Guidance Note for the Container Port Performance Index 2023 (CPPI) Guidance Note for the Container Port Performance Index 2023 (CPPI) ©2024 International Bank for Reconstruction and Development 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank, together with external contributions from S&P Global Market Intelligence. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Guidance Note for the Container Port Performance Index 2023 (CPPI) Table of Contents 1 Objective of the CPPI ......................................................................................... 2 2 Methodology of the CPPI ................................................................................... 4 2.1 What the CPPI measures ................................................................................................... 4 2.2 How the CPPI measures time in port ................................................................................ 4 2.3 How are ports included in the CPPI ................................................................................... 5 2.4 How are ports ranked in the CPPI ..................................................................................... 5 3 Interpreting CPPI results .................................................................................... 7 4 Limitations of the CPPI ....................................................................................... 9 4.1 Uni-dimensional assessment ............................................................................................. 9 4.2 Data quality and coverage ................................................................................................. 9 4.3 Underlying root causes .................................................................................................... 10 5 Recommendations for stakeholders ................................................................ 13 Guidance Note for the Container Port Performance Index 2023 (CPPI) 1 1 Objective of the CPPI Guidance Note for the Container Port Performance Index 2023 (CPPI) 2 1 Objective of the CPPI Container ports are critical nodes in globally connected supply chains, handling merchandise and semi-finished products. The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy and for the sustainable development of ports. A timely turnaround of container ships is critical to keep logistics costs low and supply chains efficient so that ports remain resilient catalysts for development. Time-efficient container ports enable fuel and emissions savings from ships, making the index an important contributor to shipping decarbonization efforts. The objective of the CPPI is to provide an objective measure of container port performance, identify global or local trends in maritime container trade efficiency, and highlight where vessel time in port could be improved. Since its first edition in 2021, the World Bank has partnered with S&P Global Market Intelligence to publish the CPPI annually. Guidance Note for the Container Port Performance Index 2023 (CPPI) 3 2 Methodology of the CPPI Guidance Note for the Container Port Performance Index 2023 (CPPI) 4 2 Methodology of the CPPI 2.1 What the CPPI measures The methodology of the CPPI focuses on a comparative measurement of the total time spent by vessels in port, establishing a metric for container port efficiency. The CPPI methodology assesses the sequential steps of container ship port calls at a specified container terminal. ‘Total port hours’ is defined as the total aggregated time from the moment a ship arrives at the port (either port limits, or waiting zone, whichever event occurs first) until the vessel leaves the berth after having completed its cargo operations. Therefore, the CPPI also captures the wait time ships may experience before berthing. While a terminal may work a ship in a time comparable to global benchmarks, delays before cargo operations may still lead to schedule disruptions for shipping lines. In any event, this results in additional costs for shipping lines and consumers, and avoidable air pollution and greenhouse gases. However, wait time potentially occurring after the ship has departed from its berth is not included in the CPPI since this is no longer linked to port operations. 2.2 How the CPPI measures time in port The CPPI only measures time spent in container ports, strictly based on quantitative operational data. The CPPI builds on a dataset provided by ten of the world’s largest liner shipping companies, collectively operating close to 80 percent of global fleet capacity. This primary source of quantitative data, which comes from port call databases of shipping lines (e.g., terminal departure reports), is then compared to a secondary, independent source of data linked to the Automatic Information System (AIS). Data received from shipping lines undergoes validation and quality checks and are mapped to the AIS movement datasets for verification. AIS further helps to establish geo-fenced zones and match and add arrival timestamps at waiting locations such as an anchorage, waiting zones, and at port limits. Arrival times at these positions are usually not reported in a standardized fashion which the CPPI addresses. Consequently, the CPPI utilizes two different and independent sources of data to calculate total port hours, or ship turnaround time. Firstly, liner shipping companies provide ship- level timestamps. Secondly, AIS matches timestamps to ship-level. For the 2023 CPPI edition, there was a 98 percent match between the AIS and the data provided by shipping lines globally. The CPPI leverages extensive AIS coverage, proprietary to S&P Global Market Guidance Note for the Container Port Performance Index 2023 (CPPI) 5 Intelligence, using both satellite receivers and around 8,000 earth-based antennas mounted on ships and in coastal areas, resulting in high data integrity. 2.3 How are ports included in the CPPI For the 2023 edition, performance time stamp data were captured for 194,198 port calls involving 253.7 million container moves at 876 container terminals in 508 ports worldwide. For ports to be included in the CPPI, at least 24 container ship port calls must be verifiably reported. Therefore, the fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. For ports, which are home to several container terminals, the final score will be aggregated across terminals and reported under the host port’s name only. 2.4 How are ports ranked in the CPPI As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). To arrive at the overall ranking, these two rankings are combined to ensure that the ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. Guidance Note for the Container Port Performance Index 2023 (CPPI) 6 3 Interpreting CPPI results Guidance Note for the Container Port Performance Index 2023 (CPPI) 7 3 Interpreting CPPI results The objective of the CPPI is to provide an objective measure of container port performance based on vessel time in port at a global level to identify performance gaps and spot opportunities for improvement. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. The underlying data, however, can indicate through benchmarking, which aspect of the port call process performance is relatively better or worse. It is not the objective of the CPPI to reward high ranking ports but to highlight container ports in which vessel time in port is objectively lower or higher. Generally, the ranking of an individual port is always a relative measurement of vessel time in port against all container ports captured by the CPPI. If, for example, the global average vessel time in port has decreased (improved) over the previous CPPI period, while an individual port has experienced disruptions, which led to prolonged port stays compared to the previous CPPI year, that individual port would inevitably experience a relative drop in ranking. A low ranking or significant change in ranking may have different root causes and may warrant special attention, for which the World Bank generally recommends a detailed diagnostic of the underlying factors. For the same reason, a simple comparison of CPPI rankings across two ports may not account for the uniquely different circumstances of these two ports. Guidance Note for the Container Port Performance Index 2023 (CPPI) 8 4 Limitations of the CPPI Guidance Note for the Container Port Performance Index 2023 (CPPI) 9 4 Limitations of the CPPI 4.1 Uni-dimensional assessment Like many other indices, the CPPI synthesizes a complex performance continuum into one key metric—time—and it should be interpreted accordingly. While being a very relevant metric of port performance, the time vessels spend in port to complete defined workloads represents only one dimension of a container port’s performance. In general, port performance is a multi-dimensional concept. For example, next to time, a container port’s performance can also be assessed from the perspectives of ship traffic (number of vessels), total container throughput (number of containers handled), utilization (of berths, cranes, yard areas), customer satisfaction, environmental/social best practices, and financial results (profits or losses). Some of these perspectives and their metrics do correlate with time. Time is a uniform, universally accepted perspective and metric, enabling a cross comparison between container ports. 4.2 Data quality and coverage The data used for the CPPI is collected from ten of the largest container shipping lines. Only verified port call data provided by the carriers become part of the CPPI. There is a 98 percent global match rate between the port call data from shipping lines and independently sourced AIS data. This leads to a coverage of around 50 percent of all container port calls globally. As a result, the data quality is deemed reliable. Yet, a certain share of container port calls—by often smaller, independent shipping lines mostly using smaller vessels—do not feed into the CPPI. Still, the exclusive use of standardized and verified global data, in contrast to subjective perceptions frequently used in other indices, makes the CPPI a uniquely objective and robust index. Different container ports function under different circumstances such as size and location. The CPPI lists all ports in a single table and also groups container ports with their peers by region and size. These subset rankings allow for a more equitable comparison of different ports. The CPPI also groups ports by size. Small ports are considered container ports, which handle less than 0.5 million twenty-foot equivalent units (TEUs) per year, while medium-sized and large ports handle between 0.5 million and 4 million TEUs, and more than 4 million TEUs respectively. Guidance Note for the Container Port Performance Index 2023 (CPPI) 10 As far as a container port’s geographic subset is concerned, many ports may have a global function and serve multiple regions, other than the region they are located in. Differences may exist between gateway ports, that is, those that focus on import and/or export of containers, and transshipment ports. Many ports combine both a gateway and transshipment function. The CPPI ranking does not currently distinguish between ports whose activity is primarily to serve as a gateway port and others for which most of its traffic comes from transshipment. 4.3 Underlying root causes The CPPI provides an effective assessment of how container ports perform relatively to each other, based on the measurement of vessel time spent in ports. However, the CPPI alone is not able to reveal the underlying root causes of why some container ports may perform better than others, and whether this difference can be explained by endogenous or exogenous factors. Examples of factors negatively affecting the relative ranking of ports can include: • Management inefficiencies: Operational inefficiencies can be a cause for poor port performance. Frequent examples include, but are not limited to, port gate planning and execution, vessel and container yard planning, equipment deployment and scheduling, labor planning and management, and operations monitoring and contingency response. • Organizational limitations: Some ports may work vessels around the clock and seven days a week, while other ports may have limitations towards work hours or on certain days due to bylaws, labor framework agreements, or customary practices. This may delay the completion of cargo operations. • Geographical and physical barriers: Ports may have physical limitations for capacity expansion while demand grows. Also, some ports (e.g., river and tidal ports) may face spatial and temporary restrictions for navigation, which could increase the likelihood of delays. • Infra- and superstructure challenges: Scheduled or non-scheduled events, like natural disasters, maintenance, or civil works may affect the availability and performance of heavy port infrastructure (e.g., quay) or superstructure (e.g., Guidance Note for the Container Port Performance Index 2023 (CPPI) 11 handling gear, cranes). Limited digitalization efforts and the absence of effective soft trade facilitation policies may contribute to poor port performance as well. • Demand volatility: A sudden increase in container traffic demand can temporarily exceed a port’s physical or organizational capacity. Congestion and delays can be amplified when a response to such a demand increase is delayed. • Extraordinary events: Geopolitical or security issues, including response measures, as well as climate events, may affect normal trade patterns and can lead to shifts in demand and infrastructure challenges, amongst others. The CPPI can reveal where in the anatomy of a port call (e.g., at anchorage or at berth) vessels may spend more or less time in a certain port. Yet, without additional location- specific analysis on the ground, it may not be possible to quickly identify the underlying root causes for a relatively better or worse performance. Guidance Note for the Container Port Performance Index 2023 (CPPI) 12 5 Recommendations for stakeholders Guidance Note for the Container Port Performance Index 2023 (CPPI) 13 5 Recommendations for stakeholders Given the CPPI’s ability to assess relative port performance, yet its constraints to explain relative port performance, the World Bank recommends a detailed location-specific diagnostic with the goal of improving the operating efficiency in container terminals. This seems particularly beneficial for container ports with relatively low rankings over several years or significant changes in their ranking from one year to another. The World Bank stands ready to facilitate and support such diagnostics in its client countries. DOWNLOAD The Container Port Performance Index 2023 (CPPI)