Term Paper: Port Productivity

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Port Productivity

The various changes seen in the world order over the last ten years, which include the globalization of production and consumption and the structural changes that have occurred in inter-port relations, port-hinterland relations and logistics, have made the role of ports significant as very important nodes in the global transport system. Under such circumstances, the port productivity has a significant role in the consideration of management of ports. (An Alternative Approach to Efficiency Measurement of Seaports)

The rapid rise in the competitive nature of the marine transportation sector has given cause for the demand in the increased requirement for port productivity. To this end a number of quantitative measures were developed for the assessment of port productivity. However there are problems that have arisen in these quantitative measurements of port productivity. Physical and institutional factors or both these factors working in tandem limit the productivity of every port. Productivity comparisons in relation to ports may cause misplaced attempts to improve the productivity of particular operational elements in a bit by bit manner. In contrast the better way to do it would be to develop a strategy for managing productivity that would involve the linking of productivity and cost data in such a manner as to shifting the existing productivity constraints from one are of operations.

Let us now examine the elements that go into port productivity and how it is measured. How valid are these measurements of productivity and the factors that affect the elements of port productivity. The factors that were responsible for the demand for improved productivity in ports include the very large capital outlays and the demands of shippers for a quicker and cheaper system of delivery of cargo. This caused the National Association of Stevedores to request the Maritime Administration -MARAD, to initiate steps for a study of port productivity. Maritime Administration or MARAD employed the Marine Board of the National Research Council -NRC to undertake the study and this study provided productivity tools for the measurement of productivity in ports. The movement of cargo in containers, which is called containerization, has two components, one an ocean component and the other a land component. The container terminal at a port is the facility that enables a package of activities and services to handle container traffic from vessel to rail or road and the reverse. (Container terminal productivity: A perspective)

Thus the container terminal becomes the physical link between ocean and land modes of transporting goods or cargo and becomes a significant part of the containerization system. This system is a dynamic one and has within it several components of carriers, terminal operators, labor, port authorities, shippers, railways truckers, government and others. Each of these elements play a role in influencing the productivity in one way or another and could be the primary determinant or bottleneck of productivity at any port or within the whole system itself. The inherent problem here is that each of the components acts in such a manner that is guided by their self-interest and as such have little or hardly any regard for the whole system and thereby impact negatively on the overall efficiency of the system.

The entry of logistically oriented carriers in the recent past has lessened the impact of this self-interest as these organizations incorporate a number of the individual components of the system and this goes well with the assumption that if the port works to give maximum productivity, then every component of the entire system reaps benefits. This may not be entirely true as the blockages in the productivity may just be shifted to any other area of operation in an attempt to maximize productivity of ports. Looking at the various self-interest of each component of the system, the port operator may be more interested in reducing or maintaining the cost per container handled to maximize the profits per unit handled, while the port authority would consider its main objective as the maximization of annual throughput per acre of its leased terminals and thus avoid the necessity to create new facilities till all the current facilities are utilized to full capacity. In the case of labor, the unions would look to maximizing the union jobs and the total cargo handled by members of the union. The shippers will look forward to minimizing the time their ships spend at port. (Container terminal productivity: A perspective)

From the standpoint of each, these are reasonable objectives for productivity of ports but are conflicting in nature. Therefore port productivity needs to be assessed in the light of these conflicting requirements. It is seen many a time that the port operator, which includes the stevedoring component is caught in the center of these tugs and pulls in various directions. To add to these worries is the normal practice of judging the terminal operators productivity by productivity measurements that are heavily founded on elements over which the operators have very little control or no control at all. Productivity of a port is the measurement wherein the output per unit of input is measured. So container terminal productivity can be considered as a measurement of the efficient use of labor, equipment and land or quantifying the efficient utilization of these three resources. Some of the physical factors that have an impact on the productivity of a port include the area, shape and layout of the port, the quantity and quality of the equipment available at the port, and the type and characteristics of the ships that use the port. (Container terminal productivity: A perspective)

The vessel type and characteristics does affect the labor productivity. Institutional factors like union work rules, customs regulations, and import/export mix safety rules, etc. may originate from any one of the components of the port productivity system. These factors that limit the productivity of a port can be assumed to be variables in the formula to measure the productivity of a port. This is because these factors as variables are responsible for influencing the measurement of productivity of a port in such a way as to make it hard to establish valid standards for the strict comparison of two or more ports. There is yet another variable that has its effect on the measurement of the efficiency of a port and that is the lack of uniform data and the differing way in which port activity is represented. This lack of uniformity makes it difficult to for valid comparison of two or more ports and the creation of uniform standards for measurements of port productivity. (Container terminal productivity: A perspective)

On February 2001 the European Commission introduced a package of measures towards improving the quality of services available at ports. This has been welcomed by the European Shipper Council. Some of the measures that the European Shippers Council feel will go a long way in improving the efficiency and quality of ports include the creation of open markets to encourage free and fair competition between and within ports to assist in improving the quality of services at ports. Other welcome moves include the introduction of the competitive tendering process, abolition of the outdated and outmoded labor practices, and abolition of monopolies in services at ports, as well as between ports themselves, clean and fair pricing and the provision for self-handling. (The European Shippers' Council Response on the Communication from the Commission to the European Parliament and the Council)

The first change in stevedoring was seen in the 1850's as ship-owner s introduced steamships in the transporting of cargo and this caused the use of steam driven machinery to lift cargoes at wharfs in place of the muscle of men. This is the first evidence of attempts to increase the productivity at ports. The next important step in this direction came about a hundred and ten-year later with the… [END OF PREVIEW]

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