A port operating model to manage risks from aging assets and natural disasters

International trade increasingly relies on longer, larger and more complex ports for maritime transportation. A correlation of this growth in international sea transportation is the increased need for efficiency and capacity of ports, marine, industrial machines and structures.

Around the world, older ports are being integrated with modern supply chain and port operating systems in response to increased trade. This can sometimes present severe and demanding challenges for the operators of port assets. Particularly on the jetties and wharfs, considered the most critical assets in the operation of port facilities.

Figure 1. Port facility and supply chain operations

Ports have location rigidity and most have expansion limitations. Like any other industry, they’re influenced by a range of factors, including:

• External environment: social, political, economic and technological
• Task environment: Importers, exporters, clearing and forwarding agents
• Competitive environment: Other ports and other modes of transport
• Public environment: Government and other public bodies
• Exposure to extreme weather condition and aggressive aging mechanisms

This paper gives an overview of the challenges operators face with aging port facilities and discusses a port condition risk model to help asset owners manage maintenance and investment options to ensure the integrity of a port’s structures.

Defining risk analysis for operational factors

As soon as structural integrity is comprised on port facilities, the operator has a problem. What starts as a cost problem may later develop into a more difficult safety and operational problem. To avoid unexpected large-scale rehabilitation measures and costly downtimes because of aging assets, the systematic planning and budgeting of integrity management activities is necessary.

This is where the risk analysis of operational factors is important and has expanded in leaps and bounds during the past three decades.

Risk is defined as a measure under uncertainty of the severity of a hazard, or a measure of the probability and severity of adverse effects. In turn, risk assessment is an essential and systematic process for assessing the impact, occurrence and consequences of unexpected events on systems with hazardous characteristics, and in response, constitutes a needful tool for safety and integrity management.

There is a lot of diversity in current risk management procedures, but on the other hand there are limited risk management models to cope with safety and integrity risks from natural disasters or aging assets at port facilities.

This paper presents a port condition risk model for port operators to identify risks at their sites and reduce the severity of failures.

The port condition risk model

The port condition risk model is a specifically-designed and risk-informed framework to estimate the short-term expected loss from operational deficiency.

Figure 2. Port condition risk model

In its regular state, port facility and supply chain operations are assumed to be at a steady state; i.e. all structures and facilities are operational. Any assets that cease operations due to age can cause a decrease in capacity and may not only slow port operations, but the resulting delays may make the port unattractive for existing or potential customers with options of using a different port facility.

The model incorporates asset condition data, its geologic setting, the accidental event (forced or planned outage) and aging mechanisms to determine the effect on the transportation network that serves the port if there’s a reduction in capacity, and how that also affects the flow of goods through the port.

The model is comprised of two independent sub-models: Vulnerability model and port operating model.

Vulnerability model

This model applies hazard analysis followed by fragility analysis to the individual intermodal system or subsystem to produce a set of pre and post-event inputs to determine the total cost of risk mitigation actions, repair or rehabilitation costs.

• Hazard analysis – The hazard analysis estimates the probability of failures, or exceedance of acceptance criteria, at the port site for natural event or asset degradation scenarios.
• Fragility analysis – Fragility analysis estimates the time dependent damage (forced outage) that each structure at the port would face; the downtime and the losses resulting from damage. The analysis also determines the repair or risk mitigation cost to bring the structure back on line.

Running the port operating model

The pre-event and post-event inputs from the vulnerability model are used to run the port operating model simulation. This approach employs data in a very different way as it takes into consideration the relationships between the different structures at the port.

It works by taking the data set inputs and running simulations with each of them separately but for the same duration. The model then compares the results from each run to determine the effect that the scenario-based event or degraded structure had on the port.

Figure 3. Port operating model

Model outputs

The goal of the port operating model is to measure the effect of each scenario (natural event or aged asset) on the port in terms of loss of revenue (direct loss due to downtime). The replacement cost and direct loss are combined to calculate the short-term expected economic loss to the port from disasters or asset deterioration.

Once the model has calculated and summed the revenue from all the sources for the various scenarios, the pre-event and post-event revenue is plotted as a function of time. The resulting graph represents the economic recovery function of the port. This is useful to port operators because it filters out most of the minute statistical data.

This understanding of potential direct loss allows port operators to prioritise their maintenance works and plan lifecycle management investments. In addition, port operators can compare reconstruction and repair costs between structures to validate investment decisions or develop risk mitigation action plans.

The power and flexibility of the port operating model lies in the careful assembly of its inputs and the wise application of its outputs.

The methodology greatly assists to reduce the potential risk of disasters and major asset system failure or deterioration of asset condition by providing port operators with the right data and tools necessary to make sure it does not.