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MEASURES OF MARINE CONTAINER TERMINAL PRODUCTIVITY A marine container terminal is a complex facility that involves a variety of different parts and processes. The physical plant con- sists of berths for ships, cranes for transfer of containers between the terminal and the ship, yards for storage of the containers, gates for entrance, exit, and checking of containers, several other smaller subdivisions for equipment, and administration. The pro- cesses involved include checking the containers through the gate (in both directions), stuffing and stripping, transporting contain- ers between gate and storage areas and between the storage area and the cranes, and hoisting the containers on and off the ship. In the United States today there exists a large number of con- tainer terminals, the total capacity of which exceeds that required to handle the current level of trade. This situation results, in part, from the fact that many local and state governments have encour- aged the development of their ports through a variety of subsidies. Selection of a particular terminal by a shipping line results from considering a multitude of factors, including the terminal charges, the turnaround time for the ship, the nearness of the terminal to the container shippers or receivers, the convenience of the terminal to the hinterland infrastructure (road, rail, feeder shipping), and Workshop participants are listed in Appendix D. 25
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26 the time required for the ship to transit from the open ocean to the terminal. The first two factors can be directly influenced by the various parties that have direct control of the terminal activities. These parties include the port, the terminal operator, the stevedores, and to a certain extent the shipping line and the truckers who use the terminal as an interface. The remaining factors, although very important to the success of a terminal in attracting business, are the result of geographic location, weather, historical accident, demographic factors, and the like. These factors are not addressed in the following discussion of terminal productivity, since they do not represent features that can easily be modified by the interested parties. The focus of this report involves, therefore, only the measure- ment of productivity of the terminal itself. Measurement is the first step in management, since it provides the necessary yardstick for assessing both performance and improvement. Productivity measures are traditionally formed as the ratios of two quantities that generally reflect an input to a process and its output. In industry either the input or the output is often measured in monetary terms, since profitability is an issue. Labor is a principal component in the cost of operating a terminal. Wide variations of labor costs exist across the United States, and even larger variations exist when compared with labor costs abroad. It is fair to say that most of the parties involved in container terminals use such cost measures in their daily business, although there is no unanimity on which measures are the most appropriate and, under any circumstance, these measures are considered highly proprietary. Approaches that involve actual costs have not been adopted here. Efficient operation of a terminal is presumed to require cer- tain labor, land, and equipment resources independent of these local variations. The point of view here is that productivity mea- sures that are ratios of two physical measurements can reflect the efficiency of the process without the need for addressing local costs. As such, these measures should have broad applicability both here and abroad. Finally, any measure of productivity should be selected on the basis that it is unambiguous, easy to measure, and sensitive to the most critical part of the operation it addresses.
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27 THE ELEMENTS AND CONSTITUENCIES INVOLVED IN PRODUCTIVITY A marine terminal involves a variety of different processes in a linear or pipeline arrangement. Each process is crucial to the subsequent process, and the productivity of each depends not only on its intrinsic ability to perform the process, but on the interface with the other processes as well. For instance, a slow loading rate of containers on board a ship could be the result of limitations of the particular crane, of poor delivery of containers to the crane, of excessive heel of the ship, or of other factors not related to the crane or its gang. The major elements in the terminal operation on which one can focus on productivity are: 1. The Container Yard Unlike the traditional finger pier and storage shed operation, which characterize break bulk operations, a container terminal requires an expanse of flat land for tempo- rary container storage. If a broad expanse of land is available, then it may be possible to stow individual containers on wheeled chassis; if the land area is small it may be necessary to stack the containers, two, three, or more high. The movement of containers in a container yard requires very different equipment for a chassis operation than for a grounded or stacked arrangement, and the efficiency of this part of the operation reflects these differences. Generally speaking, the larger the land available, the easier it is to provide efficient land operations within the terminal. On the other hand, if the shape of the land is something other than rectangular, then this geometry may adversely affect the yard performance. 2. The Cranes The cranes are the single most expensive piece of mechanical equipment used in a container terminal. These sophisticated pieces of machinery have been developed to pick up containers from the dock and place them onto a containership efficiently, or vice versa. Because as many as three or more of these units may work a ship simultaneously, it is important for productivity for these cranes to perform well. Crane delays can be caused by a variety of factors including the appropriate container or chassis not being available for the next cycle, the requirement for the crane operation to be stopped during coning or lashing, and crane driver capability and experience.
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28 S. The Labor Labor costs are a significant part of any termi- nal operation and must be considered in any analysis of a marine terminal. Most of the labor in a marine terminal is union labor, and the productivity of labor is obviously dependent, in part, on the negotiated work rules. This includes the number and type of workers required for the individual gangs, the hours worked, spe- cialization of crafts, and overtime work requirements. In addition, the labor productivity is dependent on a variety of other factors including the organization of the terminal (both physically and administratively), the age and operability of the equipment, and the weather. 4. The Gate The gate represents a significant part of any terminal operation in that it controls the flow of containers in and out of the container yard. A typical outbound loaded container is weighed and inspected for damage, and the shipping documents checked. This process can take either a matter of minutes or more than an hour, depending on the problems encountered. To prevent the gate from being a bottleneck in the flow through the container terminal, most terminals are equipped with extensive hardware such as computers or television cameras (to aid in the inspection). Most terminals have multiple lane gates so that delays in one lane need not slow down the overall terrn~nal operation. 5. The Berth The berthing facilities generally provide the ship with adequate draft, docking space, and equipment for the ship to be loaded and unloaded. As a result, the berth does not directly govern the productivity of the terminal per se. However, the preparation of the berth (including construction of the quay and dredging) is extremely expensive, and indications are that a greater share of these costs will be borne by the ports in the future. These costs, since they are associated with operations, are likely to be passed on to the terminal. The factors affecting any process in the chain of terminal pro- cesses are usually very different from those in the next process. More importantly, the constituency responsible for each set of resources is usually different from those responsible for others. In- creases in productivity in one process may negatively affect the productivity in another. Each of the parties involved in the use of, or the operation of, a marine container terminal, therefore, has a very different view of productivity. It is useful to list these constituencies and to describe their principal concerns:
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29 1. The Ship operator Because of the very high capital cost of the ship and the need to maintain a regular schedule, the ship operator's principal interest is in minimizing his time in port. The ship operator's customers are sensitive to the total transit time. Consistent delays in the terminal that increase the total transit time may make the ship operator less competitive compared to another ship operator using a different terminal. 2. The Port The port may own the space that the terminal occupies, and it usually has many goals. Usable land space is a -scarce commodity, and modern container terminals require a sig- nificantly larger amount of space than the storage sheds previously used in break bulk cargoes. As a result of the national concern for the environment, traditional methods for creating new lands using landfill are restricted, and the filling process, if allowed, is carefully monitored. The port would like to allocate this limited space to optimize its income. In addition to the efficient use of its resources, most ports are part of local or regional governments. These governments often perceive the port as a provider of jobs to the community and, indeed, even as an important symbol of the size and status of the community. Thus, the use of labor-saving innovation may not be attractive to the port. In addition to the land usage, a port will be interested in the berths, since the dredg- ing required to maintain the draft at the berth and in the access channel is expensive, and these costs will more and more be borne by the ports. S. The Terminal Operator and the Stevedoring Company Of- ten only one body performs both operations of terminal operation and stevedoring. Although situations exist where the two are sep- arated, they are considered here as a single constituency, simply referred to as the terminal operator. The personnel who operate a marine terminal are paid by the terminal operator, and the produc- tivity of these employees is a prime consideration of the terminal operator. In addition, the terminal operator may be financially responsible for some of the major equipment (such as cranes, the gate equipment, straddle carriers, and the like) and is, therefore, particularly interested in the efficient interaction between these machines and the terminal personnel. 4. Labor As a constituency, labor is interested in obtaining full employment and in obtaining a high compensation for its workers. Often labor sees an emphasis on productivity as directed
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30 toward reduction in its employment, and mechanical innovation as a way of achieving this result. The existence of coast-wide unions has standardized labor practice among ports for years, and this has tended to remove labor productivity from being a key element in competition between ports. However, with increasing competition from foreign ports as well as among domestic ports, and with nonunion ports appearing, the issue of labor productivity is again brought into question. 5. The Truckers The productivity of the front end of the terminal directly affects the truckers. Delays in going through the gate or in delivering or picking up a container can adversely affect the efficiency of a trucking operation. Most containers are delivered to the terminal from local locations, either from the originating shipper or from a railroad terminal. In this short-hauT drayage operation, gate delays of an hour or two can dramatically reduce the number of hauls per day. This inefficiency is ultimately reflected in the total freight charges and may also affect the com- petitiveness of the port. A PROFILE OF PRODUCTIVITY MEASURES As a result of the variety of different elements and different con- stituencies involved in determinating the productivity of a marine terminal, there do not appear to be any two terminals whose situ- ations are so similar that they can be called equivalent. It is clear that any single measure of marine terminal productivity would not be able to take into account all of the important facets that affect a marine terminal operation. Each terminal has a unique situa- tion involving a different site and different labor arrangements. In short, each marine terminal must optimize its own operations with respect to its niche in the marketplace. In order to make sense out of this situation it ~ helpful to consider a profile of productivity measures, which would comprise a collection of individual productivity measures, each of which addresses a particular important aspect of the marine terminal's operation. If correctly chosen, the combination of all of these mea- sures would display how a particular terminal is being operated, and give considerable insight into the efficiency of the terrn~nal. One anticipates that in such profiles port A, say, will show some
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31 measures better than and some measures worse than port B. Ex- cept in the rare case when all of the measures of one port are either better than or worse than another, the profile of productiv- ity measures will not give a global answer that one port is either better than or worse than another. The following measures focus on the most important aspects of a marine terminal: 1. The Crane Two measures of productivity related to the crane are proposed, addressing different aspects of the crane op- eration. These measures are: moves Net crane productivity: (gross gang hoursódowntimes and moves Gross crane productivity: (gross gang hours) In these measures a "move" is defined to be an exchange of a container between the apron and the ship. Rehandles on board ship do not count, and empty containers are treated the same as loaded containers. Furthermore, a move for a 20-foot container is the same as that for a hotfoot container. That is, for this measure there is no distinction between TEUs and FEUs.*"Gross gang hours" is the gang hours paid for and includes the time that the stevedoring gang and the ship are mutually available. "Downtime" is time that the crane is unavailable when required for operation due to any cause, such as breakdown or other delays. The net crane productivity measure reflects the ability of the crane and crane driver to work a ship when the loading process is limited by crane productivity, whereas the gross crane productivity measure reflects the crane activity, including all of the delays due to mechanical reliability, the ability of the gang to supply the crane with loads, and their ability to remove the discharged containers from the crane. The net productivity is principally influenced by: * TEUs and FEUs are measures of the capacity of container ships and terminals. The terms refer to the numbers of 20- or 40-foot-long containers or their equivalents capable of being transported, handled, or stored.
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32 variation in crane characteristics . work and safety rules; and crane driver skill and training. 1 Gross crane productivity clearly depends on the net crane pro- ductivity as well as on other factors. Typical factors reducing gross crane productivity are: breaks in yard support; crane and spreader breakdown; unavailability of required freight for loading; and . delivery from yard in wrong order. These measures of productivity can have many uses in improv- ing productivity including: comparison between ports with similar operating conditions; . comparison between cranes in one terminal; jawboning during union contract negotiations; benchmarking for evaluating new operating schemes; and . a basis for incentive schemes. 2. The Berth One measure of productivity of the berth is proposed: Net berth utilization: container vessel shifts worked per year container berths . In this measure a berth will typically involve a quay and apron of about 1,000 feet and will serve average container ships of 700 to 1,000 feet long. The vessel shifts are not the gang shifts, since there may be good reason for the ship to occupy the quay without being worked. The net berth productivity can be interpreted as a form of a berth use, since the number of available vessel shifts per year is fixed. A high value of the berth productivity (i.e., a high berth use) may reflect a high income of these facilities for the port and perhaps berth availability delays for the ship. As a result both the port, which bears the great expense for the design and construction costs for the berth, and the shipping line are interested in the berth productivity, but for very different reasons. Berth productivity ~ influenced by a wide variety of factors including:
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33 . vessel scheduling. A nonuniform arrival and departure pat- tern reduces berth productivity. . number of moves per call. Increases tend to increase berth productivity. ~ length of berth. A Tong, multiberth terminal can achieve higher productivity through flexibility of docking. . cranes per berth. Increasing the number of cranes can reduce berth productivity by servicing the ship faster. Alternatively, more cranes can permit more ship arrivals and actually increase berth productivity. . operational practices that may discourage full use. The net berth productivity can be used by the port to determine if it needs to construct new berths and by the shipping line to estimate potential berthing delays. 8. The Yard Two measures of productivity related to the yard are proposed: TEUs/yea~ Yard throughput: gross acre and Yard storage productivity: TEUs capacity net storage acre In these measures a TEU is used since it defines a footprint area. Thus, an FEU is equivalent to two TEUs for this purpose. The gross area includes branch roads for the equipment, parking lots for equipment and yard operations, space for control buildings and associated equipment (such as lighting poles), reefer area, and inspection areas. The net storage area includes only that part of the yard that can actually be used to store containers and includes access roads and safety areas. The capacity of the yard is based on the maximum possible storage slots, with each slot filled to the maximum stacking height. The yard throughput productivity reflects the ability of the yard to transfer containers through the yard to the ship and vice versa. The yard storage productivity is simply a measure of the density of the storage system. In a sense these two measures are in opposition, since an operating system (such as a chassis operation)
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34 that yields a low value of storage productivity leads to the pos- sibility of having higher throughput productivity. Together, the two productivity measures give a good picture of the operational productivity of the yard. The factors that affect the yard throughput productivity are: . type of equipment; operational layout and physical size of the yard; . management, including communication terrn~nal and quality of the information; . labor skills and motivation; and . overlap between quay-side and land-side operations. The factors that influence both yard throughput productivity and yard storage productivity are: . storage height and mode of operation (chassis, straddle car- riers, and stacking crane); . the spacing between ground slots both in length and width directions; and . required safety areas. These measures of productivity can be used by the terminal operator for: expansion planning; . benchmark for area use; and . production guarantees. They can be used by the port for: monitoring the profit per acre of facility and . assessing the growth potential. 4. The Gate Three measures of gate productivity are pro- posed: and Gross gate throughput: containers/hour Net gate throughput: lane equipment moves/hour lane -
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35 Truck turnaround time: total truck tune in terminal number of trucks . In these measures a lane refers to a manned lane rather than the physical number of lanes at the gate. Equipment moves include all moves through the gate that require gate action (for equip- ment such as containers, chassis, and bob-tai! tractors). Muck turnaround time, although it is not a formal productivity measure (i.e., not a ratio of an input and output), is included in these mea- sures because it plays an important role in the teamster cost. For the purposes here it is taken to be the average turnaround time experienced excluding the 5 percent slowest turnarounds. The net gate throughput productivity measures the ability of the gate to pass revenue freight through, whereas the gross gate throughput productivity reflects the ability of the gate to handle the volume of required traffic. Factors that influence both of the throughput measures and the turnaround time are: modal mix including (a) ratio of incoming to outgoing containers and (b) ratio of truck to rail hinterland transport; vessel schedules and vessel capacity; customs regulations; vehicle safety and other inspection and repair requirements; presence of proper paperwork; communication skill of gate employees and drivers; level of automation; and the presence of o~-dock facilities such as a container freight station (CFS) and equipment storage. These measures can be used in improving productivity by pro- ∑ ~- vlctlng: and . comparison between other similar terminals; a benchmark for evaluation of the number of manned lanes; . a toot for assessing if the gate is a significant bottleneck. 5. The Gang One measure of productivity of the gang is proposed:
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36 Gross labor productivity: number of moves man-hours . In this measure the number of moves includes both throughput containers and rehandles. The rehandles are counted as one move if it is cell to cell on the ship, and as two moves if the container must be placed on the apron before restowage. The man-hours in- clude all direct labor involved from the stevedoring component to the yard support personnel directly associated with the loading of the ship. These include crane operators, toploader or transtainer operators, and others. It is envisioned that both terminal opera- tors and labor wall use this measure to judge the effective use of stevedoring manpower. The factors that influence the gross labor productivity are: amount and quality of management preplanning; . effectiveness of supervision including communication skills and information flow; skill, experience, availability, and training of the work force; required gang size; . work rules and safety requirements; type of operation (chassis, stacked, and so on); vessel size and characteristics including (a) mix of 20- and hotfoot containers, (b) number of ports of call on itinerary, (c) special handling requirements, and (~) type of lashing; efficiency of ship storage plan; and ~ vessel operator's policy on accepting last minute deliveries. This measure can be used in several ways to increase produc- tivity, including: . comparison with similar terminals operating under different unions and work rules; . jawboning during union contract negotiations; and . providing a benchmark for incentive programs or for new operating systems.
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37 USING A PROFILE TO IMPROVE PRODUCTIVITY These nine measures are an extensive, but by no means com- plete, set of possible productivity measures for a marine container terminal. They do, however, provide a fairly good overall view of a terminal operation when taken in the aggregate. As mentioned before, many of these measures are in opposition to one another. That is, changes in either the terminal operation or layout that improve one measure may, and likely will, worsen another. It is the classic responsibility of the terminal management, in concert with the port, the truckers, and labor to balance all of these factors in such a way that the terrn~nal is viable and prosperous. Although these measures may be useful to each individual port in examining its own activities, their usefulness would be greatly enhanced if comparable information were available from a number of different terminals, both around the country and outside the country. The availability of this information would provide a firm basis for comparison between ports. For this reason, the proposed measures of terminal productivity were not expressed in terms of cost and were kept to the smallest number that would adequately characterize a terminal's activity. In this way the burden on the terminal or port reporting these measures would be minimized. It is likely that in comparing two ports, some of the measures from one will be better and others will be worse. Each of these measures is influenced by a considerable number of factors that vary from terminal to terminal. For a comparison to be mean- ingful requires a detailed examination and analysis of all of the influencing factors. This analysis can provide an important basis for evaluating changes in either procedures or equipment for use in the terrn~nal.
Representative terms from entire chapter: