NEWARK, N.J. — Costs at North American ports will continue to rise unless berth, yard and gate productivity increases enough to handle all the big container ships coming their way. And container lines likewise will see their port costs rise, even if current productivity levels stay the same.
Those were two of the warnings sounded at the inaugural JOC Port Productivity Seminar here on Tuesday.
U.S. ports have been spending billions of dollars in the last decade in an effort to keep up with rising container volumes. But now that volumes are are no longer increasing at double-digit rates, the focus has shifted to improving productivity. “Carriers are focusing on costs by deploying larger, more efficient ships,” Richard Larrabee, port commerce director of the Port of New York and New Jersey, said in the seminar’s keynote address.
Retail importers also are focusing on costs and want quantitative measurements of port productivity, he said. The problem they face is obtaining comparable data that measure productivity.
“Is port productivity in the U.S. acceptable? No,” said Christopher Parvin, vice president of marine operations for Mediterranean Shipping Co. He said the average number of moves per MSC vessel while in port has increased 30 percent in the last five years, but that port productivity has not kept up.
“We waste three hours per ship waiting for labor to start,” he said.
Deploying more trucks to load or unload a mega-ship’s cargo is becoming difficult because “we are nearing the limit of the number of trucks we can put on one pier,” Parvin said.
Port trucking is potentially a weak link in improving port productivity because long delays and low pay are pushing port drivers out of the business,” said Jim Newsome, president and CEO of the South Carolina Port Authority. “We have to work better with drivers to reduce their turn times,” he said. “We need to nurture and respect the truckers, because if we don’t, we won’t have that resource. Five-hour turn times are not acceptable.”
The average time an MSC ships stays in a U.S. port is 32.5 hours, down 0.1 percent from 32.6 hours in 2009. Parvin said labor costs and terminal fees are rising faster than increases in productivity, so carrier costs are increasing.
“If we can’t improve our productivity, we are going to run out of berth space in our ports,” said Thomas Ward, senior maritime planner at Parsons Brinckerhoff. “And if we run out of berth space, we will lose trade competitiveness.
Even a few seconds of time wasted waiting for yard tractors or equipment are important. Equipment breakdowns or missing staff can ruin productivity, Ward said.
“Carriers can save up to $50,000 per day if they get better service at terminals,” said Dr. Felix Kasiske, partner at HPC Hamburg Port Consulting.
He said a terminal’s cost of handling a container ship with a capacity of 18,000 20-foot-equivalent units is 50 percent higher than for a 9,000-TEU ship.