ASEAN PORTS ASSOCIATION

BEST PRACTICES MANUAL ON

LOGISTICS MANAGEMENT

The information contained in this document is solely for the use of the ASEAN Ports Association (APA) for the purpose for which it was prepared. The APA Permanent Secretariat takes no responsibility for inaccurate or incomplete information that may have been submitted to it. The facts published indicate the result of inquiries conducted and no warranty as to their accuracy is given by the APA Permanent Secretariat.

Published by the Permanent Secretariat of the ASEAN Ports Association, Philippine Ports Authority, Marsman Building, South Harbor, Port Area, Manila, Philippines

FOREWORD

This reference material, one in a series of APA port practices manuals, is the fruition of the collaborative efforts of the 25^th APA Main Meeting held in 1999 in Bali, Indonesia. It is APA’s intent to draft a manual that would provide yardsticks on the strategies of logistics management and how these are translated into practice in APA member-ports.

Responses indicated on the customized survey questionnaire, which underwent several amendments to address identified survey lapses, served as groundwork in the preparation of the manual. A total of 34 respondent ports/terminals from the eight APA member-countries, namely: Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore and Thailand, took pains in providing the needed data inputs. The survey focused on logistics management and the strategies formulated and adopted by the port operator and the port user taking into consideration various areas of concern such as the coordination of information, berth allocation, cargo handling equipment, warehousing/storage in port, transportation services, collection of customs duties, computerization of the container terminal and other types of terminal in the port, road/rail network and other logistics support services.

At hindsight, the survey returns did not yield any definitive standards or “hard and fast” rules on achieving quality port management and/or service delivery, with a singular ASEAN perspective in mind. It is to be emphasized that the benchmarks for effective logistics management are the result of the interplay of resources, capabilities and constraints peculiar to a given locale and influenced by idiosyncrasies of the stakeholders concerned.

In view of the foregoing, it was, thus, decided and agreed upon during the 28^th APA Main Meeting, held in 2002 in Singapore, for the APA Permanent Secretariat to just proceed for the time being with the compilation, analysis and presentation of the canvassed results as captured through the latest survey instrument. The Permanent Secretariat, however, committed to come up with a more refined and comprehensive manual, which may provide a general reference for a wide range of users/readers, especially those affiliated with the maritime industry.

The benefit this manual can offer could only be something relative, depending on the objectives of the user. Further improvements can be incorporated into this text to gradually and eventually fully satisfy the port information needs of APA member-ports. So, that said, we can only commit to have this undertaking as a continuing process that would document the best and the exemplary in ASEAN logistics management practices.

ACKNOWLEDGMENTS

This report was prepared by the Permanent Secretariat of the ASEAN Ports Association which would like to acknowledge the following agencies, groups and individuals:

A. BRUNEI DARUSSALAM

1. Butra Heidelberg Zement

2. Muara Port

B. CAMBODIA

1. Phnom Penh Autonomous Port

2. Sihanoukville Autonomous Port

C. INDONESIA

1. IPC I – Indonesia

2. IPC II – Indonesia

a. Pajung UTPK

b. Pontianak

3. IPC III – Indonesia

a. Aneka Kimia Raya and Conventional Terminals

b. Boom Baru

c. Jambi

d. Surabaya

e. Tanjung Ermas, Central Java

f. Tanjung Perak

g. Tanjung Priok/Bogasan

h. Teluk Bayur

D. MALAYSIA

1. Johore Port Berhad (JPB)

2. Kelang Container Terminal, North Port, Port Klang

3. Kelang Port Management, North Port, Port Klang

4. Kota Kinabalu

5. Kuantan Port Consortium

6. Kuching Port

7. Miri Port

8. Penang Port

9. Port Tanjung Pelepas

10. Rajang Port

11. Sabah Ports

E. MYANMAR

1. Sule, Bo Aung Kyaw and Hteedan Wharves

F. PHILIPPINES

1. Manila International Container Terminal (MICT)

2. North Harbor

3. South Harbor

G. SINGAPORE

1. Singapore Terminal Operator

2. Jurong Port

H. THAILAND

1. Bangkom Port

2. Laem Chabang Port

TABLE OF CONTENTS

I. INTRODUCTION/BACKGROUND………………………………...	1

II. DEFINITION OF BEST PRACTICE………………………….……	2

III. BEST PRACTICES
1. General Information (Type of Logistics Operation)...…….…...	3
2. Coordination of Information...…………………………….……	4
3. Berth Allocation...………………………….………………….…	8
4. Cargo Handling Equipment...………………….…….…….……	10
5. Warehousing/Storage In Port...………………………..…..……	12
6. Transportation Services...……………………..………..….……	18
7. Collection Of Customs Duties...……………………..………..…	20
8. Computerization Of Container Terminal.…..……...………..…	25
9. Computerization Of Other Types Of Terminal In The Port….	27
10. Road/Rail Network...…………………..……………………...…	28
11. Other Logistics Support Services...……………………..………	29

IV. APPENDICES
A. Questionnaire On Logistics Management
B. Results Of Questionnaires On Logistics Management

ABBREVIATIONS / ACRONYMS

1. APA - ASEAN Ports Association

2. ASEAN - Association of Southeast Asian Nations

3. ATI - Asian Terminals, Incorporated

4. BOC - Bureau of Customs

5. CBA - Collective Bargaining Agreement

6. CFS - Container Freight Station

7. CPO - Crude Palm Oil

8. DWT - Deadweight Tonnage

9. EDI - Electronic Data Interchange

10. FCL - Full Container Load

11. GRT - Gross Registered Tonnage

12. GT - Gross Tonnage

13. HP - Horse Power

14. ID - Identification

15. KPH - Kilometer per Hour

16. LCL - Less than Container Load

17. LOA - Length Over-all

18. MARINA - Maritime Industry Authority

19. MICT - Manila International Container Terminal

20. MT - Metric Ton

21. NGH - Net Gang Hour

22. NRT - Net Registered Tonnage

23. PCG - Philippine Coast Guard

24. PPA - Philippine Ports Authority

25. PSA - Port of Singapore Authority

26. PUNNS - Port Users’ Needs and Satisfaction Survey

27. PVOER - Port Vessel Operations Evaluation Report

28. VOC - Vessel Operations Commitment

DEFINITION OF TERMS

1. Port Authority - the port management body that is vested by the State with the authority to oversee the ports within a specified area of jurisdiction.

3. Port Contractor - any government or private entity, individual or company that is granted by the State or Port Authority, as the case may be, with the permit or license to provide services in a port, usually related to infrastructure development.

4. Port Operator - any government or private entity, individual or company that is granted by the State or Port Authority, as the case may be, with the permit or license to operate the port and provide other related services.

5. Port Owner - any government or private entity, individual or company that has the legal entitlement or proprietorship of the port.

6. Terminal Operator - any government or private entity, individual or company that is granted by the State or Port Authority, as the case may be, with the permit or license to operate the terminal in a port and provide other related services.

BEST PRACTICES MANUAL ON

LOGISTICS MANAGEMENT

I. INTRODUCTION

Background

In its 25^th Main Meeting held on December 1-3, 1999 in Bali, Indonesia, the ASEAN Ports Association (APA) identified a number of projects designed to establish standards of efficiency and productivity in member-ports. One such project was intended to come up with a manual on best practices on Logistics Management designed to provide benchmarks for effectiveness in this area of management.

A draft survey questionnaire was prepared in early 2000 to generate the information necessary for the preparation of the manual. After undergoing several revisions/amendments, the finalized form of the questionnaire was disseminated to ports of APA member-countries in February 2001. The accomplished forms were processed by the APA Permanent in May of the same year.

The survey did not yield sufficient data needed for the manual. Among the major problems encountered in the analysis of the responses were dissimilarities in the units of measurement being used by member ports, incomplete or unrelated responses, and unanswered questions.

The results of the February 2001 Survey were presented and discussed in the 22^nd APA Technical Committee Meeting held in Cebu City, Philippines on January 22-24, 2002. Further amendments were made on the questionnaire to address the identified deficiencies. The revised questionnaire (Annex A) was subsequently re-distributed to concerned member-ports in February 2002. The questionnaire focused on logistics management and the strategies formulated and adopted by the port operator and the port user taking into consideration the coordination of information, berth allocation, cargo handling equipment, warehousing/storage in port, transportation services, collection of customs duties, computerization of the container terminal and other types of terminal in the port, road/rail network and other logistics support services.

Thirty-four (34) ports/terminals from the following eight APA member-countries responded to the January 2002 survey questionnaire:

1. Brunei Darussalam – 2

2. Cambodia 2

3. Indonesia – 11

4. Malaysia – 11

5. Mynmar 1

6. Philippines – 3

7. Singapore – 2

8. Thailand – 2

---

Total 34

As with the results of previous surveys, the following problems were encountered:

1. Deviation from the uniform units of measurement for productivity standards, cargo volume, capacity and rates specified in the questionnaire;

2. Unclear or incomplete responses;

3. Unanswered questions;

4. Use of acronyms;

5. Names of the same port documents differed from port to port;

6. Poor response in submission of relevant reference materials on policies, guidelines and flowcharts as requested in the questionnaire to substantiate the information/data entered in the survey forms.

7. Submitted reference materials were prepared in the language of the country of the respondent.

II. DEFINITION OF BEST PRACTICE

The term “Best Practice” derives from various phrases now being used to refer generally to processes, procedures and measures designed to improve performance, in this case, in logistics management. There are no generally accepted criteria by which to judge which is and which is not best practice.

In addition, best practices could be applied only to cases where similar sets of operating conditions and characteristics prevail. Hence, the same operating standard would have meaning only in one kind of operating environment and would be totally meaningless in another.

Best practice also depends on one’s viewpoint. A port user such as a shipping line, a shipper or a consignee would have more stringent measures of performance compared to, say, a cargo handling operator who must deal with various constraints such as physical limitations in the port, equipment limitations, labor laws and policies, port authority regulations, institutional and other concerns as well as meeting his own profit targets. The major respondent categories pre-identified in the Survey are as follows: port authority, terminal operator, port operator, port contractor, port owner/operator and port owner. Hence, these shall constitute the main perspective for assessing best practices in the ASEAN ports.

One perspective that would be an important subject for a separate study that may be integrated in this manual on best practices is that of the port users (shipping lines, shippers, consignees). A move in this direction was the Port Users’ Needs and Satisfaction Survey (PUNSS) conducted by the Philippine Ports Authority (PPA) in 2001. The Phase II of PUNSS which was completed in July 2004 expanded the coverage to include terminals not included in Phase I. An APA-wide diagnostic survey should yield results that would be informative and provide some blueprint for documenting best practices in the ASEAN region.

WHAT IS LOGISTICS?

This is a much abused word in today’s port and shipping parlance. Its meaning extends well beyond not only the maritime sector but the universe of transportation as well. Rather, it encompasses the entire gamut involving all activities that have anything to do with the physical distribution of cargo and, in effect, has no boundaries. The term was originally used by military establishments and was defined as a branch of military science having to do with moving, supplying and quartering (lodging accommodations) troops.

III. BEST PRACTICES

1. General Information (Type of Operation in the Logistics Chain)

On general information particularly pertaining to type of operation or service in the logistics chain, the following were the categories listed in the survey questionnaire:

Type of Operation	No. of responses	% of Total No. of Respondents (34)
a) Port Authority	28	82
b) Shipper/Exporter/Importer	4	12
c) Hauler	3	9
d) Shipping Line	4	12
e) Other parties	10	29
Total	49

The following general observations can be made in this regard:

q Of the 34 respondents, 28 are port authorities while four are port operators. Respondents from Indonesian ports, IPC II, and IPC III, as well as from Thailand indicated themselves as falling under more than one category, that is, these entities were performing multiple roles (Please see Question A-1 on the questionnaire.). IPC II, for example, stated that it is a port authority, a shipper/exporter, a shipping line. IPC II indicated that it is a port authority, shipper/importer, hauler and shipping line. Thailand ports, on the other hand, gave similar responses IPC III. In view hereof, it was difficult to determine to which category their answers to the succeeding questions were referring to. Four respondents – Johore, Kelang Port, Penang and Tanjung Pelepas – indicated they were specifically port operators. Out of 49 responses (counting the multiple responses), about 57 percent indicated the dominance of the port authority in the logistics chain.

q Some answers did not provide other related information. On Questions B(1), (2), (3), for example, the information as to whom the entity coordinates with was not provided. This information is important in processing and analyzing the results of this survey.

q Documents enumerated by the respondents provided only the title or names of the documents. For Question A(4), for example, there are over 20 documents listed. Some documents may be the same or similar but it was difficult to determine which. A brief description of the information the documents contain would have been helpful.

2. Coordination of Information

Coordination of shipments inside and outside the ports is carried out mostly through personal or direct contact and through electronic messaging and communication. Even for those with electronic messaging and communication facilities (except for Singapore and Port Tanjung Pelepas which use these facilities as their sole means of coordination), direct or personal contact is still an indispensable mode of coordination. In addition to these modes, Kelang Container Terminal utilizes a wap-active Client Access System to gather and relay data inside and outside the port zone. Shipments information being coordinated by the respondents are generally and basically the same.

For communication inside the port, the survey results indicated that out of 79 responses (including multiple responses), about 35 percent of the time electronic messaging and communication was already being utilized as a form of communication. On the other hand, about 34 percent of the time, direct or personal contact was still being used. It is difficult to say at this point if electronic messaging and communication would eventually replace all direct or personal communication and become the dominant mode of communication. It would appear that, probably compared to a decade ago, it has already made significant inroads into logistics communication in view of its being speedier and more convenient. Three of the respondents, IPC I, Tanjung Priok/Bogasan and Conventional Terminals (IPC III) indicated that they use electronic messaging/ communication exclusively.

Mode of Communication Inside the Port	No. of Responses	% of Total No. of Respondents (34)
a) Direct or personal contact	27	79
b) Electronic messaging and communication	28	82
c) Communication/Telecommunication	21	62
d) Other means	2	6
Total	79

In the case communication outside the port, about 35 percent of the respondents used telecommunications while 32 percent used electronic messaging/ communication. Some 28 percent still employed direct personal contact to communicate with the world outside the port.

Mode of Communication Outside the Port	No. of Responses	% of Total No. of Respondents (34)
a) Direct or personal contact	22	65
b) Electronic messaging and communication	25	73
c) Communication/Telecommunication	27	79
d) Other means	4	12
Total	78

The types of shipment information that were the subject of coordination included the following (with the results of the survey shown):

Shipment Information	No. of responses	% of Total no. of Respondents (34)
a) Volume of shipment	33	97
b) Type of shipment	30	88
c) ETA/departure of vessel carrying shipments	33	97
d) Dangerous or hazardous	31	91
e) Mode of handling	31	91
f) Name of consignee/ shipper/ etc.	31	91
g) Identification marks	29	85
h) Warehousing needs	28	82
i) Cargo handling equipment requirement	30	88
j) Others	22	65

The general observation and practice is that all of the foregoing logistics information is needed for effiective coordination among entities in the course of doing business in the port. The disclosed relevant information, as expected and being necessary, includes the volume of shipment, estimated arrival or departure time of the vessel, dangerous or hazardous nature of the cargo, mode of handling, name of consignee or shipper, and the requirements for cargo handling equipment.

Respondents reported a variety of documentation required for submission for cargo clearance and are as follows: (This listing follows the order shown in the survey results consolidation.):

Type of Document Required for Cargo Clearance	No. of users	% of Total No. of Respondents (34)
a) Manifest/loading list	12	35
b) Operator planning	1	3
c) Dangerous cargo	2	6
d) Import declaration/ customs declaration	10	29
e) Customs clearance/permit	11	32
f) Delivery order	14	41
g) Delivery list	4	12
h) Ship's cargo list	4	12
i) Animal list	1	3
j) Narcotic list	1	3
k) Personal effects	2	6
l) Letter of import	7	21
m) Discharging letter for cargoes from temporary storage	2	6
n) Letter of export	2	6
o) Delivery cargo/container slip	5	15
p) Wharf receipt	2	6
q) Arrastre payment	1	3
r) Shutout charges	1	3
s) Dangerous cargo clearance from PCG or PPA	1	3
t) Vehicle clearance from PNP	1	3
u) Quarantine clearance	1	3
v) DENR clearance	1	3
w) Bill of lading	9	26
x) Convoy note	4	12
y) Bonded cargo k-8	1	3
z) FZ form (approval to discharge load)	1	3
aa) A1 - Packing List	2	6
bb) A2 - Parking List	1	3
cc) A3 – Invoice	1	3
dd) A4 - Relevant Customs Forms	1	3
ee) A5 - Shipping Order	2	6
ff) A6 - Shipping Advice	2	6

Based on the foregoing tabulation of results, what appears to be common practice in logistics documentation (as well as common naming) indicates the following: Delivery order, Manifest/loading list, Customs clearance/permit, Import declaration/customs declaration and Bill of lading. The rest of the documents appear to be unique to the responding entities or to just a few of them. What also seems to be a concern that may be addressed by establishing a convention or agreement on the classification of logistics documentation since it is likely that some of the documents may have similar descriptions and purposes but different names.

The means used for submitting/receiving documentation as listed in the survey form are:

Means of Submission/Receipt

No. of Responses

BEST PRACTICES MANUAL ON

Prepared by the Permanent Secretariat of the ASEAN Ports Association