Trucks are an understated but essential part of port logistics. The truck turnaround time can make a massive difference in the port efficiency, making its effects felt in the whole supply chain.
Logistics companies are always on the run for on-time delivery of the cargo. And a major part of the logistics chain is the middle-level operation like the availability of chassis, trucks, etc.
Every freight forwarding company is looking for ways to increase efficiency in its operations. The one aspect they often overlook is the truck turnaround time. It affects the port logistics massively and is a vital indicator of any port’s efficiency.
An increase in truck turnaround time has a direct impact on anyone who is a part of the supply chain. Such as shippers, shipping companies, terminal operators, and customers.
Here we’ll explain everything about the truck turnaround time. As well as how it can be improved for maximum efficiency.
What is Truck Turnaround Time?
Truck turnaround time is the total time spent by a truck in the terminal area. From gate-in to gate-out for picking and/or dropping a container. It includes the time from the arrival, loading, and unloading of containers, inspecting a truck, completing documentation, and going out from the terminal.
Impact of Truck Turnaround Time in Port Efficiency
Truck turnaround time is one of the essential key performance indicators (KPIs) in port logistics. Shorter turnaround time is economically viable. As it ensures quick loading and unloading processes and reduces the risk of bottleneck situations at the ports. It also saves money and resources for the company.
1. Port Congestion
Congestion is never an ideal case scenario in port logistics. High turnaround time can slow down the outward movement of cargo from the port. It can disrupt the entire flow of operation and exhaust the storage facility.
2. Traffic Flow Disruption
If the truck takes time to exit the port, it can increase the inflow of incoming trucks into the port. It can cause a bottleneck situation for essential activities such as vehicle security check, loading/unloading operations of cargos as well as administrative operations. All this adds up to increased turnaround time and further impacts the efficiency of the port.
3. Increase in Logistics Cost
Logistics cost is one of the major costs in port operations. And high truck turnaround time has a domino effect on the entire supply chain network. Trucks wait for long hours, thereby decreasing their profitability and increasing the traffic. Increased congestion drives up the time taken to load/unload the container. Something that leads to further cost inflation. It can increase freight charges as well as the logistics costs of ports.
4. Demurrage & Detention Charges
Demurrage & detention are the charges companies pay for using containers after they have spent more than the assigned free time. These charges can make a sizable impact on freight expenditures. Truckers may have to wait for hours in the queue before picking up a container due to the high truck turnaround time in ports. And that can amp up the demurrage and detention charges significantly.
If you want to learn more about how much demurrage and detention the 10 biggest carriers charge across the 20 biggest ports, you can read the report here.
For example, upon exceeding the free days limit on the ports of UAE (Port of Jebel Ali), the charges start from $20 for 20’ and $40 for 40’. The prices then increase every 5 days. These additional surcharges can drive up the logistics cost significantly.
Want to save money on demurrage and detention charges? Container xChange can help you with that. Click on the banner below and schedule a quick demo with our team – they’ll show you how xChange can help your business.
5. Cargo Delay
Cargo delay happens when the ports run out of storage facilities. Due to high truck turnaround time, the container ships cannot exit the docks. That leaves the incoming vessels without space. This situation leads to a longer wait time for vessels until existing cargos are cleared from storage facilities.
6. Safety Concern
Ports have their standard operating procedure for safe operations. But when the inflow rises due to high truck turnaround time, it becomes difficult to follow the safety procedures, increasing the risk of hazards.
7. Customer Satisfaction
High truck turnaround time can lead to extended shipment delivery time and may affect the relationship with clients.
8. Overall Efficiency
Trucks are critical assets of any company. And high turnaround time leads to lower asset utilization. Besides, high wait times may cause dissatisfaction among staff members and truckers, leading to unproductive operations.
How to Improve Truck Turnaround Time?
Low truck turnaround time is not only an indicator of efficiency in the port. It’s also an indicator of high-quality operations. Here are some of the ways, that truck turnaround time can be reduced to make the entire logistics chain more efficient.
Automation & Technology
Automated load pads for loading and unloading containers can cut back the unloading time. Computerized tracking with automated stock updates will eliminate any manual tasks, thus improving the truck turnaround time.
The Port at Abu Dhabi uses appointment application technology to schedule pick-up and drop off of all the containers. This enables port authorities to organize the containers ahead of time and reduce the turnaround time of trucks.
Upgrading Additional Resources
Ports can use two gates instead of one for inspection and registration of trucks. They can also use more lifting-cranes to improve the loading and unloading time of containers. Bringing additional resources into the system can reduce wait time and improve the turnaround time of trucks. The Khalifa port added additional Automatic Stacking Cranes(ASC) to decrease the truck turnaround time in the port.
Another option to reduce the truck turnaround time is to outsource some to the activities such as truck inspection and registration. A buffer area can be created outside the container terminal to check the trucks for safety and paperwork simultaneously. Once the checking is cleared, only trucks are allowed to enter the container terminal.
Gate entry process, loading-unloading operations, and the administrative process can be further simplified so that trucks don’t have to stop and wait at 8 different places to verify again and again. This simple step can improve the turnaround time of trucks significantly. One place that has made the process more simple is Abu Dhabi Port Trust. They have introduced optical character recognition and RFID tags to speed up the truck entry/exit process.
More pressure and surcharges
As much as 90% of global trade is carried out by the water. Something that will increase further with the raising capacity on the vessels. That will mean more pressure on the container terminals. As well as more surcharges such as demurrage and detention.
At xChange, we can’t do much about the truck turnaround time at the terminals. But we can, however, help you avoid surcharges like demurrage and detention when the containers are stuck at the port for longer than expected.
With SOC containers you can almost completely avoid the costly demurrage and detention charges. Charges that are added by the carrier, who owns the containers. SOC is short for Shipper Owned Container – thus the container is owned by the shipper. The SOCs, as an alternative to the common COC containers, can help you avoid demurrage and detention costs.
At xChange, all you have to do is type in the pick-up and drop-off location and within seconds you’ll have a list of potential partners and available SOC containers. Often, it doesn’t cost anything to use the containers, as the shippers want their containers to be repositioned.
You can try the public search on xChange right below and see how many containers are available at your chosen pick-up and drop-off location.
With members on xChange you negotiate a per diem charge with the supplier in case you exceed the free-days. This charge is significantly lower than the demurrage and detention.
If you’re interested in learning more about how xChange can help your business, click on the banner below and schedule a quick demo!