Port Performance

Measurement in Practice
Dr. Thomas Vitsounis
University of the Aegean &
Advisor to the Secreatry General of Ports and Port
Planning,
Ministry of Development, Competitiveness and
Shipping

The need to measure ports performance

! Generation of a highly competitive, complex
and dynamic framework
! Port actors in need for efficient adaptation
! Usually endorse new strategic directions

! Port performance is of great importance:

! Monitor how actors adapt to contextual changes
! Monitor whether the strategies they endorse
produce the desired outcomes
! Guides port planning

Demings Wheel

What is measured today? (1/2)

Source: Brooks, 2007

What is measured today? (2/2)

Source: Brooks, 2007

What measures Rotterdam

Source: De Langen et al., 2005

How is ports performance measured today?

! Growing scientific interest on:
! Container port studies
! Ports Performance Measurement (direct/indirect)

! Port Performance Studies:

!
!
!
!

1997-2001: 9 academic papers

2002-2006: 43 academic papers
2007-2008: 22 academic papers
1997-2008: 74 academic papers

! The most popular category

Governance and Performance

Governance model
(input)
Defined by
external
factors

Defined by firm (PA)

governance decisions

Performance
(output)
Internal
Performance

Structure

Internal systems
& processes

Post-reform
Environment

FIT
Strategy

Product- market
Scope
Strategic Plan

Eciency

Eectiveness
External (perceived)
Performance
(e.g. stakeholders
satisfaction)

Source: Brooks and Pallis, 2008

! According to Brooks et al. (2011)

! Port efficiency = Doing Things Right
! Port effectiveness = Doing the Right Things

Port eciency
! Measurement of efficiency directly related
to the measurement of productivity
! A terminal or a port is regarded as efficient
or highly productive:
! if it is able to produce a maximum output for given inputs
or uses minimal inputs for the production of a given level of
output (Notteboom et al., 2000).

Eciency: Not so easy

! Port services are perishables and cannot be store
! Port services are not standard output of complex
procedures with lots of unexpected events
! Even monitoring is not so easy: KPIs and DEA
Analysis

Doing things right: Not so easy

Port Eciency
! Frontier approach: Efficient units operating
on the cost or production frontier
! Data Envelopment Analysis
! Total Factor Productivity
! Stochastic Frontier Models

! Inputs: Labor, infrastructure, capital

! Output: Cargo throughput

! Internally generated data

! Emphasis on efficiency and financial data at practical
level as well

DEA

Performance Indicators
Performance indicators quantify and simplify
information for decision-makers and other
stakeholders to assess how activities and operations
affect the direction and magnitude of change in
terms of social economic, governance and
environmental conditions.

Performance Indicators
!
!
!
!
!

Easily available
Goals that are challenging yet realistic
Easily quantifiable
Strategically relevant
Customer focused

Performance Indicators in ports

! Pis can help to create a transparent performanceled ports industry
! Useful for customers and stakeholders
! Difficult to use PIs to compare the different sectors
and ports
! Communication across the industry
! Indicators to be set by individual ports
! But still a need to benchmark

Benchmarking
!
!
!
!
!

Works well in airport industry

High level of difficulty:
Need for common set of questions
Need for accurate sample of port users
Frequency

KPIs for berth operations

! If the schedule, number and characteristics
of vessels calling at a port would be known
in advance (no uncertainty in demand),
berth planning would not be an issue.
! Unfortunately, ships never arrive at ports
with a complete regularity and the time to
(un)load ships is never constant.
! A survey by Notteboom (2006): in 70-80% of
the cases container vessels record a late
arrival in one of the ports of call along the
East Asia/Europe route.

Time related KPIs

Source: Carriou, 2011

Utilisation KPIs
KPIs - Utilisation rate

Abbreviation

Berth occupancy
(General cargo)

BOR(1)

Berth occupancy
(Containers)

BOR(2)

Labor utilisation rate

LUR

Indicator (Average)

Source: Carriou, 2011

Productivity- Utilization Measures

Most commonly used data easily available
! Quay productivity: Containers or cargo tones /
meter / year
! Terminal Area productivity: Containers or cargo
tones / m2 / year
! Storage Area productivity: Containers or cargo
tones / m2 / year
! Crane utilization: Containers or cargo tones /
year (and Percentage of the nominal output)

Ship output KPIs

! Ship output indicators are derived from
time-related indicators.
! They measure the rate at which cargoes
are handled to /from a vessel in a given
period of time.
!
!
!

Tons per ship per productive hours

Tons per ship per berth hours
Tons per ship per port hours

KPIs for yard operations (liquid)

! The discharging rate is governed by the capacity
of the ships pumps while the charging rate is
governed by the pipeline diameter (mm) from the
port.

KPIs for yard operations (bulk)

! Coal and ore terminal capacity of the berth is
largely determined by the capacity of loading/
unloading equipment (variability).
! from 2 000 to 8 000 tons/hr for loading
! and from 500 to 4 000 tons/hr for unloading

Service Quality Measures

Data usually not publicly available
used by port authorities and operators
!
!
!
!
!
!

Ship turnaround (arrival-departure) time

Ship service (berth-leave berth) time
Ship operation (loading-unloading) time
Truck turnaround (terminal in terminal out) time
Truck service (gate in gate out) time
Percentage of trains leaving at scheduled time

26

Doing the right things

! Not so clear
! Limited information available

Port of RoQerdam
! We conduct an employee satisfaction survey every
two years. In the May 2010 survey a score of 7.7 was
achieved, our initial target for 2010 was a score of
7.3, the score in 2008 was 7.2.
! We carried out a customer satisfaction survey at the
beginning of 2010. The score for general customer
satisfaction levels was 7.2, similar to the 2007 result.
The target for 2009 was a score of 7.4.

Darwin Port
! Overall Satisfaction with services
! Overall satisfaction with communications

The exception
! Cruise Ports!
! Royal Caribbean International
! Best First-Turn award for customer satisfaction

Dover Port

Selection and
Measurement of Port
Performance Indicators

Why?
! Performance Measurement is common in other
industries:

! For ports only limited information is available:

! Tonnes of cargo handled
! Number of passengers

! Measuring the performance of the port industry is

relevant for interaction with policy makers and
other stakeholders. It also can assist port
development initiatives and contribute to the
competitiveness of EU ports.

Objectives
PPRISM aims to identify a key list of
sustainable and feasible indicators to monitor
the overall performance of the EU port system
and assess its impact on the society,
environment and the economy of the EU
! quantification is possible in time series in the long
term
! measurement of the performance on EU level
(not on a port level)
! precisely defined and collected in a coherent
manner for different seaports

The PP Dashboard

Port Performance Dashboard - PPD

(Virtual) Easy-to-read textual or graphical
representation of a limited number of port
performance indicators (PPIs).
Contains summarized data
Enables users to quickly interpret and understand a
snapshot perspective of port sector performance
Will monitor trends of significant indicators
Will generate overall view of port sector
performance

Port Performance Dashboard - PPD

! Delivers summarized key information to large users
communities
! Easily adapted to each PAs needs
! Provides actionable business information
! Clearly linked with the strategy/policy objectives
! Alerts users as to where they are
! In relationship to their objectives

Stakeholder relevance
! For (EU) policy makers: relevant information on the
performance of the EU port system.
! For stakeholders of the port industry: indicators that
respond to stakeholder concerns (e.g.
Environmental performance, safety, employment).
! For the port industry: contribution to quality of port
policies and societal acceptance of port activities.
! For port authorities: Next to the above mentioned
effects, an opportunity to benchmark against EU
average (taking into account port specificity, cf.
typology indicator)

The PPRISM partners

External
Stakeholders

ESPO s
Technical
Committees

Categories of Indicators
1) Market trends and structure
2) Socio-economic impact
3) Environmental performance
4) Logistic chain& operational performance
5) Governance
! Interrelated and
! Produce an overall picture of the European Port
Sector

Inventory and selection process

159 Indicators

Academic partners

39 Indicators

Academic partners and ESPO

45 Indicators

Port authorities, through

ESPO committees (1st phase)

42 Indicators

Port authorities, through

ESPO committees (2nd phase)

10-14
Indicators
Min
Number
of
Indicators

Multi-stakeholder response
panel assessment
FINAL SELECTION

Delphi Methodology
!
!
!
!

2 Rounds
Combination of qualitative and qualitative data
ESPO Technical Committees
ESPO Executive Committee

Output of assessment
5.00

Selection Matrix Market Trends Indicators (Mean)

4.50

Feasibility (Mean)

4.00
MT
VT
S.
HHI
CS
AV
DC
MS
TEUH

3.50
3.00
2.50
2.00
1.50
1.00
1.00

1.50

2.00

2.50

3.00

3.50

Acceptance (Mean)

4.00

4.50

5.00

Top-10 Indicators (1st Assessment)

5.00
Enviromental Management
System
4.80

Maritime Traffic

Acceptance

4.60

Market Share

4.40

Reporting Corporate
Responsibility

4.20

Autonomous Management

4.00

Vessel Traffic
Direct Employment

3.80

Strategic Environmental Aspects

3.60
Concentration Ratio
3.40
3.50

3.70

3.90

4.10

4.30

Feasibility

4.50

4.70

4.90

Availability of Port Community

System

Top-10 Indicators (2nd Assessment)

5.00

Maritime Traffic

4.80

Ex. of Env. Management

Programme

4.60

Ex. of Inventory of singificant

enviromental Aspects
Ex. of Enviromental Policy

Acceptance

4.40

Vessel Size
4.20
Existence of Environmental
Report
4.00

Existence of Objectives and

Targets
Ex. of Inventory of legislation

3.80

Concentration Ratio-HHI

3.60

Market Share
3.40
3.50

3.70

3.90

4.10

4.30

Feasibility

4.50

4.70

4.90

Results
Field of expertise

Member of a local community

adjacent to a port
2%
NGO
3%
Trade union
2%

Other (please
specify)
10%

Port authority
30%

Academics and/or consultants

19%

Terminal operator
7%

Government
6%
Barge transport
1%

Shipper
4%

Shipowner
7%

Technical-nautical services
6%

Rail transport Road transport

1%
2%

N=338

Market Trends & Structure

Concentration Ratio / Herfindhal - Hirschman
Index

3.45

3.57

Call Size

3.65

Average Vessel Size

Market Share

3.71

TEU Throughput per Gross Hectare

3.72

Degree of Containerization

3.88

Modal Split

3.93

3.97

Vessel Traffic

Maritime Traffic
3.10

4.02
3.20

3.30

3.40

3.50

3.60

3.70

Acceptability and feasibility

3.80

3.90

4.00

4.10

Socio-Economic Impact
Financial Health

3.47

3.55

Training per FTE

Direct Gross Value Added per FTE

3.62

3.67

Investments

Indirect Gross Value Added

3.73

Indirect Employment

3.78

Direct Employment

3.93

Direct Gross Value Added

3.20

3.97
3.30

3.40

3.50

3.60

3.70

3.80

3.90

4.00

4.10

Environmental Indicators
Total Water Consumption

3.43

Amounts of Waste Produced

3.59

Reference to ESPO Code of Practice in Port Policy

3.67

Carbon Footprint

3.67

Existence of an Inventory of Legislation

3.78
3.81

Ex. of an Environmental Report

Ex. of an Environmental Management Programme

3.85

Ex. of Environmental Training

3.86

Ex. of Objectives and Targets

3.86

Ex. of an Inventory of Significant Environmental Aspects

3.88

Ex. of an Environmental Monitoring Programme

3.98

Ex. of an Environmental Policy

3.98

3.10

3.20

3.30

3.40

3.50

3.60

3.70

3.80

3.90

4.00

4.10

Logistics & Operational Perf.

Ship Turnaround Time

3.74

Maritime Connectivity

3.75

3.78

On-Time Performance

Mean Time Customs Clearance

3.82

Quality of Port Community Systems

3.83

3.84

Intermodal Connectivity

3.68

3.70

3.72

3.74

3.76

3.78

3.80

3.82

3.84

3.86

Governance Indicators
Port Authority Employee Productivity

3.36

3.46

Integration of Port Cluster

Reporting Corporate Social Responsibility

3.54

3.57

Market Openness

3.62

Port Authority Investment

Autonomous Management

3.67

3.93

Levels of Safety

3.00

3.10

3.20

3.30

3.40

3.50

3.60

3.70

3.80

3.90

4.00

Top-10 Indicators (3rd Assessment)

Ex. of an Inventory of Significant Environmental Aspects

3.88

Degree of Containerization

3.88

Levels of Safety

3.93

Direct Employment

3.93

Modal Split

3.93

Direct Gross Value Added

3.97

Vessel Traffic

3.97

Ex. of an Environmental Monitoring Programme

3.98

Ex. of an Environmental Policy

3.98

Maritime Traffic

4.02
3.80

3.85

3.90

3.95

4.00

4.05

Next steps
! Next steps:
! A pilot, to test data availability and the calculation method
! Recommendations to European Commission on how to
establish a working European port performance
dashboard

Conclusive remark
! Short term:
! Create a culture of performance measurement
! Getting the indicators right (learning process with stakeholders)
! Design the organizational structure behind the dashboard

! Medium to long term:

! Analyse and understand port system performance indicators
linkages with policy, socio-economic and technological
development
! Support tool for decision-making and evaluation in the EU port
industry