How to determine if ICS technology is the right BHS solution for your airport

The approach to assessing ICS for your airport

In Gibbs’ view, an airport’s decision as to whether ICS technology is the right solution over a conventional system should be based on a Total Cost of Ownership (TCO) analysis.

A TCO analysis can identify both the costs borne by each stakeholder and the benefits that accrue to each stakeholder. It allows for more visibility into the impact of the various cost centres considered and the variances in each instance than can be discerned from a simple payback analysis.

Gibbs states: 

“Legitimate TCO analyses of both traditional systems and ICS-based solutions, backed by actual energy use and annual maintenance cost data, will take the airport a long way.”

However, he notes that the TCO study period must be long enough to capture real world normal operations, maintenance and replacement costs for major components, consistent with normal equipment and system life cycles.

In addition, sustainability issues should be factored into the analysis. How a BHS fits into an airport’s overall sustainability plans has now become a very important part of the discussion.

The roadmap to a TCO assessment

As co-author of a Swanson Rink study on whether there is a business case for ICS in the United States, Gibbs outlines the following components to making an accurate TCO assessment of the ICS-based system, viz-a-viz, traditional conveyor systems:

• Identifying the major stakeholders: This is the first step in an evaluation of the baggage handling technologies; each stakeholder has unique operational responsibilities, bears particular costs, and realises benefits from specific aspects of operation of the baggage handling system. The stakeholders with vested interest in a successful BHS are the airport, the tenant airlines and the TSA. 
• Identifying the cost centres: Identify those who are associated with the ownership of the BHS and therefore responsible for its cost (and by extension, its benefits). Airports are normally deemed responsible for procurement, construction and basic operation and maintenance of the BHS physical plant. Airlines are responsible for outbound and inbound bag room operations, including staffing for the bag rooms, and ownership and maintenance of the baggage handling tug and cart fleet transporting baggage to and from the aircraft. Baggage screening is the responsibility of the TSA.

• Create baggage handling system models: Create detailed system models for each of the traditional BHS and the ICS-based BHS, following industry-accepted design practices, addressing issues such as hourly peak flow rates for both outbound and inbound bags, load point, surges, jams and component failures and performance models based on assumptions of a maximum number of concurrent outbound flights and inbound flights. 
• Estimate construction cost: Prepare Rough Order of Magnitude (ROM) construction cost estimates for both the traditional and ICS BHS option. 
• Operations and maintenance cost: Tabulate, on an annual basis, ongoing operations and maintenance costs for each BHS, such as the number of staff per shift, spare and replacement parts, OEM maintenance contract costs, electrical power consumption by the respective system, costs to operate the inbound and outbound bag room and TSA operational costs. 

In addition to the above, there are further important factors, says Gibbs, that an airport should consider as part of its BHS decision. These include the environmental impact of each technology, the passenger experience each technology offers in providing more effective inbound delivery and the accuracy of each technology in terms of delivering fewer lost or damaged bags. 

The case for ICS as a BHS solution 

In comparing ICS technology and traditional conveyor technology using a TCO analysis for a BHS project of moderate size and complexity in the United States, Swanson Rink concluded that while the initial construction cost for a ICS-based system is higher than for a traditional design, the total cost of ownership is significantly lower.

“We found that the ICS delivers improved baggage delivery both to and from aircraft. In addition to reduced travel time and reliable delivery energy usage, there are fewer tug train incursions on the apron, there is a smaller carbon footprint, and operating costs overall are reduced significantly.”

The many benefits of ICS technology warrant its consideration as a BHS solution. As Gibbs says, through ICS:

• Bag travel times can be shorter by virtue of higher tub/tote speeds on the mainlines. 
• Baggage screening tracking is improved to almost 100% by virtue of RFID identification and tracking of tubs or totes. 
• Early bag storage is easier and more flexible with ICS rack delivery, storage and retrieval. 
• Energy savings are possible, at least on paper, but must be proven by actual energy demand and usage data.

However, most of the advantages of ICS are best realised if there are changes in the way bagrooms are managed. Moreover, ICS works best in a common use environment where resource costs are shared for baggage handling, check-in and operations and mainq of the system. 

Finally, Gibbs emphasises, the business case – which includes sustainability components – must be made for each airport under consideration. ICS is not the answer for all stations in all situations. The business case for ICS must be tailored to each specific station and application.

Conclusion

For Gibbs, the bottom line is that ICS must make sense, both economically and in terms of engineering, for the airport over the long term. Costs that engineers present to the airports during planning, design and analysis must be realistic and accurate. The most effective basis for informing a decision as to which system is right for an airport is a Total Cost of Ownership analysis, factoring in sustainability issues as well. A Total Cost of Ownership, assessed over the life of a system, may reveal that the cheapest system is quite often not the least expensive to own, especially when recurring costs are considered over time.