A reduced number of carriers, through consolidation, has forced ports to scrutinize whether their facilities are ready to handle the sustained, and frequent, arrival of big ships and how their port shapes up compared with competitors. Photo credit: Shutterstock.

NEWARK, New Jersey — North American ports need to use terminal space better, improve peak volume fluidity, and get ships to and out of berth faster if they are to match the efficiency of best-in-class foreign ports as more mega-ships hit the water, APM Terminals’ head of global operations said Tuesday.

As vessels get bigger and cost reduction is increasingly a priority to carriers, terminal operators will be under growing pressure to make better use of the resources they have, Jack Michael Craig told JOC’s Port Performance North America Conference on Tuesday in Newark, New Jersey.

“What this means for terminal operators is there will be bigger winners and losers as it comes to volume,” Craig said of the new era of increasing large ships making fewer stops. “The impact of winning and losing that business is now greater than it was in the past.”

Craig’s comments come as the increasing use of mega-ships and a reduced number of carriers through consolidation have forced ports to scrutinize whether their facilities are ready to handle the sustained, and frequent, arrival of big ships and how their port shapes up compared with competitors. Seventy-eight mega-ships over 10,000 TEU  — totaling 1.2 million TEU — are in the pipeline for delivery next year alone, according to IHS Markit.

Craig cited a study by analyst Drewry that found North American ports stored a far smaller volume of TEU on a hectare than any other continent in the world, and handled fewer TEU per gantry crane. North America did worse than all regions except Europe on the number of TEU handled per meter of berth each year, the study found.

“Nowhere else in the world are we chewing up acres, or have we traditionally chewed up acres of land, storing chassis,” Craig said. “Nowhere else in the world do we queue for customs and trouble tickets inside our [terminal] gates.”

Ports also, for a variety of reasons, make inefficient use of their equipment, he said. Of the 170 cranes at the Port of Long Beach, for example, only slightly more than half are used even during peak periods — a use intensity that “doesn’t make a lot of sense from a shareholder's perspective,” he said.

Similarly, North American ports fail to efficiently get ships on and off the terminal in a timely fashion, he said.

“As an operator, how many times do we see a ship come alongside and it sits idle for an hour and a half,” he said. “How many times does a ship finish and it's waiting for 45 minutes or 50 minutes for either the pilots to get on board, or tugs to come alongside.

“Around the rest of the world we just don’t see it that often,” Craig  said. “There are places around the world where routinely, every single day, every single ship from last line to first lift is less than 30 minutes, like clockwork. We just don’t do that here, yet.”

He said terminal operators could consider retooling existing equipment to cut costs, such as retrofitting cranes to add height and depth so that they can accommodate bigger ships. They also need to make greater use of technology that will provide visibility of containers along the supply chain and provide constant information to the terminal, customers, and other stakeholders about its progress, Craig said.

But all of it will require greater cooperation between different players in the supply chain, he said.

“For me, the solution is really not that difficult, it’s just a question of collective will,” he said. “For me, it’s something about the level of transparency that we have put into sharing the information back and forth. There is something about the way we dispatch freight. There is something about appointment systems and their use. Those things are there, It’s just question of can we start to get people to agree.”

Contact Hugh R. Morley at Hugh.Morley@ihsmarkit.com and follow him on Twitter: @HughRMorley_JOC.