The Logistics of a Port

Diana MaureGeneral, Shipping GuideLeave a Comment

A port is defined as any maritime facility that is operated on a commercial basis and has at least one or more wharves for docking ships. Most ports are located on the coast but there are some that are inland including those in Manchester, England and Hamburg, Germany. Usually a canal or river will connect the inland port to the sea. Asia has emerged as the continent with the most significant port growth over the last decade. Examples of these mega ports include Shanghai.

The modern port is a very busy place with many functions. The old days of the port being nothing more than a landing space for ships has changed. Even the ships themselves have changed. Some are for commercial work, others for military purposes, and some for tourism. The management of port logistics is therefore a very important topic for any industry player that wants to stay ahead of the competition.

At the turn of the millennium, there was increased interest in the logistical management of ports. Specifically, there was concern that the various departments that make up a port were no longer speaking to each other. The lack of effective coordination would lead to delays and even loss of consignments. At a time when air freight is giving the shipping industry a run for its money, it is important that all port staff and departments offer the very best customer care. Let us begin by looking at the basics of a port.

Basics for the Port

In order for a port to function, it must have these core services:

[a] An administrative department that oversees everything
[b] Infrastructure and structures for landing, loading, offloading, and exiting
[c] Security installations for ensuring safety
[d] Emergency cover in case of a crisis
[e] State of the art communication systems to liaise with other sites
[f] Government and state installations such as customs and immigration
[g] A customer service center to deal with and process clients

Obviously not all ports follow the same labeling conventions. Some departments may be split up or amalgamated in order to support service deliveries. However, the basic functions that have been listed above are required for a port to function properly.

The role of seaports in gateway performance is critical because they are the conduit for all transportation of goods across the globe. The container ports efficiency ranking study is used to compare various ports. It should be noted that the key performance indicators will always be efficiency. Efficiency is measured by the time it takes to process a transaction as compared to the other costs and benefits involved.

For example, a seaport that has long lines is considered to be inefficient even if it offers low prices. Consideration will also be given to how well the various departments communicate with each other. The multimodal framework for running a port includes ocean vessels for the shipments and trucks, barges, or trains for movement to and from the inland sites.

One of the popular options is to use the port-centric system in which the contents of the container are offloaded at the landing site and then passed on to the inland destination. The pick-up follows the reverse order with the goods being brought to the port and then packed into containers to go onto the vessel.

UNCTAD Port Development Model

The United Nations Conference on Trade and Development (UNCTAD) has approved a three generation port development model. This focuses on aligning structures and infrastructure with the changes in technology. For example, the businesses operating near or within the power must constantly review their working practice in order to ensure that they are fit for purpose.

This model also pays attention to political changes as well as the impact on international trade. For example, the UNCTAD port development model might consider the fact that the United States, under the Trump Administration, is reviewing its trade relations with countries with which it has a significant trade deficit. The fact that China (a shipping and economic powerhouse) is one of these countries means that ports must restructure their operations accordingly.

Nevertheless, the UNCTAD model has sometimes been criticized for assuming that changes that take place in a discrete and sequential format affect everyone operating on a given port in equal measure. There is evidence that a single port can have a combination of older technologies/practices and new innovations, depending on how each operator is positioning themselves on a competitive basis. Duluth is an example of this mixed development.

Key Stakeholders

In any arrangement of port logistics, it is important to ensure that all the stakeholders are involved. The main stakeholders include:

[a] Service providers
[b] Facilitators
[c] Operators
[d] End Customers

The reasons for this involvement include the need for a buy-in and ownership of the port development process. It is also recognized that one stakeholder acting alone cannot lead to changes and improvements across all departments of the port. Therefore, a collective effort is needed to achieve this.

WORKPORT Model

The WORKPORT model has emerged as one of the solutions to the problems that were identified by the UNCTAD system. Under this model the port is said to evolve, depending on the needs of the market at a given point in time. Changes are not revolutionary because they retain some of the older systems. For example, a paper trail may accompany computerized records so that they can complement one another in terms of providing good customer care.

This model also recognizes the politics of port management but always prioritizes those issues that are immediate, urgent, and critical. A case in point is the lack of safety for ships due to piracy. The key issues that will be considered in this model of port logistics include:

[i] External Environment
[ii] Internal Environment
[iii] Functional Organization
[iv] Spatial Organization
[v] Port Organization
[vi] Strategic Planning

The industry later decided to focus on a customer-centric model which tends to prioritize the needs of clients over the internal operational convenience of the various players within the port.  This is a recognition of the fact that shipping does not have the monopoly on international transportation for trade purposes. Therefore, the industry must identify and enhance its competitive advantages.

Key Determinants of Port Structure

All the elements that have been described above have contributed to the structure, infrastructure, and operations of international ports. The planners and organizers of these ports need to address the following issues in their strategic planning:

  • Ensuring that the port is suitably located for efficient operations and access to clients
  • Managing the internal and external space so that it is adequate for the port’s needs
  • Selecting the cargo types that are most appropriate and lucrative for the port
  • Understanding and meeting customer requirements in order to remain competitive
  • Establishing a wide but effective distribution channel as well as linkages for support

The take home for port managers is that they can no longer stick to one static formula and hope to succeed in a competitive industry such as this. They must embrace new technology even as they retain some of their more traditional methods of operation. Port managers must also be aware of the wider international trade trends and rules as they operate their own establishments.

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Diana Maure
Recently promoted to Sales Manager, Diana started in 2004 as the Foreign to Foreign Manager for ShipLilly. Her unique background has allowed her to help improve the supply chain of many international clients and provide customized logistical solutions throughout the years.

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