Shipping lines could save $10m by cutting 30 minutes off port calls
By Gavin van Marle in Amsterdam
11.28.2012 · Posted in Loadstar posts, Sea Add to favorites
Hapag-Lloyd
Shipping lines could save millions of dollars in fuel costs if time spent in ports was decreased by even the most marginal amounts, claims new analysis from container shipping consultancy SeaIntel.
The company, in conjunction with industry group the Global Institute of Logistics and software provider Cirrus Group, set out to discover what the effects would be on a scheduled liner service if the time it took for a port to berth a vessel was incrementally reduced. The study focused on time savings that could be made through the optimisation of the berthing process, from the point a ship arrives, on time, at its station.
The results are nothing less than startling. By reducing the berthing time of a vessel in and out of ports, an extra lag is created in the liner’s schedule which the shipping line can use to slow down the vessel en route to its next port of call by the equivalent amount of time saved in the previous port.
“If the berthing process is systematically reduced in a given port, this will allow vessel operators to slow their vessels down slightly, and still be able to berth in a timely fashion. Of course, this is only possible if the process improvement is a genuine time saving, and hence the port changes the time set aside for the berthing process,” the paper says.
The study had to make a few assumptions, given that the possible financial savings made by carriers would be derived from subsequent fuel savings made by being able to cut vessel speeds between ports. In this case, it used the fuel consumption data for the 11,400teu CMA CGM Andromeda.
The cost of fuel consumption does not work in a linear fashion – the savings made from reducing a vessel from 18 knots to 17.9 knots are greater than reducing from 14 knots to 13.9 knots. So the savings made by shipping companies on fuel costs depend on the speeds that the ships are able to reduce from. If a port was able to reduce berthing time by two hours, which was then built into a 200-mile trip to the next port, the line would save $2,000 per port call if the vessel was steaming at 14 knots, and nearly $6,000 if it was steaming close to 19 knots.
But when this type of saving is multiplied across a scheduled container liner service, where vessels of identical size would be calling at the same port on a weekly basis and steaming at the same speeds, SeaIntel calculates that a 11,400teu vessel would see annual savings of between $150,000-$300,000, depending on the currently scheduled speeds, at that one port – although there appears to be something of a ceiling on savings, depending on the distances from the previous port in the string.
“We find that savings tangentially reach a maximum level after a certain distance. However, that distance depends on the time saving obtained in the port. Generally we find that more than 90% of the savings are obtained with a port-to-port distance below 500-600 miles,” it said.
Nonetheless, if berthing time reductions can be achieved across a string of ports on a particular service, the savings can be magnified. A typical Asia-Europe service calls at eight to 12 ports. If five of those ports can reduce berthing times by half an hour, the study concluded that almost $10m can be saved annually from reduced fuel consumption on the trade as a whole. If those five ports can reduce berthing times by three hours, the annual savings on the trade would jump to $40m.
The next step was to extrapolate that calculation out to the global liner industry, with the result that if five ports per string were to reduce berthing times by three hours the industry would stand to save $180m by improved optimisation of slow-steaming techniques.
Clearly, the actual savings remain hypothetical – sailing speeds vary according to a variety of factors; fuel consumption depends on the ratio of laden and empty containers; port productivity can vary wildly and so on – but the potential benefits to the liner shipping through even marginally improved, but consistent, berthing efficiencies are huge, and would give ports an important competitive tool.
“A port which improves berthing times by a few hours can easily argue that instead of offering a carrier a reduced handling charge, the carrier is getting the value straight from the bunker fuel savings,” it concluded.
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3 Responses to “Shipping lines could save $10m by cutting 30 minutes off port calls”
- Kevin monteath says:
With the ships getting bigger, and the old system of joint service, this time saving will not be possible at ports. The shipping giants need to address these points of port services in respective countries. Bigger and more containers, and joint service with partners bring in more cargo, hence the port authorities need to understand this and bunker cost. I am sure the pencil can be sharpened to save shipping lines millions of dollars… My views..
- Mike Harrison says:
If you want to save time when berthing, the pilot and master must have confidence in the approach manoeuvre, should know the permitted berthing speeds and angles of the installed fenders, and have the right Portable Piloting Units (PPUs) to see the full picture. The cost is peanuts compared to the savings on more efficient operations. At Inshore Systems we advise clients on reducing risks and cost without compromise.
Perhaps container lines should consider equipping pilots with PPUs as well as reviewing the fenders on the berths they use. Small investments will pay large dividends.
- Ted Daly says:
The real savings comes about by evaluating and determining the best schedule to keep for the entire round trip voyage of the vessel. While I agree pilot time and maneuvering are two critical components of a port stay, many times there is little to no opportunities to save enough time to justify slow steaming unless you have a good amount of pilotage time, considered over 2 hours in duration. Most pilots and vessel captains work hand in hand to get the vessel quickly to the dock, as long as the weather conditions allow for that safe transit. So it is hard to find more time there.
The real savings comes at the dock. Vessel clearance by authorities can take up to 2 hours in some locations. Stevedoring time or the production and the number of gangs put on the vessel upon arrival also is a contributing factor. With ever larger move counts and larger vessels stowage planners need to know each port limitations intimately and make sure the vessel is stowed in the most efficient manner to allow for the most gangs and best productivity, decreasing the total port time. As an example, with a move count is 3,500 and 4 gangs to total port stay would be 35 hours, at 25 GMPH/Gang. With the same move count and production with 6 gangs you can save almost 12 hours of port time. This can be a more realistic and sustainable time savings opportunity than just saving 30 min of pilot time or maneuvering time at a few ports of call. Manage to save this kind of time over 8 to 10 port calls and you can save up to 120 hours per round trip, that is 5 days saved, now that is a significant amount of time and the vessel could then save money by slow steaming. Roll it all together, stevedoring time saved, reduce time in port, better pilot times, slow steaming and you can make a significant impact on the overall cost of operating a vessel.
- Rick Eyerdam says:
Your comment is awaiting moderation.
Great comments. Tideworks Technology among others can improve the loading/off-loading configuration and some scheduling. Ted is right on but he needs to take it to the next step in the logistics chain gang. Are there enough roadworthy chassis, TWIC empowered truck drivers, or space to store containers that must wait days for a move? When does demurrage kick in? Are the gates fast enough – in and out — and what about the highways?
Then there are the train intersection issues. In short fast cranes and agile gangs are essential unless the fill the yard so fast the cargo is bogged by its own time-sensitive volume.
These are some of the issues we are trying to reduce to the least common denominator as part of the stand up of the Caribbean Maritime Exchange.
