The port performance measurement

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Why this paper was chosen?

With the constant growth of trade between countries, the port plays a main role in handling the cargo. There are many ports which huge infrastructure facilities which can handle the cargo flows. But, somehow or other these ports are not up to the mark with regarding the performance levels. This is because, due to the lack proper logistics connectivity to the port. Because of this there are huge amounts of cargo remains idle in the port which further causes port conjuction and cargo evacuation problems.

This paper mainly looks forward through the logistics and supply chain approach which benefits the port strategy towards relevant value-added logistics activities. As this paper explains the difference between logistics, trade and supply channels. Even though by knowing the difficulty and complexity of the port activities it even deals with different performance indicator models. And it even consist extensive background work for the literature review which deal with the logistics and supply chain management within ports and across their network of organizations. It even looks at ports with future perspective. Apart from looking only from the operational point of view it even develops a model which includes the external as well as the internal integration of the logistics and supply chain activities with the port which increase the performance of the port.

Why the research is significant?

To measure the efficiency of the port it requires very diverse range of techniques for assessment and analysis, but the problem arises when one tries to apply them to a range of ports and terminals which have structural dissimilarity, organizational dissimilarity and which are complex in nature and some may have multiple organizations.

This paper is significant because, as many papers they highlight the ports as logistics centres with the changing patterns of maritime and intermodal transport, but overlooks the logistics integration of various activities performed within the port organization itself. Most published articles address separately different aspects of port management without incorporating them into an integrated logistics framework of customer service, total costs or trade-off analysis. But, it describes the three main basic channels of operation like logistical channel, trade channel and supply channel which enables the increase in the performance of the port by combining the above stated channels. It individually looks at different channel of operation with practical insight and combines all the channels of operation in traditional port management and develops a new model called "integrated channel management system" where the port stands as a key location linking different flows and channels with their members. It even deals with the recent strategies of vertical integration by carriers, ship owners who are associated with the port management.

From the above Figure 1, it represents the current and potential interactions of the three classes of channels with a port and assumes the existence of four flows or processes like physical flows of goods and cargo, capital flows, payment flows and information flows, common to all commercial cargo ports. The "integrated port management system" refers to the aggregate management of the "port community" regardless of the specific details of port ownership and organization. Often, the port authority fits perfectly in this role, but with current trends in landlord organizational structure the port authority may be more concerned with property and estate development than goods transfer or cargo-flows management.

From figure 2, it links different components throughout a chain of influence and relationships. The upper part of the model shows external drivers of change and associates them to management concepts of logistics (internal integration) and supply chain management (external integration) within the context of an integrated port management system. The lower part of the model depicts core management disciplines, both operational and strategic, and traces their contribution to performance management systems. Note the links between logistics and operations on the one hand, and supply chain management and strategy on the other hand.

The key performance indicators (KPI) for ports form the focal point of the model and integrate both the port management system and the performance management system. Since the objective of our investigation is to propose a valid framework of port efficiency and performance management, a combination of the two components should constitute the central issue of analysis. The next stage is to develop a model of port performance measurement as an interim stage on the way to developing a working KPI model for ports (see figure 3).

How the work has contributed to knowledge?

In the present world cargo handling is only considered to measure the performance of the port. But, with the integration of the logistics and supply chain approach to the port the performance indicators can be measured in accurate way which can be easily used for any further analysis. For the future investment in port, the present performance level can be considered to know the feasibility of the project. With the work contributed by the researches, an individual can assess the port with all the operational channels and can even do the SWAT analysis for the port for future development or can even study the current situations of the port and by using the operational channels can try to improve the situation by adding the logistics and supply chain approaches.

And with the Key Performance Indicators (KPI) which forms the focal point, one can integrate both the port management system and the performance management system effectively.

Any practical application the work may have?

With the constant change in the trade patterns, there is a necessity for the ports to compete with the changing environment not only by the effective cargo handling but also with the efficient logistics management which enables the faster turn-around time of the vessel which enables more vessel calls. By integrating the logistics and supply chain approach to the current port management systems any port can obtain positive results. In this competitive world there is a necessity for the new hub ports to be developed which connects major waters, so the port that has the effective combination of both port management system along with the logistics and supply chain approach will attract the market compared to other ports. So there is high degree of practical implementation of the current model. For example, many ports in developing countries like China and India has an improved approach towards its customers comparative with the last decade by managing efficient cargo movements with the successful implementation of the logistics wing to its existing management system. There are many ports which even have collaboration with the local logistics player in order to shift cargo according to its handling capacity and the future vessel calls. This not only increases the efficiency of the port but also decreases the cargo evacuation problems.

More than that most ports are not satisfied with the existing performance indicators, so this indicates that they are in search of new method of doing things which have a greater chance to adopt the current model which have all the necessary approaches which even increase their performance.

Whether the work is well presented with clear objectives and conclusions?

The paper is very well presented with its objectives and which even was sent and discussed with experts panel, consists of Ports Panel, International Intuitional Panel and Academics and Consultants Panel. Although all considered the model valid as a "first initiative" that looks at port efficiency from the perspective of logistics and supply chain management.

The research aims at conceptualizing the port system from the perspective of logistics and supply chain management, and suggesting a valid framework of efficiency measurement capable of reflecting the logistics scope of port operations and complementing, if not replacing, the conventional methods for port performance measurement and management biased towards sea access. By adopting a structured approach and methodology and involving a range of interest groups, the authors tried to ensure a valid and reliable inquiry given the time and cost constraints.

The results show a common interest in logistics and supply chain management concepts across the various panels of experts. Respondents from the port group showed a lack of familiarity with logistics and supply chain management concepts, especially those related to logistics integration, benchmarking and channel design, although there is common recognition of ports as key logistics and distribution centres.

Finally, a logistics and supply chain management approach to ports may prove of great benefit in underlining the strategic role and future potential of ports within the framework of international business in general. It can serve particularly as a valid analytical framework allowing an unbiased assessment of port performance measurement and management. The enquiry described in this paper stands as an initiative requiring further research and investigation.

Whether the paper could be improved in any way?

The paper is very well presented in the way it should be and even concludes in a way after satisfying all its objectives. However, the constant improvement can make it even better, by considering the real problems of the ports which are located in the underdeveloped countries by stating the all the potential benefits the port can get if they overcome their problems in the current situation.