Canada a model for US port productivity metric creation

Canada a model for US port productivity metric creation

The US government’s interest in Canada’s metrics and barometers for its ports and containerized supply chains hopefully signals an intention to follow a similar path toward providing transparency needed to improve investment planning and accountability.

The Commerce and Transportation departments will need to adopt bolder thinking from the United States’ neighbor to the north after an advisory group — represented by beneficial cargo owners, port authorities, marine terminals, railroads, and longshore labor — served up tepid recommendations. Labor was skeptical of the congressional mandate, largely because it started as a way to measure productivity before, during, and after negotiations among unions and employers. There was also a general resistance from advisory group members fearful that the data could be used unfairly against them.

The disappointing recommendations, mainly to standardize existing units of measurement, fly in the face of where the industry is heading: increased transparency of performance to make better decisions and keep stakeholders accountable. A quantitative lack of understanding on the state of US port performance makes it difficult to track whether efforts to improve fluidity are working and leaves transportation providers and shippers pointing fingers.

Despite the tepid recommendations from the Port Performance Freight Statistics Working Group, others in the industry and within government understand the importance of metrics. A US Commerce Department report released in January stressed the benefits of collecting port productivity data, while the US Government Accountability Office in November chided the DOT for lacking key data on containerized supply chains, saying the gap has contributed to slowdowns in port productivity and forced shippers to modify their supply chains at their own expense.

Meanwhile, Federal Maritime Commission-led industry groups are working toward a national portal in which key, nonproprietary information is shared with shippers, ocean carriers, truckers, and others to reduce port congestion.

All’s not lost for shippers and others looking for some type of standard to measure the state of US port performance and set benchmarks. The DOT’s Bureau of Transportation Statistics can go beyond the recommendations of the advisory group, and recent discussion with Transport Canada officials suggest it’s at least considering something grander. The DOT wasn't available for comment. Via an online portal and, depending on their role, users can track productivity at major Canadian ports and via containerized supply chains.

Canada’s path to the creation of metrics and benchmarks for the performance of its five largest container ports and the movement of goods from Asia through western ports to Canadian and US inland hubs provides useful lessons. First, it’s not going to be easy to convince ports, marine terminals, and others to agree on what should be measured and how.

“There was a lot of pushback in the beginning,” said Daniel Olivier, who helped create the port utilization and fluidity indicators. Transport Canada began the effort in 2008 after the government encouraged ports to measure performance amid perceptions they were unreliable, a view proved incorrect by data from the initiative. Canadian ports and marine terminals’ involvement was voluntary, unlike in Australia, where the five top ports were forced to share data on productivity after a labor dispute in the 1990s.

Relating to imports, the Canadian ports and marine terminal operators agreed to measure truck turn times, vessel turnaround times, average vessel call sizes, berth utilization, container dwell time, gross port productivity measured by 20-foot-equivalent unit per meter of berth, and gross crane productivity. The next step was establishing benchmarks that took into account each port’s unique features, including footprint, annual volume, and handling equipment, said Louis-Paul Tardif, director of analysis and research at Transport Canada.

Complementing the port indicators are fluidity indicators that measure the ocean transit from Shanghai, Hong Kong, Qingdao, and Tokyo to the ports of Prince Rupert and Vancouver. The fluidity indicators track how long it takes for the container to move from the dock to the railroad, and the transit time via rail and truck from the western Canadian ports to Calgary, Chicago, Montreal, Toronto, and Winnipeg. The fluidity metric also tracks the containerized chain between the inland hubs through Montreal and northern European and Mediterranean ports.

The transit times are collected from trucking companies, third-party logistics providers, and Canadian National and Canadian Pacific railways, and ocean transits are calculated via automatic identification tracking.

For other countries looking to follow Canada, Tardif stresses that ports, marine terminals, railroads, and others must see an advantage in cooperating and sharing sensitive data. The Canadian government is looking to make use of port performance metrics as part of its productivity and bottleneck assessment of its freight transportation system. Beyond that, the fluidity and port indicators give marine terminals and ports a way to measure their performance against their peers and competitors. The indicators also help Canadian officials promote the usage of Canadian transportation systems to foreign exporters.

Olivier, the Port of Montreal’s director of business and innovation, envisions the indicators being expanded to track how exports are handled through ports and from points of origin to destinations. Transport Canada is in the early stages of building a predictive component to the indicators, giving ports, marine terminals, and railroads an idea on just how much imports are heading to their way, Tardif said. He also sees potential to integrate information from Vancouver’s truck appointment system and Montreal’s truck turn time portal into the system. The key, he says, is delivering value to stakeholders by providing transparency of agreed-upon metrics and being open to new ways of tracking.

To US officials looking to create their own metric and standards, Tardif says, “If you build a better mousetrap, we’ll take it.”

Contact Mark Szakonyi at mark.szakonyi@ihsmarkit.com and follow him on Twitter: @szakonyi_joc.