Improve logistical processes performance

Storing a client’s precious hydrocarbons is a very complicated and demanding task. In the first place safe operations is key. However, right after that things like operational excellence and seamless handling of vessels comes. High performance and good service will ultimately lead to a long term relationship with his client.

The big question, in this case, remains: how is my terminal performing?

Having insights on your own performance is essential. But how can you determine if your terminal is actually performing well? The answer is simple: compare your performance to that of your peers. This process is called benchmarking.

However, getting access to reliable data and information to do the benchmarking exercise is easily said than done. Competing terminals are normally not that eager to share such information. And if they do, is it accurate and do they use the same definitions and methods to calculate these performance indicators. If not you might be comparing apples to oranges. So a big challenge indeed. But when you succeed the reward is significant, it will become crystal clear in what areas you are ahead of the herd and in what areas you lag behind and need attention. Just imagine how you could use this information. The applications and possibilities are enormous. To name a few options, you could use this benchmarking information in strategic planning, investment planning and in commercial processes. Really valuable information.

We’ll return to the focus area of operational performance. Looking critical at your areas of improvement and the strengths and weaknesses of your terminals versus others offers you an opportunity to enhance your own business processes. As a market driven business you need to focus on creating value for your clients. So, leaving aside safety incidents, the question is what are the biggest nightmares for your clients related to storage terminals? If you ask your clients one word will definitely be mentioned a lot: demurrage.

Demurrage are costs associated with long waiting times of ships as a consequence of congestion. In most cases the terminal is not liable for demurrage, the client is. The nature of demurrage costs is that they are hard to predict, hard to control and can be significant in size. It can easily wipe out profit margins or drive up supply chain costs for your client. This leads to unsatisfied clients, or worse, to clients leaving you terminal to never come back. So improving logistical performance and as a result reducing demurrage costs should have a high priority within your business. Benchmarking your logistical performance against competitors will give you valuable insights on where to focus your efforts. Typical logistical performance indicators that are used to gauge a terminals performance are:

• Berth occupancy (% time a berth is occupied and thus not free to receive an arriving vessel)
• Handling speed (throughput/time at berth)
• Throughput
• Tank Turns
• Average waiting times

When you have these performance indicators for your own operations and you can compare them to your peers you are able to position yourself in an optimal way. It will enable you to make justified and better logistical (investment) decisions.

Now you will ask yourself if this data is even available for you to access. Actually it is! FETSA supplier partner TankTerminals.com has released a brand new functionality in its terminal database. With this functionality, marine terminals are able to assess their own logistical performance against any other set of terminals. This feature is called Logistical Performance Benchmarking and it is integrated in TankTerminals.com. Please visit www.tankterminals.com.

Automated Vessel Clearance: One way to improve logistical performance!

Vessel clearance is the process of checking if a vessel matches with a terminal’s infrastructure, products, etc. Every vessel that visits a terminal needs to be cleared. In practice even more vessels need to be cleared because this process takes place before the nomination and vessel clearance reports are needed by charterers to select the right vessel for a transport.

It is the responsibility of terminals to carry out vessel clearance and make the vessel clearance reports. In almost all cases this clearance process is done manually  by the customer service department. This manual task is very disturbing and time consuming for customer service as there is a high urgency to these clearance requests. Because clients need the clearance to select vessels that they have in option, they want a swift response. So the clearance requests are handled with priority and other tasks need to wait. This can mess up work schedules and cause delays of very important activities. Customer service personnel might not be able to focus and allocate enough time to ensuring smooth operations at the jetty. This can lead to poor logistical performance.

Another problem with manual vessel clearance processes is that there is a likelihood of human errors. The high urgency of these requests combined with the level of detail required and the fact that it is done by humans makes it almost impossible to have a flawless execution. Any errors in a vessel clearance can potentially be disastrous. The impact can range from a vessel arriving at the terminal only to find out that it needs to wait a long time because it can only berth at a specific jetty to a loading arm that completely breaks because of discharging operations. These issues are very likely to impact logistical performance and even lead to safety incidents.

A solution to these problems is automatic vessel clearance. This is software that automatically checks and compares vessel characteristics to terminal characteristics. Also things like product compatibility and sanction checks can be incorporated in the automated vessel clearance. If the clearance process can also be executed directly by the clients of terminals instead of being executed by customer service representatives this will also relieve pressure from the terminal’s organization. This will lead to a much more robust process resulting in less errors, more efficiency and happy clients.

TankTerminals.com has teamed up with Vessel Clearance Guide (VCG; www.vesselclearance.com) to offer integrated and automated vessel clearance. Via TankTerminals.com’s Free subscription clients of terminals can select the terminals for which they need to clear vessels. They can use and upload the Q88 vessel document and input any other information needed. The data is transferred to VCG and based upon this information and the terminal configuration a clearance report is created. The terminal gets a copy of the clearance report. So clients can clear a vessel at any time and gets a report in seconds. And customer service doesn’t spend any time at all. Just imagine the time this saves and the focus it brings! Finally you can spend more resources on important things. And at the same time you’re helping clients and increasing customer satisfaction!

If you have any questions after reading this article about improving your logistical processes, please contact our marketing and sales manager Jacob van den Berge (jvdberge@insights-global.com) or visit www.tankterminals.com.