Understanding Port

Operations And Logistics

McKenzie L.

Port Operations and Logistics - Photo by Kelly Lacy

Port operations and logistics can be confusing due to the

amount of people involved, the number of steps involved,
and specific paperwork required every step of the way.

In Port Operations, there are many carriers involved,

including but not limited to the truckers picking up and
delivering to the origin port, the ocean carrier, the trucker in
the receiving country, the customs broker, and all the people
in between.

All Ports operate a little bit differently, so the logistics of

picking up and delivering can be different for each one.
Below we've broken down just the tip of the iceberg in port
logistics.

Table of Contents

Prior to Shipping
Contracts for Ocean Shipping
Bill of Lading "BOL" - Booking Indication
Customs Process - Export Process from Origins
Customs Process - Import Process into Destination
Countries
Port Operations
Port Hours
Port Operations and Equipment
Ship-to-shore gantry crane
Port Delays
Picking Up Containers
Customs Process - Destination Country
Picking up Containers from Ports
Picking Up Containers from Inland Rail Locations
Returning Containers
 Understanding Port Operations and Logistics

Prior to Shipping
Contracts for Ocean Shipping

Incoterms - Familiarize yourself with Intercoms, that will

determine where insurance and accident responsibilities lie
at any given point during transportation. It also typically
determines if the buyer or seller is responsible for a delay or
outside action in case of atypical event. For example, if the
container sits at the origin port, and misses a sailing for
whatever reason, going into demurrage - typically with most
contracts and most incoterms, the shipper would pay this
demurrage fee.

Ex-works is almost never recommended, but seemingly

always pushed by sellers hoping that buyers don't read the
fine print. Basically it makes the buyer responsible for all
aspects of shipping - even pulling the freight off the
warehouse dock in the origin country, where most buyers
won't have known carriers to do so.

Bill of Lading "BOL" - Booking Indication

A good Bill of Lading should list these indicators fairly clearly

on the Ocean Bill of Lading. Sometimes you may need to
read fine print on it as it's printed small with some carriers.
 1. CY/CY - Container Yard to Container Yard, meaning the
carrier is only responsible to transport from origin to
destination port or inland rail depots.
2. Door/Door - Door of the origin address to door of the
destination address. This means the carrier will be
picking up and delivering to the addresses listed on the
BOL.
3. Door/CY - Door of the origin address to the final port /
final delivery location / Container Yard - Typically listed
as "POD" = Port of Discharge
4. CY/Door - Carrier is responsible for picking up from the
origin port and delivering "to the door" of the delivery
address.

Customs Process - Export Process from

Origins

Before you can export a container, paperwork needs to be

sent and filed with customs before the container even
arrives physically at the port. The ocean carrier also needs a
copy. Typically the documents required are a Bill of Lading
(Issued by the Ocean carrier or Forwarder), Commercial
invoice

Customs Process - Import Process into

Destination Countries
It's a good process to initiate the import process for
destination countries as soon as possible, typically a few
days after the container has officially left the origin port.
(Ensuring the container actually left on the boat that it was
planned on).

Some countries will even require an import license to be

applied for before the container is exported from their origin
country, such as Brazil. You cannot start this process after
the container has left, otherwise it's likely the container will
be rejected at destination.

For example, when importing into Brazil, a separate

declaration is required if your goods are valued over $5,000.
Make sure you are working an experienced customs broker,
who will be very familiar with their home countries' customs
requirements.

Port Operations
Port Hours

Ports typically are open weekdays, something like 7am -

5pm. Most close for federal holidays, and will also close in
extreme weather events like Hurricanes. Some ports, such
as California ports, are also closed for ancillary holidays and
union holidays. Other ports sometimes allow weekend
pickups and deliveries, but this is fairly rare especially for US
Ports.

Port Operations and Equipment

A Gantry Crane is used to pull containers off of vessels

quickly, but once the containers are stacked, ports will use
smaller cranes and other equipment to maneuver containers
into and off of stacks.

Ship-to-shore gantry crane

"Ship-to-Shore" Gantry Cranes, or just simply gantry cranes,

are huge structures used in almost every port terminal to
unload ocean containers on and off container ships.

Often times they are "wheeled" - they have two rails spaced
based on the crane size, able to run the cranes along the
length of ships. You can read the full wiki entry on Gantry
cranes here, with many examples.

Smaller equipment is then used to move containers into and

off of stacks.

Wikipedia has a great entry on these equipment types:

https://en.wikipedia.org/wiki/Container_crane

Straddle carriers, sidelifts, reach stackers, or container

lorries then maneuver underneath the crane base and
collect the containers, rapidly moving them away from
 the dock and to a storage yard. Flatcars or well cars may
also be loaded directly beneath the crane base.

Typically, a trucker with a full container needs to "check in"

to the port gate, where they'll be directed to the correct
unloading area based on their paperwork.

Then, they'll wait for the forklift or crane driver to load the
container onto their chassis.

Once loaded, the driver will exit the port. Typically dray
carriers will not travel far from the port location; I'd say up to
250 miles is generally the maximum as retrieving a container
typically takes at least 45 minutes, if not longer, so we don't
want drivers running out of hours.

Port Delays

Sometimes, especially in recent times, the port may get

behind. Whether it's due to labor shortages or equipment
failures, the ports may not be able to unload the containers
from the ships as fast as needed.

What happens then? Well, typically there will be long lines

for picking up or delivering containers. This means the
drivers may not have time to pick up a container and also
deliver it, so they have to stop off more often.

Sometimes, the ports have even been closing some days to

focus on the unloading part. Ships may even go ahead and
skip ports altogether; meaning containers will unload at a
different port and be railed to the original port of discharge
by the Ocean and rail carriers.

In general, delays at the port are a domino effect. One delay

leads to actions needed that will further delay the
containers.

Picking Up Containers
Customs Process - Destination Country

Prior to a driver arriving to pick up the container, the

container will need to be cleared by Customs in the
destination country that the container is at. This typically
requires the Bill of Lading and Commercial invoice turned in,
as well as ancillary documents like the packing list, any
hazardous declarations, or declarations required by that
Country.

For example, when importing into Brazil, a separate

declaration is required if your goods are valued over $5,000.
Make sure you are working an experienced customs broker,
who will be very familiar with their home countries' customs
requirements.

Picking up Containers from Ports

You will need a dray carrier to pick up your container from
the destination port if your bill of lading is to "Container
Yard" - indicated by "CY" typically. POD "Port of Discharge"
is typically also listed on an Ocean BOL.

Your Dray Carrier is a specialized trucker experienced with

picking up from their local terminal. They'll know the
operating hours and expectations for their port (They differ
port to port).

They also may be able to provide their own chassis - the

equipment needed to load the container onto the truck.
Some ports have chassis pools of their own, which truckers
can pick up at the time they arrive - but a nationwide chassis
shortage has turned this into a daunting task, with most
depots completely empty.

The biggest issue with container pickups is that you only

have a few free days to get all this equipment in order to pick
up. This is usually 3-5 days, typically explained in the
contract with the Ocean Carrier and driven by the ports
they're going into (Some ports tend to be more lenient than
others when discussing storage days).

Picking Up Containers from Inland Rail

Locations

You can tell if your container is scheduled to rail inland if it

lists the inland location on the Bill of Lading as the Port of
Discharge - POD.

Inland rail depots work similarly to ports; however you will

need to wait for the container to hitch a ride on a train.
Typically this is no more than 2-4 days, but when capacity is
tight, that could take a week or even sometimes more.

Inland Rail depots have their own chassis reserves, however,

they're more likely to have less chassis than ports these
days. Unfortunately, that means your trucker may have to
wait several days for a chassis to become available, meaning
you will owe storage charges.

Typically you only get 2 free days to pick up containers from

rail depots. This presents a huge hurdle, as trains arriving
Friday nights are sometimes already counted as "in
demurrage" by Monday morning when the rails open!

Returning Containers
As the warehouse, it's optimal to have a container unloaded
as fast as possible, hopefully within 24-48 hours of receiving
the container into the warehouse.

Storage charges incurred after a container is pulled from

port is called "Detention", typically lower of a charge than
"demurrage", which is incurred prior to pickup.
Detention free time typically is about 7 days, but contracts
for high-volume companies can be negotiated with Ocean
carriers for more - I have seen 14 calendar days free time.

Truckers should also try to swap one-for-one, returning

empty containers with loaded containers waiting for them at
the port - therefore keeping their chassis and making the
process more efficient. However, that's not always the case.

Understanding Port Operations and

Logistics
In conclusion, there are many aspects to understand on Port
operations. Many times, delays happen outside of anyone's
control, so it's also helpful to keep a level head and use
visibility tools to keep everyone aware. It's a complicated
process; and best to work with experienced forwarders and
brokers due to that.

McKenzie L.

McKenzie is the main author and creator of Supply Chain

flow. They are currently a Supply Chain Engineer, and have
many years experience in the industry as well as a recruiter
with a focus in Supply Chain Candidates.