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International Journal of Civil Engineering and Technology (IJCIET)

Volume 7, Issue 2, March-April 2016, pp. 185192, Article ID: IJCIET_07_02_016


Available online at
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Journal Impact Factor (2016): 9.7820 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6308 and ISSN Online: 0976-6316
IAEME Publication

CONTAINER TRAFFIC PROJECTIONS


USING AHP MODEL IN SELECTING
REGIONAL TRANSHIPMENT HUBS
M. Ravichandran
Research Scholar, Dept. of Civil Engineering,
Karpagam University
Pollachi Main Road, Eachanari, Coimbatore, Tamilnadu, India
Dr. D. Suji
Professor and Head, Department of Civil Engineering
Adithya Institute of Technology
Sathy Road, Kurumbapalayam, Coimbatore, Tamilnadu, India
ABSTRACT
Shipping is a major link between the global economy and international
trade. More than 90% of world merchandise trade is carried by sea and
over 60% of that volume is containerized. The increasing number of
container shipments causes higher demands on the seaport container
terminals, container logistics and management as well as on technical
equipment. In the Asian region, the existence of ports such as Singapore
and trade evolving from developing countries makes it one of the busiest
container sea routes in the world. The average vessel size registered in 2008
was approx 3400 TEUs as against 2500 TEUs in 2001. However, in line
with the present global economic slowdown, Ocean carriers are carrying
out a slew of cost-cutting measures by withdrawing services, reducing
deployments, merging services, etc. In an effort to better understand the
current container transshipment scenario in the study area, we undertook
meetings with the major lines operating within the regions assessed in the
study.
Cite this Article: M. Ravichandran and Dr. D. Suji, Container Traffic
Projections Using AHP Model In Selecting Regional Transhipment Hub,
International Journal of Civil Engineering and Technology, 7(2), 2016, pp.
185192.
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M. Ravichandran and Dr. D. Suji

INTRODUCTION
In order to undertake a SWOT analysis of Nicobar as a prospective transshipment
hub when compared to the 3 other major hubs in the region viz.; Singapore, Port
Klang and Colombo one would need to understand the key criterias involved in
selecting a transshipment location from a shipping lines perspective. For this purpose
the below overview provides a brief understanding of the article published by
Palgrave Journals written by TC Lirn on An Application of AHP for Transshipment
Port Selection. According to a survey conducted by Cardiff Business School, UK
the research papers applies the Analytic Hierarchy Process (AHP) to analyze
transshipment port selection by global carriers. The survey was conducted on the
basis of two rounds of Delphi survey. The results of the AHP analysis revealed
that both global container carriers and port service providers had a similar
perception of the most important service attributes for transshipment port selection.

DESIGN AND DEVELOPMENT OF ANALYTIC HIERARCHY


PROCESS (AHP) MODEL
The Analytic Hierarchy Process (AHP) is a structured technique for dealing with
complex decisions. Rather than prescribing a "correct" decision, the AHP helps
the decision makers find the one that best suits their needs and understanding of
the problem. Based on mathematics and psychology, it was developed by Thomas
L. Saaty in the 1970s and has been extensively studied and refined since then. The
AHP provides a comprehensive and rational framework for structuring a decision
problem, for representing and quantifying its elements, for relating those elements
to overall goals, and for evaluating alternative solutions.
The AHP converts these evaluations to numerical values that can be processed
and compared over the entire range of the problem. A numerical weight or
priority is derived for each element of the hierarchy, allowing diverse and often
incommensurable elements to be compared to one another in a rational and
consistent way. This capability distinguishes the AHP from other decision making
techniques. In the final step of the process, numerical priorities are calculated for
each of the decision alternatives. These numbers represent the alternatives' relative
ability to achieve the decision goal, so they allow a straightforward consideration of
the various courses of action. Figure 1 shows the typical AHP Model.

Figure 1 Typical AHP Model

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Container Traffic Projections Using AHP Model In Selecting Regional Transhipment Hub

The hierarchy can be visualized as a diagram as shown above, with the goal at
the top, the alternatives at the bottom, and the criteria in the middle. Each box is
called a node. The boxes descending from any node are called its children. The
node from which a child node descends is called its parent. Groups of related
children are called comparison groups. The parents of an Alternative, which are
often from different comparison groups, are called its covering criteria. As the AHP
proceeds through its other steps, the hierarchy can be changed to accommodate
newly thought of criteria or criteria not originally considered to be important;
alternatives can also be added, deleted, or changed. Once the hierarchy has been
constructed, the participants use AHP to establish priorities for all its nodes. In
doing so, information is elicited from the participants and processed mathematically.
Priorities are numbers associated with the nodes of an AHP hierarchy. They
represent the relative weights of the nodes in any group. By definition, the priority
of the Goal is 1.000.

DATA COLLECTION AND ANALYSIS


The priorities of the Criteria will always add up to 1.000. The same is true with
the Alternatives Pair wise comparisons to incorporate their judgments about the
various elements in the hierarchy, decision makers compare the elements two by
two. These are known as Pair wise Comparisons. The following pair wise
comparisons were undertaken while conducting the survey shown in table 1
Table 1 Pair wise comparison

Table 2 below suggests the rating scales provided to the respondents, basis which
relative importance can be arrived at when comparing various pairs.

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Table 2 Rating Scales

The respondents were asked to circle their choice as per the following
examples. If criterion A is 9 times more important than criterion B in attracting
global container carriers to use the ports transshipment service.
Table 3 Comparison of criterion option 1

Circling 9 means - From transshipment ports perspective, (A) factor


(Physical and Technical Infrastructure) has extreme importance for attracting
global container carriers to use the port when compared with (B) factor
(Geographical Location). If criterion B is 9 times more important than criterion A
in attracting global container Carriers to use the ports transshipment service.
Table 4 Comparison of criterion option 2

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Container Traffic Projections Using AHP Model In Selecting Regional Transhipment Hub

This means - According to the Scale of relative importance, from transshipment


ports Perspective, (B) factor (Geographical Location) has extreme importance in
attracting global Containers carriers to use the ports transshipment service when
compared with (A) factor (Physical and Technical Infrastructure). If one happens to
circle 1 as shown below - it would imply that both (A) factor (Physical and
Technical Infrastructure) and (B) factor (Geographical Location) have equal
importance in attracting global Containers carriers to use the ports transshipment
service.
Table 5 Comparison of criterion option 3

The Delphi approach has been used in the preliminary stages of criteria
selection in an AHP context. More often, it has been used as a follow-up stage of
an initial AHP survey with a view to increasing consensus on the importance of
global weights of criteria.
The four major criteria retained for the survey of global carriers were

Port Physical and Technical Infrastructure


Port Geographical Location
Port Management and Administration
Carriers Terminal Cost

The 12 total 6 sub-criteria divided amongst the 4 major criteria mentioned are
described in the below table under the head CAT II. CAT III and CAT
IV are basically a list of aspects represented by each sub-criteria mentioned under
CAT II. The aim of the survey conducted on the global carriers was to provide a
rating to the sub-criteria listed under CAT II. However, these were further
broken down into CAT III and CAT IV just in order to provide a thorough
understanding of the sub- criteria in discussion.

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Table 6 Main Criteria and Sub-criteria rating as per performance score

From the above survey, the 5 main sub-criteria are involved in the process of
selecting a transshipment hub from a carriers perspective (with the maximum weight
age) have been tabulated below in table 7.

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Container Traffic Projections Using AHP Model In Selecting Regional Transhipment Hub
Table 7 Five Major Criteria of AHP Survey

CONCLUSIONS
The AHP results for the sub-criteria were consistent with the calculated importance
of the major criteria. While three out of the top five sub-criteria figuring above were
subcriteria of Geographical Location, the highest weight calculated was that of
the Handling Cost of containers associated with the carriers port cost. Geographical
Location attributes are beyond the control of terminal operators/port authorities and
even in the case of expansion there is little margin to alter substantially the
geographical location of port provision. Once the location of a port/terminal is
determined, port operators can only compensate for unfavorable deviation costs that
carriers might have to incur through either reducing Handling Costs or investing
on Basic Port Infrastructure. By contrast, the Handling Cost of containers, which
scored by far the highest in terms of sub-criteria weight, comes within the realm
of managerial and marketing decisions. As Nicobar will be required to cater to
transshipment cargo on the E-W route between Singapore and Colombo, the port
should be designed to accommodate traffic on this route, which includes the largest
vessel currently in operation. This would also increase Nicobars competitive edge
as a transshipment hub and will also provide shipping lines the required economies
of scale.

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