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Today, key performance indicators (KPIs) are well established components of quality management systems in the port industry, primarily in the port terminal business and most popular among container terminals.

Technical solutions like dashboards provide visualisation of selected KPIs while some terminal operation systems have integrated reporting tools that enable performance monitoring of a terminal in real time.

KPIs thus form an essential backbone of immediate performance improvements and of long term quality management processes – because the complexity of container terminal operations has grown beyond the level where even experienced staff can still oversee them.

Further, KPIs are used for benchmarking purposes, with the most popular moves-per-hour-count and the inevitable discussion about its limited comparability.

With this background, and because of the growing demands of international logistics, the Global Institute of Logistics and Germanischer Lloyd introduced some years ago a container terminal benchmarking system, the Container Terminal Quality Indicator (CTQI).

CTQI consists of KPIs that address all operational areas on a container terminal and is part and parcel of a certification process. It is then just a small step to track those measurements against pre-defined targets, which in turn are often derived from benchmarking or by looking at "best in class" performers.

In principle, all KPI and benchmarking systems should correspond to the developments of logistics, to global production systems and the huge impact of supply chain management practices.

Container terminals are nodes in global transport chains and as such they are under constant monitoring and productivity pressure, in terms of quantity, reliability and swiftness, from shippers, third or fourth party logistics providers, and vessel operators.

The industry puts the pressure on terminals; they respond by monitoring, comparing and improving.

Similar attempts have been promoted by the Dry Bulk Terminal Group for their clientele. This development is not confined to terminals – it now also encroaches on their business environment, the ports.

In regions with strong competition between ports, port authorities face the demands of all port users: logistics as well as ship side. And from time to time, it hurts: for example, when container liner operators move their services to neighbouring ports because of repeated vessel delays, as happened recently in the Caribbean. Or when liner operators impose a congestion surcharge for certain ports that have been identified as delaying vessels, as happened in southern African ports.

But there are only a few ports that have developed a consistent quality management system based on a set of KPIs by which performances under the control of the port authority can be monitored, managed and improved.

All too often, port authorities consider their role to be simply an administrator of port affairs. Where services like tug assistance or pilotage are outsourced, the impression of not being responsible seems to be a reason for not interfering with these operational areas. More so, as such services are often contracted directly by the liner operator or agent.

Yet, services play a major role in overall port performance: if vessels cannot be berthed because tugs or pilots are not ready, or if the port is constantly congested, the port’s attractiveness suffers.

The same is true for landside traffic. Terminals might improve truck turn-around times, but if trucks are leaving the gate only to be stuck in an endless traffic jam, the transport costs will remain high.

Of course, some ports already take measures - port data platforms, vessel traffic control or telematics systems can improve the performance of a port - but the challenge for future sustainable port management is to evolve ad hoc measures into a consistent quality management system.

A KPI system for the port authority offers a diagnostic tool to identify bottlenecks and is the starting point for improvement processes. This is easier said than done.

The first question would be how to get hold of relevant data. A vessel calling outside the port, issuing its notice of readiness, is normally recorded with a time stamp in the navigation control’s log. The berthing time is similarly recorded. But, for example, the times when a pilot boards or the when tugs start their job are normally not recorded. And only such fine grained time stamps, transferred into a KPI, would pinpoint single deficiencies.

This broad field of application for KPIs and benchmarking for port management has been picked up by a number of institutions and enterprises in the port industry context. Currently, there are two approaches that try to operationalise KPIs and benchmarking for ports.

The slightly older one originates again with the Global Institute of Logistics, offering a benchmarking process for port administrators. It is based on the knowledge that a port’s operational and commercial complexity has to be understood as a cluster, whereby the notion of the cluster highlights the need for integration and orchestration in order to efficiently provide collaborative service provision.

To put this benchmarking into practice, GIL and its Port Cluster Governance Committee (PCGC) do field research, talk with stakeholders and check factors that indicate at relevant activities of the port authority. Aspects considered include infrastructure development, logistics parks, and IT platforms, as well as the promotion of “a culture of collaboration and a governance structure for the port stakeholders” and the cultivation of “city/port relations”. Thus, the PCGC programme explicitly focuses on the relationship management of a port authority.

Operational aspects are considered by GIL only in terms of feedback from the port’s stakeholders, and are not subject to quantification in the sense of a KPI.

In course of the benchmarking process, GIL assists the respective port authority to receive expertise from other port authorities on their best practice experience. The GIL initiates so-called Share Learn Benchmark workshops – this seems to be the major benefit for the involved ports; the benchmarking process is at its core a mutual learning process, by means of which the individual port can development its own liaison and quality management system. Valencia, Callao, Shenzen, and Teesport have already received GIL’s "Best in Class Accreditation”.

The second approach is a European Seaport Organisation (ESPO) co-ordinated project: PPRISM, which stands for Port Performance Indicators, Selection and Measurement. Financed by the European Commission, it is no surprise that the project’s work plan stresses the potential usage of the data for policy making on multiple levels of the European policy system with regard to the “European Port System”.

The project is still under way and has not yielded published results, but its aim is to “determine a set of relevant port performance indicators widely accepted and commonly defined by the entire port sector and other relevant key stakeholders“. These indicators will be selected from five broad categories: markets, socio economic impact, environment and governance but also addressing logistics and operational performance.

The definition of these KPIs will be jointly reached by academics and stakeholders from the port industry. The project expects these indicators to be used for internal usage of improvements as well as for external, benchmarking purposes by the ports themselves and third parties, such as terminals or the logistics industry.

In a pilot, the finalised set of KPIs will be applied to a selection of European ports, providing first data of port performance benchmarking on a continental level. The final aim of PPRISM is the transformation of this methodology into an institution, with the current working title “European Port Observatory”. The dissemination of results will be facilitated by reports and management trainings.

Although PPRISM will, among other things, address operational aspects of port management, the wide range of indicators to be selected also emphasises the importance attached to the port’s management of its relationship with the community and with its business environment.

These two systems that still at an infant stage. PPRISM, due to the involvement of the ESPO member ports, has the potential to yield a very comprehensive result. Its net benefit for the port industry will then depend on the dissemination of the findings and on the data exchange between the Port Observatory and the ports; with the balance maintained between monitoring ports and supporting the ports’ quality management processes.

The GIL’s PCGC programme started from a smaller data basis and consequently depends on the future contribution of further ports. Provided that port authorities continue to share their expertise, GIL’s port benchmarking system can grow in detail and breadth and can become a very powerful platform for the mutual learning processes that help port authorities to develop and improve their quality management systems.