7.2 1.9

Globally, 474 million TEU worth of (empty and loaded) containerswere transferred between ships and shore in 2007.

The DP World controversy began in February 2006 and rose to prominence as a national security debate in the United States. At issue was the sale of port management businesses in six major U.S. seaports to DP World, and whether such a sale would compromise port security.

Container TerminalsContainer Terminals

33Vessels

quay to yard

yard to quayStorage yard

Trains

import

export

transshipment

External trucks (XTs)

Horizontal transport of cargo

Container lifting & stacking

1. 2. 3.

Terminal-owned equipment performs 3 kinds of tasks:

On-dock rail yard

XTs

Gate

Unloading and loading of vessels

Trains

Typically a 24-hour operation

34Port of Singapore

Land-Scarce Container Terminals

Quay cranes (QCs)

Yard trucks (YTs)

Rubber-tired gantry cranes (RTGCs)

External trucks (XTs)

1.

2.

3. Rail-mounted gantry cranes (RMGCs)

Gate

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Port of Singapore

LandLand--Scarce Container TerminalsScarce Container TerminalsCargo stacked up to 7 tiers high in large “blocks”

0-3 truck traffic lanes between blocks

Storage density: 1000-1200 TEU per hectare

Manually operated trucks and cranes

No on-dock rail yard

Cargo throughput: 2000-2500 TEU per meter of wharf line per year

Rubber-tired gantry cranes (RTGCs)

Quay cranes (QCs)

36Port of Hong Kong

LandLand--Scarce Container TerminalsScarce Container Terminals

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Straddle CarrierStraddle Carrier--Based Container TerminalsBased Container Terminals• Common on U.S. East Coast and in Europe• Cargo stacked 3 tiers high in “lanes” that are 1 container wide• Spaces between lanes very narrow• Storage density: 750 TEU per hectare• Manually operated straddle carriers perform operations 2 and 3• On-dock rail yard a possibility: RMGCs may be needed• Cargo throughput: 1500 TEU per meter of wharf line per year

3.

Straddle carriers (SCs)

2.

1. Quay cranes (QC)

Port of Hamburg

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Straddle CarrierStraddle Carrier--Based Container TerminalsBased Container Terminals• Common on the U.S. East Coast and in Europe• Cargo stacked 3 tiers high in “lanes” that are 1 container wide• Spaces between lanes very narrow• Storage density: 750 TEU per hectare• Manual/automated straddle carriers perform operations 2 and 3• On-dock rail yard a possibility: RMGCs may be needed• Cargo throughput: 1500 TEU per meter of wharf line per year

3.

Straddle carriers (SCs)

2.

1. Quay cranes (QC)

Port of Hamburg

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Straddle CarrierStraddle Carrier--Based Container TerminalsBased Container Terminals

Port of Bremerhaven (Germany)

Aerial view of

Northport's container terminal

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Simulation of a terminal in which

• SCs used in quay and storage yard areas

• RMGCs used at on-dock rail yard to load trains

Straddle CarrierStraddle Carrier--Based Container TerminalsBased Container Terminals

Source: HHLA website (http://hhla.de)

41TTI/Hanjin Terminal (Seattle)

YC/SCYC/SC--Free, GroundFree, Ground--Based TerminalsBased Terminals• Common on U.S. West Coast• Large forklifts called “top-handlers” and “reach-stackers”

stack containers up to 4 tiers high in “blocks”• Large spaces needed between blocks• Storage density: 500 TEU per hectare• Manually operated reach-stackers, top-handlers, side-picks,

and tractor-trailers• On-dock rail yard a possibility• Cargo throughput: 1000 TEU per meter of wharf line per year

3.

Quay cranes (QCs)1.

Top- handlersReach-stackers

2. Yard trucks

42Global Gateway North Terminal (Seattle)

WheelWheel--Based Container TerminalsBased Container Terminals• Common on U.S. West Coast• Loaded containers sitting on trailers (chassies) parked in

storage yard (stacking height = 1 tier)• Empty containers stacked up to 4 tiers high by “side-picks”• Storage density: 250 TEU per hectare• Manually operated equipment• On-dock rail yard a possibility• Cargo throughput: 500 TEU per meter of wharf line per year

On-dock rail yard

Quay cranes (QCs)1.

3.

Side-picks 2. Yard trucks

Top-handlers

Reach-stackers

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Automated Container Terminals IAutomated Container Terminals I• Ports of Rotterdam and Hamburg• Cargo stacked up to 5 tiers high in large “blocks”• Spaces between blocks very narrow• Automated guided vehicles (AGVs) perform operation 2• Automated stacking cranes (ASCs) perform operation 3 in yard• On-dock rail yard a possibility: RMGCs may be needed

Container Terminal Altenwerder (Hamburg)

ASCs3.

AGVsQCs1.

RMGCs

2.

www.hhla.de www.hhla.de

44Patrick Terminal (Brisbane, Australia)

• Patrick Terminal at Port of Brisbane• Only automated SC-based terminal in the world• Cargo stacked 2 tiers high in “lanes”• Automated straddle carriers perform operations 2 and 3

3. Automated straddle carriers2.1. Quay cranes (QC)

Automated Container Terminals IIAutomated Container Terminals II

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• Straddle carriers and ASCs used in storage yard

• RMGCs used in on-dock rail yard

Other Possibilities Other Possibilities

Source: HHLA website (http://hhla.de)

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Container Terminal CharacteristicsContainer Terminal Characteristics

Most terminals never closeworkload processed continuously: 24 hours per day, 365 days per yearuneven distribution of workload over time (late vessel arrivals, cust. requests)

Highly uncertain equipment processing timestruck travel times affected by road traffic conditions inside terminalcrane handling times are variable

10,000+ decisions made per dayequipment dispatching, container storage location assignment, etc.decision opportunities come with no prior warningdecisions made immediately, usually one at a timeinter-decision time highly stochastic, avg. as low as 1 sec.

Quay, yard, and gate operations highly interconnectedbottlenecks in yard late vessel departuresfew or no inter-equipment buffers

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Measures of Terminal PerformanceMeasures of Terminal Performance

Gross crane rate (GCR)Also known as the quay crane work rateAvg. # QC lifts made per QC hour beside a vessel that is being worked

Average vessel turnaround timeAvg. time it takes to fully process a vesselFrom time of berthing to time of un-berthing

Average external truck (XT) turnaround timeAvg. time it takes for external truck to be serviced at the terminalDrop-off or pick-upFrom time of gate entry to time of gate departure

Ability to keep vessels and trains on scheduleConsistency in performance more important than maximizing avg. performanceAnother goal: keep operations on-time at minimum cost

Cost per TEU moved between ship and shoreUSD $150 at U.S. ports

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Container Terminal Planning and Design

1. Where should the terminal be located?2. What kind of cargo will be handled (import, export, transshipment)?3. What is the planned throughput capacity?4. How much cargo storage capacity is needed in the yard?5. Will there be an on-dock rail yard? A large empty container yard?6. How much land area will the terminal occupy? What is its shape?7. What type of container handling equipment will be used? Specs?8. How many work shifts will there be per day?9. Should the yard layout be parallel or perpendicular?10. How many storage blocks should there be? What are their dimensions?11. How many vehicle lanes should there be between the blocks?12. How much equipment should be deployed on an average day?

Yard Trucks (YTs)

Decision .

Vessels

Yard Cranes (YCs)

unloading

loadingYard

Quay Cranes (QCs)

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Design Issue #7: Design Issue #7: Equipment Selection and SpecificationEquipment Selection and Specification

Yard Equipment Type Horizontal Lifting Stacking Transport

1. Tractor-trailers (YTs) X2. Automated guided vehicles (AGVs) X

3. Rubber-tired gantry cranes (RTGCs) X X4. Rail-mounted gantry cranes (RMGCs) X X5. Automated stacking cranes (ASCs) X X6. Bridge cranes X X7. Top-handlers X X8. Reach-stackers X X9. Side-picks X X

10. Straddle carriers (SCs) X X X11. Shuttle carriers X X12. Automated lifting vehicles (ALVs) X X

2. 3. 3.

Specification issues for Quay CranesSpecification issues for Quay Cranes

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Single trolley quay crane handles one cont. at a time

Port of Long Beach

container-terminal of Bremerhaven

QC Issue A: The Double Trolley Quay CraneQC Issue A: The Double Trolley Quay Crane

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The Double Trolley Quay CraneThe Double Trolley Quay Crane

52Double Trolley QCs and Straddle Carriers at Port of Hamburg

www.hhla.de

QC Issue B: TwinQC Issue B: Twin--lift (two 20lift (two 20’’ conts) and tandem conts) and tandem (two 40(two 40’’ conts) spreadersconts) spreaders

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Design Issue #10.1: Block WidthDesign Issue #10.1: Block Width

What is the optimal width for the storage blocks? (storage capacity is unchanged)

Block Width: TradeoffsBlock Width: Tradeoffs

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10 rows per block (3 zones)

3 rows per block (10 zones) 5 rows per block (6 zones)

6 rows per block (5 zones)?

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Group 2: scenarios 3-4

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1 3 5 7 9 11 13 15

Rows per block (block width)

Gro

ss c

rane

rat

e (Q

C lif

ts/h

r)

Less equipMore equip


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1 3 5 7 9 11 13 15


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Group 5: scenario 11

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1 3 5 7 9 11 13 15


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Group 6: scenario 12

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Block Width: ResultsMost Oblong

Most Square

From: M.E.H. Petering, “Effect of block width and storage yard layout on marine container terminal performance,” Transportation Research E, doi: 10.1016/j.tre.2008.11.004, accepted Nov 2008.

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Design Issue #10.2: Block LengthDesign Issue #10.2: Block Length

What is the optimal length for the storage blocks? (storage capacity is unchanged)

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Longer blocksFewer vertical traffic lanesLess land areaMore congestion

Shorter blocksMore vertical traffic lanesMore land areaLess congestion

Block Length: Tradeoffs

Design Issue #11: Vehicle LanesDesign Issue #11: Vehicle Lanes

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Container Terminal Operations ManagementContainer Terminal Operations Management

60Vessels

Quay Cranes (QCs)Yard Cranes (YCs)

unloading

loading Yard

1. Allocation of berths to arriving vessels 0000102. Allocation of QCs to docked vessels 0000103. QC scheduling and job sequencing 10 (off-line) or 10,000 (real-time)

4. Container storage location assignment 010,0005. Container retrieval location assignment 010,0006. YC job assignment 010,0007. Inter-zone YC deployment 010,0008. YT job assignment 010,0009. YT routing 100,00010. Selecting appointment times for external trucks 010,000

Yard Trucks (YTs)

Decision Frequency (decs/day)

Land-scarce terminal:

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Terminal ManagerTerminal Manager’’s Goal:s Goal:

Find solutions for operations Find solutions for operations management (OM) issues thatmanagement (OM) issues that

(1) are viable in a real(1) are viable in a real--time settingtime setting(2) maximize performance (2) maximize performance (e.g. gross crane rate)(e.g. gross crane rate)

GCR =total # QC lifts made

total hours of QC time beside a busy berth

62

Terminal Operating System (TOS)Terminal Operating System (TOS)

TOS is idle

TOS deciding next activity for a particular QC/YC/YT/container

TOS manipulating data internally

TOS receiving input:- QC/YC/YT task completed- Vessel arrives

(new jobs added to system)- XT arrives

(new job added to system)

storage locations

YC disp

YC deploy

YT disp

To be viable, a TOS must:

Use less than 1 second of CPU time per decision on 100% of occasions

Avoid deadlocks on 100% of occasions

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OM Issues #1 and #2: Terminal, Berth, and OM Issues #1 and #2: Terminal, Berth, and Quay Crane Allocation to Arriving VesselsQuay Crane Allocation to Arriving Vessels

Where should an arriving vessel be berthed? (Which terminal, which berth?)

Which quay cranes should work on the vessel?

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Terminal, Berth, and Quay Crane Allocation: Terminal, Berth, and Quay Crane Allocation: A MultiA Multi--objective Problemobjective Problem

Objectives:

(1) Minimize vessel turnaround times

(2) Maximize berth utilization and terminal throughput

(3) Maximize satisfaction of customer shipping lines

(4) Minimize cost (labor and equipment used) when processing vessels

(5) Maximize efficiency of vessel-to-vessel transshipment operations

Constraints:

• Water depth

• Berth and vessel lengths

• Quay crane availability and specs

• Vessel schedules

• Transshipment requests

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Once a vessel is secured alongside the terminal,

(A) Which containers are moved by which QC?

(B) What is the sequence of moves for each QC?

OM Issue #3: OM Issue #3: QC Scheduling and Job SequencingQC Scheduling and Job Sequencing

Objectives:

• Minimize vessel turnaround time

• Unload “hot” containers quickly

• Minimize cost of unloading and loading vessel

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Constraints:

1. Ship balance must be maintained

2. Stress on vessel may not exceed certain limits

3. Precedence constraints due to container stacks

4. QCs must remain a minimum distance apart to avoid collisions

5. Visibility: crane operators must be able to easily see containers

6. Stability of above-deck stacks: no “chimneys” (stacks jutting out vertically by more than 2 tiers)


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Further complexity:

1. Some cargo booked for a vessel arrives after loading has begun

2. Cranes may work at different speeds

3. Not all container moves are loads or unloads—there are also repositioning moves!


68

QCQC Scheduling: Current PracticeScheduling: Current Practice

Perform a Crane Split: (a set partitioning problem)

• Vessel bays are partitioned into contiguous areas

• Each area is served by one crane

• Partitioning done so that the time when last QC finishes is minimized

• Each QC works the bays in its area from L to R

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QCQC Scheduling: The Crane SplitScheduling: The Crane Split(Equal Crane Speeds)(Equal Crane Speeds)

70

QCQC Scheduling: The Crane SplitScheduling: The Crane Split

Containers to be moved Time required (min)

Bay # Unloading Loading Total QC1 QC2 QC3 QC4

2 15 19 34 82 102 102 136

3 9 8 17 41 51 51 68

4 66 52 118 283 354 354 472

7 35 35 70 168 210 210 280

10 26 24 50 120 150 150 200

11 40 43 83 199 249 249 332

14 72 76 148 355 444 444 592

18 55 45 100 240 300 300 400

Total 318 302 620

(Unequal Crane Speeds)(Unequal Crane Speeds)

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QCQC Scheduling: The Crane SplitScheduling: The Crane Split

Containers to be moved Time required (min)

Bay # Unloading Loading Total QC1 QC2 QC3 QC4

2 15 19 34 82 102 102 136

3 9 8 17 41 51 51 68

4 66 52 118 283 354 354 472

7 35 35 70 168 210 210 280

10 26 24 50 120 150 150 200

11 40 43 83 199 249 249 332

14 72 76 148 355 444 444 592

18 55 45 100 240 300 300 400

Total 318 302 620 574 399 444 400

Optimal solution: 574 minutes is the minimum vessel turnaround time

(Unequal Crane Speeds)(Unequal Crane Speeds)

Yard Control IssuesYard Control Issues

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Zone 1

Zone 2

Zone 3

Zone 4

Quay crane: 1 2 3 4 5 6 7 8 9

Vessel 1Vessel 3

Vessel 2

1 2

20 21

3

13

87

14

4 5 6

9 10 11 12

15 16 17 18 19

22 24

Block 1 Bk 2 Bk 3

Bk 4 Bk 5 Bk 6

Bk 7 Bk 8 Bk 9

Bk 10 Bk 11 Bk 12

cross-gantry

linear gantry

? ??

???

? ? ? ?

23

? ?

?

? ? ? ?

?

? ? ? ?

Yard Crane Yard Truck

73

OM Issue #4: OM Issue #4: Selection of Cargo Storage LocationsSelection of Cargo Storage Locations

Where should containers be placed in the yard upon their arrival?(e.g. after being unloaded from a vessel)

74

I. Re-marshalling strategy• Containers have multiple places of rest

II. “Sort and store” strategy• Containers have a single place of rest• Containers stored based on attributes (e.g. length, height,

weight class, loading vessel, destination port)

• Containers with similar attributes stored in same stack• Two versions:

1) Storage locations determined off-line in advance2) Storage locations determined in real-time

immediately after container is discharged

Container Storage StrategiesContainer Storage Strategies

75

Possible objectives to pursuePossible objectives to pursue1. Minimize container travel distance2. Minimize congestion in vicinity of storage locations3. Minimize number of times each container is touched

Container Storage: Competing ObjectivesContainer Storage: Competing Objectives

Not all objectives can be pursued simultaneously.

Thus, managers need to determine which objectives are most important!! This is not easy!

76

Zone 1

Zone 2

Zone 3

Zone 4

Quay crane: 1 2 3 4 5 6 7 8 9

Vessel 1Vessel 3

Vessel 2

1 2

20 21

3

13

87

14

4 5 6

9 10 11 12

15 16 17 18 19

22 23 24

Block 1 Bk 2 Bk 3

Bk 4 Bk 5 Bk 6

Bk 7 Bk 8 Bk 9

Bk 10 Bk 11 Bk 12

? ? ? ?

Which stack in the yard, among those which are eligible, should provide the container(s) loaded by a QC ??

OM Issue #5: Container Retrieval Location AssignmentOM Issue #5: Container Retrieval Location Assignment

OM Issue #6: Yard Crane Job AssignmentOM Issue #6: Yard Crane Job Assignment

77

Zone 1

Zone 2

Zone 3

Zone 4

Vessel 1Vessel 3

Vessel 2

1 2

20 21

3

13

87

14

4 5 6

9 10 11 12

15 16 17 18 19

24

Block 1 Bk 2 Bk 3

Bk 4 Bk 5 Bk 6

Bk 7 Bk 8 Bk 9

Bk 10 Bk 11 Bk 12

? ???

22 23

?

(1) When a YC becomes free, which YT does it serve next?

(2) How to avoid deadlocks when YCs are working in close proximity and containers halfway between them need to be moved?

?

OM Issue #8: YT Job AssignmentOM Issue #8: YT Job Assignment

78

(2) When to carry two 20’ containers?(3) Should YTs be pooled at the QC, vessel, or terminal level?

Zone 1

Zone 2

Zone 3

Zone 4

QC: 1 2 3 4 5 6 7 8 9

Vessel 1Vessel 3

Vessel 2

1 2

20 21

3

13

87

14

4 5 6

9 10 11 12

15 16 17 18 19

22 24

Block 1 Bk 2 Bk 3

Bk 4 Bk 5 Bk 6

Bk 7 Bk 8 Bk 9

Bk 10 Bk 11 Bk 12

23

Q1:24UQ1:25UQ1:26UQ1:27U...

Q2:22UQ2:23UQ2:24UQ2:25U...

Q3:25UQ3:26UQ3:27UQ3:28U...

Q4:89LQ4:90LQ4:91LQ4:92L...

Q5:89LQ5:90LQ5:91LQ5:92L...

Q6:88LQ6:89LQ6:90LQ6:91L...

Q7:90LQ7:91LQ7:92LQ7:93L...

Q8:75UQ8:76UQ8:77UQ8:78U...

Q9:71UQ9:72UQ9:73UQ9:74U...

?

(1) When a YT becomes free, what should it do next?

?

?

Pending QC jobs

QC jobs already assigned to YTs

79

What kind of truck appointment system best serves the interests of the terminal, trucking industry, neighboring community, and environment?

What should the appointment date and time be for a specific truck?

OM Issue #10: OM Issue #10: Appointment System for External TrucksAppointment System for External Trucks

Global Gateway North Terminal, Seattle

80

Appointment system should:• automatically generate appointment times for customers who call the

terminal or log onto the internet

• determine the number of appointments to be made for a given region of the container yard for a given time period

• minimize average truck service time at the terminal

• minimize truck congestion overflow into local highway system

• maximize gate throughput

• enhance yard and vessel operations in the container terminal

OM Issue #10: XT Appointment SystemOM Issue #10: XT Appointment System

Other Container Terminal IssuesOther Container Terminal Issues

81Vessels

Quay Cranes (QCs)Yard Cranes (YCs)

unloading

loading Yard

1. Labor (union or non-union)2. Container identification and tracking (OCR, RFID)3. Equipment identification and tracking (GPS, local radar, RFID)4. Customs5. Security (scanning equipment, manual inspections)6. Negotiating service agreements with shipping lines7. Negotiating lease rates with public municipalities8. Purchasing/developing a terminal operating system (TOS)9. Tactical issues: when to purchase more equipment (QCs, YCs, YTs)

Yard Trucks (YTs)

Issue .

82


83

Railway Container TransportationRailway Container Transportation

84

Railway Container TransportationRailway Container Transportation2007

North American TEU moved RevenueRailway Operator Country in 2007 (billion $)

1. BNSF USA 5,065,0052. Union Pacific USA 3,453,0003. Norfolk Southern USA 3,120,0004. CSX Corp. USA 2,111,0005. Canadian National Canada 1,324,0006. Canadian Pacific Canada 1,238,1007. Kansas City Southern USA 526,370

85


BNSF Intermodal Network


Union Pacific’s intermodal lanes, 2009 86

87Union Pacific Intermodal Network, 2008


88

Inland (Rail) Container TerminalsInland (Rail) Container Terminals

• Transferring containers between trains and trucks

• Unloading and loading of intermodal trains

• Temporary storage of containers Port of Long Beach

Frankfurt am Main East

Rochelle, Illinois

89


90

Container shipping supplies cities and their inhabitants with finished consumer goodsChicago: inland container shipping hub of the USAMilwaukee: CP “Canadian Pacific” rail facility at the Port of MilwaukeeCongestionPollutionMaritime shipping constitutes 4.5% of global CO2 emissions

Containerization Impact on CitiesContainerization Impact on Cities

91

Inspired architectural innovation

Containerization Impact on CitiesContainerization Impact on Cities

92

Literature on Container Terminal Ops.Literature on Container Terminal Ops.Briskorn, D., Drexl, A. and Hartmann, S. (2006) “Inventory-based dispatching of automated guided vehicles on

container terminals.” OR Spectrum, 28, 611-630.Dekker, R., P. Voogd, van Asperen, E. (2006). "Advanced methods for container stacking." OR Spectrum V28(4).Grunow, M., Günther, H.-O. and Lehmann, M. (2004). “Dispatching multi-load AGVs in highly automated seaport

container terminals.” OR Spectrum, 26, 211-235.Grunow, M., Günther, H.-O. and Lehmann, M. (2006). “Strategies for dispatching AGVs at automated seaport

container terminals.” OR Spectrum, 28, 587-610Hussein, M. (2010). “Efficient container handling systems and crane scheduling algorithms for seaport container

terminal”. Industrial and Manufacturing Engineering Department. University of Wisconsin-Milwaukee Kim, K. H., and Bae, J. W. (2004). "A Look-Ahead Dispatching Method for Automated Guided Vehicles in Automated

Port Container Terminals." Transportation Science, 38(2), 224-234.Kim, K. H., and Bae, J. W. (1998). "Re-marshaling export containers in port container terminals." Computers &

Industrial Engineering, 35(3-4), 655-658.Kim, K. H., Jeon, S. M., and Ryu, K. R. (2006). "Deadlock prevention for automated guided vehicles in automated

container terminals." OR Spectrum, V28(4), 659-679.Kim, K. H., Kang, J. S., and Ryu, K. R. (2004). "A beam search algorithm for the load sequencing of outbound

containers in port container terminals." OR Spectrum, V26(1), 93-116.Kim, K. H., and Kim, H. B. (1998). "The optimal determination of the space requirement and the number of transfer

cranes for import containers." Computers & Industrial Engineering, 35(3-4), 427-430.Kim, K. H., and Kim, H. B. (2002). "The optimal sizing of the storage space and handling facilities for import

containers." Transportation Research Part B: Methodological, 36(9), 821-835.Kim, K. H., and Kim, H. B. (1999). "Segregating space allocation models for container inventories in port container

terminals." International Journal of Production Economics, 59(1-3), 415-423.Murty, K. G., J. Liu, et al. (2005). "A decision support system for operations in a container terminal." DecisionMurty, K. G., Y.-W. Wan, et al. (2005). "Hongkong International Terminals gains elastic capacity using a data-iPetering, M. E. H. (2009). “Effect of block width and storage yard layout on marine container terminal performaStahlbock, R. and Voß, S. (2008) “Operations research at container terminals: a literature update.” OR Spectrum, 30,

1-52.Steenken, D., Voß, S. and Stahlbock, R. (2004) “Container terminal operation and operations research - a

classification and literature review.” OR Spectrum, 26, 3-49.Vis, I. F. A. and de Koster, R. (2003). “Transshipment of containers at a container terminal: an overview.” European

Journal of Operational Research, 147, 1-16.

AcknowledgmentAcknowledgmentEditor : Mazen I. Hussein, Industrial and Manufacturing Engineering Department, University of Wisconsin-Milwaukee.

Grateful acknowledgment is herewith made for the cooperation and permission to us the materials and photos from the following personnel/websites/institutes:

Alex Klein / www.renaissanceronin.wordpress.comAmerican President Lines Ltd / www.apl.comBurlington Northern Santa Fe Railway / www.bnsf.comCenter for Disease Control and Prevention / www.cdc.govcontainershipping.nl / www.containershipping.nlDanny Cornelissen-Maritime Photographer/ www.portpictures.nlFRANCETRUCK / [email protected] Lakes St. Lawrence Seaway System / www.greatlakes-seaway.comHamburger Hafen und Logistik AG / www.hhla.deHapag-Lloyd / www.hapag-lloyd.comKOCKS / www.kockskrane.deMediterranean Shipping Company MSC / www.mscgva.chmerriam-webster / www.visualdictionaryonline.comPort of Brisbane Pty Ltd / www.portbris.com.auPort of Long Beach/ www.polb.com/default.aspRobert West – Milwaukee School of Engineering / [email protected] Timars group / www.timars.seVDL Containersystemen / www.vdlcontainersystemen.comWebmaster / www.infovisual.infoWikimedia Wikipedia Union Pacific / www.up.com

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The End!

introduction to the container shipping industry

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