Intermodal Container Transport Logistics to and from Malaysian Ports
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, 2014 Intermodal container transport logistics to and from Malaysian ports Intermodal container transport logistics to and from Malaysian ports Evaluation of Customer requirements and environmental e ects SHAHRIN NASIR TRITATSCPHD ISBN KTH www.kth.se Intermodal container transport logistics to and from Malaysian ports - Evaluation of customer requirements and environmental effects SHAHRIN NASIR Doctoral Thesis in Transport Science Stockholm 2014 Royal Institute of Technology (KTH) School of Architecture and the Built Environment TRITA-TSC-PHD 14-010 Division of Transport and Logistics ISBN 978-91-87353-62-8 2 ACKNOWLEDGEMENT Alhamdulillah, praise to Allah for giving me the strength to complete my PhD thesis. I started working with the research in 2007. There are many wonderful people that I would like to thank for helping me complete my studies. First and foremost, I would like to thank my employer Universiti Teknologi MARA and the Ministry of Higher Education in Malaysia for giving me the scholarship to further my studies at KTH (Royal Institute of Technology) in Sweden. I would also like to thank the following people for their untiring assistance; Dr Amin Kassim (Century Logistics), Nazri Ismail (Penang Port Sdn Bhd), Gan Leong (Ocean Logistics), Mazlina (ICT Ipoh), Faiz Hakim (North Star Logistics) and Syahrul Azam (KTMB). They gave assistance from the very beginning of my research. My heartfelt gratitude also goes to my fellow friends whose camaraderie during my stay in Sweden has been invaluable. Special thanks go to Rumaizi, Ejant, Qory, Abg Karim, Kak Normah, Kak Hani and Pok. Their help and guidance throughout my stay in Sweden is very much appreciated. To my fellow Malaysians in Sweden and the Malaysian Embassy in Stockholm, your kind assistance and friendship will be cherished forever. I would also like to thank my parents Nasir Ibrahim and Azizah Ahmad for their continuous love and support. Your concern for my well-being during my stay in Sweden reflects the genuine love and sincerity of any parents towards their children. To Zahiah (Along), Azahir (Ye), Noor Imlah (Im), Adibah (Diba), Muhammad Adib (Adib) and Muhammad Nasruddin (Nas), thank you for being wonderful siblings. To my supervisors Karl and Bolle, your assistance and the knowledge you have given me will always be in my heart. Karl, since I first made your acquaintance in 2003 in the Translink Project, you have been the most supportive supervisor I have ever come across. I appreciate the time you spent on my work and the comments you provided helped improve my work. I appreciate your concern for my family’s well-being during our stay in Sweden. The short sailing trip on your boat was one of the most memorable occasions for me and my wife. Bolle, the long hours you spent in perfecting the model have been of great help. My thoughts will always be with you. Last but not least, my thanks go to my beloved wife Azian and my three children, Along, Angah and Fahmi. To Yan, kasih sayang mu tidak akan Abang lupakan. You have sacrifice four years of your working life to be with me in Sweden. During the roller coaster ride of completing my PhD, you have always been supportive. Your love will be cherished forever. To my sons, abah sayang kamu, moga menjadi anak yang soleh. To the rest who are too numerous to mention, thank you all for making my PhD a success. I will always remember the rewarding process of getting my PhD in Sweden. 3 EXECUTIVE SUMMARY Malaysian ports’ container volumes are expected to increase to 36.6 million TEUs in 2020 compare to 12 million TEUs in 2005. Almost 45% of the container volumes are local containers entering the Malaysian hinterland. The hinterland container transport movements are dominated by road haulage (90%), alongside road-rail intermodal that currently handles the remaining 10%. The aim of this research is to develop possible strategies for improving the logistics of the intermodal hinterland container transport system based on customer demand, cost-efficiency, environmental impacts and quality. Intermodal began to capture more container volumes from ports, especially Port Klang, in 1989. This was initiated by the opening of Ipoh Cargo Terminal (ICT). Other inland terminals such as Padang Besar (Perlis), Nilai Inland Port (Negeri Sembilan), Segamat Inland Port (Johore) and three other ICDs have seen a good share of intermodal movements during that time. But for the past 10 years, the intermodal share has declined. The government is concerned with the congestion, greenhouse gas (GHG) emissions from road haulage and security issues. The Prime Minister has pledged that by the year 2020, Malaysia will reduce its CO2 emissions by 40% and it is believed that intermodal could be one of the solutions to achieve this. The need to shift from road haulage to road-rail intermodal has been mentioned in Industrial Master Plan 3 (2006) and the Logistics Road Map (2009) to alleviate these problems. Intermodal hinterland container transport is a trend in many European ports to solve road haulage problems. The current hinterland container transport in Malaysia showed that the share of intermodal in Malaysia is still low. Most of the inland terminals in Malaysia are underutilised. Based on a customer survey, the major issues for customers to shift to intermodal is not only cost but also service quality. The lack of strategic policies and effective institutional aspects also contributes to make intermodal services less attractive. The Port Klang-Ipoh Corridor has a huge potential to be the main intermodal corridor in Malaysia. The case study showed that this corridor has the container volume to support intermodal services. The case study indicated a cost saving of 51% compared to direct road haulage, whereby CO2 emissions would be reduced by 36%. However, all the cost savings and reductions in CO2 emissions are not viable if there is no implementation of the most effective strategies to promote intermodal movement. The strategies include 1) introducing the Intermodal Transport Department and new policies, 2) introducing specific intermodal services, 3) setting up the green corridor concept, 4) developing a reward system for actors in intermodal transportation, 5) collaboration and coordination issues and 6) quality of service monitoring. Implementations of these strategies is vital to enhance the intermodal share in the Malaysian environment. 4 TableofContents Acknowledgement .............................................................................. 2 Executive Summary ............................................................................ 3 AbbreviationS .................................................................................... 6 CHAPTER ONE ....................................................................................7 1. INTRODUCTION .......................................................................... 7 1.1 Background of the study .............................................................7 1.2 Problem statement .....................................................................9 1.3 Aim of the study ..................................................................... 10 1.5 Scope and limitation of the study ............................................... 10 1.6 Overview of chapters ............................................................. 13 1.7 Terminology ......................................................................... 14 CHAPTER TWO ................................................................................. 15 2. Literature review ...................................................................... 15 2.1 Logistics Quality factors for mode/carrier selection ........................ 15 2.2 Hinterland transport services from different ports ....................... 25 2.3 Transport system evaluation methods ......................................... 35 2.4 Conclusion .............................................................................. 42 CHAPTER THREE .............................................................................. 43 3 RESEARCH METHODOLOGY .......................................................... 43 3.1 Overview of methodology .......................................................... 43 3.2 Data needs ........................................................................ 45 3.3 Data collection methods....................................................... 47 3.4 Data analysis ......................................................................... 55 CHAPTER FOUR ................................................................................ 57 4 REVIEW Of THE CURRENT SYSTEM ................................................ 57 4.1 Actors in hinterland transport ................................................. 57 4.2 Hinterland container movements in Malaysia .......................... 63 4.3 Institutional framework ........................................................... 70 Penang Port Commission Act 1955 ................................................... 70 Port Authorities Act 1963 ................................................................ 70 4.4 Current hinterland transport issues as highlighted from the preliminary service provider interviews ............................................. 72 4.5 Customer (manufacturers) survey and interviews ....................... 73 4.6 Conclusion ......................................................................... 83 5 CHAPTER FIVE ................................................................................