**ANNEX B — TECHNICAL ANNEX**
Binding Tariff Information Application Reference: BTI-GR-2022-003847
November 2022
Applicant: Thalassa Shipping & Logistics Société Anonyme EORI: GR094827361000 AFM (Tax Identification Number): 094827361 47 Akti Miaouli, 185 35 Piraeus, Greece
Prepared by:
Christy Bauer, Senior Associate Calderwood & Harkness LLP Avenue Louise 480, 1050 Brussels, Belgium
In coordination with:
Dr. Lukas Brenner, Managing Director Argonaut Trade Consulting GmbH Friedrichstraße 191, 10117 Berlin, Germany
Note on Qualifications of Technical Expert: Dr. Lukas Brenner served as a member of the World Customs Organization's Harmonized System Committee from 2008 to 2016. He holds a doctorate in mechanical engineering from the Technische Universität München (TUM), awarded in 1999, with a dissertation on structural load dynamics in heavy-lift offshore crane systems. Dr. Brenner has over twenty years of professional experience in customs classification of industrial machinery, including marine cargo-handling equipment, port terminal systems, heavy-lift cranes, and automated material-handling installations. He has provided expert testimony and technical classification opinions in customs proceedings before the national customs authorities and fiscal courts of Germany, the Netherlands, Belgium, France, Italy, and Greece, as well as before the Court of Justice of the European Union. His curriculum vitae and a complete list of relevant publications and prior expert engagements are appended to Annex D of this application.
Right-click to update Table of Contents
1. INTRODUCTION AND PURPOSE
1.1 Purpose of This Technical Annex
The purpose of this Technical Annex (Annex B) is to provide the Independent Authority for Public Revenue of the Hellenic Republic (Ανεξάρτητη Αρχή Δημοσίων Εσόδων, hereinafter "AADE") with detailed structural descriptions, functional analyses, and technical specifications of the two categories of marine cargo-handling equipment that are the subject of Binding Tariff Information Application BTI-GR-2022-003847 (hereinafter the "Application"). This Annex is intended to furnish the classifying authority with the technical foundation necessary for the correct tariff classification of the goods at issue under the Combined Nomenclature (CN), Regulation (EEC) No 2658/87 of the Council, as amended.
This Annex has been prepared by Calderwood & Harkness LLP, legal counsel to the Applicant, in coordination with Dr. Lukas Brenner of Argonaut Trade Consulting GmbH, who has provided the technical and engineering analysis contained herein. The legal arguments supporting the requested classification are set forth separately in Annex C (Legal Argument Annex) of the Application; this Annex is confined to technical description, mechanical analysis, and functional characterization of the goods.
1.2 Context and Background
The goods at issue consist of two categories of marine cargo-handling equipment imported by Thalassa Shipping & Logistics Société Anonyme (hereinafter "TSL" or the "Applicant") from Hailong Heavy Industries Co., Ltd. (hereinafter "HHI"), a manufacturer of port and terminal equipment based at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China (Unified Social Credit Code: 91330211MA2GR8KT5X). Specifically, the goods comprise:
(a) Twelve (12) Ship-to-Shore (STS) Gantry Cranes, designated by the manufacturer as the "Hailong QC-65 Super Post-Panamax Ship-to-Shore Container Crane" (hereinafter "Product 1" or "QC-65"); and
(b) Eight (8) Automated Stacking Crane (ASC) Systems, designated by the manufacturer as the "Hailong ASC-40R Automated Stacking Crane" (hereinafter "Product 2" or "ASC-40R").
These goods were imported into the customs territory of the European Union through the Port of Piraeus between 2019 and 2022, and were cleared through the Piraeus Regional Customs Office (Τελωνείο Πειραιά). All customs declarations (Single Administrative Documents, or "SADs") were filed on behalf of the Applicant by Peloros Customs Agency S.A. (EORI: GR801234567000), under the supervision of Licensed Customs Broker Stavros Liapis (License No. GR-CB-1287).
1.3 Import Contracts
The importation of the goods at issue is governed by two separate purchase and supply contracts between the Applicant and HHI:
(a) Contract HHI-TSL-2019-001, executed on January 15, 2019, covering the supply, delivery, assembly, and commissioning of twelve (12) Hailong QC-65 STS Gantry Cranes, at a declared CIF (Piraeus) value of €38,400,000 (thirty-eight million four hundred thousand euros), equivalent to €3,200,000 per unit. Delivery was effected in three installments between September 2019 and March 2020.
(b) Contract HHI-TSL-2020-003, executed on June 10, 2020, covering the supply, delivery, assembly, and commissioning of eight (8) Hailong ASC-40R Automated Stacking Crane Systems, at a declared CIF (Piraeus) value of €28,800,000 (twenty-eight million eight hundred thousand euros), equivalent to €3,600,000 per unit. Delivery was effected in two installments between January 2021 and June 2021.
Copies of both contracts, including all annexes, amendments, and delivery acceptance certificates, are appended to Annex A (Commercial Documentation) of this Application.
1.4 Original Classification and Correction
At the time of importation, both Product 1 (QC-65 STS Crane) and Product 2 (ASC-40R) were declared under CN subheading 8426 41 00, described in the Combined Nomenclature as "Self-propelled [machinery], on tyres." This subheading carries a 0% Most Favoured Nation (MFN) duty rate under the Common Customs Tariff.
The Applicant acknowledges that the original declaration under CN 8426 41 00 was incorrect insofar as the goods are not self-propelled on tyres. Both the QC-65 and the ASC-40R are rail-mounted on steel wheels, running on crane rails embedded in the quay apron (in the case of the QC-65) or the container yard (in the case of the ASC-40R). The goods are not equipped with pneumatic tyres or any rubber-tyred running gear. Accordingly, the subheading CN 8426 41 00 does not accurately describe the goods, and the Applicant seeks reclassification under the corrected subheading.
The Applicant respectfully requests classification of both products under CN subheading 8426 19 00, described in the Combined Nomenclature as "Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers — Other." This subheading carries the same 0% MFN duty rate as CN 8426 41 00, and the correction therefore has no duty impact.
1.5 AADE's Proposed Reclassification
The AADE, through its Directorate for Customs Operations, has issued notice ADAN/2022/0073, in which it contends that both Product 1 and Product 2 should be reclassified under CN subheading 8428 90 90, described in the Combined Nomenclature as "Other lifting, handling, loading, or unloading machinery — Other." Subheading CN 8428 90 90 carries a 2.2% MFN duty rate.
If AADE's proposed reclassification were accepted, the additional duty liability arising from the reclassification would be calculated as follows:
• Total declared CIF value: €38,400,000 (Product 1) + €28,800,000 (Product 2) = €67,200,000
• Duty differential: 2.2% − 0% = 2.2%
• Additional duty at stake: €67,200,000 × 2.2% = €1,478,400
This sum does not include any potential interest, penalties, or VAT adjustments that might arise from a retroactive reclassification. The total financial exposure, including potential penalties and accrued interest, is addressed in the Legal Argument Annex (Annex C).
1.6 Objective of This Annex
This Technical Annex demonstrates, by reference to detailed structural descriptions, technical specifications, functional analyses, and an examination of the relevant classification criteria under the Harmonized System and the Combined Nomenclature, that both Product 1 (QC-65 STS Gantry Crane) and Product 2 (ASC-40R Automated Stacking Crane) possess the objective physical characteristics of cranes within the meaning of heading 8426 of the Combined Nomenclature. Neither product falls within the scope of heading 8428, which is a residual heading for lifting, handling, loading, or unloading machinery "not elsewhere specified or included."
2. PRODUCT 1 — SHIP-TO-SHORE (STS) GANTRY CRANE — HAILONG QC-65
2.1 General Description
Commercial Designation: Hailong QC-65 Super Post-Panamax Ship-to-Shore Container Crane
Manufacturer: Hailong Heavy Industries Co., Ltd., No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China
Function: The QC-65 is a quayside container crane designed and engineered for the loading and unloading of intermodal shipping containers from container vessels at port terminals. It is the principal piece of equipment used in the ship-to-shore transfer operation, which constitutes the critical interface between maritime transport and landside terminal logistics.
Operating Principle: The QC-65 lifts containers vertically from the vessel's hold or deck using a spreader mechanism suspended by wire ropes from a trolley that travels along a horizontal boom. The containers are then traversed horizontally to the landside of the quay, where they are placed onto terminal transport vehicles — typically chassis trucks, straddle carriers, or automated guided vehicles (AGVs). The reverse sequence is employed for the loading of containers onto vessels. This operating principle — vertical lift followed by horizontal traverse followed by vertical placement — is the fundamental "hoist-traverse-lower" cycle that defines the operation of a gantry crane.
Country of Origin: People's Republic of China
Quantity Imported: Twelve (12) units
Declared CIF Value (Piraeus): €38,400,000 (€3,200,000 per unit)
Contract Reference: HHI-TSL-2019-001, executed January 15, 2019
Installed Locations: The twelve QC-65 units are installed and operational at TSL's terminal facilities at the following locations in Greece:
• Port of Piraeus — eight (8) units, deployed on Berths 7 through 10 of the TSL Container Terminal (South Terminal)
• Port of Thessaloniki — three (3) units, deployed on Berths 1 through 3 of the TSL Container Terminal
• Port of Volos — one (1) unit, deployed on Berth 2 of the TSL Multipurpose Terminal
All installations are operated under long-term concession agreements between TSL and the respective port authorities, copies of which are available upon request.
2.2 Technical Specifications
The following table sets forth the principal technical specifications of the Hailong QC-65 STS Gantry Crane, as provided by the manufacturer in its technical data sheets (HHI Document QC-65-TDS-Rev.4, dated December 2018) and confirmed by independent inspection reports prepared by Bureau Veritas Hellas S.A. (Report No. BV-GR-2020-04517, dated April 22, 2020):
These specifications are consistent with the standard configuration of a super post-Panamax STS gantry crane — designed to serve the largest class of container vessels currently in operation (vessels of 22 containers or more in width, including vessels of the "Ultra Large Container Ship" or ULCS class with capacities exceeding 20,000 TEU).
2.3 Structural Components
The following paragraphs describe each major structural component of the QC-65 STS Gantry Crane in detail, with particular emphasis on the components relevant to the tariff classification analysis.
2.3.1 Gantry (Portal Frame). The gantry is the primary structural element of the QC-65. It consists of a rigid steel portal frame that spans the quay apron, supported on four legs — two waterside legs and two landside legs. The legs are fabricated from high-strength structural steel plate (S355J2 or equivalent), welded into box-section columns. The waterside legs are inclined (raked) inward to reduce the moment arm of the boom load, while the landside legs are vertical. The four legs converge at the top to support the boom and the machinery house.
The base of each leg connects to a traveling bogie assembly equipped with steel wheels running on crane rails embedded in the quay apron. The rail gauge (distance between the centerlines of the two parallel crane rails) is 30.48 meters (100 feet), which is a standard gauge for post-Panamax STS cranes. Each corner bogie assembly comprises sixteen equalized wheels, designed to distribute the crane's weight evenly across the rail and the quay structure. Electric drive motors (four motors per corner, each rated at 37.5 kW) power the gantry's longitudinal travel along the quay. The gantry travel speed is 45 meters per minute.
The portal frame also houses the operator access stairways, elevator, electrical cable galleries, and maintenance platforms. The machinery house, located at the top of the gantry on the landside, contains the main electrical switchgear, VFD cabinets, and the hoist motor assemblies.
2.3.2 Boom (Horizontal Beam). The boom is a horizontal steel beam extending from the gantry structure waterside over the berth (65 meters outreach) and landside behind the portal frame (22 meters backreach). The boom is the primary structural element from which the trolley is suspended and along which it travels. It is fabricated from high-strength structural steel in a box-girder configuration, with the top chord carrying the trolley rails.
The boom is hinged at the waterside connection point, allowing it to be raised (luffed) to a near-vertical position when the crane is not in use, during adverse weather conditions, or to provide clearance for vessel passage. The boom raising mechanism consists of hydraulic cylinders and wire rope systems.
The functional significance of the boom is that it provides the horizontal span over which loads (containers) are traversed from the vessel to the quayside, and vice versa. This horizontal traversing function, combined with the vertical lifting function provided by the hoist system, constitutes the fundamental crane operation.
2.3.3 Trolley. The trolley is an electrically driven carriage that travels along rails mounted on the top chord of the boom. It carries the hoist mechanism (including the hoist drums, sheaves, and wire ropes) and the headblock assembly. The trolley is driven by two AC electric motors, each rated at 250 kW, through a wire rope or rack-and-pinion drive system. The trolley travel speed is 240 meters per minute.
The trolley's function is to transport the load (the container, held by the spreader) horizontally between the waterside (vessel) and the landside (quay). This horizontal traverse is one of the two fundamental motions of a gantry crane (the other being the vertical hoist).
2.3.4 Hoist System. The hoist system is the core lifting mechanism of the QC-65. It consists of two main hoist motors (each rated at 560 kW), hoist drums, multiple wire ropes reeved through sheave blocks, and a headblock. The wire ropes extend from the hoist drums on the trolley, pass through the sheave blocks, and connect to the headblock, from which the spreader is suspended.
The hoist system enables the vertical raising and lowering of containers. The main hoist speed at rated load (65 metric tons under spreader) is 90 meters per minute. The hoist system is equipped with multiple safety features, including redundant braking systems (service brakes and emergency brakes), overload protection, and slack-rope detection.
The headblock is a structural steel frame that serves as the junction between the wire ropes and the spreader. It is equipped with guide rollers, anti-sway dampers, and electrical/hydraulic connections to the spreader.
2.3.5 Spreader. The spreader is a telescoping container lifting device that locks onto the corner fittings of intermodal shipping containers. The corner fittings are standardized under ISO 1161 and are equipped with twist-lock receptacles. The spreader's twist-locks engage with these receptacles to secure the container during lifting.
The spreader is capable of adjusting its length to accommodate 20-foot, 40-foot, and 45-foot containers, in accordance with ISO standard container dimensions. The spreading/retracting mechanism is hydraulically actuated. The spreader model installed on the QC-65 units is the Bromma STS45E telescoping twin-lift spreader (or manufacturer equivalent), which is also capable of lifting two 20-foot containers simultaneously (twin-lift operation).
The spreader is suspended from the headblock and constitutes the interface between the crane and the cargo. It is the functional equivalent of a hook in a conventional crane — the device by which the load is engaged for lifting.
2.3.6 Operator Cabin. The operator cabin is an enclosed, climate-controlled compartment mounted on the trolley (or, in certain configurations, at a fixed position on the gantry with visual access to the container handling area). The cabin provides the crane operator with a direct visual line-of-sight to the container handling area below. The operator controls the crane's primary functions — hoist up/down, trolley traverse (waterside/landside), and gantry travel (longitudinal along the quay) — through joystick or lever controls.
The cabin is equipped with ergonomic seating, multiple closed-circuit television (CCTV) displays, wind speed indicators, load indicators, and communication systems. The operator controls are interfaced with the HaiControl Suite v4.2 software, which provides automated anti-sway control (dampening of pendulum motion of the suspended container) and semi-automated container positioning (fine alignment of the spreader with the container or the chassis truck for loading/unloading).
The presence of the operator cabin is a significant feature distinguishing Product 1 from Product 2 (the ASC-40R), which is fully automated and does not require an on-board operator.
2.3.7 Electrical Systems. The QC-65 receives electrical power from the quay power grid via a cable reel or bus bar system. The power supply is 11 kV, 50 Hz AC, three-phase. An on-board transformer steps down the voltage to the operating levels required by the various motor and control systems.
All major drive systems (main hoist, trolley, gantry travel) are powered by AC electric motors controlled by variable frequency drives (VFDs). The VFDs enable precise speed control and smooth acceleration/deceleration. The drive systems are equipped with regenerative braking, which returns energy to the power grid during braking phases, improving energy efficiency.
The electrical systems also include the on-board lighting (for night operations), heating/ventilation/air conditioning (HVAC) for the operator cabin, and power supply for the control and communication systems.
2.3.8 Control Systems. The QC-65 is equipped with the HaiControl Suite v4.2, a proprietary software platform developed by Hailong Heavy Industries for the integrated control of port crane operations. In the QC-65 configuration, the software provides:
• Automated anti-sway control: Real-time calculation and correction of pendulum motion of the suspended container, using feedback from encoders and sensors to adjust trolley and hoist speeds
• Semi-automated container positioning: Assisted alignment of the spreader with the target container or chassis, using sensor feedback and operator commands
• Operational data logging: Recording of all crane operational parameters (cycle times, load weights, motor currents, fault events) for performance monitoring and maintenance planning
• Manual override: All automated functions can be overridden by the operator at any time, ensuring that the operator retains full manual control
The control system is interfaced with the terminal's overall Terminal Operating System (TOS), allowing the crane's operations to be coordinated with yard planning and vessel stowage planning.
2.3.9 Rail Traveling System. The gantry's rail traveling system consists of steel wheels mounted on equalized bogies at each of the four corners of the portal frame. The wheels run on crane rails (typically A150 or equivalent heavy-duty rail profiles) embedded in the quay apron. The rail gauge is 30.48 meters (100 feet). The gantry travels longitudinally along the quay to position itself opposite the desired bay of the container vessel.
Each corner bogie assembly contains sixteen wheels, equalized to distribute loads evenly. The gantry travel is powered by sixteen electric motors (four per corner), each rated at 37.5 kW, for a total installed gantry travel motor capacity of 600 kW. The gantry travel speed is 45 meters per minute. The rail traveling system is equipped with rail clamps, storm tie-downs, and buffers for safe parking and storm securing.
2.4 Operating Sequence — Lifting Mechanism
The core operational cycle of the QC-65 STS Gantry Crane — the "hoist-traverse-lower" cycle — proceeds as follows:
Step 1 — Spreader Descent and Engagement: The operator positions the trolley over the target container in the vessel's hold or on the deck. The spreader descends via wire ropes from the headblock. The spreader's twist-locks engage with the ISO 1161 corner fittings of the container, locking the container to the spreader. The operator confirms positive engagement through cabin displays and/or sensor feedback.
Step 2 — Vertical Lift (Main Hoist): The hoist winches are activated, and the wire ropes raise the spreader and the attached container vertically from the vessel. This is the main hoist phase — the vertical lifting of a load by wire ropes — which is the defining mechanical action of a crane. The container is raised to a height sufficient to clear the vessel's hatch coaming, deck structures, and any other obstructions.
Step 3 — Horizontal Traverse (Trolley Travel): Once the container is lifted clear of the vessel, the trolley traverses the container horizontally along the boom from the waterside to the landside of the quay. During this traverse, the automated anti-sway system dampens any pendulum motion of the suspended container. The container is transported across the full span of the boom — from the vessel's hold to the quay apron — in a single horizontal movement.
Step 4 — Lowering and Placement: The trolley stops at the designated position on the landside of the boom (above the terminal transport vehicle — a chassis truck, straddle carrier, or AGV — positioned on the quay apron below). The hoist lowers the container vertically onto the transport vehicle. The operator aligns the spreader with the vehicle's container guides and sets the container down.
Step 5 — Spreader Release and Return: The spreader's twist-locks disengage from the container's corner fittings, releasing the container onto the transport vehicle. The spreader is then hoisted back up and the trolley returns to the waterside to collect the next container, beginning a new cycle.
This five-step cycle is the classic "hoist-traverse-lower" operational sequence of a gantry crane. The sequence involves: (i) the engagement of a load by a lifting device (the spreader) suspended by wire ropes from a movable carriage (the trolley); (ii) the vertical lifting of the load by the wire ropes; (iii) the horizontal traversal of the load along a horizontal beam (the boom) supported by a portal frame (the gantry); (iv) the lowering of the load to the destination; and (v) the release of the load. This sequence satisfies every element of the operational description of a gantry crane as set forth in the Explanatory Notes to heading 8426 of the Harmonized System.
2.5 Classification-Relevant Characteristics — Product 1
The following table summarizes the physical and functional characteristics of the QC-65 that are relevant to its classification under heading 8426 of the Combined Nomenclature:
Conclusion on Product 1: The Hailong QC-65 Super Post-Panamax Ship-to-Shore Container Crane is a gantry crane within the plain and unambiguous meaning of heading 8426 of the Combined Nomenclature. It satisfies every element of the Explanatory Notes' description of heading 8426 machinery: it is a machine that lifts, loads, and moves objects by means of wire ropes suspended from a trolley traveling on a boom (horizontal beam) supported by a gantry (portal frame) structure. The QC-65 falls squarely within the scope of subheading CN 8426 19 00 ("Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers — Other"), as it is a rail-mounted gantry crane that is not self-propelled on tyres.
2.6 Photographs. Photographs of the twelve (12) Hailong QC-65 STS Gantry Cranes installed at TSL's terminal facilities at the Ports of Piraeus, Thessaloniki, and Volos are included in the filed Application as Photographic Exhibits P1-1 through P1-36. The photographs depict the cranes in various operational and non-operational configurations, including:
• General overview photographs showing the full crane structure with boom in working (horizontal) and stowed (raised) positions
• Detail photographs of the gantry (portal frame) and legs
• Detail photographs of the boom, trolley rails, and trolley
• Detail photographs of the hoist system, headblock, and wire ropes
• Detail photographs of the spreader engaging containers
• Detail photographs of the rail traveling system, crane rails, and bogies
• Detail photographs of the operator cabin interior and controls
• Photographs of the crane during active container handling operations
All photographs are date-stamped, geo-tagged, and accompanied by descriptive captions identifying the crane unit, the installation location, and the feature depicted.
3. PRODUCT 2 — AUTOMATED STACKING CRANE (ASC) SYSTEM — HAILONG ASC-40R
3.1 General Description
Commercial Designation: Hailong ASC-40R Automated Stacking Crane
Manufacturer: Hailong Heavy Industries Co., Ltd. (the same manufacturer as Product 1), No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China
Function: The ASC-40R is an automated container stacking crane designed for use in the container terminal yard. Unlike the QC-65, which operates at the quayside interface between vessel and shore, the ASC-40R operates within the terminal's container storage yard. Its function is to pick containers from terminal transport vehicles (AGVs or straddle carriers arriving from the quayside), stack them in designated positions within yard blocks, and retrieve them from the yard for outbound transport (either to the quayside for vessel loading, to the gate area for truck collection, or to the rail terminal for intermodal transfer).
The ASC-40R is a fully automated, unmanned system. It does not have an on-board operator cabin. All crane functions — hoist, trolley traverse, gantry travel, spreader engagement/disengagement, container identification, and stacking sequencing — are controlled by the central terminal operating system (TOS) through the HaiControl Suite v4.2 software platform. Human supervision is available remotely via a control room, but is not required for normal operation.
Country of Origin: People's Republic of China
Quantity Imported: Eight (8) units
Declared CIF Value (Piraeus): €28,800,000 (€3,600,000 per unit)
Contract Reference: HHI-TSL-2020-003, executed June 10, 2020
Installed Locations: All eight ASC-40R units are installed and operational at TSL's primary terminal facility at the Port of Piraeus (South Terminal), deployed across four container yard blocks (two ASC units per yard block, one at each end of the block).
3.2 Technical Specifications
The following table sets forth the principal technical specifications of the Hailong ASC-40R Automated Stacking Crane, as provided by the manufacturer in its technical data sheets (HHI Document ASC-40R-TDS-Rev.3, dated March 2020) and confirmed by independent inspection reports prepared by Bureau Veritas Hellas S.A. (Report No. BV-GR-2021-07892, dated August 15, 2021):
3.3 Structural Components
The following paragraphs describe each major structural component of the ASC-40R Automated Stacking Crane in detail, with emphasis on the components relevant to the tariff classification analysis and on the structural similarities to Product 1 (the QC-65 STS Crane).
3.3.1 Gantry (Portal Frame). The gantry is the primary structural element of the ASC-40R. It consists of a rigid steel portal frame spanning the width of a container yard block, a distance of approximately 40 meters. The gantry rests on two parallel rail beams supported by legs (two legs per side, four legs total) with steel wheels running on crane rails embedded in the container yard surface. The legs are fabricated from high-strength structural steel plate (S355J2 or equivalent) in box-section columns.
Electric drive motors (two motors per corner, each rated at 22 kW, for a total of eight gantry drive motors) power the gantry's longitudinal travel along the yard block. The gantry travel speed is 135 meters per minute — significantly faster than the QC-65's gantry travel speed (45 meters per minute), reflecting the ASC-40R's need for rapid longitudinal repositioning within the yard to serve multiple container bays in quick succession.
The portal frame structure of the ASC-40R is functionally identical in principle to that of the QC-65 STS Crane: both are rigid steel portal frames supported on legs with steel wheels running on crane rails. The ASC-40R's gantry is smaller in overall dimensions (its rail gauge is 40 meters vs. 30.48 meters for the QC-65, and its overall height is 28 meters vs. 82 meters for the QC-65), reflecting its different deployment context (yard stacking vs. quayside ship-to-shore operations), but the structural concept is the same.
3.3.2 Crossbeam (Horizontal Beam). The crossbeam is a horizontal steel beam at the top of the gantry, spanning between the two upper portal connections, along which the trolley travels. It is fabricated from structural steel in a box-girder configuration, with trolley rails mounted on the top chord.
The crossbeam is functionally equivalent to the "boom" of the QC-65 STS crane. In both machines, the horizontal beam provides the span along which the trolley traverses, carrying the hoist mechanism and the load. The primary difference is that the QC-65's boom extends beyond the gantry structure (waterside outreach of 65 meters), while the ASC-40R's crossbeam spans only between the legs of the gantry (40 meters). This difference reflects the different deployment contexts: the QC-65 must reach across the vessel, while the ASC-40R needs only to span the width of the yard block. However, the functional role of the horizontal beam — providing a rail path for the trolley traverse — is identical in both machines.
3.3.3 Trolley. The trolley is an electrically driven carriage that travels along rails mounted on the top chord of the crossbeam. It carries the hoist mechanism (including the hoist drums, sheaves, and wire ropes) and the headblock assembly. The trolley is driven by two AC electric motors, each rated at 110 kW. The trolley travel speed is 150 meters per minute.
The trolley of the ASC-40R is identical in principle to the trolley of the QC-65 STS crane. In both machines, the trolley is the movable carriage that transports the load horizontally along the horizontal beam. The ASC-40R's trolley differs from the QC-65's primarily in size (reflecting the lower SWL of 40 metric tons vs. 65 metric tons) and in the absence of an operator cabin — since the ASC-40R is fully automated, the trolley carries only the hoist mechanism and sensors, without a human operator position.
3.3.4 Hoist System. The hoist system is the core lifting mechanism of the ASC-40R. It consists of two main hoist motors (each rated at 280 kW), hoist drums, multiple wire ropes reeved through sheave blocks, and a headblock. The wire ropes extend from the hoist drums on the trolley, pass through the sheave blocks, and connect to the headblock, from which the spreader is suspended.
The hoist system of the ASC-40R is identical in principle to the hoist system of the QC-65 STS crane. Both systems use electric winch motors driving hoist drums, with wire ropes reeved through sheaves to raise and lower a headblock and spreader. The principal differences are in scale (the ASC-40R's hoist motors are rated at 280 kW each vs. 560 kW each for the QC-65, reflecting the lower SWL) and in the automation of the control inputs (the ASC-40R's hoist is commanded by the TOS software rather than by a human operator).
The main hoist speed at rated load (40 metric tons under spreader) is 60 meters per minute. The hoist system is equipped with redundant braking systems (service brakes and emergency brakes), overload protection, and slack-rope detection — the same safety features found in the QC-65.
3.3.5 Spreader. The spreader is a telescoping container lifting device that locks onto the corner fittings (ISO 1161 twist-lock receptacles) of intermodal shipping containers. The spreader is capable of adjusting its length to accommodate 20-foot, 40-foot, and 45-foot containers.
In addition to the mechanical functions shared with the QC-65's spreader, the ASC-40R's spreader is equipped with optical and laser guidance systems for precise automated container positioning. These systems enable the spreader to align with the container's corner fittings without human visual input, compensating for positional variations in the container's location on the transport vehicle or in the yard stack. The optical guidance system consists of four downward-facing cameras mounted on the headblock, providing real-time imagery of the container top surface. The laser guidance system consists of four laser range-finders measuring the distance and angle between the spreader and the container corner fittings. The guidance data is processed by the HaiControl Suite v4.2 software in real time.
The addition of optical and laser guidance systems does not alter the fundamental mechanical nature of the spreader. It remains a telescoping container lifting device that engages with the load (the container) via twist-locks — the same function performed by the QC-65's spreader, which relies on visual guidance from the human operator in the cabin.
3.3.6 No Operator Cabin. The ASC-40R is fully automated and does not have an on-board operator cabin. All crane functions — including hoist up/down, trolley traverse, gantry travel, spreader engagement/disengagement, container identification, and stacking sequencing — are controlled remotely by the central terminal operating system (TOS) through the HaiControl Suite v4.2 software platform.
The absence of an operator cabin is the single most visible structural difference between the ASC-40R and the QC-65. However, the absence of a cabin does not affect the crane's mechanical structure or its lifting function. The ASC-40R lifts, traverses, and lowers containers using the same physical mechanism as the QC-65 — wire ropes, headblock, spreader, trolley, hoist, and gantry — with the sole difference that the commands to the motors are generated by software rather than by a human operator's joystick inputs.
3.3.7 Sensors and Guidance Systems. To compensate for the absence of a human operator, the ASC-40R is equipped with comprehensive sensor and guidance systems:
• LIDAR Arrays: Eight LIDAR units mounted on the gantry structure, providing three-dimensional spatial mapping of the crane's operating environment, including the positions of containers in the yard stack, the positions of transport vehicles, and the detection of obstacles or personnel in the operating zone.
• DGPS Positioning: Differential Global Positioning System receivers providing centimeter-level accuracy for tracking the absolute position of the gantry and trolley within the terminal coordinate grid. The DGPS system interfaces with the TOS to ensure accurate container placement in accordance with the yard plan.
• Optical Container Recognition Cameras: Four high-resolution cameras (two on each side of the crossbeam) providing real-time imagery for container identification (reading container numbers and size codes), twist-lock alignment, and stack profile monitoring.
• Anti-Collision Radar Systems: Twelve radar units (three per gantry corner) providing 360-degree obstacle detection around the crane. The anti-collision system generates automatic emergency stop commands if an obstacle is detected within the crane's movement path.
These sensor systems serve the same functional role as the human operator's eyes, spatial awareness, and judgment in the QC-65. They enable the ASC-40R to perceive its environment and make operational decisions without human visual input. However, they do not alter the physical mechanics of the crane's lifting operation. The wire ropes, hoist, trolley, and spreader function identically regardless of whether the operational commands originate from a human operator's joystick or from the TOS software processing sensor data.
3.3.8 Control Systems. The ASC-40R is controlled by the HaiControl Suite v4.2 software platform, the same software platform used in the QC-65 STS crane, but with a significantly expanded set of modules reflecting the fully automated operating mode:
• Automated Stacking Sequences: The software executes container stacking and retrieval sequences in accordance with instructions from the terminal operating system (TOS), determining the optimal approach path, trolley position, hoist depth, and stacking location for each container.
• Container Tracking: The software maintains a real-time inventory of all containers in the yard block, including their positions, sizes, weights, and booking/discharge statuses.
• Yard Optimization Algorithms: The software applies optimization algorithms to determine the most efficient stacking arrangements, minimizing unnecessary restacking ("reshuffling") operations and optimizing access paths for outbound containers.
• Predictive Maintenance (HaiPredict Module): The software monitors the condition of critical mechanical and electrical components (wire ropes, sheaves, motors, brakes, wheels) and generates maintenance alerts based on predictive algorithms, enabling condition-based maintenance rather than time-based maintenance.
• Remote Human Supervision: A human operator in the terminal control room can monitor the ASC-40R's operations in real time via CCTV feeds and operational dashboards. The operator can intervene to take manual control of the crane remotely in the event of an anomaly, equipment malfunction, or unusual operating condition. However, such intervention is not required for normal operation — the ASC-40R is designed and certified for fully autonomous operation.
3.3.9 Rail Traveling System. The gantry's rail traveling system is structurally identical in principle to that of the QC-65, differing only in scale. It consists of steel wheels mounted on equalized bogies at each of the four corners of the portal frame. The wheels run on crane rails (typically A100 or equivalent rail profiles) embedded in the container yard surface. The rail gauge is 40 meters. The gantry travels longitudinally along the yard block to position the trolley and hoist above the desired container bay.
Each corner bogie assembly contains eight wheels, equalized to distribute loads evenly. The gantry travel is powered by eight electric motors (two per corner), each rated at 22 kW, for a total installed gantry travel motor capacity of 176 kW. The gantry travel speed is 135 meters per minute. The rail traveling system is equipped with rail clamps, storm tie-downs, and buffers.
3.4 Operating Sequence — Lifting Mechanism
The core operational cycle of the ASC-40R Automated Stacking Crane proceeds as follows:
Step 1 — Spreader Descent and Engagement: The TOS instructs the ASC-40R to pick a specific container. The gantry positions itself at the correct bay. The trolley traverses to the correct row position. The spreader descends via wire ropes from the headblock. The optical and laser guidance systems align the spreader with the container's ISO 1161 corner fittings. The twist-locks engage, locking the container to the spreader. The engagement is confirmed by twist-lock position sensors.
Step 2 — Vertical Lift (Main Hoist): The hoist winches are activated by the TOS, and the wire ropes raise the spreader and the attached container vertically from the transport vehicle or from the yard stack. This is the main hoist phase — the vertical lifting of a load by wire ropes — which is, as with the QC-65, the defining mechanical action of a crane.
Step 3 — Horizontal Traverse (Trolley Travel): The trolley traverses the container horizontally along the crossbeam to the designated stacking position (the target row in the yard block). During this traverse, the anti-sway algorithms in the HaiControl Suite dampen any pendulum motion of the suspended container — performing the same physical function as the anti-sway system in the QC-65, albeit without human operator oversight.
Step 4 — Lowering and Placement: The hoist lowers the container vertically into the designated position in the yard stack. The LIDAR and optical systems provide real-time spatial data to ensure accurate placement without contact with adjacent containers. The container is set down in the target cell of the stack.
Step 5 — Spreader Release and Return: The twist-locks disengage, releasing the container. The spreader is hoisted back up and the crane repositions itself for the next instruction from the TOS.
The critical observation regarding the ASC-40R's operating sequence is that it is functionally identical to the QC-65 STS crane's "hoist-traverse-lower" cycle. The physical actions — vertical lifting by wire ropes, horizontal traversing by trolley along a horizontal beam, and lowering by wire ropes — are identical in both machines. The only difference is the source of the operational commands: in the QC-65, a human operator in the cabin issues commands via joystick controls; in the ASC-40R, the TOS software issues commands via electronic signals to the motor drives. The mechanical actions executed by the wire ropes, the hoist, the trolley, and the spreader are the same in both cases.
This identity of mechanical function is the central technical finding of this Annex. The ASC-40R performs the same physical actions as the QC-65, using the same mechanical systems, in the same sequence. The automation of the command input does not alter the physical nature of the machine or the mechanical function it performs.
3.5 Classification-Relevant Characteristics — Product 2
The following table summarizes the physical and functional characteristics of the ASC-40R that are relevant to its classification under heading 8426 of the Combined Nomenclature:
Observation on Product 2: The ASC-40R satisfies every physical and mechanical criterion identified in the Explanatory Notes to heading 8426 for the classification of a machine as a "crane" — specifically, the criterion that the machine lifts loads by means of ropes or chains from a movable carriage (trolley) on a horizontal beam (crossbeam) supported by a gantry (portal frame) structure. The only characteristic of the ASC-40R that differs from the QC-65 STS crane is the level of automation: the QC-65 is semi-automated with a human operator, while the ASC-40R is fully automated without a human operator. This difference does not affect the machine's physical or mechanical characteristics and, as demonstrated in Section 5 below, is not relevant to heading-level classification under the Harmonized System.
The ASC-40R is structurally and functionally analogous to a rail-mounted gantry (RMG) crane, which is a well-recognized subcategory of gantry crane universally classified under heading 8426 by customs authorities throughout the European Union and globally. An RMG crane is a gantry crane that spans a container yard block, with a trolley traversing a crossbeam to pick and place containers — precisely the description of the ASC-40R. The only distinguishing feature is the degree of automation, and many modern RMG cranes are available in semi-automated and fully automated configurations.
3.6 Photographs. Photographs of the eight (8) Hailong ASC-40R Automated Stacking Cranes installed at TSL's Piraeus terminal (South Terminal container yard) are included in the filed Application as Photographic Exhibits P2-1 through P2-24. The photographs depict the ASC-40R systems in various operational and non-operational configurations, including:
• General overview photographs showing the full crane structure in the container yard context
• Detail photographs of the gantry (portal frame), legs, and rail traveling system
• Detail photographs of the crossbeam, trolley rails, and trolley
• Detail photographs of the hoist system, headblock, wire ropes, and sheave blocks
• Detail photographs of the spreader and its optical/laser guidance systems
• Detail photographs of the LIDAR arrays, DGPS receivers, optical cameras, and anti-collision radar units
• Photographs of the crane during active automated container stacking operations (taken from the control room monitoring displays)
• Photographs of the control room showing the remote supervision workstations
All photographs are date-stamped, geo-tagged, and accompanied by descriptive captions identifying the crane unit, the installation location, and the feature depicted.
4. SIDE-BY-SIDE COMPARISON OF PRODUCT 1 AND PRODUCT 2
4.1 Comparative Table
The following table presents a comprehensive side-by-side comparison of the physical and functional characteristics of Product 1 (QC-65 STS Crane) and Product 2 (ASC-40R Automated Stacking Crane), highlighting the structural and mechanical similarities and the differences between the two products:
4.2 Key Finding — Identical Mechanical Nature
The comparative analysis set forth in the table above yields a clear and unambiguous conclusion: the QC-65 STS Crane and the ASC-40R Automated Stacking Crane share the same fundamental mechanical structure and perform the same fundamental physical function. The only material differences between the two products are:
1. Presence or absence of an operator cabin. The QC-65 has an on-board operator cabin; the ASC-40R does not. This difference relates to the mode of operational control (human vs. software), not to the machine's mechanical structure or lifting function.
2. Degree of automation. The QC-65 is semi-automated (operator-controlled with automated anti-sway and positioning assistance); the ASC-40R is fully automated (software-controlled with remote human supervision available). This difference is a matter of control technology, not of mechanical design or physical function.
3. Specific deployment location. The QC-65 operates at the quayside (ship-to-shore interface); the ASC-40R operates in the container yard. This difference is a matter of operational context and does not affect the classification of the machine itself.
4. Safe working load capacity. The QC-65 has an SWL of 65 metric tons; the ASC-40R has an SWL of 40 metric tons. This difference is a matter of scale and reflects the different operational requirements (quayside handling of loaded containers from vessels vs. yard stacking, where lighter loads are more common). It does not affect heading-level classification.
Critically, none of these four differences relate to the physical or mechanical characteristics that determine classification under the Harmonized System. The mechanical structure (gantry, horizontal beam, trolley, wire rope hoist, headblock, spreader), the lifting mechanism (vertical lifting by wire ropes from a trolley on a horizontal beam), and the fundamental physical function (lifting, traversing, and lowering containers) are identical in both products. Both products are gantry cranes. Both products lift loads by means of wire ropes suspended from a trolley traveling on a horizontal beam supported by a gantry structure. Both products should be classified under the same heading — heading 8426 — and under the same subheading — CN 8426 19 00.
5. ANALYSIS — AUTOMATION DOES NOT ALTER CLASSIFICATION
5.1 Heading 8426 Does Not Condition Classification on Operator Control
The text of heading 8426 of the Harmonized System reads:
"Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane."
The heading covers "cranes" without qualification as to the mode of operational control. The term "crane" is not modified by any adjective or clause limiting its scope to manually operated, operator-controlled, or human-supervised machines. The heading does not distinguish between:
• Manually operated cranes (in which all functions are controlled by direct human mechanical input);
• Semi-automated cranes (in which some functions are automated while others are operator-controlled); or
• Fully automated cranes (in which all functions are controlled by software without a human operator on the machine).
The absence of any such qualification is significant. The Harmonized System is a comprehensive and exhaustively considered classification nomenclature, drafted by experts in international trade and product classification. If the drafters of the Harmonized System had intended to limit the scope of heading 8426 to cranes operated by a human operator — and to exclude cranes operated by automated control systems — they would have specified this limitation in the heading text, in the subheading structure, or in the Explanatory Notes. No such limitation exists.
Moreover, the subheading structure of heading 8426 distinguishes cranes by their mounting and mobility characteristics — "on tyres" (CN 8426 41 00), "on tracks" (CN 8426 49 00), and "other" (CN 8426 19 00, CN 8426 20 00, CN 8426 30 00) — but at no point does the subheading structure differentiate cranes by their level of automation or by the presence or absence of an operator cabin. This is a deliberate omission. The Harmonized System treats the mode of control as irrelevant to the classification of a crane.
5.2 Classification Based on Objective Physical Characteristics
It is a fundamental principle of customs classification under the Harmonized System — consistently affirmed by the Court of Justice of the European Union, by national courts of EU Member States, and by the World Customs Organization — that goods must be classified on the basis of their objective physical characteristics at the time of importation, and not on the basis of their intended use, commercial designation, or operational context, unless the heading text expressly refers to use or function.
The relevant objective physical characteristics of the ASC-40R at the time of importation are the following:
• A rigid steel gantry (portal frame) structure, supported on four legs with steel wheels running on crane rails;
• A horizontal crossbeam at the top of the gantry, along which a trolley travels;
• An electrically driven trolley carrying a wire rope hoist mechanism;
• A headblock connecting the wire ropes to a telescoping container spreader;