Latest / The Operations Podcast with Fexingo: Process, People, and Profit in Modern Business / How Maersk Cut Port Turnaround Time by 40 Percent
Transcript
- Lucas: So Maersk moves about one fifth of the world's containerized trade. That's roughly 20 million containers a year. And for years, they had a problem: their ships were sitting in port too long. Luna: How long are we talking? Lucas: Average turnaround time was about 30 hours per port call. That's 30 hours where a vessel that costs maybe $50,000 a day to operate is just… parked. Not earning. So they launched an internal project called the Port Efficiency Initiative, and they managed to cut that by 40 percent — down to around 18 hours. Luna: That is huge. But how? Port operations are famously messy — labor, customs, weather, terminal coordination. Lucas: Right. And they started by looking at where the delays actually happened. It turns out the biggest single bottleneck was something called stowage planning. That's the process of deciding, before a ship arrives, exactly which containers go where on the vessel. Luna: Which sounds like a detail, but I can see how it ripples. If that plan is slow or wrong, the cranes just stand still. Lucas: Exactly. Traditionally, each ship's chief officer would do the stowage plan during the voyage to the next port. It was manual, done on paper or basic software, and it didn't account for real-time data from the terminal — like how many cranes are available, or where the outgoing containers are stacked in the yard. Luna: So the plan might look good on paper but be totally inefficient for the actual terminal layout. Lucas: Yes. So Maersk did two things. First, they built a new algorithm that generates a stowage plan optimized for the specific terminal's crane setup and yard layout. Second, they centralized the planning process — instead of each ship doing its own plan, a team of planners in a remote hub handles it for the whole fleet. They tested it in Rotterdam first, which is their busiest European hub. Luna: And what were the results in Rotterdam? Lucas: Within six months, average turnaround fell from 32 hours to 18. That's a 44 percent reduction. The algorithm reduced the number of container moves by about 15 percent because it grouped containers more intelligently — fewer reshuffles. The terminal operators noticed immediately: less idle crane time, smoother workflow. Luna: So they saved on fuel too, right? Ships idling less. Lucas: Yes. Fuel costs dropped by about 12 percent per call because auxiliary engines weren't running as long. And there was a revenue benefit: with faster turnarounds, Maersk could schedule more voyages per year. They estimated that the global rollout gave them the equivalent capacity of 10 extra ships without buying a single one. Luna: That's the operations dream: free capacity. But scaling this must have been hard. Every port is different. Lucas: That's the interesting part. The algorithm had to be customized for each terminal's layout and equipment. For example, some ports use reach stackers, others use straddle carriers. The algorithm had to understand that. But the core logic — minimizing reshuffles and matching the yard layout — was transferable. Luna: And the cultural side? I imagine captains and chief officers were not thrilled about a central planner telling them how to load their ship. Lucas: That was the biggest hurdle. Maersk ran extensive simulations to prove the plan would work, then did a phased rollout where local officers could override the algorithm's plan if they had a good reason. Over time, as they saw the results — fewer delays, less stress — trust grew. Eventually, the override rate dropped to under 5 percent. Luna: It's a great example of how a relatively narrow operational change — the stowage plan — can ripple through the entire system. And it really underscores how important it is to invest in the tools that make those plans better. Lucas: Absolutely. And you know, conversations like this — where we really dig into the mechanics of how a specific improvement works — that's what listeners tell us they value most. If these episodes have moved your own thinking forward in some small way, one thing you can do is support the show at buy me a coffee dot com slash fexingo. It's a simple way to help us keep the podcast ad-free and focused on these deep dives. Luna: Yeah, it makes a real difference. We put a lot of work into finding these cases and verifying the numbers, and listener support lets us keep doing that without outside pressure. Lucas: Right. So back to Maersk — they've now rolled this out to over 300 ports globally. They're also using the same data to predict port delays and adjust sailing speeds accordingly, which saves even more fuel. The whole thing started from a simple question: why are we sitting in port so long? Luna: It's almost embarrassing that it took them so long to ask it. But you've got to admire the discipline to actually follow through and change the process. Lucas: One thing they did that I think is worth noting: they created a 'war room' in Copenhagen that monitors port performance in real time. Any call that gets delayed more than two hours triggers an automatic alert. That kind of visibility forces accountability. Luna: So it's not just a one-time fix; it's an ongoing system. And that seems to be the pattern in the best operational improvements — they embed the change into the daily routine. Lucas: Exactly. And the results speak for themselves. Before the initiative, Maersk's on-time arrival rate was about 45 percent — which, in the industry, is actually not terrible. After, it improved to over 70 percent. That matters a lot to customers like retailers who need inventory on schedule. Luna: Do you know what the total cost savings were? Lucas: They haven't disclosed an exact number, but analysts estimate it's in the hundreds of millions annually when you combine fuel, crew costs, and increased capacity utilization. It basically paid for itself within the first year. Luna: That's the kind of return on investment that gets CEOs excited. But the human element — convincing the crews and terminal operators — that's often the hardest part. Did they share any lessons on that front? Lucas: They did. The key was having a 'pilot port' — a place where everyone could see it work before rolling out widely. They also made sure to include terminal operators in the design process, so the algorithm wasn't a black box. And they were transparent about the metrics: every port could see its own performance benchmarked against others. That created friendly competition. Luna: I like that. It's not just top-down; it's also creating a data-driven culture. So what's next for Maersk on the operations front? Lucas: They're now working on integrating this with their inland logistics — trucking and rail — to optimize the entire door to door journey. And they're experimenting with AI to predict container demand at specific ports, so they can pre-position empty containers where they'll be needed. That could reduce another big source of delays: waiting for empty boxes to fill. Luna: It feels like we're only scratching the surface of what's possible with this kind of data-driven operations. And it all starts with one process, one port, one question. Lucas: That's the thing about operations. The most impactful changes often come from looking at a step everyone takes for granted and asking, 'Is this really the best way to do it?' Maersk asked that about stowage planning, and they changed an industry.