INTRODUCTION: THE PROBLEM The ship's agent, Jimmy West, who represented the chemical shipping line Bramarine, was struggling to organize the port visit or port call for his two vessels. The Bramarine Orion was in the port finishing the discharge of a parcel (a bulk chemical moved by ship is called a parcel) of Tolulene, and the incoming Bramarine Pacific, which was about to reach the anchorage outside the port and give its NOR (Notice of Readiness) to enter the port. He turned to his planning team of Jenny McIntosh and Patrick Gentle, and said, "I know the port is busy, but this is ridiculous. I have the Bramarine Orion which will complete the transfer of the Tolulene parcel into the terminal in the next hour. It must go to another five terminals in the port to complete its loading and discharging for this port call. I cannot find one terminal from these five terminals which can take the Bramarine Orion in the next 24 hours. The current terminal needs their berth immediately as they have other vessels to berth there!" Jenny McIntosh responded with, "We need to find a lay-berth (a temporary berth where the vessel waits) where the Orion can stay until we can find an open slot in one of the required terminal berths, or we have to arrange for the vessel to move out to sea and wait at the designated port anchorage." Jimmy West responded, somewhat angrily, "The move to the anchorage wastes days, and costs a lot of money. Even more expensive in time and cost is the need to go out into international waters to clean small quantities from the tanks on the vessel as allowed by the International Maritime Organization (IMO), as the port does not have facilities to do this cleaning at every terminal. We must find an alternative to these types of delays!" At the end of the day, Jimmy West was still puzzling over this issue as he drove home. He was starting to realize that there were multiple issues faced by his Ship's Agency company and the Bramarine shipping line that they represented, as well as all the other shipping lines. The issue started to crystallize, and he started to see that part of the problem was the port did not have a scheduling methodology, it merely had a random, hit or miss, practice of allowing ship's agents to try to book a berth once they were certain a vessel was going to complete the work at its current terminal and leave it. The pilots required a minimum of 4 hours of notice for any move, so they could plan their day and perform a safe move. The next morning Jimmy West called a team meeting and summarized his viewpoint on the issue. "I think we can all agree the management of our vessels in the port is becoming increasingly difficult, and we are spending more and more time trying to make our vessels do their work in the port?" There was a moment as the team considered this, and then an almost simultaneous recognition of the problem as they started to nod in agreement. With this point made Jimmy West felt confident to take the next step. He started by describing his thoughts of what the key issues were, and said "We are faced with multiple vessels all fighting to get onto a chemical terminal berth where they can discharge or load their cargo and move to the next one. This is becoming harder to achieve as more chemical tankers visit the port. The majority of terminals are common user terminals which are required to abide by the 'first come, first served' rule to foster open competition. This means that we cannot make a booking commitment to a new terminal until the operations are complete on the existing terminal. We now have low priced Natural Gas for at least the next 50 years. The new chemical complexes that take advantage of this low priced Natural Gas are going to start production over the next few years. With more chemicals produced and products moved we are going to see large increases in vessel traffic, and that will make moving our tanker vessels even more time-consuming as the pilots will be occupied with these additional vessels. With these issues, our ability to move and find berths will continue to deteriorate, which will mean our tanker vessels will spend more time on a port of call so that the rates will increase with this unproductive time. While these charges eventually accrue to the customers, this is not good for our port, and our vessels and terminals, as they compete in the global economy". He paused and saw that everyone was still following, and in this silence, Jenny McIntosh added, "And that is why we continue to chase berths with less and less effect! If we do not find a solution to this problem, we will be so inefficient that chemical tankers may choose to call at other Gulf of Texas ports such as Freeport or Corpus Christi as these ports have less delays than Houston!" Jimmy West took up the issue again with, "We need to get the background, and understand the causes of the pressures we face. The chemical industry, the terminals, the vessels, and the pilots all need to recognize that we are struggling to berth vessels and help to find a strategic solution to the problem. That is what logistics is about - from source to end customer - and not just for one terminal or vessel or agent! Jenny and Patrick, will you please do some work on finding out what changes are taking place in the port, so our decisions are grounded on facts?" REPORT ON IMPACTS ON PORT The report from Jenny McIntosh and Patrick Gentle followed about two weeks later: The port of Houston is the largest by tonnage port for the movement of goods and products in the USA. It has developed along a 52-mile long ship channel from Galveston to the center of Houston. Terminals occur along the length of this channel, which makes this the longest ship channel with chemical terminals in the US. The refineries and chemical plants along this channel bring large quantities of oil derived products into the refineries for processing and move chemicals to and from the downstream plants. A large proportion of the chemicals from the refineries and downstream chemical plants are exported. The greater Houston area is the second largest chemical and refinery complex in the world. Figure 1 shows the growth in US chemical exports, where Houston is the dominant port for these chemical movements. The importance of the movement of oils and chemicals into and out of the Houston port is shown in table 1, where these oil and gas products (by weight) are the dominant movements in the port. The period between 2009 and 2015 saw the US develop the ability to extract oil and gas from shale areas. These new wells yielded a cheap, plentiful supply of natural gas that has become available in ever-increasing amounts from 2010 onwards. Chemical companies saw the potential for the use of natural gas as the feedstock to chemical complexes, and started to build large chemical plants that extract different chemical products from the gas taken from these wells. One of the major products from this process is Ethylene, which isthen used to make the common plastic polyethylene. Massive capital investments of over $30 Billion for plants to produce polyethylene beads will result in a sharp increase in the number of containers which will be exported each year. Houston ranks as the 6th largest container port by throughput in the USA. The containerized products include large amounts of industrial goods which are produced and exported/imported through the port, as well as some plastic raw materials in the form of beads or pellets which are bagged and palletized. One other factor, which comes from a CSCMP Roundtable speaker, is that there are discussions as to which is the best method to export the palletized bags of plastic beads. Obviously, there is a choice of 20' and 40' containers, but the size and weight of the pallets seem to have different companies choosing different options even though they are all standardized on 25 kg (55 lbs.) bags. The bags will be 55 lbs. in weight and will be around 20" by 24" in length and width and approximately 6" in height when filled. Since 2017, the shipper must declare the weight of the container to the vessel before loading, so the vessel has the correct weight distribution. If there are multiple container loading weights and container sizes, we will have to weigh containers at the port, and this will delay our containers by at least a day and add costs. The new chemical complexes will create additional streams of chemicals which will be exported, increasing the chemical tanker movements in the port. In addition, the plastics container traffic will increase the number of container vessels in the ship channel of the port by an estimated 20% (table 2), assuming larger vessels that pass through the new Panama Canal locks call in Houston. Larger vessels and an increase in the ship channel traffic will result in increasing delays in the pilots moving tankers between berths, or into and out of the port. Figure 2 shows a plot of some of the moves of the Bramarine Orion, which shows the extent of this port and the complexity of a port call. Details of the vessel movement for the Bramarine Orion are given in Table 3 (a), and the times the vessel spent on each stage of the process during its port call is shown in Table 3 (b).As ship's agents, we face an even bigger problem. There is no common system to see where vessels are, when they plan to leave a terminal and so on. Each terminal and vessel has a different system, and the pilots have their system. As agents, we do not have a system for planning the port-call other than telephone calls. We spend inordinate amounts of unproductive time on the phone trying to get information. We often find there are two terminals trying to get the vessel to berth at their terminal, so one terminal will have done preparation work only for the vessel to go to the other berth. Only once we get a firm commitment between the vessel and terminal, can we approach the pilots for a move. Figure 3 reflects the various entities which are associated with the transfer of products between ship and shore. The current situation is going to deteriorate as more tankers and container ships are going to be using the Port of Houston. Table 4 shows the proportion of chemical tanker port calls by year from 2010 to 2014. The quantity of chemical tankers has remained roughly the same over this period, but the proportion is slowly decreasing as other vessel modes have grown. However, at 40% the chemical tanker traffic is a significant amount of the work of the port and will remain so for the foreseeable future. Inefficiency here must impact the whole port, not just chemical tankers. Table 5 shows the process times for the chemical tanker port call including the mean, standard deviation, and percentiles. Jenny and Patrick distributed the report to all the meeting attendees. Jimmy West responded by calling another meeting with the aim of deciding what to do strategically. MEETING DISCUSSIONS The meeting had been in full swing for over an hour. All the attendees had read the report and the first 10 minutes had clarified all the questions, and everyone agreed the report represented the issues. The discussion was around what to do, and that was where the attendees were struggling. Many ideas had been discussed, and none of these were agreed to be an answer to their problem. Jimmy eventually said: "We need to step back. We have discussed and agreed the report shows we will face even more pressure to maintain the efficiency of the port for our chemical movement. The vessel movement will increase, the pilots will be pulled from one berth to another, and there are a limited number of terminals, all of which decreases our efficiency. This is a perfect storm concept! It is obvious we cannot do this by ourselves; there are too many players in the mix. We must find a solution that is good for all the parties involved. We will need to consider this strategically and enlist all of the players in the business to seek a solution. We can summarize the issues we face. The random allocation of tankers when they finish their discharge and/or loading is hurting our ability to plan, and this will get worse as volumes increase. Pilots rightly must know the vessel destination before they will plan a move, which adds more delays as this only occurs after the destination is agreed between the vessel, agent, and terminal. Traffic in the channel will increase and put further limits on the ability to move tankers quickly. Everyone is looking to stay competitive and profitable, and no one sees the port operation is deteriorating in efficiency and increasing the total logistics cost. That is the classic local focus and is not good logistics; it will not serve the port as a whole in the future." Jimmy paused to see that everyone had understood and agreed with his summary, and to collect his thoughts. He then added: "I am not sure I can put this clearly, but we need to see a way to strategically plan the port operations more efficiently, and I cannot see all the parties agreeing until we all understand and agree on the issues and the solution options. I leave you to discuss this with your vessel owners and bring to us any additional issues or solutions they suggest. We must find solutions which benefit all parties, even if there needs to be change, so the overall delivery of chemicals is more efficient and effective. I look forward to your contributions".

Question 1: Management of a logistics chain and global optimization issue The case study presents a complex situation with multiple parties involved. This is common in international logistics where on average there are 25 individual entities involved in the international move. Discuss the services each of the major parties in the port will deliver, and how they need to coordinate or manage the process to be most effective.

Question 2: Causes of Delays for Chemical Tankers Use the case information to determine the major causes of the tanker vessel delays.

a. Rank the reasons for delays from the largest impact to the smallest impact. Use facts from the case and the data presented where possible.

b. Decide on who is bearing the cost of these delays and what they can do about them (other than paying them), knowing these costs will escalate quickly with the coming increase in vessel traffic and chemical tanker traffic.

Question 3: Need for information in a complex logistics process The case suggests that one of the major reasons for delays in the chemical tanker port call is there is no system that all terminals, vessels, pilots, and agents use in order to determine which berths are occupied, and the position of vessels.

a. Discuss the advantages and disadvantages of a scheduling system for operations as discussed in the case, and decide whether it would or would not improve the issues discussed.

b. What primary data fields would such a system require (more advanced) to give this visibility?