If you're involved in the shipping industry, you know that dwell time (aka wait time at port) can have a significant impact on costs and efficiency, affecting the whole global supply chain.
That’s why the ultimate goal of shippers and port operators is to have shorter wait times at ports — to reduce operating costs.
To achieve this objective, we must first understand what causes prolonged idling at a port.
Our article covers everything you need to know about this concept, including:
The impact of dwell time and fees associated with it
Key port components and how they can affect dwell time
Ways to reduce wait times
But before getting into the nuts and bolts of it, let’s look over the basics.
What is Dwell Time in Shipping?
Key Port Components and their Impact on Dwell Time
In the context of shipping, dwell time is how long a vessel spends at a specific port or terminal.
It may also refer to the amount of time that a container or cargo spends at a port or terminal before being loaded onto a vessel or after being unloaded from a vessel.
The more delayed containers there are sitting in the yard, the longer it can take to locate and load the correct one.
Whenever a truck arrives to pick up a container, other containers are shuffled around to reach the one required. This is time-consuming and inefficient.
The longer the dwell times, the more containers there are sitting on the quayside and the longer truckers must wait while containers are moved to reach the older containers at the bottom of a stack.
Additionally, shorter dwell times occur when terminals store fewer containers and finish transactions faster.
Tanker and bulk carrier dwell times are governed by different factors than container vessel dwell times; these vessels do not operate published schedules.
Their times in a lightering zone or port may depend on:
Weather, tides and currents
Cargo volume and type being delivered
Cargo volume that must be lightered to allow mothership berthing
Number of lightering vessels employed and lightering operations needed
Remaining cargo volume of the mothership must unload after lightering
Having established a clear understanding of what dwell time entails, let's now turn our attention to its impact on the supply chain's overall efficiency.
The longer cargo is stuck in port, the more it costs shippers. This extra cost does not just come in the form of extra charges levied by the terminal operator or port authority but in the greater inventory-holding costs for the shipper.
Cargo stuck in port means tied-up working capital. It also prevents reliable just-in-time procurement and manufacturing operations for importers.Yet, dwell time doesn’t just impact shippers but ship operators too.
Shipping container vessels operate on schedules and delays in any particular port are felt across the service. The shorter the dwell time, the lower the vessel and marine-terminal operating costs.
Furthermore, dwell times for non-containerised break-bulk, roll-on/roll-off ships, cargo ships and tanker vessels and barges are influenced by different factors.
These vessels usually don’t operate on a schedule and their time in port depends on the volume and type of cargo and cargo-handling methods.
Now that we have explored the impact of dwell time on supply-chain management, let's explore the costs associated with it.
Dwell fees are the costs charged for the time a container or ship stays at a port.
These fees can vary depending on market conditions and the terminal’s location.
For example, beginning in the fall of 2021, in the ports of Los Angeles and Long Beach, dwell costs have been announced for containers remaining on-site for more than five or eight days, depending on container type, regardless of whether they are full or empty.
The fees for a container staying at the port for longer than the allowed time will be $100 for the first day, increasing by a further $100 per day ($200, $300, $400, etc.) until the container is finally removed.
Even though the port charges these fees to the shippers, the companies often pass them on to consumers by increasing the price of the transported goods.
So, dwell fees have a significant cost for shipping companies and end-consumers alike. Their effect ripples through the entire supply chain.
That’s why minimising dwell time is paramount!
But to find strategies that can help keep dwell costs low, we must get to the root of the problem — port infrastructure.
The operation of a port involves many different components and processes, all of which can impact the time that containers and cargo spend there.
Let’s look at the port components that affect operational efficiency and understand how they can impact dwell time.
A berth is a place to stop and secure a vessel for cargo transfer. Container and break-bulk vessels need bigger berths as the vessel’s full length is needed to unload and load cargo.
Roll-on/roll-off and bulk operations only require the vessel's full length occasionally. Insufficient berth availability leads to vessel delays. A delayed vessel taking berth space impacts the port’s schedules.
This refers to the number of channels, anchorages and waterways available to ships outside the port.
These navigable waterways lead from open water to the terminal. The channels must be maintained and dredged to ensure they remain navigable by all ships.
A lack of dredging in the channel will make the port inaccessible to larger ships with deeper draughts.
A terminal has multiple components, each with its own berths, storage and equipment. In addition, terminal design, infrastructure and efficiency significantly impact dwell time.
Efficiency in supply-chain connections can have a significant impact on dwell time at a port.
When the various elements of the supply chain are properly coordinated and operate smoothly, it can reduce delays and minimise the time containers and cargo spend at the port.
For example, if a port has efficient connections to rail and trucking networks, it can speed up the loading and unloading of containers.
Similarly, if the port has good connections to warehouses and other storage facilities, it can reduce the cargo’s waiting time before onward transport.
Storage is the space that port terminals have available for cargo. Off-terminal storage can include space for cargo before and after it is transferred to or from vessels.
This includes:
Parking areas for empty and loaded containers
Stations for truck chassis to haul containers
Parking for vehicles being transported in roll-on/roll-off ships and cargo ships
Packages to store rail cars
Space to pile dry bulk cargo
Tank farms for liquid bulk cargo
Warehouses for indoor cargo storage
Component #7: Weather
Adverse weather conditions lead to port closures and delays.
For example, high winds can mean that cranes can’t be used. Floods and droughts can make inland channels unusable. Ice and snowstorms mean some ports are regularly out of action in winter.
Therefore, it’s important to determine how resilient a port is and how quickly it can resume normal operations, to accurately estimate average dwell time and take the necessary steps towards minimising it.
Another thing that can help develop strategies to reduce dwell time is understanding the factors that affect it.
Let’s talk about that in the next section.
When asking ourselves how to reduce dwell time, it helps to know what aggravates or improves it.
To answer this question, we must understand the factors that shape dwell time in any scenario.
According to a 2018 report by The World Bank, cargo dwell time in sub-Saharan African ports is abnormally long.
Excluding the major ports of Durban, South Africa and Mombasa, Kenya, the average dwell time in most ports in sub-Saharan Africa is close to 20 days, compared to three to four days in most large international ports.
The report argues that the strategies of importers can lead to ports being used as cheap storage areas.
At the same time, collusion between shippers, intermediaries and controlling agencies may reinforce rent-seeking behaviours, to the detriment of cargo dwell time.
Handling and operational dwell time add only two days (except in cases of severe bottlenecks) to the average dwell time of 15 days and more.
Most of the dwell time consists of transaction time and storage time, which result from the performance metrics of controlling agencies and, even more importantly, from the strategies and behaviour of importers and customs brokers.
During unexpected volume peaks, terminal operators end up storing containers in every available space in their yards, even those locations not designed for storage.
This situation significantly lowers productivity.
While the strategy for most terminals includes space to handle surges, such as during peak seasons, when unexpectedly high volumes occur, a terminal’s capacity can be breached.
Speaking on this with Journal of Commerce (JOC) earlier this year, Sean Pierce, President and CEO of Los Angeles terminal operator Fenix Marine Services, commented:
“When container dwell times in yards quadruple from three days to more than 12, and truck turn times go from an average of 78 minutes in August to 98 minutes in January, terminals simply can’t flex up quickly enough.”
In a recent report, business consultancy McKinsey & Company suggests that automating processes limits the potential for human disruption and ensures more predictable port performance.
At present, though, poor data and siloed operations, amongst other factors, are impacting operational efficiency.
Through the Global Industry Alliance (GIA), MarineTraffic is invested in overcoming these operational barriers, which are currently disabling greater port efficiency.
The McKinsey report argues that should such efforts be successful, automated ports could, with careful planning and management, decrease operational expenses by 25 to 55 per cent and raise productivity by 10 to 35 per cent.
Now that we've discussed some of the factors that can impact dwell time at ports, let's move on to discussing three ways to reduce it.
By following these tips, you can improve the efficiency of your operations and keep your shipping costs under control.
Several steps can be taken to reduce port dwell time by preparing relevant documents and optimising appointments:
Ensure all necessary documentation is in order before arriving at the port. This may include customs documents, shipping manifests, bills of lading and any other documents required for the cargo or container.
Ensuring that these documents are complete and accurate can help to speed up the clearance process and reduce dwell time.
Optimise the timing of appointments and deliveries. Try to schedule appointments with customs officials or cargo handlers during periods of lower demand as this can help reduce delays and lower dwell time.
Similarly, try to coordinate the delivery of containers or cargo to the port so that they arrive at a time when they can be efficiently loaded or unloaded.
Work with port authorities and other stakeholders to identify and address any bottlenecks or inefficiencies that may be causing delays.
This may involve collaborating on process improvements or implementing new technologies to streamline the handling of containers and cargo.
You can monitor carrier and terminal performance to identify improvement opportunities for reducing dwell time.
You can obtain dwell times with MarineTraffic and check operative times in real time based on the most detailed mappings of ports, anchorages and berths worldwide.
In addition, you can compare carrier or terminal performance to your contracted times to see if they match up favourably.
While most market systems capture port calls when a vessel enters a radius around a port marker, our system distinguishes anchorages from port calls for the duration of port operations.
The MarineTraffic geometries database covers the exact port borders based on nautical charts and is enhanced by collective techniques of previously stalled vessels in the larger port region.
Furthermore, we have created a distinctive berth mapping system that accurately captures operational time data at each berth/terminal.
Altogether, this will allow you to design pickup schedules that reap the benefits of free time storage without overstaying, so minimising additional holding or demurrage fees.
Incorporating visibility technologies such as GPS tracking devices can assist users in reducing dwell time.
When used correctly, visibility tools can help:
Assess whether containers have been correctly loaded and unloaded, avoiding delays and reshipping expenses.
Measure actual stay time at terminals to eliminate unfair or unjustified charges that are often charged due to a lack of data to support your version of events.
Provide precise updates and ETAs, allowing you to plan for paperwork, pick-up and capital costs, such as customs-clearance charges.
Know when the goods will arrive, making it easier to plan downstream operations like sales and distribution based on your inventory that is currently in transit.
Enable you to discharge cargo more quickly and so liquidate working capital more promptly.
In other words, practical visibility tools like MarineTraffic, grant you real-time access to the most precise ETA predictions for every maritime shipment.
Now Over to You
To sum it all up, streamlined collaboration, open communication and increased supply chain visibility can help achieve shorter wait times at ports.
MarineTraffic can help with the latter as it combines three satellite-based Automatic Identification System (AIS) providers with the most extensive terrestrial AIS network (TER-AIS) for the most comprehensive global coverage and position updates.
Our platform outputs accurate, predictive ETAs so that you can proactively communicate arrivals and delays with port operators to ensure a smooth and fast unloading process.
Book a demo with MarineTraffic and discover the benefits of real-time container visibility!
