Seaports Magazine - Fall 2016 - 62

» GUEST VIEWPOINT Optimizing Systems for Profitability Interview with Kerry Simpson, P.E., Moffatt & Nichol N ow more than ever, efficiency is the hallmark of profitability for today's container terminal and the modern port. Finding the perfect balance in optimizing all of the systems in a container terminal is a complex enterprise, and there is no one-size-fits-all solution to achieve the level of optimization that supports profitability. Here, Kerry Simpson, P.E., of Moffatt & Nichol answers some tough questions about how to be more efficient and profitable, all while continually adapting to change, technology and congestion. Q. What factors should ports consider when trying to improve their profitability? Ultimately, container terminals are about facilitating the movement of goods from one place to another. To identify infrastructure and system improvements that will improve efficiency and profitability, three critical variables must be considered. First, it is essential to first consider both local and regional transportation networks that serve the hinterlands. Next, waterways that serve the terminal must be considered: Are the channels deep enough and the turning basin wide enough to serve the expected design vessels? Finally, the terminal itself must be evaluated within the context of the port as a whole, including the current terminal configuration, available facilities, and existing infrastructure. An analysis of these interrelated variables and their operations will help identify system bottlenecks and reveal opportunities to optimize all systems portwide. Then, as bottlenecks are eliminated and all systems are working at optimal capacity, the facility becomes profitable. 62 AAPA SEAPORTS MAGAZINE Q. What are the main concerns a larger port might have, when it comes to incorporating automation? Automation is considered state-of-theart, and it may be tempting to go in that direction. However, automation for the sake of automation without having a well-defined business case for such a costly long-term investment is not prudent. Automating a terminal demands a compelling reason: Will automation be cost effective, improve efficiency and provide an environmental benefit? Is there sufficient infrastructure and power to support an automated terminal? Will the project create a regional economic benefit? Of profound concern is that, once committed, an automated terminal must be done right the first time - it is fixed for the life of the project. Q. Which terminal upgrades bring the best ROI to a port? Like profitability, return on a particular investment is unique to a given port and ROI depends on many factors, including making a thorough analysis of bottlenecks. The business case is different for every port and deciding where to invest depends on where operational bottlenecks are found: On the waterside, does it make sense to strengthen a wharf for heavier cranes that service larger vessels? If the bottleneck is in the yard, is densification the solution, or would greater capacity be found in reducing the dwell time? In other cases, improvements to rail or gate infrastructure may resolve a bottleneck. Q. If you had one tip on making a port more productive, what would that be? Making a decision as to the best solution for making a port more productive depends entirely on specific systemwide conditions, and optimal productivity is contingent on optimized systems. In some cases, the impacted system may be the in-port or local roadway network, or the intermodal yard may lack capacity or be inefficient. Ultimately, however, berth productivity is the key to optimizing productivity. After all, the main client is the vessel carrying the cargo, and, beginning with the berth, aligning the downstream systems optimizes productivity. Q. What is one of the simpler changes ports can make to ease congestion? Introducing system changes may be the simplest approach to ease congestion and improve productivity. At the Los Angeles and Long Beach San Pedro Bay port complex, terminal operators introduced the PierPass program and a related terminal appointment system as market-based solutions to address localized congestion resulting from rapidly rising cargo volume in the early 2000s. Trucks delivering and receiving cargo during peak operating hours from 3 a.m. to 6 p.m. pay a premium, while those coming and going during off-peak and weekend hours enjoy a benefit. Other than administration, the PierPass program has no associated costs and is funded by the peak hour traffic mitigation. A relatively new alternate strategy is the "virtual empty depot" that works with today's port information technology to help shippers and packing companies track available empty cargo containers before they leave a distribution center and return to the terminal. What this means is that if an empty box is sitting at Walmart's distribution center and exporter "X" needs

Table of Contents for the Digital Edition of Seaports Magazine - Fall 2016

AAPA Headquarters
From the President’s Desk
Seaports Congestion and Cargo Movements
The Future of Automation
Port Cooperation: In the Name of Productivity
Strategy at Seaports Is Key to Handling Capacity Challenges
Thinking Outside the Box: Productivity at Non-Container Ports
Latin America’s Proactive Approach
Cruise Port Productivity — Upgrading Infrastructure for a Growing Industry
Modernizing America’s Ports for the Next Generation
Thank You, Helen Delich Bentley
Working Together for Seamless Experiences
Optimizing Systems for Profitability
New Orleans Marketplace
Index of Advertisers
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Seaports Magazine - Fall 2016 - AAPA Headquarters
Seaports Magazine - Fall 2016 - 7
Seaports Magazine - Fall 2016 - From the President’s Desk
Seaports Magazine - Fall 2016 - 9
Seaports Magazine - Fall 2016 - Seaports Congestion and Cargo Movements
Seaports Magazine - Fall 2016 - 11
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Seaports Magazine - Fall 2016 - The Future of Automation
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Seaports Magazine - Fall 2016 - Port Cooperation: In the Name of Productivity
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Seaports Magazine - Fall 2016 - Strategy at Seaports Is Key to Handling Capacity Challenges
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Seaports Magazine - Fall 2016 - 37
Seaports Magazine - Fall 2016 - Thinking Outside the Box: Productivity at Non-Container Ports
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Seaports Magazine - Fall 2016 - Latin America’s Proactive Approach
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Seaports Magazine - Fall 2016 - Cruise Port Productivity — Upgrading Infrastructure for a Growing Industry
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Seaports Magazine - Fall 2016 - Modernizing America’s Ports for the Next Generation
Seaports Magazine - Fall 2016 - 57
Seaports Magazine - Fall 2016 - Thank You, Helen Delich Bentley
Seaports Magazine - Fall 2016 - 59
Seaports Magazine - Fall 2016 - Working Together for Seamless Experiences
Seaports Magazine - Fall 2016 - 61
Seaports Magazine - Fall 2016 - Optimizing Systems for Profitability
Seaports Magazine - Fall 2016 - New Orleans Marketplace
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Seaports Magazine - Fall 2016 - 65
Seaports Magazine - Fall 2016 - Index of Advertisers
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