Australia’s average crane rate is about 28.1 boxes per hour per crane, according to the latest ACCC Container Stevedoring Monitoring report.
Box moves per hour per crane is a key metric. The faster a crane works, the more quickly a ship is unloaded and reloaded. The faster a ship is served at the berth, then the faster it can leave the berth. Which makes available more time for more ships carrying more cargo.
We’ll come back to this a bit later because it’s super-important.
Australian averages vs global average(s)
Is 28 box moves per hour per crane a good figure? The global average ranges from about 22 box moves per hour per crane for the smaller vessels and it hits about 25 box moves per hour per crane for vessels of about 13,500 TEU, according to the World Bank / IHS Markit report from earlier this year. So, when measured against the global average, Australia’s crane rates are above the global average.
But “average” figures are notorious for hiding extremes.
Take, for instance, the Port of Haifa, Israel, which set a productivity record of 319 box moves per hour with six cranes on one ship. That’s twice as many cranes as you’ll typically find assigned to a ship in Australia. And it’s about 53 box moves per hour per crane – pretty close to twice the Australian average crane rate. The record crane rate on that record-breaking shift was just under 75 box moves per hour per crane. That’s more than two-and-a-half times the average Australian crane rate.
Over in the United Arab Emirates, in the Middle East, executives from the Port of Sharjah have repeatedly declared on the local conference circuit that Sharjah can handle around 60 box moves per hour per crane.
Meanwhile, over the ditch, our Kiwi friends at the Port of Tauranga are described by the ACCC as consistently outperforming our best ports.
Suddenly, Australia’s average 28 box moves per hour per crane is looking a bit, well, below-average.
Closer to home
Is 28 boxes per hour per crane even a good average for Australia?
Well, you can probably guess the answer to that already. It’s “no”.
And that’s because average figures hide extremes. Some of our ports, (which shall (for now) remain nameless) sometimes only hit 12 or 14 box moves per hour per crane (i.e. more than six times fewer than the fastest ports in the world) and hit an average of about 15 box moves per hour per crane. The best ports in Australia are hitting about 30 box moves per hour per crane.
So the average hides quite a disparity in crane rates around Australia.
What difference does it make if some ports hit 15 and others hit 30?
It makes a huge difference in the number of hours it takes to unload the ship and, as time is money, it makes a huge difference in the direct cost borne by the vessel. Ships are very expensive assets. Even if a vessel is just floating in the water and is not going anywhere (and so is not burning fuel for propulsion) it is burning money. Crew need to be paid, crew need to eat, insurance has a cost and so on and so on. Right now, all of these costs are very expensive. In the current market, a non-sailing 6,000 TEU ship will cost something in the region of about AUD$111 a minute (1).
As we will see from the table below, the lesser performance of Port A compared with Port B results in a huge difference in terms of time saved and costs saved. Bear in mind these time and cost savings are just for one ship. Many companies operate several ships in Australia and they call many times in Australia each year. The lost time and the direct costs compound.
Port A vs Port B: cost in hours and USD$ to unload ships at 15 and 30 box moves per hour per crane; three cranes per ship
| Ship size (TEUs) | Hours to unload with 15 box moves (Port A) | Ship costs USD$ at Port “A” | Hours to unload with 30 box moves (Port B) | Ship costs USD$ at Port “B” | Hours saved | USD$ saved |
| 2,500 | 56 | 188,431 | 28 | 94,215 | 28 | 94,215 |
| 3,500 | 78 | 281,627 | 39 | 140,813 | 39 | 140,813 |
| 4,500 | 100 | 426,675 | 50 | 213,338 | 50 | 213,338 |
| 6,500 | 144 | 720,387 | 72 | 360,193 | 72 | 360,193 |
| 8,500 | 189 | 1,066,002 | 94 | 533,001 | 94 | 533,001 |
Ok, the figures in the table above are a simplified. We’re not aware of any ships that have taken 189 hours (8 days) to unload. It’s a kind of theoretical worst case.
In reality, we know that ships with a capacity bigger than 8,500 TEU are handled far more quickly than indicated in the table above. There was a 10,600(ish) TEU ship handled in a couple of ports in Australia back in June 2020 and it was handled at port in about 44 hours.
Now, before anyone writes in to complain, it’s likely that this big vessel didn’t actually have 10,600 TEU aboard and its likely that there wasn’t a 10,600 TEU container exchange (e.g. 5,000 offloaded and 5,000 onloaded). In these kinds of scenarios in Australia the container exchange is normally a lot less than the nominal capacity of the ship. For instance, there was an 8,000(ish) TEU vessel that was handled in Australia in December 2020 but with a container exchange of 6,516 containers. It was handled within 90 hours.
But isn’t all of this quite indicative of the problem?
A theoretical worked example
We know for a fact that some of our Australian ports have box rates of about 15 box moves per hour per crane (and, on some shifts, even lower than that). We also know the current average box rate as reported by the ACCC is about 28 box moves per hour per crane.
Let’s assume that Australian ports can handle ships of above 10,600 TEU or so in 44 hours when they choose to do so.
A ship of 10,600 TEU being handled in about 44 hours implies a box lift rate of about 241 boxes per hour.
Incidentally, we don’t know how long the ship was ‘under-the-cranes’, so to speak. We don’t know if the cranes were actually working the ship for all of those 44 hours. It could be that there was some idle-at-berth time. But, anyway, let’s assume that the ship was being solidly worked for the entire 44 hours. And, as remarked above, we don’t know how many containers were actually handled. But for the purpose of the illustration, we’ll assume 10,600 TEU.
At that rate, three cranes would have a lift rate of 80 box moves each per hour (as high as, or higher than, the world’s best!). Four cranes would have a rate of 60 box moves per hour (more than twice Australia’s current average) and five cranes would have a rate of 48 box moves per hour (still way higher than the Australian average).
A port would, in fact, need to deploy nine cranes to lift about 241 boxes an hour so as to service a fully laden 10,600 TEU ship in 44 hours, assuming that all the cranes worked at an average crane rate of 28 box moves per hour.
Let’s see another worked example
As we indicated above, there was an 8,000 TEU capacity vessel that was handled in December 2020. It had a container exchange of about 6,500 containers, although we don’t know how many were discharged from the ship and loaded on to the ship. So, for the sake of argument, we’ll assume a discharge of 6,500 and no on-loading. The container exchange was apparently completed in 90 hours, which tends to imply that the 90 hours was “time under the crane” as opposed to total time from arrival to departure. But we don’t know how many cranes were assigned to work the ship.
So if there was one crane working the ship we can simply divide 6,500 by 90 to give a crane rate of 72 box moves per hour per crane. Yet, it doesn’t seem likely that only one crane would be deployed. We can add more cranes and see how that affects performance.
If, as is typical in Australia, three cranes were deployed, then it would be 24 box moves per hour per crane to move 6,500 boxes in 90 hours. That’s a fair bit less than the current 28 average box moves per hour per crane rate in Australia. The terminal in question has been known to deploy four cranes and actually owns five cranes, which would make the crane performance even slower at 18 and 14 box moves per hour per crane respectively.
6,500 TEU ship worked in 90 hours; implied crane rates
| Cranes deployed | Implied box moves per crane per hour |
|---|---|
| 1 | 72 |
| 2 | 36 |
| 3 | 24 |
| 4 | 18 |
| 5 | 14 |
Assumes 8,500 TEU ship, 6,500 boxes discharged, 90 hours under the crane, figures are rounded
But how much better could the discharge have been?
Well, if performance matched the Port of Haifa at, say, 50 box moves per hour, then we could divide 6,500 TEU by 150 lifts per hour (three cranes each working at 50 box moves per hour; and which is, incidentally, still much slower than the world’s best) then we’d end up with about 43 hours. That’s less than half the time that it actually took to work a ship with a 6,500 container exchange.
Back then, the one-day cost of a ship that wasn’t actually sailing (therefore minimal fuel consumption) cost about AUD$55,200 a day (2).
Let’s have a look at how the money-cost and time-cost compares with three cranes working a 6,500 full ship at a rate of 24 box moves per hour and also at a rate of 50 boxes per hour.
6,500 TEU discharge with three cranes with a daily
ship-operating cost of AUD$55,200
| 24 boxes per hour | 50 boxes per hour | |
|---|---|---|
| Time (hours) | 90 | 43 |
| Cost (AUD$) | 207,846 | 99,766 |
Boosting performance up to 50 box moves per hour per crane significantly cuts time under the crane and massively cuts the direct cost to the shipping company. The dollar-savings would be far greater today as the one-day non-sailing cost of a 6,000 TEU ship is about AUD$159,000.
What could it look like with much better performance?
Examples from around the world show that the average of box moves per hour per crane can be far higher than what we see in Australia. What difference would that make? Well, let’s have a look…
Nearly the best of the best “Port C”:
50 box moves per hour per crane & five cranes per ship
| Ship Size TEUs | Hours to unload | USD$ cost of ship during unload time | Hours saved compared with “Port A” | USD$ saved compared with “Port A” |
|---|---|---|---|---|
| 2,500 | 10 | 33,918 | 46 | 154,513 |
| 3,500 | 14 | 50,693 | 64 | 230,934 |
| 4,500 | 18 | 76,802 | 82 | 349,874 |
| 6,500 | 26 | 129,670 | 118 | 590,717 |
| 8,500 | 34 | 191,880 | 155 | 874,122 |
We called this table the “nearly the best of the best” because we haven’t even started to discuss such matters as advanced cranes that can lift two twenty foot boxes at a time, or even four twenty foot boxes at a time. There are ports around the world that employ such technology.
Putting technology matters aside, we can see that sub-optimal port performance is causing huge wasted costs and wasted time.
And, remember, the time-costs and money-costs of poor port performance compound over time. Ships run on schedules. If a vessel is late to Port A, then it arrives even later than scheduled at Port B. Then it is made to be even more late by the time it gets to Port C. This continually compounding lateness forces ships to go faster, which causes them to burn a disproportionately large amount of fuel so as to catch-up, which increases cost. At some point, the lateness is so great that the only way to catch up is to reduce service levels by skipping ports and by reducing service frequencies (e.g. drop from a weekly service to a fortnightly service).
Taking ships out of a rotation results in a massive reduction of supply. If congestion is so bad that every fifth voyage in a loop is blanked then that’s a 20% cut in capacity. If many shipping companies are taking ships out of service – even infrequently – it causes a big cut in supply.
Faster crane rates benefit everyone
A shorter time at berth benefits shipping companies directly in lower costs. But the benefits of faster crane performance are actually so much greater than the direct savings to the ship.
A shorter time alongside means more ships are served quicker. It means ships can spend more time earning, so it massively cuts opportunity cost. It’s less waiting time at anchorage and / or less time travelling slowly on the high seas. It’s also less time speeding up after a slow port call. Going fast burns a disproportionately greater volume of fuel which is extremely costly. Faster crane performance means less congestion which, in turn, means more sailing time, which means less wasted supply of shipping capacity. More shipping capacity likely means lower freight rates. It also means more services, more ports of call, and a better quality of service as ships are able to keep to their timetables better.
Better quality of service, more capacity and at a lower rate benefits cargo owners which, ultimately, benefits the people who buy goods sold in shops or from other businesses.
From the port’s perspective, faster crane rates mean a faster turnaround of ships and more cargo throughput which means more money for them. It means a better berth utilisation and a better return on assets.
Faster and better port performance benefits everyone. But it isn’t happening. And that’s despite massive investments in productivity and better (i.e. faster) cranes at the ports.
Clearly, something, somewhere, isn’t quite right on the Australian waterfont.
Future is… worrying
As far as we understand, it is near impossible at the moment for Australian ports to service 10,600 TEU ships if they are fully laden. Right now, it is possible – but takes a long time – for Australia to service ships of about 6,500 TEU.
Looking forward, there is cause for concern. COVID has shown us what will happen if there is a small increase in container volumes. The answer is widespread congestion all around the world and in Australia too. Shipping companies will be forced to cut services because of an inability of ports to cope. Importers and exporters will left frustrated and disappointed. Australian families will be left frustrated and disappointed.
Given that the trade forecasts show a huge increase in trade, and given that bigger ships will be coming more and more frequently (because shipping companies are building more, bigger ships and fewer mid-size ships), then Australian ports will need to be able to service bigger ships.
Just as well we’re not facing a four-fold increase in trade in the next few years, eh? Eh? Eh?
There are forecasts for trade volumes at some ports to rise from about 2.75 million(ish) TEU up to 8 or 9 million(ish) TEU. If our ports have an average of about 28 box moves per hour per crane and are limited to three cranes per ship, how will they cope with a three-fold increase in trade?
They won’t.
A big effort is needed
Ports need to address physical barriers to putting more cranes to work on ships. They also need to address the endemic and persistent workforce and industrial relations issues that have plagued the waterfront for, literally, decades.
Ports absolutely must get those cranes rates up.
Container ports must up their game… it’s the only sane conclusion.
(1). Figures are calculated from publicly available data. Raw data changes every week. Data from even a few weeks ago should not be relied upon as being current. Shipping Australia re-calculates its data every week.
(2). We can’t state that a specific ship cost that amount per day. A lot will depend upon how the ship is financed and who, exactly, owns it and what the specific ship’s commercial arrangements are. We can only say that, generally, a ship of such dimensions can be considered to cost an approximate per day.
