Logistics and Port Management
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Transcript of Logistics and Port Management
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Logistics and Port Management
April 2004
C. Bert Kruk
Senior Port Specialist
The World Bank
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Logistics
Military origin: Getting the right supplies in the right place, in the right quantity, at the right time
In transport: Getting the right goods in the right place, in the right quantity, at the right time at the least possible costs
Essential: Price / Quality Ratio Possibility of choice is essential
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Port Competition
Inter-port competition Within-port competition Intermodal competition Competitive ports should offer selection of
choice of hinterland connections Example: Dedicated Freight Railway line in the
Netherlands
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Trade Facilitation
Commonly accepted definition? Logistics of moving goods through Customs or
more efficiently processing documentation associated with cross-border trade
Indicators can be useful
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Trade Facilitation Indicators
Basis for development of further Indicators for analysis of impact of Trade Facilitation
Guide for project preparation, supervision and evaluating logistics project performance
Benchmark for regional comparisons Track effectiveness of domestic reform processes
associated with accelerating Trade Facilitation Assist in shaping policy-oriented empirical
research in sectors which suffer from lack of data
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Need for effective Customs and EDI
In ‘just in time’ manufacturing, outsourcing and global production sharing, firms cannot afford delays with complex and inefficient Customs rules and lack of modern systems of information
Reduction of trade-related transaction costs can expand trade and create employment opportunities
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Some figures
Hummels (1999): Exporters with 1% lower shipping costs enjoy 5 to 8% higher market share
Limao and Venables (2001): Infrastructure quality accounts for 40% of variation in transport costs for coastal countries and up to 60% for landlocked countries
Fink et al (2001): Liberalization of provision of port services and regulating exercise of market power in shipping could reduce shipping costs by nearly 33%
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Port Management models
Public Service Port Private Service Port Tool Port Landlord Port
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Basic Port Management table
Model Infrastructure Superstructure Cargo handling
Public Service Port
Public Public Public
Private Service Port
Private Private Private
Tool Port Public Public Private
Landlord Port
Public Private Private
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Examples
Public Service Port: common model of ports in developing countries
Private Service Port: usually industrial types of ports
Tool Port: French model Landlord Port: Larger, developed ports
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Introduction of Containerization
Difficult for many developing ports:• Lack of funds• High investment costs• Lack of skilled labor• High risk investment
Change in management structure was option
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Other reasons for change
Higher labor costs Higher ships’ costs Globalization of commerce Introduction of EDI and ICT Pressure of shipping lines regarding turnaround
time of their vessels Intermodal and multimodal requirements Bureaucracy Possibility to decrease staff and / or labor force
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Sharing the Commercial Risks
A method often applied is introduction of (usually) private and often foreign partner
Partner has required skills and often also sufficient capital
Process is Commercialization, not Privatization Privatization requires transfer of ownership
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Commonly used methodologies
Concession: usually leasing of facility to operator (Joint Venture or single operator)
Management Contract
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Concession
Operator leases plot for long period of time Lease is amount of money to be paid per m2
per year (Flat Rate Lease) Combination of land lease and performance
hardly applied (Shared Revenue Lease) Lease usually indexed Long period (> 15 years) to allow operator to
develop business and get return on investments
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Equipment existing terminals
Operator may buy existing from Port Authority / Government
Usually at second hand price Operator will provide new equipment, systems
and facilities from his own resources Former staff may be contracted by Operator Operator takes Commercial Risk
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Operator existing facility
Private single operator, or Joint Venture of new operator and previous operator (Government / Port Authority)
Joint Venture: Sharing of Commercial Risks
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Operator new facility
Option 1: Government invests in infrastructure and new operator or Joint Venture in superstructure
Lease can be Flat Rate of Shared Revenue Other options: BOT or BOO
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Build-Operate-Transfer (BOT)
New Operator develops new facility (infrastructure and superstructure) from his own funds
Operates terminal Income used to get return in investment After agreed period, terminal operator hands
over terminal (infra- and superstructure) to public sector
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Build-Operate-Transfer (BOT) - 2
BOT period at least 15 years Handover usually at written-down value BOT for container terminals hardly used:
income insecurity (competitive market) If operator is linked to major shipping line more
chance of success
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Build-Own-Operate (BOO)
Basically same principle as BOT, but No pre-determined date of handing over of
facility to Government / Port Authority
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Management Contract
Experienced operator provides expertise (staff and means) to existing or new terminal
Operator is paid agreed Management Fee Possibility of Contract:
• Under-Performing: Penalty• Over-Performing: Bonus
No Commercial Risks for Management Contract party
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Regulatory Function
In all options some form of Regulation essential High level authority to control articles of
agreement between public and private parties Not complying: Penalties Involves intervention in functioning of markets in
terms of setting or controlling tariffs Also deals with control of market and fair and
competitive behavior and practices Regulation essential in case of monopoly or
significant market power
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Port Performance Indicators
Useful tools to obtain insight in performance of port or terminal on comparative level
Definition of Indicators important for comparison Most commonly used Indicators:
• Ship Productivity• Ship Waiting Time• Cargo Dwell Time• Cargo Handling Charge
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Ship Productivity
Total number of moves (containers) or tons (break-bulk and bulk cargoes) divided by total number of ship hours in port
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Average Ship Waiting Time
Total number of hours or days vessels wait for a berth (buoy-to-berth time) divided by total number of hours ships are at berth
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Average Cargo Dwell Time
Product of cargo handled and period of time (hours or days) between moment of unloading of cargo and time cargo exits port or terminal (for export cargo) divided by total quantity of cargo handled
Import cargo: vice-versa
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Cargo Handling Charge
Total charges for handling of given quantity of cargo in units or tons divided by total number of units of tons handled
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Examples of Container Ship Productivity
Average container gantry crane productivity for multi-berth terminal and Berth Occupancy Factor (BOF) in range of 50%: 60 to 70,000 moves per year
PSA record 2000: handling of 1,375 moves in 6 berth hours, or 234 moves or 376 TEU per berth hour
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Top 5 Operators 2002
Hutchison 37 mio TEU Port of Singapore Authority 26 mio TEU AP Moeller 17 mio TEU P&O Ports 13 mio TEU Eurogate 10 mio TEU
Total: 103 mio TEU, or 37% of world total
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Hutchinson Whampoa Limited
March 2004
Cbk/wb
FREEPORT
BALBOA
CRISTOBAL
ROTTERDAM
FELIXSTOWE
HARWICH
THAMESPORT HONGKONG
RANGOON
JAKARTA
LAEM CHABANG
KWANGYANG
BUSAN
KARACHI
PORT KLANG
DAMMAN
DAR ES SALAAM
BUENOS AIRES
VERACRUZ
MANZANILLO
ENSENADA
LAZARO CARDENAS
SHANGHAI, WAIGAOQIAO, YANTIAN, BEILUN, JJIANGMEN, NANHAI, SHANTOU, XIAMEN, ZHUHAI
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APM Global Terminals
TACOMA
OAKLAND
LOS ANGELES
ROTTERDAM
PORT SAID
BALTIMORE
GIAO TAURO
ALGECIRAS
SALALAH
KAOSHIUNG
YOKOHAMA
KOBE
CHARLESTON
JACKSONVILLEMARCH 2004
CBK / WB
HOUSTON
SAVANNAH
KINGSTONPORT EVERGLADES
MIAMI
NEW ORLEANS
PORT ELIZABETH
PORTSMOUTH
BUENOS AIRES
AARHUS
BREMERHAVEN
CONSTANTZA
LAEM CHABANG
PELAPAS
PIPAPAV
SHANGHAI
ONNE PORT
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Port Reform Toolkit
Comprehensive document produced beginning of this century
Update of practical examples in FY 2004-2005 Download from web:
www.worldbank.org/transport
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Trade Logistics Agenda
Trade Facilitation and Competitiveness Transit Logistics and Ports Border Crossing and Clearance Management Customs Reform Multimodal Transport Transport Security
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Trade Facilitation and Competitiveness
Economic Benefits of Trade Facilitation Logistics Costs and Export Earnings:
Geography, Competitiveness and Poverty Facilitation Performance and Competitiveness
Index
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Transit Logistics
Port Efficiency Bilateral and Regional Transit Agreements Landlocked Developing Countries Access:
Corridor Agreements Transit Guarantee Systems :
Customs/Insurance/Operators (TIR, TIF and similar)
Cost/Benefits of Transit Trade for Transit Countries
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Border Crossing Management
Single Window Environment Adjacent Border Posts Border Monitoring Systems Inland Clearance Facilities
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Customs Reform
Streamlining and Harmonization of Procedures Information Technology and Electronic
Processing Risk Assessment Methods: Security with
Facilitation Integrity Programs Training / Capacity Building : Customs
Officials / Private Operators
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Multimodal Transport
Legal Aspects Regulatory Framework Liability Regime of MTO Implementation/Amendments of/to MTO
Regimes
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Transport Security
US Regulations: CSI, 24 hour-Rule IMO Revised Standards: ISPS Code Supply Chain Security Concept Security with Facilitation
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Thank you for your attention