This document provides a status update on a container port supply chain project. It outlines a 6-stage process to construct an integrated planning model for the port: 1) Improve commodity forecasts and identify key routes; 2) Map routes using CAD/GIS; 3) Develop rolling commodity forecasts and shipping requirements; 4) Model port constraints; 5) Link revenue data; 6) Benchmark ports and develop reports. The goal is to provide management forward visibility and illustrate how supply chain principles can influence container movements and productivity.

1. A ContainerPort Supply Chain Project –
Status update
Mark Deacon
Mstr SCM

2. Presentation Aim & Disclaimer
The aim of this presentation is to provide a status update & help illustrate from a
conceptual perspective, how by applying “Fit-for-Purpose” contemporary Supply Chain
principles can providing an insight to what I call a “5PL” Organisation i.e. one with no
direct responsibility for container movements but certainly one that can influence
container movement productivity
As in my preceding presentation the data I’ll present in this PowerPoint is of a fictitious
nature and false so no linkage should be inferred between presented graphs or tables
to any actual Port location or stakeholder performance. However the data presented
does serve the purpose of illustrating the benefits that constructing a Port S&OP model
can be in order to garner discussions with various stakeholders and the various
disciplines within a Port related businesses.
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3. Project Aim
1. Improve commodity forecast accuracy for imports and exports
2. Identify key commodity routes to and from a Port
3. Construct a “Port Planning Model” that takes existing but disjointed data and
aligns that data to provide a fully integrated tool that identifies;
i. Shipping requirements as a function of average TEU exchange
ii. Quay Crane minimum performance versus capacity
iii. Rail minimum performance versus capacity
iv. Road minimum performance versus capacity
v. Impact on Empty Container Park operations
vi. Potential revenue
4. Provide management with forward knowledge about potential future supply
chain issues.
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4. Improving commodity forecast accuracy for Imports
and Exports
Various statistical techniques exist to forecast future trends based on past results but the trick is to
select a methodology that is not only relatively accurate, but makes sense (conceptually to those who
don’t understand the difference between 1 standard deviation and the fact that MSE isn’t related to
Chinese take away, so its about “Fit for Purpose” and “Multivariate Decompositional Analysis” is fun !
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5. Identify key commodity routes to and from a Port
Getting product to Port quickly, efficiently and at a financially acceptable price used to be the only
consideration to help meet DIFOT measures and achieve competiveness. Throw in Carbon Emissions
and you have a fourth dimension to consider.
As a “5PL” that wants to promote a green Supply Chain, by knowing the options and challenges of
Stakeholder to get product to and from the Port is important if your want to influence the targeted
Commodities Supply Chain. That means knowing the indicative transport times, relative costs and
potential carbon emission factors (represented by a financial related impost).
For Example:
Distance from Port $ per Km $ per Km
Cost
Km's (or miles) Tonnes Rail CO2 $ /Tonne Total Road CO2 $ /Tonne Total Differential
1,000 20 $ 4.00 $ 1.00 $ 4,020 $ 6.00 $ 3.00 $ 6,060 -$ 2,040
500 20 $ 6.00 $ 1.00 $ 3,020 $ 5.92 $ 3.00 $ 3,020 0
250 20 $ 8.00 $ 1.00 $ 2,020 $ 4.00 $ 3.00 $ 1,060 $ 960
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6. 3 .1 - Shipping requirements as a function of average
TEU exchange
Identifying the Vessel TEU exchange rate trends enables both:
1. Expected vessel visits to be calculated, ( & hence resource requirements such as berth occupancy),
2. Required discharge rates if time is a factor and,
3. Revenue in the form of Wharfage , Navigation, Pilotage and other(?)
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7. Stage 2 - CAD or GIS mapping
Illustrating where the commodity is imported
to or exported from by region helps to ;
1. Provide data in an easy comprehendible
format
2. Assist in the development of supply
strategies that may influence modal
choice for moving product to and from
the port
3. Identify contestable markets by mode
4. Estimate transportation costs and
delivery times.
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8. Stage 3 - Rolling Commodity Forecasts
Why inappropriate forecasting Forecasting at the highest level results in a
can hide the true story
loss in detail, particularly seasonality impacts
60,000
50,000 which impacts on port manning and
40,000 equipment resourcing requirements
TEU's
30,000
20,000 Import
10,000 Full
0 2009/Jul 2011/Jan M+1 M+2 M+3
1 2 3 4 5 6 1 19 20 21 22
Commodity 1 15000 12000 9000 6000 3000 0 0411 0411 Wheat 27 104 54 56 57
Commodity 2 16000 20000 24000 28000 32000 36000 0412 0412 Rice 492 324 378 376 374
Commodity 3 19000 19000 19000 19000 19000 19000 0414 0414 Barley 0 0 - - -
Total TEU's 50000 51000 52000 53000 54000 55000
•What if Commodity 1 had previously been moved by rail and what
impact does it have on a ports strategy of attaining a consistent Source Market Intelligence
increase in rail modal share?
•What would be the effect on port road congestion if Commodity 2
was previously being transported in 40 foot containers via a single
truck movement and is now being transported in two 20 foot
containers via two individual truck movements?
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9. Stage 4 - Port Constraint Model Reports
Knowing actual performance by Stevedores versus
their individual constraint points at the quay-side
and landside provides a valuable insight into;
• Individual Stevedore performance,
• Forecasting trend issues by mode,
• Potential key constraints point or identification
of future constraints dates, and
• Empty Container Park requirements,
to name just a few.
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10. Stage 5 – Financial Impact
The aim is to link revenue data associated with overall TEU monthly
forecasts.
By rolling up example charges such;
• Navigation services
• Pilotage
• Container size
you can apply at a high level, an indicative financial revenue factor
Future
Past
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11. Stage 6 & 7 – Benchmarking and Reports
Stage 6 – Develop Port Benchmarking exercises targeting supply chain initiatives with other ports;
• Are S&OP processes in place
• Do regular meetings occur with key commodity stakeholders
• Are vessel size impacts taken up in future strategies
• Is a landside improvement strategy in place
• What frequency do you meet with key logistics organisations
Stage 7 -Publication of a monthly “Dashboard” Supply Chain Management report.
Purpose is to develop a simple but meaningful “traffic light” report that provides a high level
indicative “health measure” of the overall Port supply chain;
For example:
• Commodity forecast accuracy by %
• % of Commodity modal routes mapped
• Modal splits by % versus target
• Operational levels versus capacity for quay side, rail & road
• Other
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12. Desired Outcome
Supply savvy organisations understand the “value-add” an efficient supply chain will
bring to an organisation.
As outlined in this presentation there are significant benefits to government port
organisations applying contemporary supply principles that provide significantly
improved task visibility towards understanding stakeholder interactions and port modal
capacities.
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13. Thank you