Ports and Terminals

Source: personal archive, sailing with my family.

Source: https://www.delftacademicpress.nl/f031.php

Port and terminal planning

Throughout my private and professional life, I have had substantial interest in waterways and seaports. My parents were recreational sailors and before entering into university I had already seen most of the seaports between San Malo in France and Helgoland in Denmark, including the UK ports between Cowes and Great Yarmouth. I still enjoy sailing, but now with my own family.

My interest in sailing and ports continued at university where I took all available courses on shipping, port economics, and port development that were offered at the Erasmus University in Rotterdam and at the Technical University of Delft.

In my professional life I contributed to various port master planning projects for Royal Haskoning (now RHDHV), in which I used to be responsible for the freight forecast, the port requirements, concept layouts, navigational aspects, and the financial and economic evaluation. During my PhD I have conducted research on probabilistic long-term port projections and became responsible for the shipping section of the Dutch Delta scenarios , which related to both ports and inland waterways.

Following my PhD I developed an integrated foresight method for assessing the impact of trends and key uncertainties on ports, with a case study for the port of Rotterdam. I also started giving lectures on economics of port master planning and autonomous shipping and supervised quite some students in port and transport related graduation projects. I wrote several sections on port planning in the book "Ports and Terminals" , in which my contribution relates to freight forecasting and financial and economic evaluation of port investment projects.

I am futher specialised in port hinterland logistics, especially by inland waterway transport.

Cash-flow optimisation

Source: own representation, conceptually similar to figure included in my contribution in the book Ports and Terminals .

Evaluation of port investment projects

Transport economists are mostly involved during the first stage of a port development project in which the freight projections are made and during the later stages in which the feasibility of the project is evaluated. In my experience it is, however, also important to take financial feasibility into account during the planning and design phase.

I teach students the principles of financial evaluations as well as the difference between a financial and an economic analysis. I learn engineers to prepare a (simplified) real pre-tax pre-finance cash flow model that does not require inflation, finance structures, depreciation and tax-regimes to be included, as opposed to more complex nominal post-tax post-finance models that are used in practice to support final investment decisions. By using simplified cash flow models during the initial design stage, the risk of being confronted with an unfeasible project in the final evaluation stage is substantially reduced.

Cargo Forecast

Source: own representation, hypothetical figure based on a comparable forecast that I once made for an African seaport.

Port throughput projections

Port throughput projections are usually prepared by a transport economist at the beginning of a project. They are often conducted under extreme time pressure as the entire design team requires the projections as input for their planning exercise. Rushing up freight projections is however not wise, as large investments will be made on the basis of these projections. Freight forecasts usually concern projections of expected future developments based on historical trend analysis and expert opinion. They are complemented by a sensitivity analysis in which the assumptions for several input variables are varied. In general, a forecast refers to a single most probable estimate of expected future developments. A more advanced approach is to develop probabilistic projections (see discussion in page on trends ). Probabilistic forecasting techniques are only valid in absence of key uncertainties to which no probabilities can be assigned. In response to the major transitions taking place today, there is a tendency to shift to methods for dealing with higher levels of uncertainty.

Long-term scenarios

For higher levels of uncertainty use is often made of scenarios to explore a broader range of possible futures. This was also the case for the Dutch Delta scenarios , that were first published in 2012.

The aim of the broader Delta Scenario study was to explore the outer corners of possible future developments on the requirements of the water system from the perspective of various stakeholders. To this end it mainly took into account the combined effects of socio-economic developments and climate change on: nature and built environment; river discharge, sea level rise, and safety against flooding; availability of sufficient clean fresh water for consumption and agricultural purposes; availability of sufficient fresh water for industrial production and cooling of power plants; and the effects on seagoing- and inland shipping. My contribution concerned the shipping section of the broader Delta Scenario study, related to ports and inland waterway transport.

Scenarios are well suited to deal with uncertainty in case the system is confronted with severe key uncertainties. They can help to assess the impact of possible futures on the system, and to develop policies that are more flexible and adaptive.

Use of trends and narratives

Scenarios are well suited to anticipate possible changes, but commercial plans that are designed to accommodate a broad set of requirements presented by innumerable scenarios, require high investments and risk becoming non-competitive. To stay competitive in a commercial environment, one does not have the luxury to invest in plans that are robust under innumerable possible developments. Instead one has to focus on the more plausible developments, which can be identified on the basis of a comprehensive understanding of the system, for which I develop an integrated 3-layered framework (see page on trends ) through a case study for the Port of Rotterdam.

By combining insights obtained from this framework with specific domain knowledge on the strengths and weaknesses of the port, a limited set of ‘trend-based narratives’ can be drafted on the basis of which new business opportunities can be identified and developed into a broader vision and spatial strategy for the port.