Economic Analysis for Investment of Public Sector’s Automated Container Terminal: Korean Case Study

Round 1

Reviewer 1 Report

This study conducted an economic analysis of automated container terminals and obtained break-even capacity to ensure economic feasibility. Methods are fine although I thought more factors can be considered in the total investment costs. The main concern I have is the result and discussion section. Authors need to largely improve the readability of this section; listing all results in tables is not a good way to illustrate the results. After reading the tables, I have no clue what the authors are trying to show me. Also, the discussion is too short and weak. No uncertainty analysis? How robust are the economic results you obtained in this study? What are the broader impacts?  Overall, unless the results are significantly improved, I don't think this manuscript is ready for publication in its present form. Please see my other comments/suggestions below: 

1. is the geographical scope in Korea only or worldwide? in your assumption, you used fixed numbers in the calculation (line 112-113), I guess it may be the same # may be used in Korea, but is it the same across the globe? If not, do you need to incorporate upper and lower boundaries in the analysis?
2. how about the labor fee? is there any reason why you don't consider it in this study? 
3. Fig.2 needs to be improved. 
4. Why only choose 2 factors in sensitivity analysis? What are the selecting criteria?
5. I highly suggest authors only keeping the most important result tables in the main manuscript, and moving others to SI. Instead of using tables, please use some figures to help readers visualize your results. 

Author Response

Dear Reviewer:

We appreciate the valuable comments on our scripts and constructive suggestions for further improvements. In responses to reviewers’ comments, we revised our previous manuscript as in the table below, which summarizes our response. All changes are colored red. We hope that you will find our 2^nd manuscript improved significantly in terms of whole paper reviewers designate to correct and rewrite.

 Best Regards,

Yohan An and Nam Kyu Park

Author Response File: Author Response.pdf

Reviewer 2 Report

Dear Authors,

Thank you very much for your submission. The topic of the paper is interesting and includes many aspects of economic analysis for public investment on automated container terminals.  I will ask some minor amendments to increase the quality of your paper.  You may kindly find my main comments regarding your paper below.

• Is the scale of your paper just Korea or all public container terminal projects globally? If only Korea please update your title and text accordingly.
• In Line 37, you are presenting ACT as a major industry 4.0 trend in logistics industry. From which aspects? Please add a bit more information.
• Please provide references for information given between Line 37 and 41.
• Is there any reference for similar applications to the proper terminal capacity definition in the literature? Or is it a definition just derived by the authors own approach?
• In the methodology section authors say: “An investment that earns the same rate of return as the desired rate of return has an NPV of zero. The NPV will be greater than zero when an investment earns  greater than the desired rate of return”. Based on what information? Please clarify a bit more.
• Authors say: “The standard rent fee is calculated by distributing 40% 108 of the total rental fee paid by TOC on the basis of the Berth and 60% on the basis of TGS.” Is this information based on the study of Theo Notteboom? If not please provide your data reference.
• Is there special reason that authors take berth length as 350 m. If there is please explain why.
• Equation 6 is not very clear. What is average exclusive pier usage fee (EPUF)? Please explain.
• What is the number 30 in equation 8? Please give details.
• Why are the equations 10 and 11 based on 5500 TEU? Any special reasons?
• Why one of the five berth options is 9 berths? Why not 6-7-8?

Author Response

Dear Reviewer:

We appreciate the valuable comments on our scripts and constructive suggestions for further improvements. In responses to reviewers’ comments, we revised our previous manuscript as in the table below, which summarizes our response. All changes are colored red. We hope that you will find our 2^nd manuscript improved significantly in terms of whole paper reviewers designate to correct and rewrite.

 Best Regards,

Yohan An and Nam Kyu Park

Author Response File: Author Response.pdf

Reviewer 3 Report

The authors address an interesting line of research, performing an economic analysis for informing public investment decision with regard to automated marine container terminals. However, their work presents a number of important limitations.

The introduction is quite poor and should be enhanced. Considerations with regard to the global uptake of ACT can be included, along with a description of the main factors driving such an investment. The motivation for the authors conducting this study can also be highlighted.

There is no reference on previous relevant work that has been published. A literature review section must be added, providing a critical overview of where research on ACT has focused on till today and which research contributions have addressed economic aspects, with the authors indicating if they build upon any of these. To this end, they will be able to better justify the innovation level of their work and the contribution they make in the available literature.

The paper does not make clear from the start (only mentioned in the conclusions) if the method described is general (i.e. it can be transferred and applied in different port contexts) or its applicability is limited to the port of Busan that serves as the case study. Furthermore, the authors should explain how the different parameters that are being taken into consideration (e.g. in the calculation of direct and indirect benefits, etc.) were selected. Was the decision based on some relevant literature (no such references are included) or after consultation with port-related experts / stakeholders? In the latter case, were these limited to a specific port or a wider sample was engaged in the process (i.e. from different ports)? For example, in the added value for the port service users, it can be argued that land transport service providers (mainly road transport operators) are not being taken into consideration although the benefits to be derived (in terms of waiting costs) can be important.

The same question also applies to some reference numbers that are being used (e.g. standard berth length, TGS per berth meter). Do these reflect the characteristics of the port of Busan or are they based on some other reference? This is not clear and should be explained.

It’s also not very clear how the number of berths considered in the economic analysis was determined? This should not be taken exclusively from an economic point of view but other perspectives (e.g. technical) should be also considered for coming down to a realistic option.

The conclusions are not sufficiently supported. The authors point out that the selection of parameters to consider lies into the expertise of the respective research team, but do not adequately justify their own decisions within the previous sections of the paper. More specific recommendations on how the results of this research can be exploited by public sector stakeholders should be also provided, while the challenges to be faced when considering the transferability of the method to some other port context should be also highlighted.

Some more detailed comments for the authors to consider are also listed below:

• Are the authors considering full or semi-automation? In some ports, semi-automation proves to be providing greatest benefits (in terms of productivity) compared to full-automation.
• Abstract – p.1 / line 12: ‘securing the feasibility…’ – this implies that there is a threshold for the public sector making the investment, and seems to be case-specific although it is stated as a general remark. Consider revising.
• Abstract – p.1 / line 14: I wouldn’t refer to ACT as a logistics facility, but as a cargo handling one.
• Abstract – p.1 / line 16-18: Is there any key reference supporting this statement?
• Introduction – p.1 / line 31: ‘high-speed of ships’. This is questionable, since in many commodities, low steaming is a widely spread practice so as to cope with the environmental regulations (IMO).
• Introduction - p.2 / lines 45-48: The definition provided for the ‘proper terminal capacity’ is not clear. Consider revising.
• Section 4.1 – p.8 / Table 4: Given the total berth length considered according to Table 3, shouldn’t the total rent fee be $47,082,156 instead of $47,081,979? A slight difference also exists for the total rent fee for TGS.
• Sections 4.1 – 4.3: The authors should consider substituting some (if not all) of the tables with appropriate graphs.

Author Response

Dear Reviewer:

We appreciate the valuable comments on our scripts and constructive suggestions for further improvements. In responses to reviewers’ comments, we revised our previous manuscript as in the table below, which summarizes our response. All changes are colored red. We hope that you will find our 2^nd manuscript improved significantly in terms of whole paper reviewers designate to correct and rewrite.

 Best Regards,

Yohan An and Nam Kyu Park

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

The manuscript has been improved based on reviews' comments. I am fine with publishing it in its present form. 

Reviewer 3 Report

I would like to thank the authors for carefully considering and successfully addressing all of my comments. The manuscript has improved greatly and is now suitable for publication.