Barge transportation has been steadily increasing in popularity due to its superior efficiency, inherent cost-savings, and environmental-friendliness compared to trucking and rail. More ocean carriers are beginning to realize these tangible advantages that barges can leverage for their business. By moving more of their containers via water rather than land, they are also incidentally helping to alleviate traffic with less trucks clogging and damaging the highways, all the while saving money in the process.
However, there are several factors inhibiting barge traffic from growing at Laem Chabang Port. The biggest issue currently is that barges must call at each individual terminal at the Port, which may already have their berth occupied by a container vessel that normally takes priority. Often barges must wait for a berthing window to open, increasing their cost to operate and decreasing their operational efficiency.
In a bid to improve productivity, the Port Authority of Thailand (PAT) has announced plans to construct an exclusive barge terminal within Laem Chabang Port area to support the rapidly-growing trade and transportation to the Port. This new exclusive terminal aims to ease the strain placed on other terminals that are currently serving both container vessels and barges. For a deeper insight into the proposed project, we also spoke with industry expert and barge terminal operator, Mr. Banchai Karuchit, Deputy Chief Executive Officer, Sahathai Terminal for his views on what it will take to make this project a resounding success.
In 2015, PAT initiated the A Terminal project within Laem Chabang Port, which is also known as, “Barge Terminal A0.5.” The A0.5 terminal will be located between Terminal A1 and A0. PAT’s plan is to design an L shape terminal that allows two barges to be berthed at the same time, with one berth at 120 meters long, and the other 125 meters long. The terminal plans to be able to accommodate barges with a capacity of 3,000 DWT and 1,000 DWT, and will be able to facilitate in quicker transshipment services.
Furthermore, the A0.5 terminal is proposed to have efficient container handling equipment that allows it to support 300,000 TEUs per year. The proposed 3,000 DWT capable berth will feature quay gantry cranes, while the 1,000 DWT capable berth will feature mobile harbor cranes. For the proposed onsite container depot, rubber tired gantry cranes will be used to stack and move containers around.
The A0.5 barge terminal is proposed to be situated on a 43-rai piece of property that will include a workshop substation, a three-story office building, and two onsite container depots that should support 1,100 containers with space for 54 reefer plugs. Additionally, the terminal will be built with two entry gates and one emergency gate, which will all feature weight bridges.
The new terminal announcement was initially met with enthusiasm from operators, terminals, and carriers. However, as Mr. Banchai explained there are potential pitfalls that need to be avoided if is to achieve the goals that PAT set out. “The designed capabilities of the A0.5 terminal may not be enough for the demand it will face. The current design was made to support 300,000 TEUs per year, but we estimate that average annual volume received by barges is already at 350,000 TEUs. We are worried that this capacity will not be enough to support the volumes we are currently experiencing, and hinders the ability for future growth. This also brings up a problem of overflow. If the new barge terminal is full, will barges then be forced to wait for berthing space or will they be rerouted to individual container terminals once more? It would be great if these questions of future growth and terminal capacity could be addressed well beforehand.”
“In addition, operators are still looking for clarity on the structure of service fees and tariffs of the new terminal. If charges such as an additional lift on/lift off or the extra truck dray from the barge terminal to the container terminal are not factored in the cost to use barges, they may become more pricey than other modes of transportation. This will then defeat the purpose of moving containers with barges if it’s more expensive, and companies will inevitably continue to use trucks or rail their containers to the Port, leaving none or very few of the benefits to be realized from the new barge terminal. Setting a tariff and fee structure that encourages a shift from surface transportation to barges is what will truly make the terminal a success.”
Room to Grow
Currently, almost 90 percent of containers transported to Thailand’s Laem Chabang Port is done via road transportation, 8 percent via rail, which leave a mere 2 percent currently being transported via barge. It will take time to change the way containers are transported to and from the Port, but Mr. Banchai has been encouraged that the PAT has held talks with the private sector. With the correct infrastructure, sufficient capacity, and if enough incentives are put in place, the market will naturally switch to utilizing barges.
The idea and plan for creating a new dedicated barge terminal for Laem Chabang should be applauded, as the benefits for such a project stand to be beneficial for many. However, the new project still needs clarity in terms of terminal functions, as well as the additional costs that may add to operators’ expenses and ultimately puts the viability of the new terminal at risk. A0.5 terminal may suffer from these issues in the long run, and this is exactly why it will need both private and public sectors involved in the discussion. All parties involved have much to gain from creating a smooth path towards growth that all can benefit from in the future from the new terminal.