Understanding Port Operations and Logistics

Cargo ship docked at port — 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.

Prior to Shipping
Port Operations
Picking Up Containers
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.

CY/CY - Container Yard to Container Yard, meaning the carrier is only responsible to transport from origin to destination port or inland rail depots.
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.
Door/CY - Door of the origin address to the final port / final delivery location / Container Yard - Typically listed as "POD" = Port of Discharge
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.

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.