Role of management highlighted as key to raising productivity

Roger Hailey

Lloyd’s List - Monday 8 June 2009

CONTAINER terminal managers should emerge from behind their desks and don fluorescent jackets if they really want to improve box-handling efficiency, according to a leading consultant.

The back-to-basics, hands-on approach to managing a box terminal is one suggestion from Kent Busk, a principal at the Seaport Innovations consultancy.

Research by Mr Busk suggests that up to 30% of a container terminal’s output and productivity resides in the area of management, rather than in the physical handling equipment and the quayside workforce. Equipment costs average 30%-40% and quayside labour 40%-50%.

He said: “Management can make a big difference. We found that efficient terminals have a management that is prepared to dirty its hands and be active on the quayside, rather than focusing on administration tasks.”

Mr Busk, who spent four years at APM Terminals with responsibility for research and development, said managers should hold regular morning meetings to discuss performance levels and make sure they are seen around the terminals, if necessary giving orders but showing leadership.

“The physical presence of a manager on the terminal area makes a tremendous difference to productivity and efficiency.”

Asked whether terminal operations and processes should run smoothly without daily tweaking by managers, Mr Busk said: “If all terminals were highly automated, that would be true. But terminals are not highly automated and they have a workforce that needs to be managed and motivated.”

Mr Busk will present his ideas at the TOC Europe Pre-conference and exhibition, which takes place on June 16-18 in Bremen, Germany.

The use of appropriate key performance indicators in container terminals will form a major part of the pre-conference workship, with reference to the present downturn in global maritime box volumes.

Mr Busk said: “How do we get out of the crisis? How do we adjust our costs and service levels to make sure we survive, and how can KPIs help us?”

Labour productivity (the amount of labour used per unit handled) and equipment productivity (measuring the number of equipment hours per unit handled) are important tools for container terminal managers to benchmark.

Equipment productivity, said Mr Busk, is one of the best KPIs, because it is not influenced by manning or union issues. For instance, an average container crane gang in the US may require up to 20 people to operate, compared with seven in northern Europe and eight in Asia.

It is also important for ports, particularly transhipment hubs, to strip out double counting of containers in order to have a real feel for their efficiency.

“Transhipment requires two quay moves per one container. So, a transhipment hub with 2m teu, actually handles 1m teu. In order to measure the efficiency and productivity we prefer to deal with single container moves, rather than quay or gate transfers.”

But perhaps the most important KPI, said Mr Busk, is the one measuring the interface between the containership and the quay cranes for loading and unloading boxes.

“It is of the highest importance for shipping lines, because the vessels are running to very tight deadlines. They want to know how quickly their ships are being turned around by the ports.”

The latter point is particularly pertinent at present, when shipping lines have shown themselves to be more than ready to drop port calls to save money.