Repositioning of empty containers in the Dutch hinterland: How to achieve cost savings at empty depots in Rotterdam

The container business is a competitive market, which suffers from trade imbalances, causing empty flows to arise between surplus and deficit regions. The port of Rotterdam and its hinterland is an example of a surplus region. Empty container management is subject to keeping costs at a minimum, while meeting customer demand and off-dock empty depots, located near the ocean terminals, provide cheap storage and the facilitation of repair of damaged containers. When containers are damaged, the supply of empty containers is reduced, which means extra costs are made as demand does not reduce. Two options need to be weighed when deciding on the repair of containers within the region; should the container be repaired within the region at higher cost or transport to overseas regions at lower cost plus transport cost. To ensure demand is always met by the carrier a target stock level is implemented at empty depots and inland terminals. To be able to meet future demand, the Maersk Group is opening a new ocean terminal in Rotterdam port, which operates at a higher frequency and reliability, resulting in a change in operations regarding empty container steering, making it important to review current operations compared to future scenarios to determine cost optimum. The study focusses on the question: How can total costs be optimized on the steering of empty containers through empty depots, while keeping operations in the hinterland and terminals in mind? A multi-commodity model has been developed that takes two states of containers into account, viz. Damaged and non-damaged containers, in a network of off-dock empty depots, ocean terminals and inland terminals. Supply of empty containers is per node divided into damaged and non-damaged supply with a failure rate and send for repair or evacuation for overseas repair. The developed theoretical model has been implemented into as a DSS tool in Matlab 2014a, which is used to investigate current operations in comparison to various future scenarios, which look at ocean terminal and depot topologies, Target Stock Level scenarios and move type scenarios (altering the network to allow direct evacuation (inland terminal to ocean terminal without transport via the depots) or direct positioning (inland terminal to inland terminal without transport via the depots) From running the model the following conclusions have been developed. - Cost of container moves is subject to two handling and one transport unit cost per OD-pair. Depending on the distance a container is transported, the weight of transport and handling cost is shifted. - The cost aspect distribution (move vs. repair vs. storage cost) for dry containers 75/20/5 and for reefers is 50/45/5, resulting in a shift in focus from move cost to repair cost minimization per container type. - Depending on the composition of the network and the corresponding cost structure the DSS tool determines the combination of empty depots resulting in a cost optimum compared to the base year. For the Maersk Line case cost savings between 3-17% have been found depending on the network topology selected and on the container type investigated. - Target stock level heuristics do not improve the costs significantly, but does show the importance of correct selection of stock with respect to cost optimal empty container steering - Direct evacuation results in large cost savings, but should only be implemented during off-peak operation at the ocean terminal. - Direct positioning results in a cost saving of 13% - Reducing the failure rate by improving container quality results in cost savings - A balance exists between container repair at the port of Rotterdam and overseas, resulting in the requirement of global collaboration within a company to reduce costs.Transport, Infrastructure and LogisticsTransport and PlanningCivil Engineering and Geoscience