Using queuing theory to solve port optimization problems can result in large potential savings by both ports and shippers. This methodology generally makes the assumption that minimizing ship waiting time optimizes the entire port system. However, this overlooks the contribution to the system given by the port itself. There is a fixed cost of facilities that must be incurred to open a berth at a port. By minimizing ship waiting time alone, the current algorithm tends to encourage ports to build excess capacity. When a port's cargo transfer capacity is idle, the port authority suffers a capital cost of lost revenue. An extension of the existing principles of queuing theory to include port facilities is offered. An algorithm is tested with case study data from the Port of Galveston, Texas, and is a promising solution for the operational analysis of seaports. The method of analysis can be used to assist in making both capacity expansion and reduction decisions.
Available at: http://works.bepress.com/douglas_gransberg/6/