3-minute read
The time is now for chartering managers to progress from traditional, less accurate calculation methods when predicting laytime and unpaid time in ports.
Managing time and costs in ports is a key business consideration for dry bulk shipowners and operators, but traditional methods being used to predict them are not as accurate or effective as companies may think.
When chartering directors predict laytime and unpaid time in ports, they all too often rely on outdated calculation methods, such as the SHEX factor equation, to predict and account for delays. These calculations also commonly rely on easy-to-access – yet unreliable data – such as previous port cost estimates, manual port files, and advice from colleagues and/or agents.
The SHEX formula, which excludes Sundays and public holidays in its calculation for a total number of laytime days, uses flat factors across the year to conduct predictive analysis. Furthermore, Turn Time is almost always estimated to be 12 or 24 hours despite any mitigating conditions. And neither account for other factors such as unforeseen delays and bespoke weather nuances – all of which can have major implications.
This rigid approach often leads to inaccurate predictions, resulting in unpredicted voyage costs when unpaid time is not covered by demurrage.
Marcura conducted a study of over 20,000 dry bulk laytime calculations to evaluate the proportion of actual time spent by a vessel in port versus the time counted on the laytime statement and found that:
- For 79% of 20,000 laytime calculations we studied, the budgeted unpaid time was not sufficient to cover what really happened
- On average, 38% of the actual time in port is unpaid
- For 9% of the port calls, +70% of the time in port is not counted
Refined predictions
These survey findings point to a need to improve predictions further so companies can more accurately assess fixture risks and opportunities, and estimate laytime and port costs.
Marcura’s PortLog can help to create much more accurate predictions of these risks, laytime and port costs, and make a major difference to a company’s top line. This tool combines standardised Statement of Fact (SoF) data with AIS, weather, berth-level restriction and actual terminal effectiveness data – and applies actual Charter Party terms for a full laytime prediction.
Instead of relying on a rigid formula and faulty or outdated information, PortLog uses millions of data points to enable charterers to accurately and meticulously measure and analyse vessels’ turnaround times in ports, while also delivering key insights into costs, berth-level restrictions, and productivity.
Competitive advantage
Pacific Basin uses PortLog across its 280 owned and chartered vessels to drive operational, cost, and environmental efficiencies and better manage its ‘last mile’ supply chain.
Kristian Helt, Chartering Director, Pacific Basin, said the company has been investing in digitalisation and state-of-the-art systems to drive “greater operational and cost efficiencies”. In conjunction with this, the tool will help the company harness meaningful data to provide real insight and intelligence that will enable better-informed decision-making.
“Utilising an advanced platform like PortLog is representative of our strategy and commitment to such investments and to deliver a more optimised and efficient freight service in our customers’ supply chain. This enhances our competitive advantage and provides more value for our customers,” he added.
Changing old habits
It is important to remember that just because an industry has done something one way for 30 years does not mean it needs to keep doing it. Having a tool that provides insightful, meaningful data will make a significant difference by enabling better port time and cost estimates, and solving the unpaid time problem many owners and operators are still suffering from.
Predicting demurrage with PortLog
To view a demo of PortLog and better understand how to leverage the 38.2m digitised events in PortLog to identify fixture risks and improve the accuracy of your voyage estimates, click here.
The session covers:
- How to use PortLog to power-up your voyage estimates, with a focus on the value of predicting demurrage
- An overview of the Veson IMOS Platform integration
- A demo of some of the latest PortLog features, including “Will my vessel fit?”, Agent Request and cost drivers
- Exclusive port data insights
