Port industry and container terminal business have been continuously developed in line with the world economic growth and the globalization of the world. The current trend of building mega vessels and efforts to reduce operating costs have led shipping lines to selectively use major ports which are usually located in the main trade arteries and very convenient for the lines to relay transshipment cargos through the well organized feeder network in the ports. The so-called hub and spoke system has ignited fierce competition among each government to develop its ports as hub ports in the region.
While the government has competed with neighboring nations to position Busan and Gwangyang as a hub port in the North East Asia, it has also accelerated its effort to expand ports and logistic facility in may regions and accordingly, Busan and Gwangyang ports have been facing with internal competition with the neighboring ports such as Incheon, Ulsan, Pyungtaek, etc.
Since the opening of Busan New Port, the imbalance between supply and demand has caused an insecure market situation in Busan port. Under the poor market conditions, terminal rates have been sharply decreased and terminal operators are suffering very serious financial difficulties and doing cutthroat competition in spite of the risk of possible bankruptcy if they continue to do so. Terminal operators can't help but put priority on cost saving over customers' satisfaction and the deteriorated service quality resulted from the cost saving could eventually impair the reputation of Busan port.
Under the difficult market situation, it would be highly required to suggest countermeasures to prevent the services quality from being further deteriorated. In the meantime, terminal operators are required to improve the quality of current terminal services to meet shipping lines' expectation in spite of the cost pressure.
The purpose of the study is to suggest a new approach to the terminal operators in order for them to efficiently control their operation cost and support the strategic decision making system and build a performance evaluation process through the systematic cost analysis approach.
This study implemented terminal cost analysis based on the traditional cost system, ABC and TDABC and compared the results of each approach.
Throughout the study, the usefulness of TDABC was proved in finding operational problems and suggesting countermeasures for improving cost effectiveness and minimizing unused cost.
In conclusion, this study proved the usefulness of TDABC approach for a container terminal's cost analysis and summarized 17 suggestions for the improvement of terminal management.