Algorithm could provide new, transparent approach to berth allocation

Stephen Xuereb, COO of Global Ports Holding and Aris Batsoulis, head of technical services & PFSO at Corfu Port Authority, delved into practical approaches to this issue during the ‘Discussing Efficient Berth Allocation Strategies’ session on September 12. 

While Xuereb encouraged a structured, well-managed flow of information to ensure efficient berth allocations and avoid unnecessary cancellations, Batsoulis promoted the application of mathematical equations to maximise the transparency and fairness of allocations. 

In 2011, Batsoulis developed a tool for this purpose for the Port of Corfu and believes the time has come to roll out the application on a larger scale, potentially under the MedCruise umbrella.

No 'one-fits-all' solution 

With a 24% increase in the global cruise ship fleet over the next five years, along with a predicted 33% rise in passenger volumes, the issue of berth allocations is of growing significance. The increasing share of megaships will lead to an even stronger concentration of cruise vessels at fewer ports. 

Thanos Pallis, professor of port & maritime economics and policy at the University of Piraeus, predicts that the number of ports visited by cruise ships globally will grow marginally until 2030 - from around 595 today to a maximum of 610. 

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At the same time, 80% of all cruise passengers visit approximately 115 ports, equivalent to just 20% of destinations theoretically available. In view of these numbers, robust plans for managing capacity are called for, especially at cruise hotspots. 

Xuereb said there will be no 'one-fits-all' solution as conditions in ports vary. Accordingly, different berthing policies need to be applied, taking local requirements into account. 

Xuereb used Valletta as an example; the port, which is part of GPH’s network, confirms bookings at short notice to support operators' itinerary planning needs, without specifying the berth. Berth allocation is decided at a later stage, providing flexibility for the port. Xuereb also stressed that GPH foremost considers the needs of long standing cruise line customers. 

Phantom bookings 

Both Xuereb and Batsoulis confirmed cancellations and uncancelled 'phantom bookings' remain a problem, although the severity of these issues varies from port to port. 

Phantom bookings impact all parties concerned. They block available capacity, make planning for both the port and cruise line more complicated, and may lead to a loss in income for the respective port city. 

Xuereb cited a case where a port agent duly received information regarding an itinerary change from the respective cruise line, but failed to pass this onto the port/terminal operator. The mistake was discovered by coincidence at a much later stage. The COO remarked that it is usually difficult to impose cancellation fees in such cases. 

Some ports with a strong market position such as Nassau can take measures if phantom bookings or cancellations occur repeatedly, for instance, by giving away capacity historically reserved for a long-standing client if this customer fails to fulfil its commitments.  

Information management helps efficient berth allocation

Xuereb called on cruise lines to ensure the flow of information is  effective, particularly in the case of itinerary changes and cancellations. He also encouraged operators to communicate directly with the port to ensure it receives critical information without delay, while still keeping the port agent informed. Xuereb argued that direct communication can minimise the loss of information to support efficient berth allocation.

Corfu: Algorithm applied to determine berth allocation

Batsoulis presented an innovative approach to allocating berths with the Allocation Algorithm. He developed the application for the Port of Corfu in 2011 to end emotional discussions around berth allocation between local stakeholders, including agents, pilots, etc. 

The Allocation Algorithm comprises four parts: the ships' data, port's restrictions, parameters and weights assigned. The number of parameters that can be defined is almost unlimited and may include factors such as the cancellation record of an operator, whether the ship usually stays overnight or homeports, and the number of passengers and crew etc. 

Parameters may count positively or negatively, for example in the case of the cancellation record. 

Through the assigned weights, ports are able to prioritise the parameters. The result of the algorithm is a grade (‘N’). The ship with the highest-grade N is given priority over others, being assigned the best berth. 

Used more widely, ships with the lower-grade N may be allocated anchorage positions if available - or may not receive confirmation to call at the port.  

Batsoulis said this approach, offering real-time information on the berth allocation process, leads to a fair and transparent system, supports itinerary planners and reduces bureaucracy.

The algorithm has been used at the Port of Corfu for a number of years with positive results, Batsoulis added. 

MedCruise

Batsoulis advocates for the tool to be rolled out to other ports and suggested MedCruise play a part by connecting various participating ports through a central server. Itinerary planners can see information on berth allocation in real-time, as well as cruise traffic in port on a set date without details of the ships being shared. The algorithm would additionally allow ports to limit the number of passengers in port simultaneously if desired.

18 months ahead of the season kicking off, berth allocation would be finalised based on the algorithm. 

Xuereb agreed that an algorithm could be of interest for some ports at least, while noting that manual allocation would still remain necessary to take specific issues into account, including the availability of shore power.