Maritime logistics performance

Maritime logistics performance [1]

Overview:

Improving the logistics performance of maritime transport hinges mainly on ensuring smoother ship-port interfaces. By reducing both ship waiting times at anchorage points and handling time at berth, this facilitates the move towards just-in-time operations that will increase efficiency in the logistics chain – and thereby reduce the energy consumption of ships and related emissions.

One possible way to achieve smoother ship-port interfaces is to provide advance notice of berth availability and assign handling slots to reduce waiting time at anchorage points. This also facilitates the use of optimum speed at sea, leading to further efficiency improvements (implementation of "virtual arrival" in charter contracts). Upon arrival in a port, vessels are currently served on a first-come-first-served basis, which often leads to “hurry up and wait” behaviour. Flexible berth planning can be achieved by trust building, collaboration and data exchange between ship operators and ports.

Another option for improving ship-port interfaces is to reduce ship turnaround time by minimising idle time and reducing cargo-handling time at berth (e.g. optimisation of crane movements and working sequence). Customs, immigration and phytosanitary authorities' time of inspection on the ship can also be reduced through advance transmission and verification of documents.

Further, digital queuing systems for trucks can decrease congestion and emissions on the land side, e.g. by providing better planning horizons and predictability for loading/offloading at ports.

Impact on CO₂ emissions:

The CO2 benefits of smoother maritime logistics stem from the reduced use of auxiliary engines of ships during idle time before cargo handling at berth.

In addition, slow steaming and the use of optimal speed at sea reduce emissions. Virtual arrival can provide up to 43% CO2 emissions reduction for tankers if speed is reduced to meet an agreed arrival time. This number strongly depends on ship type, size, voyage characteristics and current port times. One study has estimated a fuel-saving potential of up to 19% for tankers. BP estimated that implementation of virtual arrival can reduce GHG emissions on the tanker and bulk carrier sectors by around 5%. Another study found that the potential for increased energy efficiency due to reduced waiting time was at least 2–8%.

Costs:

Smoother interfaces require harmonised operations between ship operators and ports in order to enhance reliability for securing on-arrival services in port.

Costs associated with improved maritime logistics performance may include the implementation costs of enhanced digital information and management systems by ports to improve operational planning and service scheduling.

Other costs may include investments in improved handling capacity, e.g. terminal equipment such as cranes (usually these would be covered by private terminal operators).

Additional costs could be caused by 24/7 port operations, faster loading and discharging, flexible design of cargo-handling equipment, and more-efficient port clearance.

Public authorities may face investments related to the implementation of digital data-exchange standards and single-window environments for reporting formalities.

Finally, there are examples of cost savings resulting from the inclusion of a “virtual arrival” clause in charter contracts: The fuel savings achieved by BP and Maersk with virtual arrival for a single voyage of the “Bro Elizabeth” in 2009 was USD 12 400, which corresponded to a 2.3% reduction of the total freight bill to the charterer.

Co-benefits:

Reduction of local air pollutants, such as NOx, SOx and fine particles (and hence positive health impacts for residents).
Reduction of port time, minimisation of waiting time through just-in-time arrival and departure, improvement of berth productivity, and simplification of administration processes improve overall logistics performance.
These improvements translate into time savings, which ultimately contribute to cost savings.
Investments in operational efficiency in ports increase their competitiveness.
Reduced waiting time in ports may improve safety, e.g. by reducing congestion and vessel movements in anchorages or reducing crew fatigue and uncertainty.

Other considerations:

There is no “loser” when applying virtual arrival, but the commercial imperatives of cargo owners (other than fuel savings) can be obstacles to implementation, such as demurrage revenues of ship owners (ship owners continue to make money while the ship is waiting in a port).
In the tanker business, waiting time is a common commercial practice used to speculate on commodity prices.
Moorage waiting time may be used as a period of needed rest for the crew or an opportunity to do work that is difficult to carry out while at sea.

Sources:

BIMCO (2019) Input paper to IMO Expert Group on Data Harmonization: EGDH 1/7 - IMO Data Set Related to "Port Logistic Operational Data Related to Just in Time Concept".

BP (2010) BP Sustainability Review 2010. https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/sustainability/archive/archived-reports-and-translations/2010/bp_sustainability_review_2010.pdf

BP/Maersk (2010) Virtual Arriva: BP Shipping and Maersk Tankers. https://weathernews.com/TFMS/topics/seminar/2010/pdf/4_BP_Maersk.pdf

Golias, M., Saharidis, G., Boile, M., Teofanis, S. and Ierapetritou, M. (2009) The berth allocation problem: Optimizing vessel arrival time. https://link.springer.com/article/10.1057%2Fmel.2009.12

Jia, H., Adland, R., Prakash, V. and Smith, T. (2017) Energy efficiency with the application of Virtual Arrival policy. https://www.sciencedirect.com/science/article/pii/S1361920917301359

Johnson H. and Styhre, L. (2015) Increased energy efficiency in short sea shipping through decreased time in port. https://www.sciencedirect.com/science/article/pii/S0965856414002857?via%3Dihub

OCIMF (2010) Virtual Arrival: Optimising Voyage Management and Reducing Vessel Emissions - an Emissions Management Framework. https://www.ocimf.org/media/115960/Virtual-Arrival.pdf

Poulsen, R.T. and Sampson, H. (2019) “Swinging on the anchor”: The difficulties in achieving greenhouse gas abatement in shipping via virtual arrival. https://www.sciencedirect.com/science/article/pii/S1361920918311568

UNCTAD (2020) Digitalising the port call process. https://unctad.org/en/PublicationsLibrary/dtltlb2019d2_en.pdf