Port call optimisation – two sides of the same coin

In recent years strong emphasis has been put upon port call optimisation to facilitate just-in-time shipping, with diverse initiatives to standardise processes and communications conducted within the port, with visiting ships, and with previous and next ports.

Not surprisingly, ports and terminals have led this development to enhance their value proposition. One core value coming out of port call optimisation is enhanced predictability, which is an important foundation for shipping lines’ scheduling and planning processes.

Predictability in a ship’s arrival to the port is at the same time an important foundation for expanding the planning horizon for ports moving towards a commitment-driven planning process, rather than continuing to follow the first-come first-served principle.

However, port call optimisation needs to be regarded from different business logic perspectives. A port-centric approach focuses on the port and its operators optimising the utilisation of their resources, while a ship-centric approach will aim to ensure high utilisation of the ship while it is paying visits to multiple ports.

Container shipping tends to operate a port rotation schema, where the rotation through successive ports needs to be taken into consideration – for the shipping line it is not enough to just explore the direct relationship between a single ship and a single port.

Port call optimisation

Increasing demands are being made to overcome the fact that many of the world’s ports continue to serve ships on a first-come first-served basis, causing inefficiencies and an adverse carbon footprint. This port business logic has increased attention on just-in-time shipping and, as a result, increasing the synchronisation between the ship’s plan for arriving to the port and the port’s capabilities of serving the ship is now high on the IMO agenda and is a component of how digitalisation is recommended to be adopted by the world’s ports.

Just-in-time shipping is one of the toughest initiatives to realise, but also one of the initiatives that would have most impact on improving both the sustainability and the image of shipping transport. This is also an area where capital productivity from the involved actors has a direct relationship to energy efficiency.

Port call optimisation is now being actively promoted by organisations such as the Digital Container Shipping Association (DCSA) as a standardised approach to port visit interaction and the foundation for optimal turn-around times.

In this article particular emphasis is put upon container shipping and on the need to take the container line rotation schedule into consideration, because disruptions occurring at one port causes accumulated delays to succeeding ports.

Delays at previous ports may cause

•             a ship needing to steam faster and burn more fuel to meet an original time slot, thereby reducing returns on capital productivity and energy efficiency, or
•             a ship having to cut and run, or even skip a visit to a port in the rotation schedule, thereby presenting a lesser quality of transport service to clients, or
•             a ship risking waiting in the next port and thereby reducing the optimisation of the ship as an asset when it becomes idle.

It is also important to take a wide perspective on global efforts in this regard, so as to avoid simply ‘paving over the cow paths’ – we need to question what really matters. 

The port-centric perspective

A port is concerned with optimising its utilisation of resources and infrastructure while serving multiple visits made by different shipping companies simultaneously. The average port serves different types of trade, such as container traffic, wet and dry bulk, regular and cruise-based passenger transport, etc., all driven by a different business logic.

Container calls are part of a larger schedule with multiple visits to the same port, a single cruise call is planned maybe two years ahead of time, regular passenger traffic is often repetitive, and bulk ships are highly dependent on supply and demand driven by market prices for the cargo.

For the port to overcome the challenges of meeting the needs for different types of trade, two complementary approaches are taken: to seek as much flexibility as possible on re-planning at the last minute and to expand the planning horizons as far as is feasible.

The latest developments at the top of the data analytics agenda of maritime informatics – access to data streams and enhanced digital connectivity across the ecosystem of maritime transport – are all expected to support such ambitions. Unfortunately, it seems that many ports are slow to digitalise.

This, in turn, affects the opportunities to harvest the data now being created by smart containers – something that could only help ports to shorten container dwell time in terminals and support vessel planners in adjusting their stowage plans.

Initiatives to standardise the core definitions used as coordination mechanisms (such as the meaning of an estimated time of arrival (ETA) to a particular location) in the port call process as well as standardising processes of interaction between the involved actors have already been taken. 

One may however raise some concerns about whether all the ports in the world, in the short run, will act in the same way. It will, for sure, take some time before a consensus is reached on a predefined pattern, or patterns, of operations. This is especially challenging when many of the world’s ports lack suitably responsive governance structures. One solution might not fit all, since ports are not all managed the same way.

Nevertheless, port call optimisation, from a port’s point of view, aims to provide enhanced predictability on when visiting ships can be served and when they will be ready to depart from the port. This includes coordination with various government and service actors, who all have roles in relation to the vessel’s arrival, e.g., customs and immigration, ships chandlers, husbandry agents (crew change, doctor appointments etc), as well as acknowledgement of service level agreements (SLA) between carriers and terminals. To do this, a fundamental level of standardisation is essential.

A complementary approach, not taking a particular port governance model into consideration, is to adopt a principle where actors continually align their plans based on common situational awareness, created by each of the actors that belong to the community sharing their knowledge. This principle is followed within port collaborative decision making (PortCDM).

The ship-centric perspective

Ports, being a collaborative effort among the actors belonging to the port, are concerned with optimising the utilisation of resources and infrastructure in providing value for their clients. While shipping lines are ultimately focused on efficiently leveraging their resources and infrastructure to serve their clients, an underlying concern is to optimise the use of the ship for operations.

Consequently, shipping lines want to steam at an optimal speed between ports, experience as fast a turn-around time as possible, arrive just-in-time for the purpose of the call, and experience as little waiting time as possible. A high degree of predictability in starting and finishing port call operations is of major importance to a shipping line. To do this requires digitalisation and collaborative data sharing processes to be established.

Taking scheduling realities into consideration in the interaction between the shipping line and the port prior to and during port visits is therefore unavoidable. Shipping lines are concerned with optimising their routing on visits to multiple ports and do not necessarily want to interfere with the processes upon which the port operates to provide its services for inbound and outbound passages, and the visit to the terminal operator.

However, shipping lines and other shipping companies do need to establish a channel for collaborative interaction with both the port authorities and terminal operators. It is also highly advisable that ports establish a channel of communication with ship operations (i.e., fleet operating centres) avoiding the need for the port to interact with every single ship for medium and short-range planning.

Possible combinations

Many of the initiatives with digital implications currently being pursued by the “community” of port call optimisers are both promising and re-usable from a ship centric perspective, including:

•             a shared understanding of the definitions of core events, time stamps, and nomenclature associated to the port call process;
•             a shared understanding of a standardised messaging format, such as S-211;
•             standardised interfaces for messaging;
•             a digital infrastructure that allows episodic visitors to connect to the port authorities and terminal operators; and
•             a joint agreement on the tolerance for deviation from 100% predictability for some key events in the port call process.

Figure 1: A fleet and port centric view on port call optimisation

Existing port-centric approaches to port call optimisation most likely won’t provide all the desired effects for shipping as a whole. In this article we have described the reality for container shipping. What does this mean for other types of trade, since container shipping only represents about a third of all sea transport and all port calls being made?

To avoid any misunderstanding of whether we are talking about a ship or a port centric approach to port call optimisation, maybe we should include the ship-centric perspective on port call optimisation under the revised title of port visit optimisation.

Editor’s note: This article is an abridged version of this paper by the authors, which includes a full list of references. The full paper can be downloaded here.

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About the Authors

Mikael Lind is Associate Professor and Senior Strategic Research Advisor at Research Institutes of Sweden (RISE) and part-time at Chalmers University of Technology, Sweden. He serves as an expert for World Economic Forum, Europe’s Digital Transport Logistic Forum (DTLF), and UN/CEFACT.

Hanane Becha is the IoT program project lead at DCSA and also the lead of UN/CEFACT Smart Container Project as well as the UN/CEFACT Cross Industry Supply Chain Track and Trace Project.

Andre Simha is the Chief Digital & Information Officer at MSC Mediterranean Shipping Company, and the chairman of the Digital Container Shipping Association (DCSA).

Steen Erik Larsen is the head of Technology M&A at A.P. Moller – Maersk, and represents Maersk in the Digital Container Shipping Association (DCSA).

Eyal Ben-Amram is the CIO of ZIM Integrated Shipping Services Ltd., and a member of the Digital Container Shipping Association (DCSA).

Martin Gnass is the Managing Director Information Technology of Hapag-Lloyd AG and represents Hapag-Lloyd in the Digital Container Shipping Association (DCSA).

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