THE EVOLUTION OF the Global Institute of Logistics
The Evolution of CHAINPORT can be traced back to the establishment of the Global Institute of Logistics in 2003.

CHAINPORT has its genesis in the Institute’s strategic decision 10 years ago to focus on maritime logistics and more particularly the container supply chain as our core research area.This was followed  by our decision in 2008 to champion the role of the Port Authority in the supply chain. It is our considered opinion and indeed that of a growing number of thought leaders, that the  Port under the direction of the Port Authority can add significant extra value to the global supply chain.

CHAINPORT goes further by bringing together a group of ports from around the world with shared vision and values to create a singular standardized port system fit for purpose in this era of globalization. Over the next number of pages I would like to take the reader on a journey which maps the evolution of CHAINPORT, the material is made up of extracts from our White Paper “The Evolution of CHAINPORT”.

EXECUTIVE SUMMARY

At first glance a port seems to be almost exclusively driven by the vessels which call and the terminal operators who discharge and load them and it’s easy to see why this is the case when most of our attention is constantly drawn to the brands which control these two aspects of port life, attention which is garnered through brand reinforcement through the media either through news or advertising, both of which feed off each other.

Port operation is far more complex and deserves to be better understood especially by cargo owners and port authorities, as much of the inefficiency’s in port is due to a myriad of other factors outside the control of both shipping line and terminal operator, much in the same way that the smooth running of an airport depends on much more than planes and ground handling.

To any impartial observer the port as a functional node in the chain presents the most complicated set of obstacles to be dealt with by import and export containers, the simple truth is that the junction box which is the port is made up of a diverse set of companies and organizations each with their own particular agendas, agendas not always necessarily driven by saving time or reducing cost.

Institutional Environment

Ports are quite literally a “law unto themselves” and indeed many Port Authorities come equipped with their own police force, a testament to the fact that a port is a border and represents an entrance or exit point to a sovereign territory. Against this backdrop its understandable how national and indeed international and global security will always take priority over supply chains and their timeliness.

Indeed the much vaunted 100% screening of all containers destined for the USA is still the stated objective of the Department of Homeland Security, some 11 years after it was first recommended in the wake of 9/11.

And of course Ports are excise collection points and are very much monitored and driven by members of the host governments tax collection agencies, again a group who’s priority is not necessarily the supply chain, but rather that imported goods be properly licensed, coded and their excise paid before making their way to the open market.

And the list goes on, you can add everything from veterinary inspection to health and safety for good measure and these are just the bureaucratic hoops that a container has to jump through, the more obvious obstacles are concerned with the physical movement of the boxes which even when efficiently discharged from a vessel (which has a 50% chance of being on schedule to begin with) are a long way from their point of consumption when neatly stacked in the container yard.

The Physical Process

Whether it’s to a smaller vessel, barge or feeder service, the railhead, on or off dock or simply to a chassis there is much more work to be done before the port can truly say that it has done its job. Logistics is an experience that cargo has en route from the point of production to consumption much like a holiday is an experience that a tourist has from leaving to returning home. Holiday makers will admit that it only takes one bad experience over the course of the trip to ruin the whole experience, the same is true for cargo, it only takes one bad experience over the course of its journey to ruin the experience. Holiday makers are comfortable navigating the ins and outs of transferring themselves to their local airport, they are a little less comfortable in the airport, generally speaking the flight throws up very few challenges, the real hard work begins when the flight touches down in the host country.

Now their familiarity with airports only has a small influence on their experience, they are now at the mercy of the eco system in to which they have entered, from here on in, it is the service and the efficiency of its delivery which will make or break the holiday experience. The airport is not their final destination it’s merely a junction through which they must pass to get where they want to go, however the way in which it operates and how it connects to the final destination is of paramount importance to the holiday experience. The same holds true for containers. MORE

2004-2006 RESEARCH PROGRAM

1: FOLLOW THE SHIPPER

To see how the most adaptive companies coped with the challenges of global trade, we conducted our first research project “Follow the shipper” in Shenzhen, southern China between 2004 and 2006. We focused on how the US Beneficial Cargo Owners (BCO’s) from the consumer goods and retail sectors were coping with this region’s particular logistical challenges.
Acting as a bridge between the worlds of academia and business, we set up research parameters using both hypotheses from the academic community and the real experience of innovators and early adopters.
Our research focused on Consumer Products from the Chinese Market and specifically focused on the Trans Pacific Trade Lane and the Containerized Shipping Mode of Transport. We looked at ports at both sides of the Pacific Ocean as well as the internal Chinese logistics market.
The Institute’s first research project “Follow the Shipper” proved that the seaport was the key to making logistics global and would become increasingly relied upon to drive global trade. Joined-up thinking between all stakeholders in the container supply chain can lead to significant operational improvement. Ports and terminals can gain significant competitive advantage by engaging directly with the cargo owner.
Our findings led to the formation of the Institute’s Global Maritime Logistics Council in 2005. The network and experience gained in convening focus groups as part of our research was used as the building block for the council.

2: THE ROLE OF THE CONTAINER TERMINAL IN GLOBAL LOGISTICS

The research was collected from a series of industry dinners, public presentations at a number of key global conferences and over 100 face-to-face interviews and deep dives with key industry executives across the globe from October 2006 to April 2007.
As part of this we developed the Container Terminal Quality Indicator (CTQI) which measures of the effectiveness of Container Terminal Operations and provides a quality indicator score from a checklist of 80 factors.
It also allowed us to describe a Port Centric logistics model which enjoys the benefits of situating warehouses near ports to reduce the time spent trucking cargo between holding areas and in turn reducing fuel and labour costs.
The research also shed on light on the problems faced by 3rd party logistic companies and Beneficial Cargo Owners in determining the status of their containers moving through ports and the costs that could be reduced by better communication and visibility in this regard.
Formed under the umbrella of the Institute’s Global Maritime Logistics Council, the Hamburg Committee was established in 2006 to act as the advisory group to the development of the CTQI.