The problem of port congestion cannot be solely attributed to megaships and should be addressed through better industry collaboration and behavioural change across the supply chain, a global consultant in the container industry has claimed.
“Severe peaks existed long before ships exceeded 10,000 teu in capacity,” Andy Lane, a partner with Singapore-based CTI Consultancy, told the TPM Asia Conference in Shenzhen. “While this can create temporary congestion, it is the paradigms of weekly manufacturing cycles and week closing that need to be challenged and changed.”
Following analysis of data sources developed by IHS Maritime & Trade, Lane found that out of 49,000 calls to 27 major Asian ports in 2014, just 12% of vessels were above 10,000 teu. The larger ships accounted for 22% of total volume.
“Clearly megaships are not the major part of the problem, although I add the caveat that vessel size may become a bigger part of the problem in the coming years.”
While vessel size has increased significantly over the past two years, terminal productivity has not, leading to concerns about potential congestion. Analysis of IHS data related to quay crane use at the world’s 12 largest ports showed crane usage rates currently average about 48%.
“If these ports were to raise that to 60%, it would increase average crane usage from 28 to 32 moves per hour and provide 44% extra capacity. Given cranes cost in the region of USD10 million each, this would result in a very large increase in return on investment (ROI) for that capital equipment, to a value of more than USD1 billion/year.”
The end-of-week peak in shipments and its ripple effects are a major factor in port congestion, according to Lane. Ships gather in east and south China at the same time in order to meet weekend closing schedules. Given that most ships sail at similar speeds, they arrive in bunches at southeast Asian hubs and this spreads to feeder ports, as well as onwards to US and European ports.
Robbert Jan van Trooijen, CEO of Maersk Line for north Asia, agreed that uneven cargo flows were a big part of the problem. “When you fix the crane issue, the problem gets moved to the yard; when you fix the yard issue, the problem gets moved to hinterland connectivity. Unless you address this on a total supply chain level, a new bottleneck will emerge somewhere else.”
Regular rate increases, which result in a rush in cargo volumes directly before the rate increase takes place and a reduction in volumes directly afterwards, are part of the cause of uneven cargo flows. This could be alleviated with a reliable freight rate index that would help to smooth the disruption in the shipping process.
Misdeclared weights are also an important factor in port congestion and a serious cause of disruption and safety issues, van Trooijen added. “But the key to solving this, in my view, is improved collaboration and better visibility across the supply chain. The correct e-solutions need to be developed and put in place to facilitate better information sharing so supply chains become more predictable and we reduce the number of disruptions as much as possible.”