TPR chain cost model

TPR economic evaluation model:

A model was developed (van Hassel et al. (2014)) that allows calculating the generalised chain cost from a selected point of origin, via a predefined container loop to destination point. The model was coded in C# and uses Microsoft Excel (data) and JMP11 (maps) as output formats. In order to calculate the chain cost, first a container loop has to be defined. A loop is defined as a circle route of a ship from one port to the next (it has no beginning nor an end). This loop will determine the maritime part of the chain. In figure 1, the general overview of the developed model is given.

The model is built up as a route builder for ships. This route builder connects different aggregated hinterlands via a route of ports (bold lines). The aggregated hinterlands are defined as a summation of different smaller geographical areas, which in Europe correspond to NUTS-2 areas. In the aggregated hinterland, at least one, but mostly more ports are located that can serve the same set of hinterland areas. Examples of aggregated hinterlands are mainland Europe or the United States.

Once a ship has been selected, the main dimensions and related costs of that ship are known. Based on the physical characteristics of the ship, a set of ports which can accommodate the selected ship are available. At current, the model encompasses 42 ports in total, on which the loop can be set up.

Figure 1: structure of the model


From each terminal in a port, the hinterland distances via road, rail and inland waterways (if available) are incorporated in the model. The hinterland areas are defined as NUTS-2 areas in Europe and in Great Brittan. Using the hinterland distances, it is possible to calculate the hinterland cost per mode from a terminal to a hinterland destination.

A chain is defined as a route from a hinterland area in a specific aggregated hinterland to another hinterland area in another aggregated hinterland. A chain therefore has a beginning and an end. In order to calculate the chain cost from a point a origin to a destination point, the model must not only calculate the total cost of the ship, but it must also incorporate the cost of transporting a container from a hinterland area to a port on both ends of the chain, the cost of a container in the port phase (port dues, pilotage, container handling, etc.) on both chain sides, and the cost of transporting via sea the container from the port of loading to a port of unloading. In Figure 2, the overview of the model is given when a chain calculation is made.

Figure 2: overview of a chain calculation

A hinterland model is developed that will be used to calculate the hinterland transport cost from the selected container terminals in the selected ports to in total 250 European hinterland areas. The generalised costs of three different transportation options (road, rail and inland waterways) are calculated. Therefore, with this model, also purely land-based flows can handled, for instance using rail.

van Hassel E. , Meersman H., Van de Voorde E., Vanelslander T., 2014; .Impact of scale increase of container ships on the generalized chain cost, IAME conference 2014