To remain competitive in today's makerts, companies must continually im- prove the performance of activities and business processes. Activity-based costing (ABC) has been developed in an effort to restore compaines' competitiveness. The revolutionary new system traces costs prduct according to activities. ABC provides important information about problems and opportunities, reports accurate cost information that leads to a better understanding of product and customer profitability, calculates costs of the organizations's activities bases on time and resources, and provides useful information about activities that have potential to accelerate improvement efforts. The major benefit of the ABC approach is the overhead reduction by indentifying and eliminating non-value-added costs. The research employs the methodology of ABC and the practice of Ocean Cargo Terminal Operation to develop a model of analyzing Terminal Operation Cost. Several key questions are included during the activity analysis:(1)Who are people in the organization,(2)What are their key activities, (3)Does an individual activity take different amounts of time to perform under different circumstances, and what are those circumstances,(4)What percentage of each person's total time is spent on performing each activity, and (5)What are the cost drives of each activity? According to ABC, we attempt to assigns indirect costs to products and customers' orders, with more accurate pricing decisions.