DACHAN BAY TERMINALS – Case study

DACHAN BAY TERMINALS MOVES TOWARD AUTOMATION

“WE RECOGNIZE THAT AUTOMATION ALLOWS TERMINALS TO MAINTAIN A COMPETITIVE ADVANTAGE THROUGH AN ENHANCED QUALITY OF SERVICE. THE DATA THAT N4 PROVIDES ALLOWS FOR THE TRANSPARENCY THAT WE NEED TO MAKE INFORMED DECISIONS AND BE A MARKET LEADER.” – Barbara Zhang, Operation General Manager

OVERVIEW

DaChan Bay Terminals, owned by Modern Terminals, is strategically located in the Bao An District of Western Shenzhen. This location is 20 nautical miles north of Hong Kong, 40 nautical miles south of Guangzhou, and 10 kilometers south of Shenzhen Bao, an international airport. Due to its strategic access, DaChan Bay is the ideal spot for managing cargoes that pass to and from all major manufacturing hubs in the Pan-Pearl River Delta (PRD) region. The terminal achieved 1.26 million TEUs in 2015, with a full capacity of 5 million, providing operational excellence, customer-driven services, convenient and cost-effective land and waterway transportation solutions for customers, including its express barge network covering 8 major cities in West PRD and more than 50 terminals in Guangdong, Guangxi, and Hainan.

CHALLENGES

Toward the end of 2011, DaChan Bay recognized a need for change. The terminal had several challenges to overcome:

• It needed a formal in-house system that could provide the scalable, flexible, and sustainable service necessary to support a modern, automated infrastructure that would support future growth efforts.
• It required a terminal operating system (TOS) that specifically interfaced with its shipping and cargo line customers, provided enough flexibility to meet the demands of both port locations, and integrated with its current billing system.
• It needed to meet and uphold the standards of automation being established across the shipping sector and demanded by carriers and shippers.

SOLUTION

DaChan Bay selected Navis’ flagship N4 Terminal Operating System solution to achieve its goal of providing best-in-class customer service through optimized performance, improved productivity, and cost-effectiveness.

RESULTS

DaChan Bay was the first terminal in the Modern Terminals family to implement N4 in November 2013 – the project was completed in just 8 months. During the aggressive project schedule, a range of terminal executives, from operation to finance to the commerce team, were involved in implementing change management initiatives including organizational review, job provisioning, and process review. The Navis team worked to ensure that DaChan Bay was fully prepared for the results that would inevitably come with automation and the implementation of new technology.

Following DaChan Bay’s N4 journey, results from the planning phase to post-implementation are as follows:

• The port experienced a 57% cargo throughput increase. Within the first four months of 2016, the terminal continued to reap the benefits of N4, improving its TEU cost by 5% compared to the same period in 2015.
• Total haulage productivity in the first four months of 2016 increased by 18% while unit costs declined by 27%.
• The terminal was also able to decrease its total haulage costs by 19% versus the same time frame of 2013, despite an 11% spike in volume and a compound 21% increase in contractor rates.
• Additionally, DaChan Bay experienced a shift in mindset, moving away from its previous “firefighting” mode towards a more strategic attitude when addressing challenges.

Looking towards DaChan Bay’s future, Barbara Zhang, Operation General Manager, says, “As a result of these viable successes from N4’s capabilities, we are revitalizing container stacking by taking the entire cycle of containers, from arrival to departure, into consideration, in order to avoid unnecessary shuffling. We are also now able to control yard density with a preset target to ensure effective use of equipment resources, as well as set target performance metrics for each vessel in order to achieve a maximum return on investment.”

In order to continue to provide optimal service to its maritime shipping customers, DaChan Bay will remain committed to building on its modernization efforts. “We understand the value of process automation and the importance of evolving with the times,” explains Zhang. “We recognize that automation allows terminals to maintain a competitive advantage through an enhanced quality of service – in addition to other factors such as location and talent. With N4, we have improved quayside times and vessel rates. As we continue on our transformation journey, we are now implementing the QC OCR interface to automate hatch clerk’s work in quayside operations and plans to remotely control the yard crane operation and automation technology, among other functions of our ports in the future, are currently being studied. The data that N4 provides allows for the transparency that we need to make informed decisions and be a market leader.”