Comparison of port efficiency for Deep Sea PCTC/RoRo Operators in a major European port

20 Dec 2019 Reading time calculated text

RoRo’s are said to be the utility players of the high seas, carrying outsized and overweight cargoes that no one else can handle - everything from helicopters and railcars to buses, cranes, cement mixers, and tractors.

But as versatile as they are, in today’s world, the challenges faced by RoRo operators have not changed much in comparison with a few years back. RoRo operators are very conservative and have not yet found a way to successfully tap into the rapidly changing world of digitalisation. In a very competitive market, operators are looking to be more efficient and reduce cost. The focus has been mostly on the voyage itself and, unfortunately, on reducing the number of people employed. PCTC/RoRo operators have not yet been focusing on port efficiency, where there is still a big potential for saving money.

Port efficiency and its importance

Functional ports are an integral part of modern society, as the world continues to explore more free trade possibilities, and it is clear that this has become more important as countries increase trade between one another.

Ports provide a variety of services for vessels, shippers, and inland transport, which are essential for economic growth and stabilisation. It is, therefore, a requirement that these ports have to offer very satisfactory services to vessel operators while equally managing optimal infrastructure based on the expected vessel type and cargo to be handled.

At our port of observation, port efficiency continues to be a weak spot for the vessel operators. Sadly, this continues to exist because most RoRo operators do not have the systems or local representation in place to gain a complete understanding of the level of efficiency in the port. At the same time, we see that the trend is to further reduce supervision of suppliers in order to save cost.

We also believe that these vessel operators have only a limited view of how much low port efficiency and productivity actually cost them. The shipping lines would benefit greatly from having an evaluation system in place. This system should include parameters such as non-working time and productivity, together with an ability to identify the reasons for low efficiency. Our studies show that there exists a strong interrelationship between these parameters and the ability to effectively increase port performance.

Our Findings

To better understand the current situation, we undertook a six-month test analysis at a major port of PCTC/RoRo shipping lines. We used the MacGregor Port Supplier Optimiser (PSO), a new system that provides a more transparent assessment of port operations to collect and analyse the actual port performance of three of the major deep-sea operators working there.  In the graphs below, we do not identify each individual shipping line results.

All were running the same type of vessels (RoRo/PCTC), same size (4-8000 CEU), same terminal, same place in the loading rotation, same cargo mix (Cars/H-H), and our findings were material.

We discovered very different productivity levels amongst the three operators. Shipping line1 had an average productivity of 65 units (CPE) per hour, while shipping line 2 had an average of 105 units (CPE) per hour. A difference of 65 %. The main reason for this is that shipping line 1 operates full shift lengths even with low volumes. This is possibly due to a contract that is not optimised according to the RoRo operator’s needs. The other two shipping lines do adjust their working times according to volumes.

Car Productivity Equivalents (CPE) per working hour

We also saw a significant difference in productivity per man-hour, which would require a more in-depth investigation to determine the main reasons for this.

Car Productivity Equivalents (CPE) per manhour

Shipping line 1 had the highest cost per CBM. Even though they have the least amount of idle time in port, this resulted from less productivity in comparison with shipping line 2 and 3. A 38% difference in cost per CBM between the lowest and highest RoRo operators was also discovered. Although shipping line 3 had the highest percentage of idling time in port, it was able to reduce the total cost per CBM by having higher productivity levels.

Port efficiency (active time vs total time in port)

Cost per cbm

Finally, the cost of non-performance during this period for all three shipping lines came to about 1.8 Million USD. The number of port calls varied for each shipping line, and this is also reflected in the total cost of idle time in port as shown in the graph below.

Cost of idle time in port

MacGregor Port Supplier Optimiser (PSO)

The MacGregor Port Supplier Optimiser is a cloud based port and supplier operations and performance management system, which provides an ability to: 

  • Gain actionable insights on which to improve supplier collaboration
  • Negotiate better contracts with suppliers using actual data to support
  • Improve operational planning and efficient port calls<
  • Share information in real-time between stakeholders
  • Reduce workload and simplify data maintenance
  • Have one central portal for all vessel and supplier related information

In conclusion, we believe that use of the MacGregor Port Supplier Optimiser to gather insights on port efficiency across multiple ports can enable a marked improvement in port efficiency, resulting in mutually beneficial business improvement for both deep-sea operators and the ports themselves.

 

Deep sea RoRo photo: Ignazio Messina & C.