Optimal throughput of crude oil terminals with options for infrastructure improvements

Crude oil is a major commodity transported through ports. Determining the optimal throughput level of crude oil terminals is crucial for efficient utilization of coastal resources and sustainable development of ports. This paper develops a simulation model for estimating the logistics costs associated with the unloading operations of oil tankers at a terminal using the simulation package Arena. The model parameters are estimated using real data collected from a major crude oil terminal in China. Simulation results unveil the optimal throughput level that minimizes the overall logistics cost per ton of crude oil unloaded for a given terminal. In addition, the simulation is modified to examine various combinations of infrastructure improvements: adding a berth, upgrading handling equipment, and dredging the navigation channel. Their impacts on the optimal throughput level and the unit logistics cost are quantified, and suggestions on port infrastructure investments are provided.