The Role of Port Communities in Global Logistics

THE ROLE OF CONTAINER PORTS IN GLOBAL LOGISTICS

Globalization means that more and more goods flow between continents and subsequently the traditional role of ports in the wider supply chain context is being subject to a process of radical review. In broad terms, the traditional port system is being replaced by a model which focuses on logistics service quality which in turn has brought the performance of ports and their communities into sharp focus.

Port customers, whether they are shipping companies, importers/exporters, terminal operators or logistics service providers, judge a port not on the basis of any one port stakeholder’s individual service – but rather in a combined way, as after all logistics is a combination service. In essence, the port is only as strong as its weakest link, and therefore its reputation depends on the level of Coordination, Communication and Control amongst port stakeholders.

Across the world “First Mover” Port Authorities and their communities alive to these new challenges have devised and developed a myriad of strategies and programs designed to deliver a seamless integrated logistics product to their customers. Since 2003 the Global Institute of Logistics has enjoyed a direct relationship with a diverse range of global port authorities and their communities, people and places that we have identified as First Movers, Thought Leaders and Early Adopters of the logistics model of port development. In essence, communities committed to the ‘Relay’ rather than the ‘Delay’ of cargo.

Researching the development of these port communities, identifying their best practices and, in some cases, building international standards of excellence around these experiences has been the work of the Institute for the last 12 years. Our research proves that great port logistics is delivered as a result of a combined effort from a diverse group of port stakeholders working in harmony. Furthermore, we have identified that the Port Authority is the natural leader of the port community, and the only agency independent and powerful enough to marshal these resources.

As a natural trade development agency, the Port Authority is also in the unique position to build bridges across the world with other like-minded Port Authorities and their communities. This combination of both acting locally and globally combines to provide the perfect maritime logistics support for the global supply chain. Our mission is to facilitate the flow of Knowledge, from port to port, inside the port and to the port end user.

The research program is continuous and to date has covered the following modules.


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RESEARCH FOCUSSED ON IDENTIFYING BEST PRACTICE AND ITS THOUGHT LEADERS

PORT COMMUNITIES: THE KEY TO CONTAINER SUPPLY CHAIN INTEGRATION

Port customers, whether they are shipping companies, importers/exporters, terminal operators or logistics service providers, judge a port not on the basis of any one port stakeholder’s individual service – but rather in a combined way, as after all logistics is a combination service. In essence, the port is only as strong as its weakest link, and therefore its reputation depends on the level of Coordination, Communication and Control amongst stakeholders in the port community. The responsibility for the development of an effective port community resides with the port authority.

Institute research supports the academic communities assertion that strong relationships between logistics partners in a supply chain lead to  a number of beneficial operational outcomes such as reduction of inventory, transportation, ordering and warehousing/handling costs.

However the major challenges identified by our research was that of integrating Ports & Terminals in supply chains. The research identified them as the weakest and least transparent link in the global container logistics supply chain. Port customers, whether they are shipping companies, importers/exporters, terminal operators or logistics service providers, judge a port not on the basis of any one port stakeholder’s individual service – but rather in a combined way, as after all logistics is a combination service. In essence, the port is only as strong as its weakest link, and therefore its reputation depends on the level of Coordination, Communication and Control amongst port stakeholders.

While container terminals were beginning to develop relationships with end users in pursuit of greater Visibility, Velocity and Value add, many of the gains being made were being lost in the wider port community and the hinterland. Much of the reason for this is the lack of communication between port community members at a majority of the world's container ports. In terms of performance, the port community is defined as the value added generated by the community, and is shaped by the interrelationships between the structure of the community and the port authority.

These findings led to the establishment of our port research program which identified the thought leaders and early adopters of port community development. Early indications were:

  1. Port communities are formally organised at many global ports however they are at varying levels of maturity.
  2. Mature port communities provide "Best in Class" port logistics as a result of a combined effort from a diverse group of port stakeholders working in harmony
  3. Mature port communities were driven by Port Authorities that actively encourage, foster and develop unity amongst port stakeholders based on a system of merit, reciprocal accountability and shared vision.

FOLLOW THIS LINK TO READ/ DOWNLOAD THE BUILDING PORT COMMUNITY RESEARCH


PCS: A VITAL ROLE TO PLAY IN COMMUNITY DEVELOPMENT

Port Community System (PCS) or an electronic platform that connects the multiple systems operated by a variety of stakeholders that comprise a port, or Gateway, community. As defined by Capgemini a Port Community System is “an entity delivering information to supply chains operating in the port.

Recognizing a need for joined-up communications throughout the port stakeholder network, many ports have invested in a bespoke Port Community System (PCS) to integrate the port authority, customs, cargo owners and carriers. PCS is developed on an open ‘infrastructure’ that enables a secure and efficient flow of information among all port stakeholders and public bodies. PCS improves the quality of port activity and maximises resources through a tighter coordination of activities, sharing of information, control, security and safety of operations and, consequently, optimized planning and execution of operations. The development of a sucessfull PCS relies heavily on collaboration between the key authorities, as well as with stakeholders, potential customers and local trade associations.

PCS Services
A PCS is a modular system with functionality designed to provide all the various sectors and players within a port community environment with tools specific to them, thus delivering a tightly integrated system. Developed for port users by port users, a PCS encompasses exports, imports, transhipments, consolidations, hazardous cargo and maritime statistics reporting.

PCSs in general provide a huge range of services and key features which can be summarised as follows:

  • Easy, fast and efficient EDI information exchange, re-use and centralisation, available 24/7/365
  • Customs declarations
  • Electronic handling of all information regarding import and export of containerised, general and bulk cargo
  • Status information and control, tracking and tracing through the whole logistics chain
  • Processing of dangerous goods
  • Processing of maritime and other statistics

With all of these services come many advantages. The core benefits for all parties involved are higher efficiency and speed regarding port processes, particularly through automatisation and the reduction of paperwork. In this way, PCSs contribute to sustainable transport logistics and support the ambitions to meet global carbon reduction requirements.

The functionality is aimed at eliminating unnecessary paperwork which can clog up cargo handling. Using electronic data exchange, the PCS is an effective real-time information system; fast, focused, flexible and multi-faceted, it aims to improve efficiency at all stages of the process of manifesting, through vessel discharge and loading, Customs clearance, port health formalities and delivery in and out of the terminal.

As well as the above, the PCS offers improved security, cost reduction and potentially more competitiveness for each user.

FOLLOW THIS LINK TO READ/ DOWNLOAD THE PORT COMMUNITY SYSTEMS RESEARCH


CHAINPORT is the World’s First Global Alliance of Port Authorities

Our continuing research in to the changing role of the Port Authority’s from the traditional role of landlord to facilitator and economic strategist. The report titled “Operation Port Unity” proved the potential to improve global logistics one port at a time provided Port Authorities actively encourage, foster and develop unity amongst port stakeholders based on a system of merit, reciprocal accountability and shared vision.

One of the recommendations of the report is that the potential of sister port agreements be fully explored to identify how a “chain” relationship between ports can help to optimize the port centric logistics aspect of global supply chain. It is to this subject that our next research program “Operation Inter-Port Unity: From Main to Chain port” addressed.

The traditional role of a Sister-Port Agreement has been seen as little value other than a “photo opportunity”, but now ports are seeking ways to explore this formal alliance into practical exercises. The Global Institute of Logistics through its “OpPortUnity” research sees the Sister Port Agreement as the prefect foundation to align global ports, who are already “sisters” into the Chain Port research Program and has been proactively lobbying the Port Authorities globally to participate in the “Operation Inter-Port Unity: From Main to Chain port” program.

The process has led to the formal development of a "CHAINPORT" brand and the work has begun to build a formal alliance of global container seaports as founding members

CHAINPORT is the world’s first Global Alliance of Port Authorities established to develop collective competitive advantage and contribute to the long-term profitability of its members and their communities beyond their individual capabilities.  The Alliance achieves collective competitive advantage by increasing Velocity, improving Visibility and adding Value to Global Supply Chains. The Network offers global solutions to global shippers while at the same time working with shipping lines to drive improvements in operational efficiency, data accessibility and port centric logistics.

MORE ABOUT THE CHAINPORT 1ST GLOBAL ALLIANCE OF SEAPORTS


VALENCIAPORT ACCREDITED GLOBAL BEST-IN-CLASS PORT COMMUNITY

The The Role Of Container Ports In Global Logistics research program sought to identify a "benchmark" port community which others could emulate, a port committed to the ‘Relay’ rather than the ‘Delay’ of cargo. That benchmark was identified as Spain’s number one container port, Valenciaport which was accredited with “Best-in-Class” status.

Valenciaport comprises the ports managed by the Valencia Port Authority: Valencia, Sagunto and Gandía. This strong combination makes it Spain’s leading Mediterranean port in terms of commercial traffic, basically containerised cargo, particularly because of its dynamic area of influence and an extensive network connecting it to major ports around the world.

Valenciaport is a tightly knit Port Community due to innovative elements like the Seal of Quality Guarantee and the Community Information System (S.I.C.) and is formed by all economic agents who provide their services through the ports of Valencia, Sagunto and Gandía. Valenciaport is not only a key element in promoting the Valencian Community abroad but also the maritime gateway for production and consumer goods to and from the entire Iberian peninsula.

Globalization means that more and more goods flow between continents and subsequently the traditional role of ports in the wider supply chain context is being subject to a process of radical review. In broad terms, the traditional port system is being replaced by a model which focuses on logistics service quality which in turn has brought the performance of ports and their communities into sharp focus.

Port customers, whether they are shipping companies, importers/exporters, terminal operators or logistics service providers, judge a port not on the basis of any one port stakeholder’s individual service – but rather in a combined way, as after all logistics is a combination service. In essence, the port is only as strong as its weakest link, and therefore its reputation depends on the level of Coordination, Communication and Control amongst port stakeholders. Port logistics is delivered as a result of a combined effort by port stakeholders working in harmony supported by the Port Authority as the natural leader of the community. The Port Authority is the only agency independent and powerful enough to marshal these resources.

Across the world “First Mover” Port Authorities and their communities have devised and developed a myriad of strategies and programs designed to deliver a seamless integrated logistics product to their customers. The Institute established direct relationship with many of them as part of its "The Role of the Container Port in Global Logistics" research. The research identified the First Movers, Thought Leaders and Early Adopters of the logistics model of port development. The research considered ports at different levels of community maturity and with varied business streams – transhipment, import only, export only, and mixed.

The research sought to identify a "benchmark" port community which others could emulate, a port committed to the ‘Relay’ rather than the ‘Delay’ of cargo.That benchmark was identified as Spain’s number one container port, Valenciaport which was accredited with “Best-in-Class” status.

The criteria for the accreditation was that the port community identified demonstrated an exceptional level of maturity and a culture which indicated that stakeholders in the supply chain truly engaged in a collaborative process.

MORE ABOUT VALENCIAPORT'S ACCREDITATION BEST IN CLASS PORT COMMUNITY


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