1. Best Practices Consortium
Supply Chain
Best Practices Consortium
Ocean Ports – Congestion, Risk, Contingencies
Executive Seminar
Track 3, Session F
September, 2006

2. Scope
This session will focus on ocean ports and issues related to congestion, service disruptions and actions being taken to make this link in the supply chain more reliable.
Congestion – A discussion including volume growth, programs designed to improve throughput, and initiatives to promote more efficient operations.
Risks – A discussion including cargo security, labor disruptions, natural disasters and terrorism.
Contingencies – Actions being taken by shippers to avoid disruptions and manage responses when they do occur.

3. Your Expectations What would you like to learn from this session?
Important issues?
What’s working? What’s not working?
What’s changing?
Shared good and bad experiences?
Reasonable performance expectations?

4. Potential Discussion Points
What do you see as the most significant risks associated with moving freight through ocean ports?
How active should shippers be in influencing port operations?
Do you have to incur higher transportation costs to reduce risks associated with ocean ports?
What actions, if any, should large ocean shippers be taking?

5. Origin Regions for Ocean Shipments
The majority of ocean shipments originate in China and the Pacific Rim.

6. Preferred Origin Ports
A few ports in China and a small number in other Pacific Rim countries account for a majority of originating ports. Disruptions at one or a few ports could have a significant impact.

7. Preferred Destination Ports
The flow of inbound ocean freight into North America is also focused on a few ports. There is diversity in port usage, but volumes are light in many ports. LA and Long Beach are still the primary focus.

8. Forecasted Changes in Destination Ports
Over the next 3 to 5 years, shippers are forecasting a change away from the ports at LA and Long Beach, but the shift is not dramatic.

9. Port Selection
Port selection is determined by several role players who may not share similar priorities.

10. Investigating Non-North American Ports
For most shippers, contact with ports and the operating entities within the ports is limited.

11. Investigating North American Ports
In North America, contact with ports and the operating entities within the ports is more extensive, but still limited.

12. Causes of Port Congestion

13. Vessel Arrivals

14. Potential Solutions for Port Congestion

15. Important Takeaways
While there are many ocean port takeaways in Benchmarking & Best Practices, some of the more important are:
Risk – The majority of ocean freight passes through a small number of ports, creating a few significant potential points of failure.
Selection – The determination of which ports to use is often spread among numerous role players who likely do not share a common set of priorities or concerns for mitigating risks.
Investigation – Shippers tend to spend little time working with the ports that they depend on for efficient, uninterrupted service.
Action – While labor unrest on the West Coast and more recently Katrina have spurred interest in port operations, the changes in international freight routing seem to be minor. However, change takes time. It remains to be seen if the momentum created by Katrina is sustained.

16. Questions?

17. Benchmarking & Best Practices References
Information on ocean ports can be found in the following references:
Online Interview: Ocean Transportation Section, Shipment Profile Topic
Report: Best Practices – Ocean Transportation
2005 Executive Seminar Presentation: Ocean Transportation – Trends, Capacity, Congestion and Risk
Note: Reports can be downloaded from the B&BP Resource Center at