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Barriers Toppling Supply Chain Optimization via San Pedro Bay In February 2015, the FMC approved an amendment to the ports of Long Beach and Los Angeles' cooperation agreement that allows the neighboring ports to discuss new efficiencies and other improvements to enhance their business competitiveness, environmental sustainability and security. "That put us on the path of a joint port supply chain optimization exercise," said Michael Christensen, senior executive of the Port of Long Beach's resulting Supply Chain Optimization (SCO) group. Seeking new efficiencies, the ports created working groups focusing, at first, on peak operations and terminal optimization to strengthen the competitiveness of the San Pedro Bay port complex and its economic benefits to the region. Working group participants are drawn from shipping lines, cargo owners, labor, railroads, trucking interests, equipment owners and other groups. In a presentation before a Senate Subcommittee in July 2015, Christensen said, "Larger ships, coupled with a new level of vessel-sharing dynamics created by the carrier alliances, have created congestion issues at most ports because the existing container terminals and operating practices are simply not geared to handle the discharge of containers from these vessels." According to Christensen, "Supply Chain Optimization is an effort to find and implement ways to make the supply chain run more efficiently, maximizing velocity and reliability of goods movement through the San Pedro Bay gateway." He said the industry - accustomed to working in "silos" with minimal communication and information sharing - has responded enthusiastically and cooperatively. The SCO umbrella includes terminal efficiency strategies (advanced terminal operations systems and software, modernized terminal infrastructure and equipment, "peel-off" operations and on-dock rail optimization). It includes drayage trucking improvements (an interoperable chassis "pool of pools" and state-of-the-art traffic information systems). And it has begun a dialogue about improvements in on-dock and near-dock rail operations, including short-haul rail, as a means of improving cargo velocity. New technology and data are expected to drive SCO change. "We have been engaged for one year and two months, and have had about 50 working group sessions," said Christensen. The SCO has focused on cleaner, more efficient, safer transportation, with operational goals for truck turn times, terminal dwell times, ship unloading performance and other key indicators. It is currently developing target metrics, but according to Christensen, isn't at the stage where it can point out concrete improvements: "It is a very complex system. Measurable metrics-driven improvement data is scarce." That is, in part, because some of the data is captured by individual, private companies. The SCO does have plenty of anecdotal evidence for enhanced performance. For example, "There has been an uptick in the use of peel piles across the gateway," according to Christensen. Peel piles are essentially a grouping of containers by destination, cargo owner or distribution center (DC). The premise is that if there are perhaps 50 containers destined for the same DC, they can be offloaded, grouped and then any of the 50 trucks arriving for pick up can take any of the containers, thus avoiding the normal hunt and peck. Christensen said that there has been great progress. For example, the level of dialogue between terminal operators and motor carriers has been dialed up, and there is a new sense of urgency in implementing optimal terminal appointment systems. "They have even facilitated a test on advance notification - assigning a time slot for pick up prior to vessel arrival. These successes come largely from the working groups of stakeholders pushing hard," according to Christensen. 30 AAPA SEAPORTS MAGAZINE Like ocean carriers, U.S. port alliances that wish to delve deeper than general promotion typically require anti-trust approval from the FMC. Each country faces a different regulatory and legislative environment, but in the U.S., recent alliance approvals confirm the FMC's predisposition to encourage port cooperation. The U.S. Shipping Act allows cooperation, and Cordero said that the FMC encourages work that helps to improve the efficiency of U.S. ports and supply chains. "It is imperative that the ports are at the table to successfully address the issues," said Cordero. The issue of productivity is a chief concern because, according to Cordero, "In 2015, 31.5 million loaded containers moved though our nation's gateways. The forecast at end of the next decade, if you use a practical 5 percent growth estimate, would double the amount of loaded containers to 60 million." He said fluidity of cargo movement is becoming paramount, especially moving trucks in and out of port gates. "We have a major problem in this country addressing gate turn times," said Cordero. In his opinion, the model port for gate efficiency is Port Metro Vancouver, but, "It is my hope that at one point we can cite a U.S. port as the model." He added, "You can have the most state-of-the-art terminal, in terms of container moves - some reference automated "The good news, from the perspective of the port authorities, is that today, landlords are far more active than a few years back. You are seeing them roll up their sleeves and address operational issues and efficiencies, in collaboration with the private terminal operators." -Mario Cordero, Federal Maritime Commission

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 - cover1
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Seaports Magazine - Fall 2016 - 4
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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
Seaports Magazine - Fall 2016 - 12
Seaports Magazine - Fall 2016 - 13
Seaports Magazine - Fall 2016 - 14
Seaports Magazine - Fall 2016 - 15
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 - 36
Seaports Magazine - Fall 2016 - 37
Seaports Magazine - Fall 2016 - Thinking Outside the Box: Productivity at Non-Container Ports
Seaports Magazine - Fall 2016 - 39
Seaports Magazine - Fall 2016 - 40
Seaports Magazine - Fall 2016 - 41
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Seaports Magazine - Fall 2016 - 43
Seaports Magazine - Fall 2016 - Latin America’s Proactive Approach
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Seaports Magazine - Fall 2016 - 48
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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 - 55
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
Seaports Magazine - Fall 2016 - 64
Seaports Magazine - Fall 2016 - 65
Seaports Magazine - Fall 2016 - Index of Advertisers
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