Cost Transparency: A catalyst for sustainable and efficient port calls

Posted by Thi Pham

The global shipping industry is at a critical juncture, facing an urgent need for transformation to address environmental concerns and stakeholder demands for sustainability. The role of port agencies in this process are often overlooked or underestimated with their pivotal role in ensuring smooth operations for shipping companies. When tendering, transparency of cost estimation can drive sustainable practices while opening doors to commercial opportunities.  

Jason Berman, S5 Agency World’s Chief Commercial Officer, explores the urgent need for transparency in the operations of port suppliers to facilitate better collaboration and communication among all stakeholders involved in shipping. By stripping away complexities, ship operators can make better informed decisions that ultimately reduce delays and costs. By providing transparency when quoting costs, port suppliers can build trust, strengthen long-term relationships, and contribute to more sustainable and efficient port calls. 

The need for change in the industry

The activities of the global shipping industry are intricately linked to the environment. The impact of maritime activities on the environment and the industry’s contribution to greenhouse gas emissions and their effect on the marine ecosystem is undeniable. The call for change is driven not only by environmental concerns but also by the demands of stakeholders, particularly cargo owners, who recognise the commercial opportunities in adopting more sustainable practices. 

Simplifying port operations is fundamental in achieving this transformation. By streamlining processes and fostering better collaboration and communication among key stakeholders involved in the shipping process, we can empower ship operators to make better decisions and ultimately reduce delays and costs. 

One of the recurring issues faced by clients when dealing with port suppliers is the uncertainty of cost quotes. It is easy for items to run over budget, with the only explanation being that the goods turned out to be more expensive than initially quoted. While port agencies have sufficient knowledge of the local market, regulations, and customs, as well as long-standing relationships with local suppliers, port calls should run smoothly and to time. By being transparent when quoting costs and clear communication in cost information, port agencies can facilitate smooth port call coordination. This helps optimise port visit timelines and resource usage, promoting more sustainable port call practices over the long-term. 

Fostering sustainability with transparent services

Transparent costs are critical and vital for port suppliers. This transparency helps all parties involved understand financial aspects without hidden surprises or unexpected expenses. The shipping industry operates in a constantly changing world, where the cost of goods and services can vary significantly by location and over time.  

Long-term relationships between port agencies and their clients help improve sustainable practices around port calls. Over time, these relationships reduce the need for rework on each port call, helping operators better manage their port turnaround. Clear pricing and transparency make it easier for clients to track cost changes over time, facilitating long-term planning and partnership. 

Shipping companies that work with transparent agency partners will notice several benefits. Operators will have clearer expectations about costs and returns, and budget management will be much simplified. Clear pricing also streamlines negotiations, avoiding delays arising from quality, availability, or delivery time disputes.  

At S5 Agency World, we know that digitalisation acts as a catalyst for these transparent practices by facilitating seamless communication, ensuring information is accessible to all the relevant parties, and enabling more sustainable just-in-time delivery of port services. When actions and information about port calls are digitalised, communication becomes more accessible, reducing the risk of slow or poor decision-making that could lead to additional costs, delays, or increased energy consumption and emissions.

Digital platforms can help enable shipping companies to control access to their data and share information with third-party suppliers for just-in-time delivery. This streamlines the process, reducing the chances of mishaps and ensuring all necessary information is in place for a successful port call. 

As the shipping industry is navigating towards sustainability and accountability. Port agencies play a crucial role in this transformation by simplifying their operations, offering transparent cost quotes, and embracing digitalisation. By doing so, they foster trust, strengthen long-term relationships, and contribute to a more sustainable and efficient maritime sector. 

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