Auckland Freight Transportation: Efficiency and Effectiveness of Hub Sharing

Abstract

Freight transportation has transformed today's business environment significantly. It allows companies to expand their worldwide trade, and to handle containers that are exported and imported. Container transport has been an important point for operation managers, business practitioners, and researchers, and has gained significant public attention in recent years. This research focuses on the ability of freight companies to combine their operations, and to use hubs as an extra facility for the storage, process, and handling of containers. A study for New Zealand's major ports, i.e., Ports of Auckland and Ports of Tauranga, both situated in New Zealand, is conducted. They handle containers with two major forms and modes of transport, i.e., trucks and rail. These companies are the main competitors in New Zealand. The academic literature lacks of detailed knowledge on the possible split between container transportation and 'hub sharing' between companies. Furthermore, most of the literature focuses on hub allocation and hub and spoke systems within the airline industry. The purpose of this research project is to make contributions to the freight transportation and hub related fields. This study investigates the container movement by different modes of freight transportation, truck and rail, with a future join of operations between two of the major ports in New Zealand: 'Ports of Auckland' and 'Ports of Tauranga'. Operations of both companies have been mapped out into two simulation models and experimentation of possible effects on the simulation system has been performed. These operations have been carefully studied, and were constructed into two simulation models. Different scenarios have been provided in order to identify possible variations on the actual system. The first five scenarios demonstrate a range of a split of resources between the transportation of containers between the ports and to the customers. Additional three scenarios were studied in order to identify a range of costs that can be altered into the model with a combination of costs for entities and resources used in the simulation model. The results identify that companies would need to move their freight transportation of containers between ports into transportation by rail in the long-run, where approximately 46 containers can be loaded into the train, instead of one or two containers in the truck. Important measures are presented, such as the total cost of resources and entities, time and cost of entities, queue waiting time and costs, and utilization of resources. Results obtained from different scenarios identify that the second proposed model is more beneficial for companies to use in most of the cases. This study can be treated as the starting point for other future researchers. Both simulation models provide a practical background for studies that have a similar aim of bringing two major companies to work together for their benefit and for New Zealand as a country.