If the pandemic brought any part of supply chains to light, it was port operations, as mainstream media became aware of the impact of port congestion on supply chains. Now the current market looks much different than it did just a year ago, with congestion cleared and shipping rates having fallen by 90%, but shippers are still realizing how much their port performance matters and how efficiency can give them an advantage.
The increasing prevalence of visibility data has been beneficial for many aspects of supply chains, including port performance. There is a significant potential for shippers to reduce demurrage and detention costs and increase supply chain efficiency using visibility data, specifically real-time visibility through an API.
Why Shippers are Evaluating Port Performance
In more ways than one, the pandemic revealed weak links in supply chains. To recap the causes and effects: initially, certain categories of consumer spending increased as more people redirected their spending from experiences like restaurants, concerts, and vacations to goods. Shippers everywhere experienced stockouts and as a result, decided to build up their inventories. The demand for transportation capacity sharply increased, and combined with a container shortage/distribution problem, it snowballed into a bigger problem of port congestion.
There were, of course, other factors that prevented the congestion from clearing quickly, but regardless, it caused a surge in demurrage and detention charges, in some cases rising from about $150 per day to $300, a 100% increase. For shippers with containers affected by port congestion, these daily charges added up quickly.
While trucks were often unable to pick up containers to be destuffed for reasons outside their control, for shippers, the end result was the same. They saw the problems that these delays and mounting charges can create and how proactively seeking to improve their port performance is in their best interest. Not only does it help their bottom line with decreased costs, but it also means a more optimized supply chain that comes with its own benefits.
How Shippers Can Reach a Better Position of Port Performance
With numerous reasons to strive for better efficiency in port operations, shippers are now employing several strategies.
Intermodal Supply Chain Visibility
Container visibility data provides shippers with updates and notifications on the status of their shipments. This data informs better decision-making when responding to unexpected carrier delays, reducing the risk brought on by these delays and helping them manage capacity needs across different modes of transportation. The result is faster response times, shorter wait times, reduced costs from demurrage and detention, and at the end of the chain, better customer satisfaction. Accurate and timely data insight into market trends also allows shippers to better anticipate the occurrence of risks.
Easier Communication with Partners
Streamlining communication between supply chain partners provides another strategy of support for shippers optimizing port performance. APIs (application programming interfaces) may be the best solution for improving the exchange of information, as they can update in real-time in the system or platform where the data is needed. The most common alternative for getting information is using carrier tracking websites—a time-consuming, manual process that often has fewer updates available in real-time. API-provided container visibility helps shippers receive data and monitor their shipments, while it also provides the potential to easily make updated shipment status information available to their customers, furthering the exchange of information.
Advanced Data Analytics
With increased visibility and a better method of receiving real-time data, shippers need analytics to apply data. In the case of port performance, the container tracking events related to demurrage and detention are important— Container Discharged from Vessel, Gate-out Full to Consignee, and Empty Container Returned—which directly affect performance metrics. But to proactively manage port performance, shippers need a deeper understanding of what their container event data is showing. By tracking and analyzing this data, shippers can identify bottlenecks and other issues, use this to reduce delays that are within their control, and evaluate their performance trends for continued improvements.
Improve Port Performance with an API-first Solution
In just the last year, the significance of port performance has been brought to the forefront for many shippers. Real-time container visibility through an API has a critical role in helping them improve performance and keep demurrage and detention costs low, made possible by the analytics and insight derived from visibility data. VIZION API provides container visibility data that shippers can use to power their decisions and processes to reduce costs and increase their supply chain efficiency. For more information on how VIZION helps shippers with port performance, reach out to us for a demo today.