Port Management and Logistics

Topic 1: Introduction to port management and logistics

Learning Outcome:
- Define port management and Logistics,
- Tell the history, and importance of port management and logistics.

Basic Concepts:

Port
 derived from the ancient Greek poros (πόρος), which means both “passage”
and “journey,” which in turn became the Latin word portus, and the modern
international port.
 can be defined as a harbour or an area that is able to provide shelter to
numerous boats and vessels (transferring people or cargo), and can also allow
constant or periodic transaction of shipment.
 In layman’s language, a port is a place to facilitate loading as well as unloading
of vessels. Technically speaking it is a convergence point between freight
circulation domains.
 Ports are the inhibitors which begin the social and economic growth of a region
by not only allowing trade but also by serving a hub for social activities.

Port Facility
  means a specific location in a port where passengers or commodities are
transferred between land and water carriers or between two water carriers,
including wharves, piers, sheds, warehouses, yards, and docks. Ocean water
terminals are classified as fixed-port facilities, unimproved port facilities, or bare
beach port facilities. These facilities are further sub classified as general cargo
terminal, container terminal, RO/RO terminal, and combination terminal.
 Fixed port terminals are an improved network of cargo handling facilities
specifically designed for transfer of oceangoing freight, vessel discharge
operations, and port clearance. At these facilities, deep-draft oceangoing
vessels come alongside a pier, ship or quay and discharge cargo directly
onto the apron. Most cargo moves into open or covered in-transit storage
to await terminal clearance. Discharge selected cargo direct to land
transport. Fixed port facilities also have state-of-the-art facilities and
equipment, and are organized to support cargo discharge and port
clearance operations.

 Unimproved port facilities are not designed for cargo discharge. They do
not have the facilities, equipment, and infrastructure characteristic of
fixed-port facilities. Unimproved port facilities have insufficient water
depth and pier length to accommodate oceangoing cargo vessels.
Therefore, use of shallow-draft lighterage is necessary in discharging
oceangoing vessels that are anchored in the stream.

 Bare beach facilities best fit the perceived definition of a LOTS operation.
In a bare beach facility, Army lighterage is discharged across the beach.
There are no facilities, equipment, or infrastructure available equal to
cargo discharge or port clearance operations. Beach terminals require
specifically selected sites where delivery of cargo by lighterage to or
across the beach and into marshaling yards or onto waiting clearance
transportation. There is usage of landing crafts, amphibians, and terminal
units in a beach operation under the command and control of a terminal
battalion.

Port Authority
 The Port Authority of any country is a government or semi-government public
authority which builds, maintains and operates critical transportation and trade
assets at the seaports.
 In short, the seaport authority facilitates the management of people working on
the harbour and maintains or supervise vessel movement. The London Port
Authority was the first port authority. It came into action in the year 1908.
 Port Authority controls, legalizes and manages all the port and marine services,
facilities and activities within the concerned country waters, it also includes
management of vessel traffic, improvisation of navigational safety, and facilitation
of security and environmental management at the port.
Port Terminal Manager

A port terminal manager is one who:

 Is responsible for planning, administering and reviewing the operations on a port
terminal in order to optimize resource use, minimize costs and maintain quality
standards.
 Leads the safe, effective, efficient and profitable production operation of a port
terminal facility by managing all aspects of the terminal to meet customer and
throughput commitments
 Develops and delivers on business plans to meet port terminal commitments
Oversee terminal budget
 Handles coordination with rail carriers on delivery of product (minimize of rail
demurrage)
 Manages vessel tug, barge switching and fleeting operations
 Is responsible for safety and health throughout the terminal, including proper
handling of dangerous goods
 Leads, develops and implements strategic and operational planning for a port
terminal facility

Port Management
 is the process of organizing, monitoring, and controlling the activities of a seaport
in a precarious global industry, in order to accomplish corporate goals, which are
in line with its regional and national interests.
 port management within a typical supply chain is a nexus of sea trade,
multimodal trade, and inland trade.

Logistics
 is the process of planning and executing the efficient transportation and storage
of goods from the point of origin to the point of consumption.

Supply chain
 is defined as the entire process of making and selling commercial goods,
including every stage from the supply of materials and the manufacture of the
goods through to their distribution and sale. Successfully managing supply
chains is essential to any company hoping to compete.

Supply Chain management

 Is the coordination and management (movement) of supply chains of an
organization

Logistics Management
 Is a small portion of the supply chain management which combines the flow of
goods, services, information, and capital right from raw material to its final
consumer.
 It is a process of integration and maintenance (flow and storage of goods) in an
organization.
Ports’ History

The world’s most ancient port known

 Byblos Port is an ancient port in Byblos, Lebanon and is believed by the
Lebanese to be oldest port in the world. Around 3000 BC, Byblos Port was the
most important timber shipping center in the eastern Mediterranean. It was used
by the Phoenicians to ship their local wine, Cedars of Lebanon and other wood to
the Pharaohs of Ancient Egypt to be used in tomb construction and shipbuilding.

“Papyrella”, the Mesolithic oar boat

Extensive archeological evidence verifies that humans built ships since at least the
11th millennium BC: a Mesolithic oar boat that dates back to 11,000 BC; it consisted of
many fascicles of thin cane (“papyruses”) tied together with ropes and was used for
prehistoric fishing and trade, including the trade of obsidian stone (a semiprecious
volcanic stone used as a cutting and piercing tool) in the Aegean sea (Hellenic Maritime
Museum 2013).

A modern timeline of global port development encompasses four key eras and
outlines a set of drivers:

 First, the era of national independence, whose grandeur signified

the beginning of the industrial revolution and faded in the 1960s.
 Second, the era of containerization from the 1960s until the 1980s, a time
when global trade had regained its pre-WWII level through manufacturing and
trading of value-added goods.
  Third, the era of logistics, whose rapid expansion lasted from the 1980s to the
1990s. That era saw an intensive production of high value-added goods, while
more complex production and trade networks and efficiency resulted in the most
profitable ports operations.
- What is an example of a value-added product?
Value added products are raw agricultural products that have been
modified or enhanced to have a higher market value and/or a longer shelf
life. Some examples include fruits made into pies or jams, meats made into
jerky, and tomatoes and peppers made into salsa.

 Fourth, globalization gained momentum in the 1980s and continued throughout

the 1990s, by means of trade and financial growth around the globe. The author
proposes a fifth era in the Post-New Economy era, signifying the aftermath of the
2008 global economic meltdown.

To quote Sir Walter Raleigh (1552–1618), “Whosoever controls sea trade, eventually
controls the world itself.” Four centuries later, his belief becomes more timely than
ever: from the British Empire, to the American dream and the Chinese and Indian rapid
development, the making of a global empire only seems feasible through controlling
maritime trade, seaports, canals, and terminals.

Napoleon Bonaparte, a French military general and statesman, opined that “to know a
nation’s geography is to know its foreign policy.”

When it comes to seaports, it can be inferred that to understand a nation’s

seaports is to perceive its underlying economic fundamentals: to forecast the
commodity markets with unfailing accuracy, one simply need visit a port on a regular or
seasonal basis and observe the ship types and sizes, while assessing the commodities
these ships carry.

To acquire an overall picture of the market cycles, one can observe a port’s short-
term traffic, in conjunction with the port’s long-term strategy. This includes partnerships
with oil majors, terminal operators, shippers, major liner companies, cruise lines, and so
on.

As fundamental logistic and financial portals, a seaport’s efficiency is crucial to

ensure the
 safe,
 secure,
 productive,
 and ecofriendly practices of marine operations.

Regardless of their size, location, and specialization, seaports are principally

designed to provide shelter to oceangoing or inland ships, while effectively managing
numerous dissimilar activities, human force, materials, and financial resources. Port
authorities are in charge of harboring and securing ships, while ensuring smooth
operations throughout ships’ anchorage, pilotage, berthing/unberthing, lightering,
mooring/unmooring, loading/unloading operations, and so on. They oversee canal
transits and channel passages and supervise cargo movement, transferring of wet, dry,
and gaseous cargoes, while handling bulk, containerized, and palletized cargoes.

Global trade is characterized by:

 high-risk,
 cutthroat competition
 and capital intensive activities.

Hence, port authorities find it increasingly difficult to adapt to an everchanging global

landscape and antagonize with global ports in an effort to improve their annual
performance and achieve sustainable import/export levels.

Port executives are in charge of purchasing land and facilities; they allocate and
maintain warehouses as well as indoor and outdoor storage spaces, while recruiting
and training efficient personnel.

While ports’ efficiency is typically measured in terms of:

 time,
 safety,
 and value for money,
the ultimate challenge for modern port managers is the optimum combination and usage
of their factors of production, in order to serve the global supply chain. After all, the
demand for seaports derives from the demand for commodities and seaborne trade.

The significance of ports

 was highlighted between the fifteenth and eighteenth centuries, when the
economic doctrine of Mercantilism emerged in the Western Hemisphere. The
theory advocated that a positive balance of trade and government control of
foreign trade had to be achieved in order to safeguard the nation’s sovereignty
and military security.
 Ports are vital transportation hubs that provide facilities for the movement of
goods from local markets to worldwide markets. Ports are considered vital for
supporting the economic life of any country. Ports do not only serve the purpose
of cargo handling but also bring about local economic well-being.

The significance of port management

 The management of ports plays a significant role in the management and control
of transportation cost, total delivery time from the source to the final destination
and its variability, cargo security, and reliability of the logistics company, and
eventually its throughput.
 A port management analysis involves an understanding of the port conditions,
including intra-port distribution, and routes and hinterland connections outside
the port.

The significance of logistics management

 Improves efficiency
 Creating visibility into a company’s supply chain can further improve
production efficiency. Business management can utilise the analysed data
and tracked movements of goods in and out of a business from a
transportation management system for process optimisation and avoiding
potential disruptions.
 Ensures seamless delivery
 Logistics management is key in successfully delivering your products at the
right place on time. Additionally, professionally organised logistics help
ensure fast and safe shipping, warehousing and delivery of products to
customers by choosing an experienced team of professionals.

 Key to a successful supply chain

 Logistics is an important element of a successful supply chain that helps
increase the sales and profits of businesses that deal with the production,
shipment, warehousing and delivery of products. Moreover, a reliable logistics
 service can boost a business' value and help in maintaining a positive public
image.

 Provides quality customer satisfaction

 Satisfied customers are vital and help define a business' true success. Good
logistics management creates reliable strategies that help provide superior
services to meet customer demand. Additionally, a business would be able to
get repeat orders through the creation of goodwill for the supplier every time a
better and/or timely delivery is met.

References:

1. Port Management and Operations by Maria G. Burns

2. Supply Chain Magazine- https://supplychaindigital.com/supply-chain-2/what-supply-
chain-definitive-guide
3. AG Careers- https://www.agcareers.com/home-skin/creative/assets/logos/logo.png