July 2012 | Commentary | Viewpoint

Ports Can Help Ensure Ship-Shape Supply Chains

Tags: Ports

Kevin Doherty is Chief Executive Officer, Montreal Gateway Terminals Partnership, 514-257-3046

As shippers see their business volumes increasing even as revenues lag, it becomes more important than ever for ports to focus on reliable and prompt service. Shippers are entitled to a high level of service, and they should be able to expect that their ports of call will take a proactive role in managing the supply chain so it runs as efficiently as possible.

Areas that are ripe for improvement include: dwell time (the average time it takes for a container to be placed on a railcar after being discharged from a vessel), turn-around time (the time a truck is within a terminal as well as the time a trucker spends on public roads to get to and from terminals), and flexibility in scheduling warehouse deliveries. Proactive, progressive marine terminals recognize they are in a unique position to monitor and manage freight transport and delivery efficiency even after shipments leave their port.

Vessels may be unloaded soon after arriving at the terminal, but if the boxes' arrival and collection are not precisely coordinated, valuable time is lost. In some instances, trucks and railways will only take out a container when they are already bringing one in.

This policy means that if an export container arrives at the terminal but the inbound container is not there, the truck or railcar will not wait or make an additional trip until it is bringing in another inbound container. This results in import containers being stored at the terminal for a dwell time of five to eight days.

Many warehouses only allow trucks to deliver containers between 8 a.m. and 5 p.m., putting the supply chain at the mercy of traffic during the busiest times of day, and creating added delay.

Delivering the Goods

By bringing together leadership from ports, railways, trucking companies, and receiver warehouses, terminal operators can facilitate a discussion that will lead to better solutions. All parties working collaboratively can collect and examine their metrics, then uncover ways to transform the way they work together.

Parameters to set include: when the railways deliver railcars; how frequently trucks pick up at the terminals; when railcars are placed at the port's terminals and how long it takes; the timeframe for terminals loading railcars; and when warehouses receive deliveries.

Ship-shape Supply Chain

If the supply chain is working as it should, shippers can expect that ships arriving on Monday morning will finish unloading and back loading by Tuesday night. In nearly all cases, the cargo can begin to move by late Monday and be 98-percent complete by Wednesday. Depending on the final destination, containers can then reach receivers during the next 24 to 36 hours.

The goal is a clockwork operation in which containers move out of the terminal faster and more fluidly, and consistently reach their destination without delay.

Great shipping leaders are outspoken about the importance of reliability and service, but they are still only part of the chain. By holding their marine terminals more accountable for the remaining links, and making this style of proactive management a prerequisite in the selection process, shippers can leverage their weight to yield greater stability for their industry, while having a positive impact on international commerce.