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Inc. Langdon Seah | Hyder Consulting | EC Harris
“Measuring Container Port KPIs – DOs and DON’Ts”
APEC Strategy Workshop on Gateway Port Productivity
Dr Jonathan Beard
5th September Kuala Lumpur
© Arcadis 2015
Outline Apples with Apples
• Market focus:
• Transhipment versus gateway; versus mixed
• Right size your port: mega port versus niche player / local player
• Regulatory structure and commercial incentives – chasing volumes or financial returns?
• It’s all relative: comparator versus competitor
Who controls what? How does it vary by market?
Measuring or regulating…or stifling?
Don’t let the perfect be the enemy of the good
04 September 2016 2
© Arcadis 2015
Apples with Apples
04 September 2016 3
© Arcadis 2015
Market Focus & Cargo Segments
04 September 2016 4
Transhipment Hub:
e.g. Singapore ~85% TS
• Limited road-side / gate
interaction – limited inland
distribution network
• Limited role for customs
• Double lifts for most cargo
• Mother vessels and smaller
feeders
Gateway:
e.g. Sydney +95% IE
• Links to extensive inland
distribution networks: gate, road
and rail, DCs, etc.
• Customs play a significant role
• Single lift for most cargo
• Limited range of vessel sizes
Gateway & Transhipment:
e.g. Rotterdam ~30%TS, ~20%
Road, ~20% barge, ~30% rail
• Links to extensive inland distribution
networks: gate, road and rail, DCs, etc.
• Customs play a significant role
• Ocean-to-ocean transhipment, barge
transshipment, road and rail
• Wide range of vessel sizes
© Arcadis 2015
Nansha
Humen
Yantian
Gaolan
Dachan Bay
Huizhou
Guangzhou
ShekouChiwan
Mawan
HKZMB
Market Focus & Cargo SegmentsHong Kong – ‘A box is not a box is not a box…’
04 September 2016 5
2015: 20.0 mil TEUs
• ~28% ‘ocean’ transhipment; ~31%
river barge; ~11% HK import/export
(IE); ~30% mother vessel IE
• Barge & ocean transhipment often
lumped together by analysts
• But they have different handling
requirements, different measures of
connectivity, different market drivers
and different revenue profiles
• Note also that the double or triple
counting of barge cargo has
bolstered the HK total throughput
numbers
© Arcadis 2015
Right Size Your PortMega port versus niche player
Physical Planning KPIs for Major Ports:
• 18m water depth;
• long straight / contiguous quays (1,000m or longer) to provide maximum flexibility
• adequate number of super post panama cranes: outreach for ≥23 TEUs across
• land: adequate yard to support quay face operations & large box exchanges (ideally 600-650m average yard depth / m quay)
• inland connectivity: gate, road, rail, barge, etc. (for gateway ports)
• capacity to accommodate all alliances partners
04 September 2016 6
Source: World Maritime News
© Arcadis 2015
Right Size Your PortMega port versus niche player
04 September 2016 7
Melbourne – Australia’s main gateway,
2.64mil TEUs ‘15-16
• Max vessel size that can be handled:~7,000
(possibly ~8,000 YEU with VICT)
• Vessels are getting larger, but main Australia
trades typically still 4-5,000 TEUs, up to 6,500
TEUs
• Cost-benefit of building for ≥ 18,000 TEU?
Shanghai – World’s largest container port,
36.54mil TEUs ‘15
• Older city centre terminals & Waigaoqiao draft
constrained (9.4-14m)
• Major gateway – must be able to accommodate the
largest vessels, hence new terminals Yangshan
• Largest vessels 18-21,000 TEUs)
• Also a variety of smaller vessels: intra-Asia, feeders,
YRD barges, etc.
© Arcadis 2015
Right Size Your PortSimilar Size but ‘Location, Location, Location’ - This Matters
04 September 2016
8
Melbourne – Australia’s main gateway,
2.64mil TEUs ‘15-16
Vessels 4-5,000 TEUs, up to 6,500 TEUs
Réunion – <0.5mil TEUs ’15
6,700-10,000 TEU vessels (CMA) call
“Australia has 2 ports in the top 100 containerports of the world (Melbourne at 60 andSydney at 72) yet smaller ports than oursattract larger ships.” Drewry, Melbourne Intermodal Conference Feb 2016WHY?
Mauritius – <0.5mil TEUs ‘15
8,000 TEU vessels (MSC) call
© Arcadis 2015
Right Size Your PortSimilar Size but ‘Location, Location, Location’ - This Matters
04 September 2016
9
The difference has little to do with cargo
volumes or infrastructure, but everything
to do with location
Mauritius & Reunion offer Indian
Ocean Hub potential & related
connectivity
Australia does not – relatively small
market at ‘end of the line’
© Arcadis 2015
• Private Port will likely
have greater
commercial discipline
as compared with a
‘state backed player’
that might be able to
‘buy cargo’
• In S China, see Hong
Kong vs. Nansha
• Deliver excellent
customer service BUT
also deliver high asset
utilization & return on
investment
• Gateway regulation
more challenging than
TS hub?
05 September 2016 10
Regulatory structure and commercial incentivesChasing volumes or financial returns?
Port Models: Public-Private Roles
Source: World Bank
Public Service
Port
Tool Port
Landlord Port
Private Port
Private Sector Risk
Pu
bli
c se
cto
r ri
sk
Low High
Low
High
Works & Services
Contract
Operations &
Maintenance
Contract
Concession
Agreement
Full
PrivatizationPrivate Sector Participation
UKAustralia
Hong Kong
© Arcadis 2015
Gateway competition is usually over shorter distances - e.g.
S China, S Vietnam), but not always – e.g. North America
Intermodal market
International transhipment markets are often more footloose,
lower revenue yielding and competitors may be located 100s
/ 1000s miles away – e.g. Singapore vs Klang vs Colombo vs
Hong Kong
Competition is always relative – improvement over year has
to exceed competitor’s to increase competitiveness
N America ports are not competing with Asia…fortunately
04 September 2016 11
It’s all relative: comparator versus competitor Relative performance versus competitors is first objective, but comparator analysis is also valuable
N America Berth Productivity* Asia Berth Productivity*
Vessel Size 2012 2013 Change Vessel Size 2012 2013 Change
10,000 & Over N/A 83 N/A 10,000 & Over 110 121 10%
7,501 to 10,000 78 88 13% 7,501 to 10,000 98 112 14%
5,001 to 7,500 56 66 18% 5,001 to 7,500 80 96 20%
2,501 to 5,000 44 56 27% 2,501 to 5,000 63 75 19%
2,500 or Less 28 36 29% 2,500 or Less 42 53 26%
Top 5 Berth Productivity by Region 2014*
Americas
Balboa 99
Baltimore 84
Lazaro Cardenas 82
Pointe a Pitre Guadeloupe 80
Los Angeles 76
Europe / Middle East / Africa
Jebel Ali 131
Khor Fakkan 100
Khalifa 97
Salalah 96
Bremerhaven 90
Asia
Tianjin 127
Qingdao 126
Yantian 119
Yokohama 112
Nansha 106Notes: *No of total container moves (on-load, off-load, & re-positioning) divided by no of
hours during which vessel is at berth. Comparisons are not “apple for apple” -
some data are for ports some for single terminal. Breakdown by call size would
offer better ‘standardisation’
Source: IHS / JOC
© Arcadis 2015
South China Export to N America
Total through cost
Service quality
If latter are similar, routing decision is v cost sensitive
Port / terminal operators control relatively little
04 September 2016 12
Who controls what? How does it vary by
market?
Source: ICF; Arcadis
Nansha
Humen
Yantian
Gaolan
Dachan Bay
Huizhou
Guangzhou
ShekouChiwan
Mawan
HKZMB
0 1,000 2,000 3,000
Via Hong Kong
Via Yantian (Shenzhen)
USD
Ocean freight &
surchargesTrucking
Port
(THC, etc)
© Arcadis 201504 September 2016 13
Who controls what? How does it vary by
market?
Source: ICF; Arcadis
South China Import to
Chicago / Ohio Valley
Total through cost
Service quality, including total transit time
If latter are similar, routing decision is v cost sensitive
Port / terminal operators control relatively little
Rail roads are very influential
0 1,000 2,000 3,000
Via LA
Via NY
Via S
USD
Ocean freight &
surchargesRail
Port
(THC, etc)
+6-7 Days
+5-7 Days
© Arcadis 2015
Soft infrastructure: Customs, Trade Regulations, Anti-corruption / transparency, Security,
etc. often as critical as hard infrastructure, especially in emerging markets:
• Africa: containers wait in port an av. of 2.5 weeks before moving to final destination*
Especially important for small territories that cannot leverage a large IE hinterland
Freeports (e.g. Hong Kong) substantially reduce and refocus
the role of Customs, as compared with jurisdictions where
Customs are critical to revenue collection
(e.g. Kenya 40% of Gov revenue from Customs)
Burdensome regulation of terminal concessions / overly
prescriptive performance monitoring can also damage performance:
• India: Tariff Authority for Major Ports (TAMP)
Lack of transparency / poorly designed tendering
process for concessions – often leads to delay and
increased project costs and lost cargo:
• India, Mumbai – JNPT 4th container terminal (4.8 Mn TEUs)
• Philippines, Subic Bay
04 September 2016 14
Soft Infrastructure and Regulation
*Source: World Bank
© Arcadis 2015
Acknowledge how different stakeholders view KPIs or performance, and especially
what matters to the key customers for a port:
Shipping lines have little interest in density of yard operations or TEUs/quay crane per annum
They do care about berth productivity and more importantly port productivity
How that is achieved by the port & terminal operator is of less interest
Note that different stakeholders may have conflicting KPIs:
Terminal operator wants high asset utilization – TEUs/quay crane, berth (TEUs/m/pa), etc.
But high asset utilization for terminal operators may be viewed as ‘congestion’ by lines
High yard density (TEUs/ha/pa) may be important for government, especially where land is
scarce, but viewed less favourably by lines
Improved environmental performance should be a benefit to host economy, but can undermine
competitiveness if competitor ports are more lax – see for example S China Emission Control
Area (ECA) discussions
Taken to its extreme, any port can be regarded as unique or difficult to compare with
any other
No KPI or benchmark is perfect, nor can a single KPI capture the full picture…
…but there is plenty that can be meaningfully compared or KPIs set, provided
the context is understood
04 September 2016 15
Don’t let the perfect be the enemy of the good
Thank you
Any questions?
4-9-2016 16
T +852 2263 7300
m +852 6095 8434
Arcadis 38/F AIA Kowloon TowerLandmark East100 How Ming StreetKwun Tong, KowloonHong Kong
DR JONATHAN BEARDHead of Transportation & Logistics, Asia
© Arcadis 2015 4-9-2016 17
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