Benchmarking to get ahead

A port should not fall into the trap of simply benchmarking against league tables, or falling for the common misconception that “by getting bigger we get better”, says Geoff Adam, head of marketing for the Port of London.

A simple, quick analysis of what competitors are doing is not an answer in itself. “A comparison of league tables results in a quick fix which is only done once, and is then forgotten, ” he says.

“You must ask yourself what you are going to benchmark against.

Is it against the highest overall tonnage achieved by another port, the highest number of TEUs, or the highest number of ship calls?”

Adam speaks from a position where the Port of London developed strategies – principally the London Gateway Project – arresting its own slide in both national and international terms over the last decades. It was the number one world port until 1930, the number one European port until 1970 and the number one UK port until 2000. In 1993 the Port of London’s share of seaborne trade was around 8.4%. Now it is in the 11% region and rising.

The importance of benchmarking comes from the four steps of:

learning by example adopting best practice sharing information making performance step changes.

In short, says Adam, it is a question of learning from others.

Regular comparison of performance allows the identification of gaps in performance, and also the opportunity to see where performance can be improved. By following through and monitoring these performance improvements, it is possible to see what benefits have accrued.

“Seeing the bigger picture gives us a wake-up call and reveals ways to achieve a step-change in performance. It allows one to seek new ways of doing things, and the development of staff skills.”

Adam divides the methodology of benchmarking into two areas: strategic and performance.

In the strategic area the goal is to compare core competencies, achieving a change in the balance of activities undertaken by the port and the development of new services. Performance-based benchmarking on the other hand allows for measurement of key service delivery and same-sector comparisons.

“At the Port of London we benchmark what the port offers its customers in facilities and services and the performance of those against that of our local competitors.”

To do this, Adam says his port had narrowed down the 130 commercial ports in Britain to its four local competitors of Southampton, Medway, Dover and Felixstowe. To these it added the “local” European competitors of Hamburg, Bremerhaven, Rotterdam, Zeebrugge, Antwerp and Le Havre.

Against a backdrop of changes in the world shipping market, such as the emergence of China’s trade growth and the increasing size of container ships, Adam says the Port of London has focused on the performance criteria of meeting customers’ expectations in for example, the just-in-time market niche where the port had a competitive advantage in that it was closer to the end market for distribution.This allowed for same sector comparisons with the performances of Felixstowe, Southampton and Thamesport.

The development of the London Gateway project is one of the drivers behind the Port of London’s strategy to maximise its comparative strengths, particularly in the proximity from berth to the end market. “The Port of London now knows, from our benchmarking studies, that our service standards are comparable to our local and European neighbours. The London Gateway project is our answer for the future, ” he says.

Briding the Gap and Getting Ahead

Shipping lines and container terminals have a range of expectations that differ in many respects, but there are common areas where expectations overlap, and increases in productivity can go a long way to bridging the gap, says Prof Carsten Boll of the Institute of Shipping Economics and Logistics in Bremerhaven.

Reviewing the expectations and requirements of the shipping lines, Boll says the shipping lines focus was on the minimum time taken to service the vessel, the maximum flexibility of a berthing window, the provision of feeder facilities, good access to hinterland infrastructure and a minimum level of handling charges.

The terminal operator’s expectations and requirements came from a different perspective and looked for high usage of facilities, higher flexibility of the operating system, decreasing dwell-times, short distances for cargo marshalling in the yard, increased reliability in planning and high profitability.

Common targets therefore were higher productivity of the berth, yard and equipment. Higher reliability could be achieved by improvements in the vessel arrival times, prediction of truck and train arrivals, resource and yard planning, and the capability to handle “exception” incidents – when things did not go to plan.

As to methodology, Boll says that overall terminal productivity can be benchmarked in a variety of ways such as using berth productivity (TEU/metre berth length], yard productivity (TEU/hectare of yard), quay crane productivity (TEU/crane) and yard equipment productivity (TEU/device).

Berth productivity could be benchmarked by regions with the best practice figures extrapolated to provide a yardstick. The same could be done for selected terminals and for crane productivity per region.

As a case study in increasing productivity, Boll cites three scenarios where optimising the type of equipment used, and the type of vessel serviced, can drastically change productivity figures. (See table).

Scenario A is of a berth for super post-Panamax vessels of 8,000TEUs using four single-trolley STS cranes for a cargo exchange of 2,000 containers, 60% of which are 40 footers and 40%, 20 footers. At an average move per hour per crane of 25, a total of 4,000 hours of crane operation are achieved and 400,000 boxes per year moved.

The split of 40 footers and 20 footers equates to 640,000TEUs annually and productivity figures are achieved of 1,600TEU/metre for the berth, 32,000TEU/hectare for the yard, and 160,000TEUs per crane.

Scenario B examines the productivity increases that can be achieved if the berth moves to handle ULCS vessels of 10,00012,000TEUs using five single-trolley STS cranes with twin-lift and dual cycle. The new cargo exchange of 3,300 containers, with the same proportionate splits of 40 footers and 20 footers, produces an average move per hour per crane of 33, a total of 5,000 hours of crane operation, and 825,000 moves per year. The spread of 40 footers and 20 footers equates to1.32m TEUs per year.

Productivity figures are now 2,640TEU/metre for the berth, 44,000TEU/hectare for the yard, and 264,000TEUs per crane.

By changing the scenario again to Scenario C – exactly the same as for Scenario B, except that five double-trolley STS cranes are used – still further benchmarking improvements are achieved.

The average move per hour per crane goes up to 40, which at 5,000 hours of crane operation realises one million boxes per year, equating to 1.6m TEUs. The spread of 40 footers and 20 footers equates to productivity figures of 3,200TEU/metre for the berth, 53,300TEU/hectare for the yard, and 320,000 TEUs per crane.