IMROVING PERFORMANCE

IN PORT AUTHORITIES

WAFI DAWOOD JAFFAR

Dubai Ports Authority, UAE

Gordon Berry
Ian Ridley
University of Sunderland, UK

Integrating for Excellence Conference

16 June 2005
Sheffield, UK
 Contents
Overview of ports

Port Performance Research

The Strategic Approach

Overview of Ports
 Major reference books on ports list
around 3500 to 4000 ports worldwide

Any ports story begins when the two

way exchange between land and water
transport is performed at a place

Generally, Ports are places with

facilities for shipping lines where
equipment are available to transfer
goods from and to the ship
 Role of Ports
Traditionally, ports were:
sources of employment,
attractors of industries,
places of lower prices,
communications nodes
and centres of militant activity

Traditional ports began to decline in the United

States during the 1950s and throughout the
rest of the world during the 1960s and 1970s
 Role of ports in todays
global market
Essential links in the transportation chain

The gateway that enables trade as 90% of

world trade is carried by vessels

Major economic multiplier as they attract

other industrial activities (banks, hotels
agencies,)
 Change in Demand Competition
Trade patterns

Inland Water depth

transport (ship size,
Dredging)
Port
development

Environmental Cargo handling

pressures technology

Different ownership Port Labour

(different goals: Management
Region, country, (unions)
City, private)
 Main types of cargoes
handled in ports
Dry bulk,
Liquid bulk,
Containerised cargo
Non-containerised non-bulk cargo

Each of these types require a certain type

of ships and certain cargo-handling
equipment, thus certain type of ports
 The pressure to redesign the
method of cargo handling came
after World War II

Costs while in ports had risen to over

40% of all costs for shippers
Labour frequent strikes
Damages were causing losses of up to
24% of cargo
 Containerisation offered
solutions to all these problems

Containerisation is simply the loading of

cargo into uniform-sized package, whose
dimensions are generally 8 feet wide, 8
feet tall, and either 20, 30, or 40 feet
long
The first use of containers was
in 1956 as a shipment of 58
boxes between New York and
Houston. This shipment was
organized by Malcolm McLean of
the McLean Trucking Company,
which later became Sea-Land
Service
Due to the multiplicity of port
functions and various cargoes handled
in ports, this paper will examine
container ports only

Container Ports can be defined as

places with facilities for shipping lines
where equipment are available to handle
container flow from vessels to rail or
road, and vice versa.
 Growth in Container Business
200

180

160

140

120

100

80

60

40

20

0
1985 1990 1991 1992 1993 1994 1995 1996 1997 1998

M i l l i o n T EU s

Million TEUs Nort h & West Europe Medit err anean Middle East Indian Sub-Cont inent
Nor t h- East Asia China Port Region Sout h-East Asia Nort h Amer ica Cent r al Amer ica & caribbean
Sout h America Aust r alasia Af rica
 Problems associated with
container business
large investment
increase in size and complexity of
ships
need for a comprehensive information
system and greater efficiency
A significantly smaller but better
trained workforce
Port Performance
Research
 The need for Port
Performance Approach

Global Market
Increase Competition
Different Parties involved in port
development
 Port Performance Improvement

An important issue facing policy makers

in container ports

Earlier studies suggested a model for

port performance management (Jaffar
and Berry 2004, and tested the model
using time series analysis (Jaffar et al
2005)
The model consisted of TEU as
a performance measure

5 main predictor variables

(criteria)

29 performance enablers (sub

criteria)
 Leadership commitment to
excellence
The government working as a facilitator to
privatise the port
Adoption of modern management concepts
Customer satisfaction
Port charges
Quality of personnel
Motivation of staff
 Modern technology
The use of latest port equipment
IS department to handle customers
requirements
Communication technology
Use of modern software in various port
operation
Integration to Custom IT
Use of security technology
 The efficiency of the
terminal
Crane productivity
Technical productivity
Yard equipment productivity
Gate productivity
Equipment utilisation
No. of berths
 Port size
Geographical position
Port capacity
Spare capacity
Level of congestion
The ability to handle Mega ships
Master plan
 Port hinterland
Level of economic activity
Accessibility to modern roadwork
system
Access to wide range of markets
Feeder services
Transshipment traffic
Freezone
 Model Testing
The time series Analysis and the
multiple regression suggested that
the most sensitive enablers in the
model are:
1. The government working as a
facilitator to privatise the port.
2. Port capacity
3. Crane productivity
 The aim of this paper is to
develop a strategic approach
that can assist policymakers in
container ports to manage and
improve performance
 Originality of the
Research
Fundamentally, this research makes a contribution to the
knowledge by adopting a strategic approach for managing
performance in container ports.

Earlier studies investigated the performance of ports at

a defined year.
This study investigates the performance change over
five years

There is lack of academic materials using ports in the

Middle East
This study has used 3 ports from the Middle East
within its sample
 Methodology
Research sample was container ports: 12
ports world wide (purposive sampling)

Data collected using interviews and

questionnaires with the port managers

Data analysis approach included grounded

theory, multiple regression and time
series analysis
The Strategic
Approach
 Major port
operator to
provide Improved
value Performance
added
activities

Major Port Operator Port Capacity Crane

to prepare / improve Productivity Use of
/ modify the Technology People
following according to Security
the overall objective

Port
Strategic
Alliance

Government
Commitment
to support
the port
 Phase I: Government commitment
to support the port

macroeconomic level: improve external

trade by reducing transport costs

microeconomic level: develop alliances

with port operators
 Phase II: Strategic Alliances with
major port operator
Port authorities cannot compete with the efficiencies
and capital offered by port operators

major port operators are controlling 58% of the world

container market

Ports a not wishing to have an alliance, might loose their

business trying to compete with major port operators

Governments should decide on the best approach of the

strategic alliance depending on the countrys
economical, political and social environment
Phase III: The port operator to
prepare/improve/modify the
following enablers according to
the overall objective:

9 Port capacity
9 Crane productivity
9 Use of Technology
9 People
9 Security
 Port Capacity
Diffrent definitions in the literature

The research considers the quayline in meters

(berth availability is more critical comparing with the
yard space)

9 Utilising the current capacity

9 Expansion plans
 Capacity should be extended
promotionally to the predicted
growth

Increasing capacity of container

terminals in Europe has more
obstacles when comparing with the
Middle East because of the pressure
from environmental groups
 Crane Productivity
Measured by Moves/hr

The increased vessel size has affected the

cranes design

Container terminal management has to plan

that the future containerships will require
increasingly larger container cranes.
 Use of Technology
Using different computerised packages to
support the terminal operations

Use of ERP (Enterprise Recourses Planning),

a system that covers all the port business
including communication, operation,
maintenance, marketing and finance, by
integrating the management resources as a
whole through business process
reengineering.
 People
Recognised as a vital element in management models

A detailed study to evaluate the people productivity:

number of employees, average age of total labour
force, average hours worked per week and idle time
percentage

Develop the local people using the supervision of its

expert professionals. They could also be trained in
major terminals worldwide to enhance their abilities
and skills in managing container terminals.
 Security
The precautions implemented against terrorist, theft,
sabotage, stowaways, illegal immigrants and
smugglings. A particular aspect that is a major
concern currently is the measures against terrorism.

the ISPS (International ship & port security code),

which is a mandatory regulation by IMO

Risk Assessment to evaluate the port security

measures
 Value Added Activities
9 Freezone
9 Pre-trip inspection
9 E services
9 Break-bulking
9 Packing / Re-packing
9 Packaging / Re-packaging
9 Sorting / Grading
9 Labelling / Re-labelling
9 Repair of goods in storage or transit
Thank You

Questions?

wafi.dawood@dpa.ae