Port Terminal ALG Advanced Logistics Group Newsletter

Designing the business of an Inland Container Terminal (ICT)

Adding value to the port logistics chain

What is an Inner Container Terminal?

Inland Container Terminals (ICTs) or Inland Container Depots (IDCs) are facilities offering services for handling and temporary storage of import/export laden and empty containers carried in some cases under customs control.

The primary functions of ICTs/ICDs may be summed up as under:

  • Receipt and dispatch/delivery of cargo
  • Temporary storage of cargo and containers
  • Stuffing and stripping of containers
  • Customs clearance operations
  • Consolidation and desegregation of LCL cargo
  • Maintenance and repair of container units
  • Transit operations by rail/road to and from serving ports

The ICTs/ICDs are composed of the following main areas:

  • Gates: the gates regulate the entry and exit of road vehicles carrying cargo and containers through the terminal. Documentation, security and container inspection procedures are undertaken at the gates.
  • Container Yard: container yard occupies the largest area in the ICT. It is the stacking area where the (i) export containers are aggregated prior to dispatch to port, (ii) import containers are stored till customs clearance and (iii) empties await onward movement.
  • Warehouse: A covered space/shed where (i) export cargo is received and import cargo stored/delivered, (ii) containers are stuffed/stripped or reworked, (iii) LCL exports are consolidated and import LCLs are unpacked and (iv) cargo is physically examined by Customs. Export and import consignments are generally handled either at separate areas in a warehouse or in different nominated warehouses/sheds.
  • Rail siding: the place where container trains are received, dispatched and handled in a terminal. Rail siding are present only in rail based terminal.
01_Container terminal ALG Advanced Logistics Group
Inner Container Terminal layout (Illustrative)

What are the main benefits of an ICT/ICD?

ICTs are increasingly adopted by several ports worldwide since they help to decongest ports and increase the efficiency of the logistics chains.

Port decongestion: ICTs provide several advantages to reduce port congestion such as:

  • Providing extra container storage capacity
  • Decreasing the truck traffic at the container terminals
  • Reducing the customs procedures at the port (whether these can be done at the ICT)

Logistics chain efficiency: ICTs help to decrease the overall logistics costs by:

  • Reducing the storage costs due to more competitive tariffs than container terminals
  • Improving the container usage and reducing the movement of empty containers
  • Providing additional value added services not offered by the container terminals

Based on these advantages, ICTs generally provide reasonable investments returns with an appropriate level of investment. They also suffer a limited demand risk if an adequate phasing of the infrastructure is done, aligning its development with the expected demand.

Container logistics chain and ICTs/ICDs ALG
Container logistics chain and ICTs/ICDs (Non-exhaustive)

Steps to be followed in the business conception of an ICT

In order to successfully define the business of an Inland Container Terminal, there are several steps that need to be followed. These steps cover the entire conception process from the definition of the ICT business till the structuring of the operation:

ALG’s approach development ICT terminal. Advanced Logistics Group ALG News
ALG’s approach for the development of an ICT terminal
  1. Current demand and supply analysis to map the volumes of containers moved in the area and the main companies requiring logistics services.
  2. Analysis of the supply of ICT and container terminals to identify gaps in the existing competition/supply (service, infrastructure, level of service…), defining potential business opportunities.
  3. Definition of the ICT value proposition including services, tariff structure and key competitive advantages.
  4. Identification of the ICT infrastructure and equipment requirements. The main output of this phase will be the preliminary ICT layout design and the phasing for the development.
  5. Definition of the business case including its operational model and investment cash flows, thoroughly analysing the project’s main financial indicators.
  6. Selection of the most appropriate financing, management (property) and operational scheme: financing scheme to be deployed,definition of the potential partners to be involved and agreements to be in place, definition of the management scheme of the operation (PPP, private terminal, outsourcing…).
  7. Definition of a reasonable, realistic and actionable implementation plan: activities, players, roles & responsibilities, timeline, milestones…
Phasing of an ICT terminal development ALG News
Phasing of an ICT terminal development (Illustrative)

About the authors
Pablo Ruiz del Real is MSc in Civil Engineering, Partner at ALG and Head of Middle East operations
Rubén Naveiro Seijo is MSc in Industrial Engineering and Manager at ALG
For more insights, please check www.alg-global.com or contact:
pruiz@alg-global.com
rnaveiro@alg-global.com