In 2007, the last year before the financial crisis, the container industry was at the end of a spectacular multiyear growth spurt. China was at the height of its dominance of manufacturing, container volumes were swelling worldwide, and the system was feeling the pressure of rapid growth in demand. Carriers increasingly complained about port congestion and its impact on productivity at the berth: They needed their ships worked and sent on their way as quickly as possible so they could fetch more Asian cargo for eager consumers.
One of the problems with the productivity discussion, however, was its anecdotal nature. Although carriers and others regularly cited numbers for crane moves per hour and berth productivity at various ports and terminals, there was no independent verification of the data. It was “common knowledge” that U.S. port productivity lagged that of Asia, but no one really knew by how much outside of the occasional one-time academic study or news report.
Terminals, meanwhile, were starting to self-declare productivity records — claiming to have handled a “record” number of moves per hour on a particular ship, with no third party to verify the accuracy.
Part of the reason for the absence of independent productivity data was the approach. Those seeking such data in the past invariably approached ports and terminals, which, for obvious reasons, were reluctant to divulge such data. The carriers, after all, are their customers. As a result, port productivity studies were few and far between with no consistency that would allow productivity trends to be tracked over time.
But facts remained: Despite the lack of a single database, the metrics used by the industry were uniform and apples-to-apples globally. Carriers increasingly viewed productivity in terms of total berth moves per hour, with the higher the number equating to the faster the ship would be on its way to the next port. As fuel prices skyrocketed and slow-steaming became the industry norm, the attention on berth productivity only grew, and so did the need for the data to be collected and presented on a global basis.
“There are good statistics available on vessel schedule reliability, and we are seeing a trend toward the same on vessels’ environmental efficiency, both of which are elements that factor into the selection process of our customers and that serve the purpose of improving awareness and competition. The same needs to happen on terminal productivity,” said Tommy Nilsson, head of terminal procurement and strategy at Maersk Line.
That’s a challenge we at the JOC took on nearly five years ago. Instead of approaching ports and terminals, we went to those most motivated to see productivity levels rise because of the need to cut fuel costs: the carriers. We approached carriers one by one, asking them to share with us their operating data — the time their ships arrived and departed and the number of moves achieved during that time at the terminals they call globally, down to the individual vessel call.
The assurance to the carrier was confidentiality; an exercise of this type wouldn’t be possible if the carriers’ names were made public. But what would come out would be groundbreaking: a continuously updated database of berth productivity — the total moves per hour achieved — broken down by terminal, port, region, ship size and call size.
Although carriers don’t know which other carriers are participating, the data is revealing; it shows them if their productivity differs from that of their peers. If it is measurably lower at a specific terminal, the carrier can delve deeper into its operations to figure out why. Maybe it’s holding its ships for valued customers’ cargo, arriving late at the terminal or loading too much breakbulk cargo. Perhaps the terminal isn’t working the ship as fast as it could.
Either way, the data illustrates the existence of a problem in need of a solution. The data has other uses as well: Terminals will know productivity levels at other terminals only if they are within the same operating group; if not, until now they have been at the mercy of carriers or the trade press to know how they themselves measure up against their peers.
To date, 17 carriers representing a significant majority of the world’s deployed capacity are contributing data to this project. The database contains hundreds of thousands of port calls, covering more than 400 ports and 650 terminals worldwide. This week’s JOC Cover package, and a presentation on productivity to be given at the TPM Conference in March by Ocean Shipping Consultants’ Director Andrew Penfold, is the first public use of the data.
We believe the benefits of this data will be enormous. Higher productivity levels mean greater utilization of berth capacity. Faster ship turnarounds mean cost savings through slow-steaming and lower carbon dioxide emissions. Shippers benefit from their cargo moving faster through the system overall. We look forward to sharing more of this data. You can check out where we’re headed at www.joc.com/port_productivity.