Lesson

Consider using incentives to encourage the participation of private sector freight operators.

The Port Authority of New York and New Jersey's experience in developing the FIRST system and gaining participation from industry stakeholders in the system's operation.


5 October 2003
New York City,New York,United States; Hoboken,New Jersey,United States


Background (Show)

Lesson Learned

While the FIRST system operated correctly from a technological standpoint, it did not attain high levels of use during the two and a half years it was operational. In addition, some users complained that the FIRST data (provided by the private sector) was neither accurate nor timely. In contrast to other portals (e.g., Port of Vancouver's Pacific Gateway Portal, eModal), FIRST did not provide intermodal partners with incentives for providing their information, nor charge a fee for accessing the information that was provided.

The following suggestions are based on the FIRST evaluation and the Port Authority of New York and New Jersey's experience in developing the FIRST system:
  • Keep in mind that some organizations may not want to contribute data to a public system when the data are used to benefit their customers. During FIRST, certain intermodal partners, especially terminal operators and ocean carriers, began to operate individual web sites; these sites were designed with the customer in mind, and tracked many of the same data points as FIRST. The attitude among these organizations, therefore, was that they did not want to provide the same data to an outside source when these activities were being tracked in-house for the benefit of their customers. This was evident when the ocean carriers partially or completely stopped sending their information to the FIRST system administrator. Although the data transmissions between the intermodal partners and the FIRST system administrator was free of charge, the ocean carriers saw no commercial incentive to participate in a public intermodal freight portal such as FIRST.
  • Strive to obtain financial stability by developing a fee structure that helps recover operating costs. Whereas FIRST was designed and operated using PANYNJ funding, other external funding sources are critical to sustaining the operations of these types of systems. Adequate funding may also be used to improve the quality of the data provided to the users. Quality information could justify the collection of a fee from users for accessing various levels of a system like FIRST. Another portal system, eModal, offers a range of access privileges, which are available at varying costs to the user. eModal is increasingly successful at ports around the U.S., a fact that seems to convey that the features the portal provides are truly beneficial in improving the efficiency of its users.
  • Consider "in-kind" agreements that will support the system. The Port of Vancouver's Pacific Gateway Portal (PGP), in particular, seems to have found a financing means that has allowed the PGP to overcome some of the issues encountered by the FIRST system. While PGP is a non-profit organization, they have obtained additional support for their web portal through "in-kind" assistance: current port community members allow the portal to access existing, relevant systems assets that they own; members providing this assistance are given free data in return and/or a discount on other PGP services that they use. This is an especially positive element of the PGP. It does not charge port community members for data or information that the portal receives at no cost. When the PGP does charge a price, it is reflective of the cost which would be paid to obtain the data elsewhere. Revenue sources that the PGP currently utilize include: advertising fees, annual membership fees and transaction fees; the latter two are specific to defined services only.
  • Consider instituting non-financial incentives to make a system like FIRST more attractive to users. As an example, for ocean carriers, a non-financial incentive would be to allow them to search for chassis at no cost via the community web site. Current chassis leasing companies charge steamship lines for this service; therefore, a free chassis-locating service would allow ocean carriers and others who lease chassis from the large equipment pools in the NY/NJ vicinity to locate misplaced chassis. FIRST administrators did add this parameter to the system; however, the small number of leased chassis being tracked limited the usefulness and value of this incentive. In order to effectively use this as an incentive to ocean carriers, it would have to be deployed on a large number of chassis within the port.
  • Discourage potential conflict of interests that may result in users discontinuing their participation. Another aspect of the FIRST system that may have caused the ocean carriers to discontinue use of the system was the fact that the company which compiled the port community information (Americas Systems, Inc.) was purchased by Maersk Data, a subsidiary of the A. P. Moller Group, the parent company of Maersk. The appearance of A. P. Moller-Maersk, a leading ocean carrier operating about 1,000 vessels and rigs, having control and access to other carrier's real-time freight location and status information, may have discouraged these companies from participating and using FIRST. While this is a unique situation that occurred during FIRST's operation, it is a lesson which should be noted for those considering the deployment or use of a port community web site.

Although usage of FIRST decreased during the demonstration project, the experiences of the PANYNJ provide useful insights into the impact of incentives and funding. The use of incentives, financial or non-financial should be explored to encourage participation by the private sector. Developing a fee structure or utilizing "in-kind" agreements allows operating costs to be recouped. However, in spite of such measures situations may arise (such as organizations not wanting to provide proprietary data or perceived conflicts of interest) that result in some organizations choosing to not participate.


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Source

Freight Information Real-Time System for Transport (FIRST): Evaluation Final Report

Author: Srour, J., et al.

Published By: Federal Highway Administration, U.S. DOT

Prepared by SAIC for the U.S. DOT

Source Date: 5 October 2003

EDL Number: 13951

URL: http://ntl.bts.gov/lib//jpodocs/repts_te//13951.html

Lesson Contacts

Lesson Contact(s):

Mark Jensen, Robert Sanchez
SAIC
805-473-2471, 859-626-5109
Mark.A.Jensen
@saic.com, Robert.R.Sanchez@saic.com


Agency Contact(s):

Karen Ryan Tobia Manager, Technology Planning
Port Commerce Department Port Authority of NY & NJ
212-435-7841
ktobia@panynj.gov

Lesson Analyst:

Firoz Kabir
Noblis
202-863-2987
firoz.kabir@noblis.org


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Lesson ID: 2006-00203