Measuring port resiliency
MIT survey finds shipping industry fails to see big picture.
By Chris Gillis
Resiliency is the ability to recover from an event.
Researchers at the Massachusetts Institute of Technology's Center for Transportation & Logistics (CTL) recently applied this concept to a survey of shipping interests to determine just how resilient they are in the face of operational breakdowns at the nation's ports. MIT CTL's survey was supported by American Shipper.
| Rice |
For several years, MIT CTL has participated in the U.S. Department of Homeland Security's Centers of Excellence program, focused on port security and the impact on how supply chains deal with disruptions. 'We're now applying these concepts to the maritime transportation environment, especially ports,' said James Rice, MIT CTL's deputy director, in an interview.
MIT CTL initiated a port resilience survey that attempted to collect data on opinions regarding critical operating systems and processes in ports, and experience data on delays segmented by impact area, including intermodal connections, terminal operations and waterways.
Rice and Kai Trepte, a research associate, started work on the format of the survey in late 2008. The study topic was admittedly a challenge, and several iterations were developed before it was ready for release, Rice said.
MIT CTL launched the survey in the third quarter of 2009 and closed it in February. Reponses were generated from 525 shippers, carriers, terminal operators, port authorities, third parties, freight forwarders and others operating in the port environment.
The largest respondent group was shippers at 123, but a solid group of more than 50 carriers, more than 50 identifying themselves as focused or multi-role terminal operations, and some 180 other entities covering a range of service providers complemented the survey's outcome, Rice said.
The survey found some distinct differences in responses between the various groups.
'We observed the respondents largely self-selecting to report on delay experiences in areas that are directly connected to their respective operations,' Trepte said. 'That is to say, shippers nearly unanimously only provided delay experiences on intermodal connections, carriers mostly provided delay experiences on waterways, and terminal operators mostly provided delay experiences only on terminal operations.'
Shippers further reported experiencing delays in six areas within the intermodal connections:
' Communication and information systems.
' Equipment availability.
' Gate operations.
' Rail capacity, rail loading and unloading operations.
' Truck loading and unloading operations.
About half the shipper respondents said the frequency of delays was once a year or less, while the other half reported quarterly or more frequent delays for each of the six intermodal connection areas. On average each delay lasted just over a day and half, Trepte said.
For the MIT CTL researchers, the survey results were not surprising on the surface, but they raised the question about whether these entities have visibility awareness of the activities in other operation areas of the port environment.
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'When discussing the criticality of the overall system, respondents see nearly every port system as being critical to a port's overall resilience,' Rice said. 'While they may not have visibility into the causes of delay and frequency of delays in other areas they are aware of the importance of the other systems.
'It would be worthwhile for all parties to understand each other's challenges,' he added.
The researchers said it's unreasonable to suggest that U.S. ports act as a single unit or a coordinated entity in terms of business development and operations.
'While it is true that collectively the ports handle enormous cargo volumes in and out of the U.S., these activities are not coordinated by any central or overarching entity,' Rice said.
'Free market forces dictate the choices that each individual entity makes, and therefore the system of ports works as a collection of cargo-handling maritime entities, but it's not a thoroughly integrated and optimized system,' he explained. 'Some speak of the concept of a national port system, but this is a serious mischaracterization of the maritime transportation system. It works but it's neither centrally coordinated nor optimized.'
Most respondents to the survey highlighted two measures ' communication/information systems and flexible labor agreements ' as the primary actions to improving U.S. port resiliency. The MIT CTL researchers referred to these recommendations as 'flexibility' measures, and said developing resiliency in the ports would entail both introducing 'redundancy' measures ' such as ensuring sufficient freight capacity and inventories are in place ' as well as flexibility measures.
'In the past decade, most organizations have reduced or eliminated system redundancy through inventory reductions,' Rice said. 'In our view, there's a need for a certain amount of redundancy to make it work during times of disruption. How much redundancy each system needs depends, of course, on the specific system.'
The MIT CTL researchers believe the survey's findings should assist firms involved in the maritime domain think about how to make their operations more resilient to disruptions, no matter if they're caused by a dock labor lockout, coastal storms or even a terrorist incident.
'It's a complex environment,' Rice said. 'Our objective is to help people in this industry better understand what are the systems risks and the potential benefits of resiliency.'
MIT CTL will make a summary of its port resilience survey available on American Shipper's Web site at www.AmericanShipper.com, and welcomes any companies that are interested in participating in future phases of this research on port resilience to contact James Rice at jrice@mit.edu.