A cargo terminal in a port, whether it is a container terminal or one serving the bulk dry/liquid trades, is a key node in the logistics chain. It is the crucial junction where the transport modality of the cargo changes – from marine transport to hinterland transport and vice versa. Not only does the transport modality change, terminals also need to store the cargo safely until it is ready to be transported. To ensure these activities are carried out safely and to the maximum efficiency, as you could imagine, is a Herculean task that calls for meticulous planning across a wide spectrum of activities.
To explain this a bit further, a cargo terminal has three main areas of operations:
- Quayside / Jetty / Berth / Dock – where the ships come alongside
- Yard / Tank farm / Silos – where the cargo is stored
- Landside & Hinterland connections – Onwards transport by Rail / road / inland barging / pipelines
Now, invariably, the terminal is in the driver’s seat in determining a suitable berthing window for the vessel as it is the terminal that has maximum visibility on the constraints imposed by the limitations of the interactions listed above. So, in essence the terminal is juggling 3 moving targets and finding the most optimal solution for keeping the customer’s supply chain unhindered. While doing so, the terminal is also ensuring that the utilization and productivity of assets (quay, handling equipment and personnel) remains high. The planning in each of the three areas affects the other two. However, it is the quayside planning (being the largest quantum per movement) that is easier to take control of. And Just-In-Time arrivals is all about optimising this planning that will translate down to a significant reduction in plan variability for the entire terminal.
Anyone from the industry will vouch for the “dynamic nature” of the operations and how often plans change. For effective JIT arrivals, it becomes imperative that changes in the berthing window are communicated to the vessel and all other players in the port call process as soon as possible so that timely action may be taken. Changes in terminal planning affect the schedule of all other parties involved in a port call. For example, the previous vessel’s delay at the quay affects the next vessel’s arrival time. To ensure that everything goes smoothly, terminals need to communicate these updates frequently. PortXchange platform is an ideal way to communicate real-time updates in operational planning amongst the relevant participants of a port call. It obviates the need for multiple emails, redundant phone calls and sifting across multiple webpages to get timely updates.
Benefits of JIT for terminals
Let’s touch upon the most relevant benefits of JIT arrivals for terminals:
Idle time reduction & improved asset utilization
If all parties are informed and ready to perform their part of the process when needed, idle time can be reduced significantly. This has been proven in various Portxchange pilots, both involving container and bulk terminals. For example, the pilot at Shell Europoort Terminal in Rotterdam yielded a 20% reduction of idle time on the departure of Shell vessels. Another pilot at APM Terminals Rotterdam reduced idle time on the departure of Maersk vessels by 36%. For the terminal, this means that it can streamline vessel rotation time and improve its operational efficiency. In fact, a terminal’s adoption of JIT arrivals will help other actors (viz. Pilots, tugs, ancillary services to the ship) in the port call process to improve their asset utilisation and productivity by reducing the variability in their planning.
Improve competitive position
Terminals need to compete with each other on location, infrastructure, productivity, amongst other factors. Shipping lines are looking to reduce their emissions and unnecessary bunker consumption. If a terminal they collaborate with can help them achieve this, it is a critical competitive advantage. Not being able to react to the updated terminal planning costs time, money, and unnecessary emissions. If the pilots have to wait for the vessel’s departure, because it is later than expected, they miss an opportunity to serve other clients meanwhile. If the vessel doesn’t receive an updated ETA berth while approaching the port, it fails to benefit from slow steaming to decrease fuel consumption and CO2 emissions.
Improve transparency in supply chain
Connecting to a digital platform like PortXchange to share the terminals planning in real-time means terminals significantly improve their communication with their customers. Without any extra efforts through automated warnings, customers stay updated in case of any changes on the terminal’s side. This digital way of communication is less labor-intensive and a more efficient alternative to periodic updates. It goes beyond bilateral communication and ensures an all-round transparency in the supply chain.
Reduce GHG emissions
The expectations from shareholders across all businesses are slowly shifting from focusing solely on economic targets. Sustainability and emission targets, also gain attention. By sharing their data and using the same source of information as all other parties in the port, terminals contribute to reducing CO2 and NOx emissions.
In today’s connected world, a terminal cannot wash its hands off from the emissions a ship has generated while waiting for a berth at the terminal. The terminal has a responsibility to ensure that this is kept to a minimum, which is easily achieved using the JIT arrival concept.
Furthermore, increasingly customers and end-users are keen on being aware of the carbon footprint generated by the entire supply chain of a particular product. Optimum planning will ensure housekeeping moves or shuffling moves (non-value added operations that need additional power and resources) are kept to a minimum.
Barriers to implement JIT
It sounds like a logical thing to do. Yet Just in Time Arrivals has been attempted before in shipping, and it has not yet been implemented successfully on a global scale. Why not?
We see a few problems in our experience of working with different ports.
Sharing operational data real-time is new to most terminals and can have commercial side effects.
Our industry is steeped in a business model that encourages information asymmetry amongst players in the logistics chain. The nature of the products being shipped lends it susceptible to price speculation in trading markets. The structure of contracts used in shipping also does not promote transparency as users often report that information-sharing is used against them in claims and litigations.
This is changing though. Calls for increased information-sharing between participants of a port call from end-users and drivers of the supply chain is growing. There are already contractual clause structures that have been developed to facilitate Just-In-Time arrivals. Case in point is BIMCO’s Virtual arrival clause (2013) and STM clause (2018). This sets a framework for industry players to inculcate JIT arrivals into their charter parties.
Terminals are usually not feeling the pain of information not being available.
The role of the terminal in the port call process is usually the supplier of data. If you look at it from a process perspective, it looks as follows:
Supplier –> Process step –> Customer
I.e. for the Estimated Time of Arrival that would be:
Terminal –> Estimated time of Arrival –> Shipping line
As the terminal is often leading in the planning, they don’t feel like they are missing information to take action. All the other parties dealing with the ship however do need to make sure they stay up to date about every change in plans.
This means that if there is a delay, the pain is with the customer, the shipping line in the Estimated Time of Arrival example and not with the terminal.
Terminals usually operate in a more local way than their customers, as shipping lines have global processes and operate in multiple ports.
This means that focus areas and strategic digitalization decisions are more locally focused for terminals and do not go beyond the borders of the port. Just in Time Arrival actually already starts at the previous port, so the scope is bigger than the operating field of the terminal.
PortXchange as a tool for Terminals in driving JIT
Terminals play a crucial role in Just in Time arrivals. Even more, the extent to which a terminal uses PortXchange to monitor port calls and share its own planning real-time with the port community impacts the reduction of vessels’ anchor time. The higher the usage frequency, the lower the anchor time or idle time.
In a recent research work undertaken by our data scientist Eline Gelderman at Tilburg University on the impact of PortXchange usage on Just In Time arrivals, it was found that when terminals used the platform, there was a significant improvement in JIT arrivals and reduction in anchoring time. This translates to an improved bottom line for the terminal and all other actors involved in the port call process.
Our implementation projects with multiple terminals globally has reiterated the need for sharing of real-time operations planning and the resulting Just-In-Time arrivals have already contributed to improved planning efficiency. Needless to say, terminals on our platform are making their contribution to the reduction of GHG emissions and facilitating an efficient supply chain. Are you?