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The Decisive Episode 8: Container Port Performance Index

 

Kristen Hallam

Welcome to the latest episode of the Decisive Podcast. I'm your host, Kristen Hallam, Lead Content Strategist for Global Intelligence and Analytics. Today, Turloch Mooney is joining us to discuss the Container Port Performance Index. Turloch is Head of our Port Intelligence and Analytics business. Welcome back to the podcast, Turloch.

Turloch Mooney

Thank you, Kristen. It's nice to be back.

Kristen Hallam

Right. Well, Turloch, let's start by defining port performance. What does that mean? Is it a single metric? Or is it a collection of metrics?

Turloch Mooney

Yes. So port performance is a container port and terminal benchmarking system that essentially enables comparison of container port and terminal performance across a range of different metrics constructed from standardized data. Many of the metrics we track in port performance are in the form of a period of time cross referenced with a specific workload achieved in that time, which could be, for example, a quantity of container moves or a specific segment of the port called process.

Some of the metrics we track are offshore waiting time, berth productivity, crane productivity, throughput, container dwell time. We also break the port call into segments, which we can measure and then compare across assets. You have arrival process, which would include any offshore waiting time prior to the cargo exchange, the start-up process, which is the time from when a ship arrives at berth until the first container lift takes place, the cargo operations themselves and the finish process from last container move until the ship departs the berth.

We also track throughput on a monthly basis. And on the land side, we track container dwell times, which would be the amount of time a container is in the terminal after offloading from the ship until gate out for imports and vice versa for exports. And then ship to ship within the same port for transshipment. This is useful, of course, for assessing yard congestion, efficiency of processes in the yard, customs efficiency and so on.

Kristen Hallam

All right. Thanks for that overview, Turloch. It was bringing back to me some memories of my recent holiday, which we were discussing a moment ago before we started recording, pulling into ports, although it was a cruise ship with only passengers, no cargo. Now can you tell us what the container port performance index is? What does it measure and how is it put together?

Turloch Mooney

Sure. So the CPPI or Container Port Performance Index is a databased index that ranks global container ports by efficiency. It's based entirely on empirical data, the port performance data. And the latest index was released in June, and it ranks 405 global ports by efficiency.

The CPPI metric is port hours or ship turnaround time, which is the time from when a ship arrives at port limits until departure from the berth after completion of cargo operations. Port hours are cross referenced with quantities of containers moved, so it effectively measures and compares the time required to complete particular workloads.

The objective of the CPPI and the underlying data is to identify gaps in performance and opportunities for improvement. This is important because, as we know, ports are critical nodes in supply chains and improving their efficiency has multiple benefits for stakeholders in the global trading system and supply chains from shipping lines to manufacturers of products to governments, ports and terminals themselves, of course, and ultimately, consumers.

Kristen Hallam

You said the latest version of the index came out in June. What are the main differences between that latest index and the previous index, Turloch?

Turloch Mooney

So the latest index is our third full index. And since the challenges experienced by the global port sector as a result of the pandemic eased in 2023, this would be the first full index without a significant impact from the pandemic. There are 57 new entrants in CPPI 2023 compared with the previous year. And we also had quite a few movers in the ranking since 2022.

The new index is based on our biggest ever data set. Data was captured for more than 180,000 ship calls globally and roughly 380 million TEU or containers, which enabled us to rank 405 ports across all world regions.

Kristen Hallam

Wow, 405 ports, that's a lot. Can you give us the high-level takeaways from the latest index?

Turloch Mooney

Sure. The latest index shows that global container ports enjoyed improved operational performance in 2023. And we're generally on a path of recovery following the congestion and supply chain disruption of the pandemic years. We did, of course, have continuing or new disruptions in the form of the war in Ukraine, for example, the attacks on shipping in the Lower Red Sea and Gulf of Aden and draft restrictions on the Panama Canal, which impacted the global container shipping network and ports in the index to greater or lesser extents.

The new index shows that ports in East and Southeast Asia continued to excel with ports from those 2 regions accounting for 13 of the top 20 places. Middle East ports also did quite well, although as a group slipped a bit in the rankings compared with the previous year.

Kristen Hallam

Well, 13 of the top 20 from East and Southeast Asia. That's really interesting. What are the main factors that influenced port performance in 2023?

Turloch Mooney

Good question. Factors that can influence the amount of time ships need to spend in port can either be location-specific and therefore, somewhat at least under the port's control or external and beyond the control of the port. In terms of the latter, for example, the disruption to container shipping traffic in the Lower Red Sea and Gulf of Aden certainly would have had some impact as well as things like the draft restrictions on the Panama Canal.

Some factors that would be under the control of the port would be the quality of port services, the quality of the physical infrastructure, technologies employed and processes in areas such as gate planning and execution, berth and yard planning, equipment deployment, labor planning and management and improving interactions with third parties around the port, such as customers and government agencies as well.

Kristen Hallam

Thanks for that. Now you did mention that we saw some movement in the rankings in 2023. Did we see a lot of movement? And I think it's time for the big reveal and what the top-ranked ports are.

Turloch Mooney

Sure. We did see quite some movement in the rankings in 2023. In part because there was no longer a significant impact from the pandemic. From a regional perspective, the location of the top performers did stay fairly consistent, particularly in terms of the very good performance of ports in East and Southeast Asia and as well in the Middle East to an extent, although as mentioned, we did see some slippage in the rankings there.

The top ranked ports this year were the Port of Yangshan in Shanghai, China in first place, followed by the Port of Salalah in Oman in second, both of which retained their ranking from the CPPI 2022. Third place is occupied by the Port of Cartagena in Colombia, while Tangier Med in Morocco came in fourth and Tanjung Pelepas in Malaysia came in fifth place.

Kristen Hallam

Right. Maybe I should have given you a drum roll there before you did the top 5. So Turloch, maybe you could tell us more about who uses the index and how they use it.

Turloch Mooney

Sure. The main aim of the index is to identify areas for enhancement. And this is for the benefit of stakeholders in the global trading system and supply chains such as, for example, port authorities, terminal operators, shipping lines, various government agencies and so on.

If you take, for example, a port authority, with the index, they can identify the competitive position of their port regionally or even globally. And together with the underlying data, they can identify where there might be gaps in efficiency and therefore, opportunities for improvement, and then they can start to take corrective action.

They can then track the impact of that action with the data to improve ship turnaround times and cargo velocity on a continuous basis, improve customer service and do things like evaluate infrastructure and technology needs that might support efficiency improvements. A terminal operator then may use the index and the data to gain a better understanding of the operational situation at ports and terminals in a particular developing country or region where they may be looking to expand footprint and start a development, for example.

Shipping lines can use it to track the time their ships spend in port. And then work with terminals to reduce that time which creates opportunities to optimize speed on ocean crossings in order to reduce fuel burn and reduce emissions.

Kristen Hallam

Lots of use cases there. Thanks for walking us through that. Now as you mentioned, the index has been out for over a month as of the time we're sitting here recording this. What impact have you seen from the release of the index? Or what impact might we expect to see?

Turloch Mooney

Yes, that's right. It's out for over a month, Kristen, and it's the third full index that we've done. It's become very high profile. It generates a lot of interest globally. We definitely see a greater awareness and focus on resilience and efficiency of ports. And also a greater understanding of the negative impact of port delays on economic development.

Countries that develop high-quality container port infrastructure that operates efficiently can achieve higher levels of growth than those that do not. Efficient ports facilitate investment in production and distribution systems, expansion of manufacturing and logistics, they create employment opportunities and generally raise income levels.

Conversely, inefficient ports cause shipment delays, supply chain disruption, reduced competitiveness, lower levels of growth and higher emissions. So the index brings these issues very much into the public domain. It drives a lot of discussion around them and puts more focus on the critical areas of port efficiency and the various measures that can be taken to improve it.

And given current agendas like the drive for industry decarbonization, poverty reduction and the increasing awareness of the economic, social and even geopolitical importance of ports, I would certainly expect this to continue.

Kristen Hallam

All right. Thank you so much, Turloch, for taking the time to share your insights with us on the Container Port Performance Index. That wraps up this episode of the Decisive Podcast. Until next time.