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I'm very curious about what you folks do! How much effort is expended on this optimization? Perhaps in terms of FTE developers per terminal.



For the customers in my size category (50k to 1 million TEU / year) the answer is that they may have 2 or 3 planners, optimizing berthing slots and stowage plans, but other than that there is no coordinated effort.

You have to realize that these terminals are typically a lot smaller in terms of manpower than you might think. A terminal handling 1 million TEU/year may operate with 2-3 crews in a 16 hour/day schedule for handling ships and trucks, plus some extra people handling the empties. Let's say it's 60 dock workers a day. A typically office might only employ about 12 people in overhead: one for customs/quality stuff, one for invoicing and finance, one HR, a bunch of order entry / customer service people, and 2 or 3 yard/berth/stowage planners.

Unless you look at the biggest of biggest terminals, you have to essentially regard them as SMEs in a very non-sexy business, and they treat tech and fundamental research into optimization accordingly.


One day when I leave, I swear I'm going to write a tell-all book about this industry. Until then, here's some condensed info.

To set the stage, this is a blue-collar industry, and what happens, so I've been told, is quite common in blue-collar industries. A lot of good ol' boy networking, people getting promoted who have no business being promoted, and as a consequence, a lot of corruption, ineptitude, and inefficiencies. The software in this space just flat out suck and anyone at a FAANG company would be appalled at how we write software. It's literally longshoremen trying to run software businesses.

On the other hand, as a terminal, it's very hard not to make money, so there's a lot of players, and unfortunately a lot of, at least shady deals.

I'm involved with a company that sells to terminals that don't have home-grown software systems. I don't have that much info on terminals that have their own software staff, however, there just isn't that much breakthroughs in the space. It's a conservative industry with a lot of money already, so there traditionally have been little incentive with high risks.

In addition to the aversion to risk, there's a lack of software product and engineering strategy to invest in optimization properly. One major vendor, I was told by a colleague did invest substantially, failed, and "it almost bought the entire company down." My company has dabbled before. We've had a couple of PhDs on staff. We even had a neighbor search solution like in the article developed. It worked in simulation and testing, and failed miserably in real life. The customer didn't take it, and we never had the vision to actually salvage anything from the effort.

There are a few vendors in this space, but again, the landscape is pretty sad. I know of one that are flat out frauds. They exist because the CEOs used to be in the industry and have credibility. They're still around because they're able to con non-technical terminal managers and string them along for a while. A few more maybe have 1 or 2 competent data scientists, but that's not enough. I've worked with one company that is good and is easily the most qualified, but they have never had the marketing and leadership to make themselves the billions they should be worth. They also simultaneously price themselves out of range for most terminals.

The industry is changing, though, because private equity has gotten involved in many companies. They have taken over some internal initiatives and basically dragged many of these good ol' boys against their will, or forced them out. They've also forced companies to partner with tech giants to address these issues. IMO, this is the only way we will see supply chain optimization revolutions any time soon.


As someone in the industry as well for many years (coming from the business side having ventured into software), the main problem is always that the software just is not good enough and do not account for all the edge cases - leaving many users better off using pumped up Excel sheets combined with a few hours on the phone every day to account for all the nuances and changing customers/suppliers demands.

In short: It is not good enough. When it is good enough, customers adopt it.


Interesting. So a private equity company might have actually done something good? That's news!


This experience has given me first-hand experience of a PE takeover, and the standard line of PE guts the soul of a company and sells off everything is crap.

I don't know how many meetings I've been at where the PE team blatantly states over and over, let us help you, tell us what you want to do, tell us what you need, and we completely flub it. Sometimes our CEO is too paranoid, sometimes too prideful, sometimes too oblivious, but mostly just doesn't have the knowledge on how to run a software company.

PE is going to run out of patience soon, and it won't be good for us. There's going to be headlines of how PE gutted us, but in reality, we gutted ourselves.


I agree, mostly, but I've also seen (and been in) situations where the PE acquired a company for it's customer base and knew going in that it was going to gut the current leadership and install all new systems & processes [that would support 10x scaling]. This doesn't make PE bad or evil, but it's not accurate to state that PE overlords are always hands-off.


But what about the cases where the PE firm asset strips the company, loads it up with debt and then walks as the company implodes and everyone loses their job? That seems to be the model of some PE firms. But maybe those are the ones that mostly make the news. I would certainly hope they aren't all predatory vulture capitalists.

BTW the current state of English water companies is a not a good advert for private equity.


IOW, mathematics is only a small part of the equation.


Not in shipping but in high volume manufacturing it's generally expected that anyone on the shop floor, or creating systems for the shop floor, is exerting at least some gray matter toward optimization. In most places of decent size, there will be at least one "manufacturing engineer" or "operations lead" whose primary job is to focus on optimization.




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