Organisation in bulk

Bulk or multipurpose terminals with a couple of products may well be more weighed down by the admin than the cargo so some ports would be best doing the sums.

“It’s an overstatement to say bulk terminals are simply buffer warehousing, but they really are mostly low-tech operations – to the point where a TOS’ biggest competitor is usually a Microsoft Excel spreadsheet,” says David Trueman of DBIS.

This can be at odds with the put-and-take game between the quay and storage areas: though there are single commodity ports that simply tick over, some bulk operations can switch from slow to giddyingly fast, especially if there’s more than one cargo stream to take care of. “The loading and unloading can be erratic with seasonal peaks and troughs: ideally a couple of different types of cargo even out the activity, but coincidental spikes can ‘trampoline’ operations into extremes,” says Mr Trueman. He adds that even the best plans can be put under pressure by the rounds of speculative commodity buying “which results in ships suddenly being directed to port in order to get the best price”.

“Unfortunately, most of these facilities aren’t huge and even one unexpected ship can mean things quickly get unmanageable. A port is then faced with some steep decisions as, unlike container ports which can turn a ship around in hours, the quay is often effectively blocked up for days. You can’t unload... so do you keep other vessels hanging around and pick up demurrage or direct it to another port?”

Live steaming

Bulk terminals handling a variety of different cargo streams can fall prey to a number of problems, points out Mr Trueman. Truck and rail car arrivals both need scheduling, plus on the yard side, dropping loads off in a haphazard way can mean the same product spread across lots of areas, taking up space. And there’s separation issues: “Keeping track is paramount especially with grain or foodstuffs as it only takes one truckload dumped on the wrong pile to contaminate the food chain and make the headlines. So, even really small operations often end up with a large admin team, out of proportion to the business,” says Mr Trueman.

Further, while the value is generally much lower than box cargo by tonne, there’s generally a lot more coming across the threshold, so what a bulk terminal brings to the table rests squarely on its speed and efficiency: difficult for any facility faced with a spreadsheet as the main organising principle.

More, the paper trail can lead everyone astray.

For example, there can be issues with ‘disappearing’ bulk. “There are many ways to lose cargo, and they are all factors. There’s obviously spillage, but there’s also the difference between the bill of lading and what gets delivered onto the quay. In fact you have potential losses all the way along the line,” says Mr Trueman.

“A lot of times a terminal will get complaints from the customers based on an inventory: what follows is an argument that gets escalated into a compensation claim. It’s sad but it’s actually usually a paper loss where a figure has been rounded up somewhere along the way.”

The other disappearing trick is shrinkage from moisture loss: olive pulp or goods with a high oil content can lose a significant amount. Further, coal piles can vary by 4% to 5% with the monsoon season or a hot, open yard.

All this can be mitigated against and managed by an overarching system that pulls its information directly from the cranes, weighbridges or other handling equipment on the berth, saving a lot of strenuous, often misguided, administration efforts.

Considerations in bulk

So, is it really time to consider TOS for non-box facilities? There’s very good reasons it hasn’t happened wholescale so far: “The container sector has really been able to push forward with their operating systems, it has had some big players with deep pockets that have decided strategy,” says Mr Trueman. “However, the bulk market is a lot more disparate, and by comparison with container terminals, it has a number of smaller players, and few really large facilities.”

On the other hand, Mr Trueman points out that a bulk TOS may well pay for itself in a couple of years by savings on the wages bill alone, not counting demurrage issues, or the ravages of arguments about where the missing cargo went.

It may be that multipurpose facilities might be closer to implementing TOS than pure bulk ports, adding that diversification has been the saviour of a number of smaller Russian or Central European ports, “with the last three years especially showing clear signs of change” says Dan Pershin of Solvo.

This does alter the game: “When you come up against multipurpose operations, then the separate machine approach simply won’t work, you definitely need one single system to manage it all,” he says.

Similarly to bulk, administration presents a perennial problem. Despite an extensive physical upgrade, the biggest driver for a TOS at Aktau, Khazikstan wasn’t simply organising the space, but also how to achieve compliance with the regulations and customs procedures for cargo which stretches from bags, barrels and rolls through to loose and liquid bulk, box, auto and trailer cargo.

Different problems

Further there are regional differences that impact on implementation: while tying together a number of already sophisticated, complex subsystems of the kind you might find in Baltic or European ports might seem challenging, Mr Pershin explains that a low-tech base presents its own problems. “You have issues to overcome like a slow wifi network speed, so there’s no running complicated, heavily-loaded graphic interfaces.”

Occasionally ports have quite a jump to make in terms of processes and culture: “In some cases there are virtually no subsystems in place which makes it a bit like inventing the bicycle,” he says. While a clean sheet might initially look simpler for the vendor, there are other issues that spring up: ports may have a difficult time getting personnel to obey the TOS instructions or follow procedures “especially where people are used to making decisions from a mixture of experience, conversations, hunches and their own initiative”. The fact is, it’s hard for people to give up control to a machine and the TOS’ strategies aren’t necessarily going to be easily evaluated from the ground.

All in all bulk and multipurpose TOS developers are facing a tall order: they have both the layers of complexity at the port to deal with, plus they need grass-roots growth in the number of interested parties as the market lacks those huge, global players common to the box industry. If Mr Pershin and Mr Trueman are to be believed, these TOS developments will slowly gain traction, maybe just because a rising number of smaller ports are now looking for whatever cargo they can snare.