Boosting Capacity at Hongkong International Terminals

The Problem

In the 1990s, Hongkong International Terminals (HIT), the world's busiest seaport cargo handling facility, faced the grave threat of losing market share to newer, more efficient ports in other southern China coastal communities. A booming export manufacturing economy in the region, coupled with a sharply rising volume of imports, were straining HIT's ability to handle the thousands of shipping containers that move through the terminal every day. Severe and permanent physical space constraints at HIT, not a problem at newer competing ports, resulted in inefficiencies in the storage and manipulation of shipping containers at HIT.

The Analytics Solution

In 1995, HIT concluded it had to create a new, sophisticated analytics-based decision-support tool that would dramatically improve the efficiency of terminal operations to accommodate the processing of cargos for some 125 ships that stop at the port every week. In particular, “3P” (for “productivity plus program”) would help improve and automate such basic decisions as how to route container-bearing trucks in the yard, where arriving containers should be stored within the facility, how many cranes should be used to unload each ship, how many trucks to assign to each crane, and when to schedule trucks to arrive to haul shipping containers out of the terminal. Using customized algorithms translated into intelligent business rules, 3P provides optimized decision support for basic terminal operations.

The Value

Applying 3P has enabled HIT to add 50% to its shipping container handling capacity without an increase in personnel, equipment or real estate. The basic payoff of 3P, from the port customer's perspective, is measured in vessel turnaround time and cargo handling cost. The 3P system has led to a 30% reduction in vessel turnaround time and cut the average cost of handling each container by 35%. 3P also generated some environmental benefits: More efficient terminal operations cut the utilization of diesel trucks used to move containers within the port facility in half.