It pays to know how well you’re performing

A key performance indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. KPIs can be used to evaluate how successful a company is at reaching specific targets. A high-level KPI may focus on big picture performance goals, while a low-level KPI may focus more on the daily processes in each department of an organization, such as marketing or sales.

For port terminals, measuring KPIs to improve operational efficiencies and productivity is crucial. With vessel sizes on the rise, shipping companies are more demanding than ever. However, selecting high-quality KPIs isn’t easy. The best way to evaluate the relevance of a KPI is to use the SMART criterion. SMART is an acronym that typically stands for Specific, Measurable, Attainable, Relevant and Time-bound. You can’t manage what you don’t measure, so when the time comes, use these five conditions to determine the best KPIs for your organization:

• Is your objective Specific?
• Can you Measure progress towards that goal?
• Is the goal realistically Attainable?
• How Relevant is the goal to your organization?
• What is the Timeframe for achieving this goal?

Effectively implementing KPIs requires a well-thought-out strategy. Too often, companies blindly adopt industry KPIs without reflecting on their own organization’s goals. Before applying KPI measurements, organizations should start with the basics and truly understand what their goals are, how they plan on achieving those goals and the members of the organization that will be in charge of implementation and measurement.

For port and terminal managers, and anyone seeking to improve operations and business performance drastically, KPIs are one of the most efficient tools with which to measure and improve terminal-wide performance. Here are six of the key primary indicators every port terminal should track closely:

1. Crane productivity

Crane productivity describes how quickly your port loads and unloads containers off a vessel. Measuring crane productivity is crucial because shipping companies want their vessels to stay on schedule and expect terminal operators to complete their loading and unloading quickly so that the vessel can move to the next port of call.

Tracking crane productivity as one of your six key primary indicators is SMART because time is money and shipping lines will always choose to work with the fastest terminals. Progress for this goal is measured by your port’s efforts to reduce load and unload times. This information is very relevant for shipping companies for decision-making purposes.

2. Container dwell time

Container dwell time (CDT) describes how long a shipping container stays at a port terminal. The shorter the CDT the higher the potential utilization of the port terminal. Measuring the average CDT is one of the most cost-effective ways to optimize terminal output. More specifically, at terminals where the availability of stacking area and storage yards is limited, even the most marginal reductions in CDT can have a major impact on productivity.

Tracking and monitoring CDT is SMART because it allows port terminal operators and their teams to define factors impacting the CDT and better estimate how long containers should remain in the yard. Monitoring CDT is one of the best ways ports can improve their operations and know exactly how much of their space is being used now and will be used in the future.

3. Reefer dwell time

Reefer dwell time (RDT) describes how long a reefer container stays at a port terminal. A refrigerated container, or reefer, must be measured differently due to the fact it contains temperature sensitive cargo and may require access to an external power supply.

Separate tracking of RDT is SMART because it allows port terminal operators to generate key information for monitoring and optimizing the logistics and management of cold chain assets and resource. Measuring the RDT can complement the reporting of reefer temperatures and any abnormal or excessive fuel uses.

4. Container traffic

Measuring container traffic refers to how much container traffic is going through a terminal at any given time. Container traffic can be measured in TEU or number of moves and it should be analyzed daily, weekly, monthly and yearly.

Container traffic measurement is SMART because it allows port terminals to analyze how they are doing compared with traffic numbers weeks, months or years ago. It also gives port terminal operators a quick way to see how the current season’s operations are going. Typically, it is also the first number used when introducing your port terminal and discussing your operations. Container traffic is always asked for by anyone interested in your port, so it’s important to stay updated on this number and be ready to give it out.

5. Truck turnaround time

Truck turnaround time refers to the amount of time truckers are spending at your terminal when they come to pick up and drop off containers. This is an important KPI to measure because it greatly affects a trucking company’s bottom line. As a key player in the supply chain and an important customer of the port terminal, you want to help truck operators succeed and to provide them with the best service possible. If they can make more trips per day to the port because you’ve reduced the time it takes for them to visit, they will love working with your terminal instead of the competitors’.

Tracking truck visit time is SMART because it can help your port terminal reduce costs for your clients. When clients are happy with your terminal operations, it can also help you garner recommendations and encourage other shipping companies to choose your terminal.

6. Number of gate moves

The last KPI your port terminal should monitor closely is the number of gate moves you complete per day (in and out). This is an incredibly valuable metric because it not only helps port terminals understand their volume in real-time but also helps control overall operations.

Measuring the number of gate moves is SMART because it can help ports reduce congestion and increase the average number of gate moves per week – and therefore boost the port’s overall productivity.

Of course, there are other KPIs that port terminals can track such as utilization of equipment and crane monitoring and scheduling, but these are the key primary indicators that port terminals can use to improve operational efficiencies and boost productivity.

For port and terminal managers, operators and anyone seeking to improve port operations and business performance drastically, Octopi’s terminal operating system can help you easily track these KPIs to improve terminal-wide performance. The Octopi platform tracks and manages all port operations and live productivity KPIs. You can manage everything from equipment and employees to vessels and cargo from one device in real-time.

*Luc Castera is the founder and CEO of Octopi, a modern Terminal Operating System (TOS) provider.