The role of maritime container terminals in the provision of

logistics services
Aleksandra Bartosiewicz, PhD
University of Lodz

Introduction

Sea ports attract a variety of economic and logistics activities and are
attractive locations for central distribution and logistics centers with a multinational
scope. They also have to face competition from inland locations for value added
logistics services. For these reasons modern maritime container terminals have to
offer logistics services in these aspects that had usually not been provided by sea
ports. Since ports are forced to widen the range of their services to stay competitive
in the global economy, in the article there the role of maritime container terminals in
the provision of logistics services for cargos (retail and distribution, handling,
transportation and transshipment),vessels (supply, repair, towing, mooring or
industrial and other auxiliary services) and a crew (social, health, hotel or
information services) will bedescribed.

Main types of logistics services

The main factors that determine the competitiveness of the sea port on the
services market include:
 frequency and number of shipdepartures;
 quality of transportation links between the port and its hinterland (e.g. time, cost
and security oftransportation);
 degree of development of port’s mainfunctions;
 competitive position of theport;
 prices and quality of portservices.

Nowadays the increasingly important question is what activities in logistics can

be attracted by sea ports. In most ports logistics activities generate more employment

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than terminal activities. What is more, activities in logistics are in most ports the most
attractive growth options.
A maritime logistics chain consists of three large sections: the purely maritime
activities, goods handling in the port and hinterland transport services. The necessity
of temporary storage in ports and the presence of efficient transport services
(shipping and intermodality) make ports potentially attractive locations for logistics
activities. On the one hand, the cargo handling system consists of such activities as
pilotage, towing and stevedoring that facilitate the loading and unloading of cargos.
On the other hand, cargo handling is strongly linked to the transport system.
The port is a cluster of organizations in which different logistics and transport
operators are involved in bringing value to the final consumers. This value comes into
play when a logistics supplier goes beyond the mere transportation of goods (which is
a basic service) and provides a package of logistics services differentiated on the
basis of customers’ requirements. A value added activity is, therefore, an activity that
adds value to the product or service the final customer is willing to pay for.
It appears that the current trend of port selection is shifting from prices (port
dues/taxes, handling tariffs etc.) to product (services time, reliability and quality).Thus,
ports skip from traditional services to value added services a sthey
needtooffermoretotheircustomersthansimplyactingasamooringfacility.

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Core competencies are basic traditional functions of ports while value added services
include logistics services in the developed market. The main functions of most sea
ports are cargo handling, pilotage and tug services, sometimes agency and
forwarding services operated either by the same company or a separate government
owned company.
It seems that currently most ports provide only a narrow range of logistics
services(see columns A and B of Table 2).

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According to sea carriers, however, a sea port should provide:
 timely delivery and loading of goods;
 fast transportation through the port;
 low prices for services;
 wide range of services;
 accurate invoicing.
As a result, adaptation of port operations to changing market conditions forces sea
ports to create special packages of logistics services the examplesof which are listed
in Table 2. The logistics strategy in relation to port operations should therefore
concentrate on offering logistics services in these aspects that had usually not been
provided by sea ports. Within port areas or nearby there are built logistics centers
which include warehouses, railway sidings, container repair services, gas stations and
hotels. They provide not only such services as transportation, handling, storage,

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distribution or completion of cargos but also satisfy a client’s need for marketing,
financial or social services.
Unfortunately, many ports are unable to provide potential customers with the
right combination or standard of services because they do not have the right mix of
infrastructure. The main criticisms of quality of service focus on:
 availability: firstly the customer’s ability to define the cargo handling ser- vices
to be provided by the port and secondly the ability of the port to provide or
facilitate value-added logistics services;
 speed: time taken to service ships and cargo;
 reliability: consistency of port performance;
 flexibility: ability to provide alternative solutions when things go wrong.

Logistics services provided by maritime container terminals

Ocean carriers have been increasingly using regional hubs for transshipment
of containers. This is accomplished via a network of regional and sub-regional hubs
with onward service to outlying locations, in this way major ports developed so called
feeder services. The largest ports have become key logistics centers, while smaller
ports started to play the role of feeder ports for them. Feeder vessels transport cargo
to the port, where it is placed onto large vessels to be taken to its final destination.
The growth in container volumes and the concentration of container flows on a limited
number of hubs, which partially derives from the increasing vessel size, requires the
development of new terminal infrastructure at maritime terminals. In addition to the
pressure that such vessels impose on the terminal cargo handling capabilities, those
larger vessels also require higher capacity in hinterland transportation or a
rationalization and better use of existing transport alternatives. Facilities for
devanning, clearing, staging and storing containers are increasingly shifting inland,
thereby becoming more decentralized. Thesedevelopments are creating a hierarchy
of ports and changing traditional terminal operations.
Regardless of the above mentioned tendencies, in order to use a maritime
container terminal a range of intermediary services is often required, which can be

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provided by the terminal itself or by independent intermediary parties. Most important
terminal services include:
 pilotage;
 towage;
 cargo-handling that includes:
- marshalling services;
- stevedoring services.

Pilotage is a service provided by a pilot with local knowledge and skills which enable
him to conduct the navigation and maneuvering of a vessel in and approaching the
harbour. Towage is provided by tug boats which move larger ships that either should
not or cannot power themselves. The main problem concerning pilotage and tug
services is usually price. Pilotage and towage are examples of choke points. If pilot
boats or tugs are not available for ship assist, the port may continue to function but
not necessarily at the normal level of efficiency.
Finally, cargo-handling involves the movement of cargo in and around a port.
These activities are conducted in a facility or port terminal constructed on the port
surface, according to the types of goods to be handled, e.g. containers. Marshalling
services involve the receipt, storage, assembly and sorting of cargo in preparation for
delivery to a ship's berth, while stevedoring may be defined as the loading of cargo
onto and discharging cargo from ships.
The set of services offered by a maritime terminal can also be classified into ship’s
services and good’s services:
 ship’s services:
− services for the use of port infrastructure;
− services to perform internal navigation;
− general services for ships.
 good’s services related to the handling of goods.
Ships require different services to access a port, these are referred to as
infrastructure services, and assistance to ships for reaching a dock so calledtechnical-
nautical services. The infrastructure services refer to the use of means created in a

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terminal so that vessels can access it and remain there while loading or unloading
goods (berthing, dockage and wharfage). Services for the ship’s internal navigation
are those that allow the ship to access, under the best security conditions, the docking
area. These services need the guidance of a marine area expert, who should lead the
ship to the dock and a boat (trailer) to aid the ship perform the maneuvers ordered by
the pilot. Once the ship is in the berthing area it should be ready for cargo maneuver
activities that requires the ship to be secured to the dock (mooring, tying).
Additionally, there are a number of services offered to the ship and its crew known as
general services. They include fuel, food, drinking water, equipment and electric
power supply , waste/sewage gathering and disposal, security, maintenance, cleaning
and repair of the ship or disinfection services.
Good’s services related to the handling of goods include loading, unload- ing, storage,
haulage, consolidation and processing of cargo. It is important to consider that in sea
ports diverse services are carried out and different port terminals are available which
feature specific facilities, according to the goods they handle. For example, container
terminals tend to have gantry cranes and require space; grain terminals have silos or
storage facilities, fluid terminals have storage tanks and pipelines at dockside; mineral
storage terminals are usually equipped with a mineral deposit area and a special
location, in respect to other port terminals, to avoid the potential harm of mineral
waste in other cargo. Is should be also noted that unlike technical nautical services,
cargo-handling is typically provided in a competitive environment. In three out of four
core ports in Europe there is more than one operator inside the port providing this
type of service.
Types of services provided by maritime container terminals not mentioned above are
as well:
 container services;
 inspection services;
 public services;
 social services;
 information services;
 miscellaneous.

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Container services may include leasing, trading, packing, repairing and cleaning of
boxes. Inspection services apply to goods. They consist of checking the quantity,
volume or weight of the cargo and taking its samples in order to conduct appropriate
analyzes in laboratories. People counting cargo are calledtallymen, weighting goods -
weighters and those who take samples are samplers.
A public service is usually provided by the government to people living within
its jurisdiction. Examples of public services in container terminals are customs, fire
brigade, water police, watch keeping or traffic control. Social ser- vices are a range of
public services provided for crews and terminal personnel including such things as
health care, housing, social security or catering services.
A real-time exchange of information is the most useful type of service in-
cluded in terminal’s ITS (Intelligent Transportation System) and IT/ICT (Information/
Information and Communication Technology) systems. Computer systems that
streamline and facilitate trade of goods, supply logistics and customs practice should
be introduced in all marine terminals. Such systems may use cargo tracking modules,
chip cards, non-intrusive cargo inspection systems, smart charging systems,
multimodal information about the movement of people and planned vehicle routes,
traffic information and the system of deli- very notification.
Additionally, management systems manage operations associated with the
navigation of the vessel in the area of roadstead (anchorage areas), approach
channels (pilot area), operations during the approach to the wharf and ship berthing or
cargo handling. What is more, a vessel traffic surveillance system VTS (Vessel Traffic
Services) or VTMIS (Vessel Traffic Management and Information System) are
systems that are commonly used in maritime container terminals to collect and
consolidate information on arrivals ofships, cargo current status or condition of local
roads.
Operators of marine container terminals provide other services to ships and
port users too. For example, in a relevant number of European ports dredging is
directly provided by the port managing body, thus preventing other providers from
entering the market. As a result, the level of competition in such services is quite low
both in small and large ports. In some cases weather may determine the demand for

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special types of service.
A long winter with freezing seas generate a specific need for ice breaking in the
Finnish shore and ports. Finally, in many marine container terminals throughout the
world cable television providers are increasingly offering telecommunication services,
as are Internet service providers.

Conclusions

So to adjust to changing market conditions a modern maritime container

terminal must provide a wide range of services within its area or in nearby logistics
centers. The worldwide market for port services is estimated to gener- ate available
revenues of $50–55 billion annually.
This is a large available market that should be of interest to a wide variety of
port service providers. Terminal operations is the most advanced area in terms of the
private operation ofport services. Although port authorities often own and operate the
harbour tugs used for ship assistance, dredging has traditionally been performed by
commercial dredging contractors or port authority personnel using publicly owned
dredgers.
What is more, increasingly sophisticated IT is spreading throughout the port
sector as users demand more timely information to support their logis- tics systems.
This is producing a variety of opportunities to design, install and operate IT systems in
ports throughout the world. Environmental facilities and ship safety can also be
performed by the private sector (e.g. operating a ballast water treatment plant in the
port or vessel management system).
Finally, warehousing and storage, container freight station operation, port
security and equipment maintenance are all activities that can be operated by the
private sector.

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