MARITIME LOGISTICS COUNCIL NEWSLETTER ISSUE 4 SPRING 2007
INTRODUCTION
Kieran Ring CEO GIL
 Welcome to this special edition of the Newsletter of the Global Institute of Logistics? Maritime Logistics Council.
This edition reviews the Institute?s primary research program conducted over the last 6 months, into the establishment of a port terminal performance indicator benchmark, CTQI.
The idea for the development of such a benchmark came through the work of our Maritime Logistics Council , which was established in 2006 with the express aim of promoting a collaborative culture amongst stakeholders in maritime logistics.
Having affirmed the need for such a benchmark through secondary research the Institute set ourselves the task of identifying the key partners with whom to collaborate on the benchmarks development.
In the fall of 2006 we invited the world renowned port terminal expert Dr. Gustaaf De Monie ,(pictured left) to act as adviser to the Institute on the development of the benchmark and working with him identified Germanischer Lloyd Certification ,as the development body to work with.
 The primary reason for GLC's selection, other than the fact that the organization has been at the heart of the maritime industry since its inception 140 years ago in 1867, is the unique approach developed by GLC under the direction of Bernhard Staender, its Managing Director, (pictured left) in auditing process quality as part of its development of CCQI , developed for global temperature controlled logistics in partnership with the Cool Chain Association .
The Institutes decision to work exclusively with Germanischer Lloyd Certification (GLC) as our preferred partner is reflected in the name of the port terminal performance benchmark, CTQI or Container Terminal Quality Indicator.
CTQI will join CCQI is the second member of GLC's family of quality indicator benchmarks which will ultimately span the global supply chain.
GIL/GL RESEARCH PROGRAM OCT 2006-APRIL 2007
The research program undertaken by GIL since the autumn was designed in conjunction with our partners with the 3 distinct aims, that of:
1. Collecting the widest possible range of view points on the subject
2. Identifying the key organizations, agencies and individuals to work with.
3. Creating an industry wide consensus in support of the idea.
The research was collected from a series of industry dinners, public presentations at a number of key global conferences and over 100 face-to-face interviews and deep dives with key industry executives across the globe.
As you will read further on in this newsletter the benchmark is being developed in consultation with all the key stakeholders in global maritime logistics and as such reflects the views and opinions of terminal operators, carriers, beneficial cargo owners, logistics service providers, port authorities and academics.
GIL and GLC will jointly host a news conference in Dusseldorf Germany on May 21rst where we will first publish our complete findings as part of a white paper entitled:
Hypothesis, Reasoning and Methodology for the development of a Port Performance Benchmark (CTQI)
The publication of the white paper will be followed by formal invitations to key stakeholders to join a cross industry committee to be known as the Hamburg committee that will meet in unison over the coming year to develop the indicator benchmark, CTQI.
It is our ambition to launch CTQI to the industry in early 2008
Our research to date has strengthened our resolve to develop a truly comprehensive, collaborative benchmark, which provides all stakeholders with accurate, reliable information needed to support decision-making and planning.
I would like to take this opportunity to thank all those that have given of their time to this very worthwhile cause. I look forward to keeping you informed of all future developments.
Finally if you feel that your organization would like to contribute to the development of CTQI, please contact me directly at: ceo@globeinst.org
Best Regards
Kieran Ring
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 Pictured at the April 5th meeting to discuss the development of the CTQI at the HQ of Germanischer Lloyd in Hamburg were (back row L-R) Dr Andreas Baumgart, Germanischer Lloyd, Wolf von der Mosel, Hamburg Port Authority, Wilmer Aguilar, Yantian International Container Terminals PRC, Dr Yves Wild, Germanischer Lloyd (front row L-R) Kieran Ring, Global Institute of Logistics, Dr Gustaff de Monie International Port Consulting, Harry Mohns MSC Gate Bremerhaven, Heinrich Goller HHLA CTA, Bernard Staender Germanischer Lloyd, Steve Longbotham Marine Terminals Corporation USA Full Size Picture Click HereCOVER STORY
Germanischer Lloyd Certification Announces Development of CTQI
| DOWNLOAD CENTER | Click Here To see Power Point Presentation on CTQI
POWER POINT |
At the European launch of the Maritime Logistics Council in Brussels in October of 2006 the Institute announced plans to work with world-renowned experts to establish a benchmark for measuring efficiency in port terminals.
Dr Gustaaf de Monie, the Antwerp-based academic and consultant on the ports industry, and Bernhard St?ender, the managing director of Germanischer Lloyd Certification ? a Hamburg-based global standards agency specialising in the maritime industry ? began discussions with the Institute?s chief executive, Kieran Ring, and Executive Directors of the organisation?s maritime logistics council. All have been endeavouring to define a benchmark by which terminal operators worldwide can measure their level of performance.
From the outset it was acknowledged that much thinking and discussion would be needed before there is a definitive set of KPIs and a benchmark that earns industry-wide recognition. Comparing like with like is difficult, owing to the great disparity in the way different ports operate. Following from this starting point the Institute has hosted a series of dinner meetings across the globe to discuss the project and to receive feedback from the key stakeholders in the industry.
The meetings held in Antwerp, Long Beach and Hong gave an opportunity to interested parties to hear more about the project and to give their input on developments so far.
Following the series of meetings Germanischer Lloyd Certification made the official announcement of the development of the benchmark in their customer and business partner magazine ?Nonstop?
?Quality and efficiency of container terminals are of great importance to the smooth functioning of the global supply chain. But how to measure terminal operation standards? At this year's European Maritime Logistics Council in Antwerp the Global Institute of Logistics (GIL) suggested the introduction of a new benchmarking system: CTQI - Container Terminal Quality Indicator. The benchmark is intended to adjudicate the quality of global port terminal operations by combining financial, operational and organizational indicators. CTQI will differ from existing measurement systems by not only evaluating the port terminals' performance but also analysing the port operations in respect of the overall supply chain. Hence, the industry will be able to choose terminals best suited to their needs, supply chain strategy and objectives.
The Global Institute of Logistics has asked GL/GLC to develop the benchmark together with the industry. The launch of the Container Terminal Quality Indicator is planned for September 2007. Subsequently, Germanischer Lloyd Certification (GLC) will complete first audits and certification of benchmark terminals, thus expanding GLC's Quality Indicator series.?
editors note The Institute will launch its White paper outlining the hypothesis, reasoning and methodology for the development of CTQI at a press conference in Dusseldorf on Monday 21st May.
The launch coincides with the 9th Annual European Supply Chain and Logistics Summit , which is being held in the Swissotel.
Kieran Ring will chair the Conference.
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 Pictured at the Maritime Logistics Council China Chapter dinner: Dr. Fu Yuning , Chairman and Managing Director of China Merchant Holdings is engaged by Paul Goldsbrough Hellmann Worldwide Logistics & Chairman of the China Chapter in the company of John Kok General Manager/CSI of Hutchison Port Holdings Hong Kong RESEARCH PROGRAM
Worldwide Meeting Review
ANTWERP
The Institute hosted a series of dinner meetings across the globe to discuss the development of the container terminal quality indicator benchmark and to receive feedback from the key stakeholders in the industry.
The meetings held in Antwerp, Long Beach, Hong Kong and Hamburg gave an opportunity to interested parties to hear more about the project and to give their input on developments so far. Feed back from each meeting was carefully evaluated and each new addition or indeed subtraction was incorporated before the next industry session. Participants at each of the events were asked to give a candid appraisal of the project and asked to make suggestions on how to strengthen the benchmark.
The attendees were chosen to reflect the broadest possible spectrum of stakeholders thereby ensuring that what is developed would have multi stakeholder approval.
Pictured at the Antwerp meeting: Bernhard St?ender , Managing Director Germanischer Lloyd Certification, Kieran Ring CEO Global Institute of Logistics, Nicolette van der Jagt , Secretary General European Shippers? Council and Founding Member Global Shippers Forum and Fer van de Laar , Managing Director International Association of Ports and Harbors | |
Speaking at the conclusion of the series of worldwide meetings, GIL?s Kieran Ring said,
?We are absolutely delighted with the response we have received to the initiative, the development of CTQI is absolutely critical to the development of the global maritime logistics sector.
The exercise has proved beyond doubt that progressive logisticians from all elements of the supply chain are committed to the development of end-to-end visibility and see CTQI as an important component in their quest.
The worldwide meeting was the first time that many of them were afforded the opportunity to sit with their customers and their customer?s customers and truly engage in ?joined up thinking?.
Participants really sensed that they were party to new collaborative approach to problem solving and systems development, and while a collaborative approach has been much talked about in the media and universities people really felt that these sessions were the real deal and evidence of collaboration in action.?
Members of the Maritime Logistics Council and guests gathered in the Crowne Plaza Hotel, Antwerp on January 31st for the first in the series of meetings to discuss the port terminal performance indicator benchmark, CTQI.
The meeting was addressed by Dr Gustaaf de Monie, Bernhard St?ender, the Managing Director of Germanischer Lloyd Certification and Kieran Ring of GIL who moderated proceedings.
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 Pictured at the Maritime Logistics Council US chapter dinner: (L-R) Thomas Krusin, Hellmann Worldwide Logistics, John Wheeler Georgia Ports Authority, Ed O?Callaghan CMI, ?Skip? Hansen Lynden Airfreight and Vincent Wong Kerry Logistics Network LONG BEACH March 5th 2007
Ben Cook Kimberly Clark Chairman US Chapter.
 It is my great pleasure to provide readers of this special edition of the Global Maritime Logistics Council (GMLC) Newsletter with an overview of our meeting here in the US in March. But before I go into detail on the evening itself, allow me to reiterate for the uninitiated the GMLC core aims and objectives:
The Global Institute of Logistics (GIL) differs from other industry group by being a truly global and multi stakeholder body, we base our world view around two key ideas: that logistics requires collaboration by all nodes in the supply chain; impossible to execute in isolation, and requires an ?acting global thinking local? mentality in order to meet the needs of each market.
The mission of the GMLC is to encourage global maritime supply chain stakeholders:
(a) To co-operate closely, leveraging best industry practices to add real value.
(b) To deploy collaboration, as a strategic organizational tool
While our key objectives are:
(a) Facilitate increased cargo visibility and standardization.
(b) Influence maritime security and global regulatory compliance.
(c) Encourage collaborative logistics.
(d) Promote environmental sustainability.
The key mechanism we deploy in pursuit of our objectives is to bring logisticians from all parts of the global supply chain together. We schedule our meetings to coincide with major industry conferences so as to maximize the use of people?s time. In the case of LB the meeting coincided with TPM.
Pictured at the US Chapter Meeting & Dinner:
(L-R)Wilmer Aguilar, YICT & Executive Director of the Maritime Logistics Council, Barry Sedlik, Undersecretary & Senior Advisor for Economic Development, Business, Transportation & Housing Agency for the State of California, Kieran Ring, CEO of the Global Institute of Logistics, Eduardo Lugo Leader of Corporate Planning Panama Canal Authority and Rodolfo Sabonge Director of Corporate planning & Marketing Panama Canal Authority. | |
We tell guests in advance what the subject for discussion will be on the evening, in this case we wanted feedback on the development of CTQI. We open the meeting with a power point presentation setting out our hypothesis before inviting guests for their opinion. All opinions are noted and eventually are aggregated into a white paper. The feedback from LB will be published in the Institutes forthcoming white paper Hypothesis, Reasoning and Methodology for the development of a Port Performance Benchmark (CTQI) published on May 21st in Dusseldorf
In essence we promote collaboration by collaborating in the first place. Our experience to date has been very positive, feed back that I received after Long Beach was that the event, was for a lot of people their first opportunity to engage in ?joined up thinking? and in this case talking.
The discussion point in LB surrounded the development of CTQI; I personally welcome the development of the benchmark, the current system of ranking terminal purely by TEU throughput is of very little use, it provides no real insight into productivity and absolutely zero information on the terminals connectivity.
Pictured at the US Chapter Meeting & Dinner:Christopher Chase Marketing Manager at the Port of Los Angeles and Robert J. Bowman Senior editor of Global Logistics & Supply Chain Strategies magazine. | |
When I worked at The Home Depot we conducted ongoing research in to which port terminals were the most agile, which was critical in informing our decision-making and proved invaluable in reducing our costs and speed to market.
When I think of how much effort, time and dollars we could have saved had such a benchmark as CTQI been available at the time it reinforces my commitment to the initiative.
For CTQI to be effective it has to be developed with all stakeholders and when available should provide real value to the entire community: Our guest list at LB reflected this, to see who attended the meeting go to the download center at the beginning of my report.
We invited two guest speakers to address us on the evening Robin Lanier Executive Director of the Waterfront Coalition (pictured left) AND Joe Andraski CEO at VICS organization.
The Waterfront Coalition is a US based organization made up of concerned business interests representing shippers, transportation providers, and others in the transportation supply chain and are committed to educating policy makers and the public about the economic importance of U.S. ports and foreign trade, and to promote the most efficient and technologically advanced ports for the twenty-first century.
Waterfront has been enormously successful in their efforts and their success has been largely achieved through collaboration.
In inviting Robin to speak, we wanted to hear first hand the background to the Coalitions recommendation published in their ?Call To Action? white paper which calls on the terminal operator community to agree commonly agreed KPI?s to measure port productivity and performance.
 John Joseph of Limited brands (pictured left) who worked on the white paper was also at the meeting and spoke to guests later about the background to the work and in particular about the value of an industry benchmark from the beneficial cargo owners perspective.
I would like to personally thank the Waterfront Coalition for their contribution on the evening I think their experience and indeed support will make a huge contribution to the Institutes efforts to develop CTQI.
 Our other guest speaker was Joe Andraski (pictured left) of the VICS Joe is the President and CEO of VICS (Voluntary Interindustry Commerce Solutions) Association.
VICS was established in 1986 to provide a forum for retailers, suppliers, information systems solution providers, consultants and third party providers, to develop supply chain processes and technology that improve supply chain efficiency and effectiveness.
More than 200 members have annual sales that exceed $2 Trillion.
VICS has enabled companies in the retail and consumer-focused industries to eliminate billions of dollars of waste and delay. By creating voluntary guidelines, often referred to as ?standards,? VICS has created new best practices that ultimately lead to lower costs and better availability of products for consumers.
VICS? volunteer members improve the flow of products and information throughout retailing and the consumer-focused industries that supply retail.
We look forward to leveraging the experience of VICS in developing our platform and more importantly in incorporating the standards developed by the organization in to CTQI.
 Barry Sedlick (pictured left) Undersecretary & Senior Advisor for Economic Development, Business, Transportation & Housing Agency for the State of California also attended the meeting
Barry provided a unique insight into challenges faced by government in deciding how to deploy limited resources for infrastructure development and the responsibility of the logistics industry to provide clear evidence that it was committed to operating to best in class standards, CTQI was in his opinion one example of such an initiative.
Finally, I would like to thank all those that attended the function, each and every guest made a valuable contribution to the debate.
The views of all our guests will feature in the Institutes forthcoming white paper that aggregates the myriad of opinions collected through out its series of worldwide meetings this spring. The white paper will set out the road map for the development of CTQI while trace its development to date and in particular demonstrate how meetings like Long Beach have contributed to its development
I look forward to welcoming you all again to our industry meeting and dinner in Atlanta in June.
Please feel free to mail me at Ben.cook@kcc.com to learn more about the work of the council.
Best Regards
Ben Cook
Chairman
US Chapter
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Hong Kong March 12th 2007
Paul Goldsbrough Hellmann Worldwide Logistics Chairman China Chapter.
 Since its formation last April in Shanghai the China chapter of the Institutes Global Maritime Logistics council has gone from strength to strength and no where was this more evident than over the week beginning the 12th of March last when I had the privilege of hosting an industry dinner and meeting on behalf of GIL here in Hong Kong followed by a panel debate at TOC Asia which our meeting was timed to coincide with.
If you have been reading the trade papers or indeed attended any industry conferences recently you will have noticed that the industry is finally beginning to recognize that the supply chain of the future is demand driven and impossible to manage with out total visibility end to end. Of course this in it self is nothing new, however what is definitely new is that we seem to be transitioning from the challenge to the solution and the solution is spelled ?collaboration.
In my 25 years in the business I can honestly say that the most successful solutions that I have had a part in developing involved a number of different transport and logistics service providers. I have worked with some truly amazing organizations and with my hand on my heart I can honestly say that not one of them was in a position to provide a total solution by purely leveraging their own assets etc.
You might say that I am stating the obvious and I am, however I am sure that you will also agree that while multi service provider solutions have always been the norm, the difference now is that the shipper knows and is demanding transparency and rightly so. The powers that finance business, the Wall Streets, the London?s, the Hong Kong?s have finally realized that supply chain has become the single biggest force affecting the bottom line in world business, the success of brands like Zara, Dell Toyota is all the evidence that that is needed that big business is no longer a battle of the brands but one of supply chains.
The bottom line is the shorter the cycle time between point of production and the point of purchase, the better the bottom line, not to mention the less working capital tied up in inventory. Our friends and colleagues from the FMCG sector tell us that their customer, you and I are becoming increasingly demanding for more and more choice at a lower price or best at a price that is static.
So in the final analyses time has become the new currency and more and more CFO?s are beginning to learn how to audit speed and where once the logistician had to scramble to have his or her voice heard in the board room he know is being welcomed with open arms and cast as the guy who can not only save money but also sell more.
Pictured at the Maritime Logistics Council China chapter dinner:
(L-R) Ken Tse Director & General Manger Yantain International Container Terminals, Clas Thorell, DHL Global Forwarding, Dr. Fu Yuning, Chairman and Managing Director of China Merchant Holdings, Suresh Pandya Operations Director Euro Suisse International, Jackie Lin General Manager NYK lines Shenzhen | |
This is why I am excited about the work of the Global Institute of Logistics, its mantra is that regardless of how well an organization performs over multiple KPI?s, in the final analyses it will be its commitment to developing a collaborative culture at the heart of the organization, which will ultimately set them apart from the competition.
In my capacity as Chairperson of the China chapter that has been my primary focus encouraging stakeholders here in Asia to meet, to greet, to listen and to collaborate. Much like any discipline collaboration demands a new lexicon, a new language, which we all have to learn to speak, we are beginning to assemble the language as we speak?together.
Pictured in Hong Kong Thomas Nelson Managing Director of VF Asia, Elizabeth Hu Trade Manager East Coast South America CSAV Hong Kong Alan Au Assistant General Manager Yantian International Container Terminals | |
I believe that one of the by products of collaboration will be standardization, we already have standardized English as the international language of business, google as the international language of archiving and searching and the list goes on, now the phenomenon is making its way in to the logistics industry, the hi-tech community are standardizing information exchange through Rosetta Net, the Air Cargo community is streamlining its processes through Cargo 2000, the global pershibable logistics industry through CCQI (Cool Chain Quality Indicator) and we at the Global Institute of Logistics are actively pursuing the development of CTQI, (Container Terminal Quality Indicator)
CTQI has its genesis in ?joined up thinking? and when it is developed will be the fruit of many many hours of collaboration between all the stakeholders who rely on container terminals to keep the supply chain moving. The purpose of our dinner meeting here in Hong Kong last month was to further facilitate this dialogue.
Bernhard Staender MD of Germanischer Lloyd Certification came to HK last month to pledge his organizations commitment to the development of CTQI and to tell our guest?s where the research process had led thus far. What followed was a most enlightening debate centred on a Q&A session that elicited response from all nodes of the supply chain.
We had contributions from individuals as diverse as the Chairman and CEO of one of the worlds largest terminal operating companies, the supply chain director for one of Europe?s largest high street retailers, a World renowned Professor of Logistics, the owner of the worlds largest privately owned logistics service providers, the editor of the foremost journal on marine terminals, the list goes on and on.
What resulted was quite satisfying I believe that both the Institute and Germanischer Lloyd came away with some essential intellectual property needed to build up the benchmark but the rest of us probably went home having had a master class in ?joined up thinking?
Pictured in Hong Kong Dr. Chung-Yee Lee Head and Chair Professor Industrial Engineering & Logistics Management Department, Hong Kong University of Science & Technology (HKUST) and Bruce Stinson Managing Director Chilab Hong Kong | |
I hope you enjoy reading the various documents at the beginning of my report that you can download for your own information. It includes biographies on all attendees together with the PowerPoint presentation delivered on the evening and some additional photographs.
We are currently setting the date for our next chapter meeting that will focus on reviewing the white paper being produced from the aggregated opinions collected by the Institute in its series of worldwide meetings.
In the meantime should you wish to learn more about the China chapter and indeed how you can become involved please do not hesitate to contact me at pgoldsbr@hk.hellmann.net
Best Regards
Paul Goldsbrough
Chairman
China Chapter
Global Maritime Logistics Council
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HAMBURG April 5th 2007
Kieran Ring CEO Global Institute of Logistics
Hamburg on April 5th was the last stop in the Institutes current series of world wide meetings and in a sense we ended up right back where we started, in the HQ OF Germanischer Lloyd. It was while researching the extraordinary lengths that the Cool Chain association went to develop a standard for temperature controlled logistics that the Institute first became aware of the extraordinary prowess of Germaischer Lloyd Certification (GLC) in the development of quality indicators.
I would like to acknowledge here the work of the Cool Chain Association, which was the first industry body to develop a quality indicator, CCQI with GLC. It has made the task of developing a quality indicator for container terminals less daunting as we have the benefit of their experience and more importantly the unique intellectual property, which is the foundation of the quality indicator series.
Pictured in Hamburg were: Dr Yves Wild , Germanischer Lloyd Bernard Staender Germanischer Lloyd, Harry Mohns MSC Gate Bremerhaven, Wolf von der Mosel , Hamburg Port Authority | |
I would like to thank all those that attended the meeting but in particular I would like to single out Steve Lomgbotham of Marine Terminals Corporation in the US and Wilmer Aguilar of Yantian International Container Terminals in China who both travelled to be with us on the day.
The meeting that lasted the entire day was the first time that Eurogate terminals represented by Harry Mohns, HHLA represented by Heinrich Goller and the Hamburg Port authority represented by Wolf von der Mosel had an opportunity to review the concept.
Gustaff De Monie explains the critical KPI?s at last months Hamburg Meeting | |
Dr Gustaaf De Monie who the Institute has appointed as its advisor in the process was present as was Dr Yves Wild of GLC who worked closely on the development of CCQI and of course Bernhard Staender MD at GLC.
I am delighted to report that we achieved consensus on the overall need for CTQI and from there spent a lot of time discussing next steps.
The findings from the meeting will form part of the Institutes forthcoming white paper, which will be published on May 21st at a press conference in Dusseldorf.
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CONFERENCE PARTICIPATION
Panel Discussions
TOC Americas Acapulco Mexico Nov 2006
The Maritime Logistics Council presented a panel discussion at the TOC Americas 2006 Conference, which took place in the Fairmount Princess Hotel in Acapulco, Mexico from 28th to 30th November. Kieran Ring and Wil Aguilar represented the Maritime Logistics Council and presented a paper entitled:
The Shipper-Centric Port: Structural change in demand and the need for relationship orientation in maritime logistics.
Rosa Hakala of Agility and Gary Ferrulli of Global Logistics Consulting also took part in the presentation.
TOC Hong Kong March 2007
The TOC2007 Asia conference took as its central theme this year: "Making a visible difference: Integration & efficiency across the maritime logistics chain." On the opening morning of the event a specially commissioned round-table debate was led by the Global Institute of Logistics.
Moderated by Kieran Ring, Chief Executive Officer of GIL, major shippers, forwarders, carriers and terminal operators discussed the need for 'joined-up thinking' along the maritime supply chain. Panellists discussed what role ports and terminals should play within the shipper's network, and how all players can improve visibility and control at all points in the logistics chain. Bernhard Staender of Germanischer Lloyd addressed delegated on the Container Terminal Quality Indicator benchmark. (CTQI)
The panel was:
Paul Goldsbrough, President, Business Development, Hellmann Worldwide Logistics
Bernhard Staender, Managing Director, Germanischer Lloyd Certification Hamburg
Marc Castagnet, Chief Executive Officer, SGT Group Hong Kong
Professor Chung-Yee Lee, Head and Chair Professor, Dept of Industrial Engineering and Logistics Management, The Hong Kong University of Science and Technology
Stefan Duhring, Manager, Operations and Consortia Asia, Hamburg Sud
John Kok General Manager/CSI, Hutchison Port Holdings.
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MEDIA COVERAGE
Media Reaction to CTQI
American Shipper April 2007
Rating Container Terminals
Eric Johnson
For years, we?ve been told that the best way to analyze the efficiency of a container terminal is to look at the number of annual TEUs that move through a terminal per acre. Asian terminals, of course, set the pace in this category, regularly beating North American terminals by a factor of two, three and even four. There are a host of reasons for the disparity in efficiency, but the end result is inescapable ? ports like Hong Kong move more containers with less acreage than even the best North American ports. In fact, they?ve gotten so efficient and are moving so many containers, there are a new statistic emerging for mega-mega-terminals ? TEUs per berth, or more specifically, the 1-million-TEU-per-berth terminals. It?s a staggering statistic really, and emblematic of how uber-efficient terminals in China, Korea, Singapore and Hong Kong have become.
Meanwhile, the Global Institute of Logistics in March un-veiled an ambitious new plan to develop a standard that shippers, carriers and forwarders can use to gauge global port efficiency aside from the standard volume measurements (which really don?t say anything about quality). The plan would attempt to rationalize the huge differences in port productivity, investment and efficiency to provide port users with an accurate way to measure container terminals ? a sort of Michelin guide to the best terminals in the world. Preliminary ideas revolve around a points system, with terminals earning points for volume forecasting and cranes per foot of berth among many suggested measurements.
The institute was actively soliciting feedback to help shape the standards during the Terminal Operators Conference Asia in Hong Kong. ?We didn?t come here to announce the standards, we came here to develop the standards,? said Kieran Ring, chief executive officer of the institute. Of the need for a benchmark to measure terminals against one another, Ring said ?We know which ones are bigger, but we have no idea which terminals are best in class. It?s like saying a hotel with 400 rooms is better than one with 300 rooms. It doesn?t say anything about quality.? The GIL has enlisted classification company Germanischer Lloyd Certification in Hamburg, which previously constructed a standard for cold chain operators. Stakeholders are ?seeking a reliable standard,? said Bernhard Staender, managing director at Germanischer Lloyd. ?Container volume is projected to double over the next 10 years and you can?t build double the terminals in that time. We are going to build a standard so everyone can strive for excellence.?
Many obstacles to a standard exist, including how terminals of varying sizes could be compared. One solution could be to separate terminals into three size categories. Also, the extent to which terminals are held responsible for infrastructure bottlenecks out of their control has to be factored in. And one audience member at TOC suggested that it?s difficult to formulate standards for excellence when the highest expectations today are lower than potential port productivity in the future. To that, Staender responded, ?These will be living and dynamic standards that will change as new ways of doing things emerge.? In September, the GIL will invite stakeholders from throughout the supply chain to help shape the standards. And maybe then, Hong Kong and Shenzhen won?t just be moving 1 million TEUs per berth, but they?ll also have five star ratings.
Cargo Systems
The New York-headquartered Global Institute of Logistics (GIL) has teamed up with ship classification society Germanischer Lloyd to develop a set of benchmarks with which shippers, carriers and logistics firms can measure port performance. Following the success of the German class society's Cool Chain Quality Indicators (CCQI) programme launched a couple of years' ago, the partners are now planning to introduce a Container Terminal Quality Indicator (CTQI) matrix that will seek to standardise performance metrics across the industry. Bernhard St?ender, Germanischer Lloyd MD, said: "The key performance indicators for a container terminal must be standardised in order to ensure all terminals use the same calculation methods and are comparable for benchmarking methods. We at Germanischer Lloyd are proposing to verify and certify these standards to ensure that terminals can be compared. "It will also have to be suitable for taking into account best practices and the employment of good equipment," he said. The working idea at the moment is that the CTQI will revolve around a points system and terminals will be measured on their operational performance on the quayside, in the yard, and at the terminal gates and/or intermodal operations.
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 Pictured at the Maritime Logistics Council European chapter dinner: (L-R) Juan M. Manzanedo, Logisfashion Spain, Bertrand Guinard SGT Europe, Frank Kho, PSA-HNN (Hesse Noord Natie), Paul Ham, Europe Container Terminals (ECT) & Luc Jacobs, DHL Global Forwarding Europe and Central Europe FUTURE PLANS
Next Steps in development of CTQI
Publication of White Paper on CTQI Dusseldorf May 21
The complete findings from the Institutes research on the development of CTQI will be published as part of a white paper entitled: Hypothesis, Reasoning and Methodology for the development of a Port Performance Benchmark (CTQI) in Dusseldorf on May 21st. at the Swissotel.
The launch coincides with the 9th Annual European Supply Chain and Logistics Summit
Panel debate on CTQI at TOC Europe Tuesday June 19TH
The Institute has been given the honor of moderating the opening day of TOC Europe which takes place in Istanbul Turkey from the 19th to the 21st of June.
Launch of Institutes Annual Report Atlanta June 25th
The Institute will launch its Annual Report at its yearly North American Industry dinner, which takes place on June 25th in Atlanta. The dinner is held in the memory of GIL?s founding Chairman Bob Delaney and the highlight of the evening is the induction of an industry veteran to the Institute?s Logistics Hall of Fame
US Maritime Logistics Council Meeting Atlanta June 25th
The US Chapter of the Institute?s Maritime Logistics Council will meet for the second time in 2007 on June 25th in Atlanta. The meeting will review the progress of the Council in the second quarter.
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INDUSTRY NEWS
Related Stories
Port Volumes Distorted by Double Counting
Greg Knowler Editor Cargo News Asia
Container terminals are forever wrestling with the concept of design capacity. How do you measure the size of a port and what is the annual throughput figure that should trigger expansion?
Traditionally, a port is measured by the TEU capacity it handles every year, but this figure says nothing. For instance, Singapore last year had a throughput of 23.98 million TEUs, making it the world's busiest container port.
However, more than 90 percent of those boxes were transhipment cargo that basically gets hauled off one ship and placed on another. The two moves mean that the container is counted twice, but all the efficiency is being expended on moving that box from one ship to another as fast as possible.
Now take a port where more than 95 percent of all containers are direct exports, such as Shenzhen in the Pearl River Delta. Last year, the ports that make up Shenzhen handled 18.46 million TEUs, but almost all of it was gathered by forwarders from factories in the region, trucked in through the port gates and lifted on to ships. The economic value of this cargo is far greater than that of transhipment because it requires vastly more effort and more services. Yet each box exiting the mainland via Shenzhen is counted only once. So despite having a de facto throughput of 18 million TEUs, Shenzhen is below Singapore on the list of busiest container ports, even though Singapore's annual total can be almost halved.
Improving efficiency and productivity in a direct export environment will have an immediate benefit to the port economically, and the additional containers it adds to the annual throughput will be a more accurate measure of the port's capacity than adding an extra million transhipment boxes.
In other words, the headline numbers are not an accurate picture of a port's capacity. A decision to expand a port should take into account its ability to improve terminal efficiency, minimise delays and congestion, reduce costs and satisfy customers. It should look at rapidly improving technology improvements and berth design specifications that can radically improve throughput per berth.
Hong Kong is another case in point, although it is in the peculiar situation that no matter how efficient and productive it is, the port will continue to lose market share to Shenzhen. It's competitive position is completely divorced from its performance.
More than half of Hong Kong's 23.2 million TEU throughput is transhipment, river trade or midstream cargo, and because these boxes are counted up to four times in some cases, it heavily distorts the entire South China container market.
Some kind of standard measure needs to be found to accurately assess port throughput or it will continue to be a hit-and-miss affair
India: New Productivity Linked to Remuneration
An agreement between the Federations of Port and Dock Workers and the Management benefiting 66000 thousand Port and Dock workers was signed here today in the presence of Thiru T.R. Baalu, Union Minister of Shipping, Road Transport and Highways. Shri N. K. Raghupati, Vice Chairman of Indian Ports Association alongwith the Chairmen of Major Port Trusts signed the Agreement on behalf of the Management while leaders of five major federations signed on behalf of the employees. Shri A..K. Mohapatra, Secretary, Shipping was also present on the occasion.
It may be recalled that on an initiative taken by Thiru T.R. Baalu, the Government has recently approved the new Productivity Linked Reward Scheme for the employees of Major Port Trusts and Dock Labour Boards, which will replace the earlier Productivity Linked Reward Scheme. The PLR shall be paid annually on the basis of the productivity and performance of the Major Ports on three parameters viz. average turn round time of ships, average ship berth day output and unit cost of handling. The new scheme envisaged under the Agreement signed today, will be applicable from the year 2002-03 onwards and will remain operative upto the year 2009-10. The scheme also envisages the payment of the difference between the PLR payable and the adhoc PLR paid for the years 2002 to 2006.
With the signing of the settlement today, the way has been paved for the joint withdrawal of reference from the National Industrial Tribunal, thereby finally, settling the long-pending issue relating to the payment of PLR. It may be recalled that a joint reference was made to the National Industrial Tribunal, Mumbai through Ministry of Labour for settling the issue connected with payment of PLR in October 2002.
The leaders of the Federations present during the signing ceremony welcomed the new agreement and applauded the positive approach adopted by Thiru T.R. Baalu in this regard. Thiru Baalu hoped that the new agreement would pave the way for further improving the efficiency of major ports and would help in achieving higher port productivity. The representatives who signed the Agreement included Shri S.R. Kulakarni of All India Dock & Port Workers Federation, Dr. Shanti Patel of All India Dock & Port Workers Federation (W), Shri P.K. Samantray of Indian National Port & Dock Workers Federation, Shri V.V. Rama Rao of Port, Dock Water Front Workers Federation of India and Shri S. Chakravorty of Water Transport Workers Federation of India.
Thiru Baalu has already approved the release of the PLR arrears to the approximately 66000 Port and Dock employees and workers. The expenditure to be incurred for this payment of arrears is likely to be to the tune of Rs. 31 Crores.
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INSTITUTE NEWS
New Members & Future Events
U.K .Stiller Group Joins Global Institute Of Logistics
The Global Institute of Logistics has inducted the Stiller Group into its Partnership Excellence Programme, which recognizes the key contributors to the development of global supply
The Institute has recognised the Stiller Group for its contribution to the development and smooth operation of complex global supply chains. Companies involved in the global supply chain turn to the Global Institute of Logistics to help them find the right partners as they work to improve the ways in which they store and ship products for their customers. With this in mind the Institute launched the Partnership Excellence Programme to recognise and reward the companies that are offering the right kind of help.
The Institute recognises the tremendous amount of work that companies are doing to help their customers to improve the efficiency and speed of their supply chains. We want to recognise the important role these companies are playing at this crucial time for the whole logistics sector.
Pictured Paul Stiller Managing Director Stiller Group and Kieran Ring, CEO of the Global Institute of Logistics at the Stiller Grop?s induction into the Institute?s partnership Excellence Programme | |
UK-based transport and distribution company Stiller is a family firm founded in 1954 with one vehicle and is now the largest privately owned logistics service provider in the UK. As a privately owned Company it impresses with the speed with which it can make decisions and put new ideas into effect.
While increasing its market share the company has also been growing by acquisition, buying up companies including Carline Transport of Cardiff and Osborne Logistic of Yorkshire to consolidate its position in specialist areas such as bulk liquid distribution and abnormal loads for the construction industry.
The Stiller Group has committed itself to delivering dependable, cost effective logistics solutions and has adopted a customer-orientated approach and it is these qualities that this programme highlights. The Institute believes that the development and nurturing of relationships between provider and customer will result in greater operational logistics service quality improvements and as a consequence of this, better economic performance for both parties. The Stiller Group
About Stiller Group
Stiller Group is a leading provider of supply chain solutions. We design and operate creative added- value solutions for our customers. Our business has a turnover of over EUR95million / 66million pounds and we employ over 750 staff in 10 locations. Warehousing, transport and specialist services are provided for customers in a range of sectors including industrial, automotive, retail, FMCG, petrochemicals and manufacturing.
HI-Tech Logistics Conference Antwerp May 15th & 16t
The Institute will provide the Chairman for the upcoming HI-Tech Logistics Conference which takes place in Antwerp on May 15th & 16th .
The Conference promises logisticians and supply chain directors from the Hi-Tech space, an opportunity to review developments in transportation and logistics in their quest to achieve supply chain fluidity.
The main themes to be discussed are:
? Outlook on the costs of globalisation.
? Logistics infrastructure challenges and opportunities within emerging countries
? Impact of consumer driven supply chains and what can be done to stay competitive
? Implementing strategies to manage the risk in longer supply chains
? Achieving, maintaining and strengthening collaborative relationships and trading partnerships to achieve speed-to-market results
? Examining the impact of the Waste Electrical and Electronic Equipment (WEEE) Directive and other key environmental considerations
? Effective reverse logistics management case studies
? Reducing excess inventory and inefficiencies through leaner and improved chain visibility strategies
? Security - protecting high value items
9th Annual European Supply Chain and Logistics Summit
The Institute will provide the Chairman for the upcoming 9th Annual European Supply Chain and Logistics Summit to be held in Dusseldorf on May 21st & 22nd
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| Maritime Logistics Council Newsletter Volume 2 Issue 1 | Publisher
Global Institute of Logistics
245 Park Avenue,
39th Floor,
New York,
NY, 10167
United States of America | Telephone
(+1) 212 672 1846 |
PUBLISHER: Kieran F. Ring
ceo@globeinst.org | EDITOR: Stephen Tierney
stephentierney@globeinst.org | NEWS EDITOR: Siobhan Kelly
siobhankelly@globeinst.org | web address
www.globeinst.org |
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