MEASURING PORT PERFORMANCE – FINAL

This is the final post series about PORT PERFORMANCE MEASUREMENT (FOURGEAUD, Patrick; World Bank paper). We hope to be contributed to establish management concepts related this issues and benchmarks.

4- NOTE ON BERTH OCCUPANCY RATE AND QUEUING THEORY:

Ships are berthed according to available space and other constraints as number and size of bollards, number and location of main pieces of handling equipment, nautical constraints etc. For example, a 1000-meter quay can theoretically receive three large Panamax-type ships or four or five smaller ones. Only simulation systems could take these details into account. Analytical approaches require that a number of berths be specified in advance.

It must be done by considering the length of ships commonly operated. Thus, if a terminal actually accommodates ships with various sizes and berthing space can be optimized, its real capacity may be slightly underestimated when using the methods described below.

4.1- berth occupancy rate

This rate is usually computed over a year, to include seasonal effects:
Cargo handling performance may be monitored by recording:

formula:

Cumulated length of commercial operations alongside the quay v/s... /

_________________________________________________

...available time over the given period

The optimal use of infrastructure might be best monitored with the following ratio:

formula:

Cumulated length of call alongside the quay (including idle time) v/s.. /

________________________________________________
...available time over the given period (365 x 24 h)

The difference accounts for all tasks and procedures to be performed when the ship is berthed, at the beginning or the end of the call. It also includes the consequences of the organization of work: restricted working time, lack of flexibility (shifts scheduled at fixed hours) etc., and the consequences of other constraints that apply to ships mooring or sailing out (tide, current, availability of pilots and tugs, swing bridges, locks...).

A distinction must be made according to the way ships are chartered:

Liner-ships have to comply with a precise schedule. If no berth is available at the time of ar

rival, the call may be canceled, the cargo shifted to another port or waiting for the next call. Thus, whenever competition exists between ports, the berth occupancy rate usually does not exceed 50 to 60 %.

Higher rates can be seen when port facilities are saturated and there is no alternative, or when it is possible to schedule precisely a high number of calls; e.g., terminals dedicated to a single intensive traffic like short-sea Ro/Ro traffic or some private terminals operating on East-West trade with very intensive and well coordinated activity.

Chartered ships are usually less affected by port congestion, depending on the nature of the cargo, the demurrage rate. Calls may be planned only a few days or weeks in advance.

Their length may vary according to the nature and the size of the shipment. High berth occupancy rates can be observed, up to 80%, sometimes more, generating significant waiting time.

Expanding the working period to 3 shifts per day and to the week-end, whenever possible, is the first and simplest way of improving this ratio.

4.2- queuing theories and simulations

Port congestion can be precisely assessed by using simulation models taking into account each significant step of the process. In some case, rough estimates can be obtained through simplifying methods. A common one is based on the computation of the ratio:

formula: waiting time/operating time, according to the berth occupancy rate and the number of berths[1].

Theoretical requirements are: a set of identical berths where an homogenous fleet of ships call on a first come first save basis. Arrival patterns and distributions of service times are approximated by a statistical law (Erlang distribution), simulating processes ranging from the random distribution (Erlang 1) to increasingly regular ones (Erlang 2, 3...).

· The average assumptions for a freighted traffic are:

no distinctive pattern of calls => arrival at random,
- and various types of cargoes => service time at random.
- or homogeneous traffic => more regular service time, increasing order of the Erlang law,

· The average assumptions for liner traffic are:
- strict compliance with a schedule, i.e., a fixed distribution pattern of arrivals, => (Erlang ∞), practically Erlang law at 2 to 4th order.
- variation of service time depending on the nature and size of shipment. => increasing order.

This method is more suitable for chartered traffic and should not be applied to liner ships, as long as they do not wait. In such a case , the max berth occupancy rate depends primarily on the actual possibility to schedule calls evenly distributed.

This method represents correctly two phenomena:

- a very rapidly increasing waiting time when the berth occupancy rate rises;
- a very rapidly decreasing waiting time when the number of berths increases; dedicating an additional berth to an existing traffic improves flexibility and capacity to a much larger extent than the mere relative increase in the number of berths.

Generally, the maximum berth occupancy rate (corresponding to a low average waiting time) is lower with liners than with freighters.

Synthesis of the proposed approaches:

FINAL
[1] These methods, initially much developed for telecommunication purposes, have been extensively applied to port planning and design in the seventies. cf. UNCTAD Manual on Port Management 1976; the number of interchangeable berths where the same ship can call.

MEASURING PORT PERFORMANCE - PART I

This blog starts a new post series about PORT PERFORMANCE MEASUREMENT to contribute establish management concepts related this issues and benchmarks.
The Word Bank published in 2000 this important paper we selected to post in three parts.

Author: Patrick Fourgeaud.

1 – PREAMBLE

This note proposes a more customized approach of indicators used to monitor port performance, forecast development and set targets in port sector projects. The main points are that, in most cases, it is not possible to determine benchmarks which would be applicable for any port, and that all expressions of port performance do not address the same requirements. Therefore, carefully identifying problems to be monitored and taking into account the main characteristics of the commercial activity should lead to more accurate indicators and targets.

Available data: In public ports, expressions of port performance are based on data recorded by port authorities which traditionally tend to focus on traffic recordings and parameters used in tariffing of port services. Most available and reliable data are related to the maritime interface where information is more easily collected than on the land interface. Port Authorities usually monitor berth occupancy and dwelling time of ships, characteristics of calls, performance of ship-to-shore cargo handling and availability of the main pieces of handling equipment. Additional but often less reliable data may be available as regards landward operations: dwelling time of cargo in ports’ warehouses and storage areas, characteristics of Customs and other administrative procedures and, rarely, performance of handling for pick-up and delivery goods...
Most of the time, developing a relevant set of indicators would require more information; a survey is the only way to identify whether existing data are reliable, the cause and extent of existing problems and the way they could be monitored.
Whatever criteria are chosen, they must be associated with a precise definition of what is recorded, as all port authorities do not take into account all parameters the same way; for example, they may include empty containers, shifted and transshipped boxes or the tare weight of unitized goods.

Forecast: These indicators are often used to forecast port productivity and assess future capacity.
Computerized simulation systems can give accurate estimates of berth capacity and ships’ waiting time.
Various statistical programs designed for all purpose process modeling or specialized in transportation and port logistics may be used. This note will remind of some simplifications of the queuing theory, which can give rough estimates in some simple cases.

Performance and competitiveness: These expressions of performance display mainly a technical capacity. But shippers and ship-owners have additional requirements; they are also looking for:

- Reliability: a steady and predictable performance adapted to shipping lines schedules;
- Cost: a high performance at a competitive and predictable cost;
- Quality: no overage, no wastage or pilferage or any damage registered during handling and storage operations. Progressively, producers and transporters have to comply with international standards (ISO 9000 or equivalent) and get their process certified; ports, at least those operating in a competitive environment, have to catch up with this trend;

- Adaptability: a capacity to listen to their problems and needs, negotiate and propose solutions.

A port is also a link in the transport chain and, of course, similar requirements apply as regards capacity, performance and quality of connections with short-sea and feeder shipping lines, and with inland transportation networks : road, rail, barges.

Complying with these requirements results is competitiveness and, ultimately, growing market share; ports process more traffic and shippers benefit from lower freight rates and insurance premiums. This can be assessed mainly indirectly. Fortunately, performance and competitiveness are more or less linked: high productivity is often synonymous with reliability and quality and, not systematically, with low costs.
Therefore, performance and cost targets are an acceptable approximation of competitiveness.

1.2- technical valuation of port performance

Port operations are increasingly specialized and processed in dedicated terminals but many flows of goods are still handled at general purpose berths. Depending on the case, port performance should be assessed for an homogenous set of berths or a terminal. It is usually expressed as the average number of calls and the average flow–volume or weight–of goods over a standard period of time; number of calls per berth and per year, volume or weight of cargo handled per hour, per call or per day, per gang or per crane.

In addition, other criteria can be used to see how existing capacity and performance meet the requirements of: i) the shipper or the ship-owner: mainly average waiting time of ship, dwelling time of cargo and data related to quality if possible, and: ii) of the Port Authority: basically berth occupancy rate and global traffic.

All these parameters are not equivalent:

- “snap-shot” performance (recorded during an hour, a shift, a call) describes the technical capacity of a terminal; a flow of goods recorded within a larger period depends also on parameters related to competitiveness, market share, seasonal effects, berthing capacity etc.
- Some of them are used to monitor specific points of concern for port authorities, operators or clients and cannot improve simultaneously. For example, Port Authorities are looking for relatively high berth occupancy rates whereas shippers do not accept significant waiting time.

1.3- explanatory factors

High performance is observed in private terminals and poorest performance is often associated with ports run by public Port Authorities, still in charge of cargo handling and maintenance of equipment. Beyond such a statement, explaining a poor or a good performance may require a more thorough analysis.

Exceptionally high performances occur when all parameters concur positively: as far as containers are concerned, the typical high-performing terminal is dedicated to one or a few shipping lines and privately run, processes regular and well timed calls of large ships, with economies of scale allowing it to be geared with the most high-performing gantry cranes, and handles shipments representing the major part of the ship capacity. Similar parameters can be mentioned in the case of bulk (freighted) traffic.

Conversely, in poor performing ports, many causes, often interrelated, may be mentioned:
- Physical characteristics, mainly: nautical access: dredging backlog and other factors narrowing the access time-slot; land access: ill-maintained pavements, restricted access to land-transportation networks; and port capacity: lack of berths and storage areas, insufficient room for modern ship to shore operations;
- Organizational parameters, related to ships: old ships with narrow hatches, large tween decks, slow moving derricks, spending too long idle time at berth; cargo: ill packaged, non unitized, damaged goods, organization of lashing-unlashing of containers; handling capacity: unsuitable and ill-maintained handling equipment, poorly trained work force, not enough crane drivers, unsuitable, congested and poorly managed storage areas; organization: non-productive methods, ill prepared calls, too restricted working time, unwillingness of port operators to work at night, commercial operations interfering with ship-to shore operations, excessive dwelling time of cargo for commercial motives, documentation delays; procedures: lengthy customs and other administrative procedures and controls, corruption.

Public port authorities but also other administrations, port operators, ship-owners, and shippers, involved in this process with their own objectives, may be partly responsible for these shortcomings. A rapid survey of the situation should help identify the main causes of the problems and choose adapted criteria to monitor further progress.

1.4- measuring port performances - basics

Poor performances are generally due to the organization of handling and storage operations and of maintenance. Therefore, the most common and practical way to measure port performance is to check whether organization and yard equipment can match the actual capacity of the main hoisting machines: generally quay cranes or gantries, which are the most expensive and high-performing pieces of equipment. The first step consists in determining the nominal and the optimum–or commercial–output:

- The nominal output of a crane or a gantry is the theoretical result when all parameters are optimized and reliability is absolute; it can be precisely assessed by taking into account :
. the average load to be handled:
.. break-bulk and unitized traffic: unit load plus accessories: spreaders... ;
.. dry bulk traffic : weight of buckets plus capacity x density of product,
- the average duration of a whole handling cycle (loading or unloading), taking into account the length and speed of each elementary move: hoist, translation, rotation, lowering and back to hold, with and without the load, according to the manufacturer’s technical specifications;

- The commercial output is lower; due to various factors:
. physical factors such as nautical and weather conditions impairing average performance: tide, swell, wind or rain;
. factors related to port operations: average ships’ characteristics, time spent in stowage, trimming, for opening or closing of hatch-covers, lashing-unlashing of containers, etc.
. equipment related factors: standard reliability of cranes, the time it takes to shift them, to change buckets or spreaders, and organization of work, i.e.: proportion of effective work-time during a shift;

The second step is to identify the main causes of poor performance and choosing adapted and measurable criteria.
Over a long period of time, additional delays must be deduced from the commercial output to take into account the extra time spent by ships when they are berthed, before and after commercial operations, waiting for various motives: due to nautical and weather constraints, because of locks or swaying bridges, waiting for port services (bunkerage, repairs), because of non flexible working time.

Benchmark: Most container gantry cranes have a theoretical output of 35 to 40 moves per hour or more. The commercial output, depending on local conditions, varies usually from 15 to 35 in average, with peak performance nearing theoretical performance.
The Delta Sea-Land Terminal at Rotterdam has recently invested in double-trolley gantry cranes and a fully integrated and automatized system between ships and stacking areas which is intended to reach 50 TEUs per hour and per hold, i.e., almost doubling the usual output.
In the case of continuous handling of bulk products, the commercial performance may be closer to the theoretical output (80 to 90 %) with peak performance exceeding theoretical performance, depending on the reliability of equipment and the characteristics and number of products to be handled during a call.

As far as the performance of the land interface is concerned, the problem is generally the lack of data;
- Average cargo dwelling time. A distinction should be drawn between the impact of customs and other administrative procedures, of shortcomings in storage management and cargo handling, and of commercial practices (e.g., when port storage is less expensive than private warehousing). The average dwelling time should not exceed 5 days for containers, 7 to 10 days for general cargo, two weeks for bulk products.
Commercial constraints may lead to longer delays.
- the average time spent by a trailer waiting for its load to be located, handled, and to get its clearance, is usually known only through occasional surveys, even though pick-up and delivery of goods often accounts for a large part of the port congestion and inefficiency. It should not exceed 4 to 6 hours. 2 hours are the norm in modern container terminals.
Regarding equipment reliability, two parameters must be identified: i) the reliability in operation, i.e., the number and length of breakdowns occurring during commercial operations and: ii) the average availability, after deduction of planned maintenance and all breakdowns.
For small pieces of equipment like tractors, trailers, forklifts, availability should be very high (95 % or higher), provided that their number matches the demand and standard preventive maintenance is performed.

Regarding gantries, cranes, RTGs, breakdowns may occur and stop port operations; with normal preventive maintenance, most of them should be limited to electricity and automation problems and repaired within a few hours. Availability should be more than 90 %. The norm in modern terminals is close to 98 %, or 2% unscheduled downtime. An occasional lack of gantry-cranes drivers may reduce the above availability; this parameter is not always identified.

Next post: Part II will continue.

Produtividade na gestão portuária: Temos que fazer a lição de casa

Title: Port management productivity: we need to make home work

A fórmula clássica de PRODUTIVIDADE é o resultado da divisão dos OUTPUTS (saídas) pelos INPUTS (entradas). Isto é, a relação dos resultados obtidos de um processo com os recursos utilizados.

Resumindo: PRODUTIVIDADE = OUTPUTS / INPUTS

O Banco Mundial tem alguns indicadores de performance de portos, por tipo de operação, por empregos diretos e indiretos, produtividade cais, e muitos outros aspectos. Não temos ainda uma cultura de medição de indicadores, de trabalhar com benchmarks. Como dizia o velho guru da administração Peter Drücker: “Não há administração se controle.”, portanto, qualquer administração portuária que se preze deve ter seus indicadores de produtividade, perfomance em vários aspectos e compará-los com as boas práticas no que se faz em logística portuária nas várias partes do mundo.

Vamos ver alguns números:

Nº de funcionários diretos na administração do porto (autoridade portuária): 100.000 toneladas por funcionário (Rotterdam). Vejamos o porto de Paranaguá como exemplo: Em 2008 movimentará cerca de 40 milhões de toneladas, e neste conceito deveria ter no máximo 400 funcionários; tem 650. Santos movimentará 80 milhões, teoricamente 800 funcionários; tem 1.300. Ou seja, as opções são: ou aumenta-se a movimentação ou reduz-se pessoal. Paranaguá optou pela primeira.

Movimentação de cargas por metro de cais: acima de 10.000 toneladas/ano é considerado alta performance; Paranaguá tem 3.500 metros de cais nos seus terminais, o que significa que com 40 milhões ton/2008 terá uma produtividade de mais 11.400 ton/metro de cais; Santos fará a metade disso com seus 13.000 metros. Ou seja, tamanho tem que ser proporcional ao desempenho, senão é sinal que algo está errado na configuração do porto;

Terminais de contêineres: movimentação de 35 a 50 movimentos por hora. Isto significa que o terminal tem embarcar ou desembarcar um contêiner em no mínimo 1 ½ minuto. São poucos os brasileiros que atingem este desempenho;

Geração de empregos indiretos na comunidade portuária, em atividades relacionadas com a logística e serviços do porto:
- Se utilizarmos o benchmark Porto de Rotterdam, teremos 25.000 empregos para 300 milhões de toneladas/ano. Isto significa que cada 12.000 tons movimentadas geram um emprego;
- Se usarmos o padrão dos portos franceses (25), teremos 35.000 empregos para uma movimentação de 275 milhões de tons/ano ou, cerca de 7.800 toneladas para um emprego;
_ Considerando o benchmark francês, a movimentação de Paranaguá geraria atualmente mais de 5.100 empregos na operação, o que é o que ocorre de fato.

Portanto, a gestão chegou pra ficar nos portos brasileiros, e não há como fugir do processo, pois a eficiência das estruturas globais estão sendo dia-a-dia esticadas até o limite de rompimento, e quem não tiver elasticidade e flexibilidade organizacional, quebrará como um palito. Voltaremos com este tema nos próximos artigos.