The Challenge of Fragmented Container Port Capacity



Neil Davidson, Drewry


Neil Davidson, Senior Analyst (Ports & Terminals) with Drewry Maritime Research has written a new technical paper for Port Technology in which he offers fresh, pioneering insight into how to achieve optimal terminal efficiency via the analysis of terminal fragmentation. 

Ever-larger container vessels and much bigger liner alliances have brought a sharp focus on the nature of terminal capacity in each port. In the ‘old days’ of smaller ships and smaller ‘customers’, each customer could be accommodated in a single terminal and it did not matter whether a port had one large terminal or a number of smaller ones. However, the large scale and ‘lumpiness’ of customer volumes in the mega-alliances has markedly changed the nature of demand for terminals. Fewer, larger terminals are needed in each port and this has led Drewry to analyse the degree to which terminal capacity in the world’s ports is either concentrated in a small number of terminals in each port, or fragmented across numerous terminals.


Figure 1 illustrates the various scenarios. On the vertical axis, the degree to which a port’s capacity is fragmented into numerous terminals is measured using the HHI Index, where 1.0 means no fragmentation at all (i.e. the port only has one terminal) and zero means it is highly fragmented (i.e.  the

port has numerous terminals within it). However, the question of fragmentation also must be seen in the context of the size of the port and so the horizontal axis plots this, ranging from an  annual  throughput of 1.0 million teu to 20 million teu. As can be seen, there are  two  quadrants  that  are undesirable and two that are more desirable. Smaller ports are better off with low fragmentation, but larger ports can function with a degree of fragmentation. A very large port with a single terminal might appear to be an attractive operational option on the face of it, but this may result in inefficiency due to very long internal moves of containers between the yard and the quay. It is possible therefore to show an operational ‘sweet spot’ across the matrix, as illustrated in Figure 2.

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