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Home Digital Series Ports are at the heart of supply chain digitalisation

Ports are at the heart of supply chain digitalisation

Ports and terminals are at the centre of the digitalisation process in the container shipping industry, as one of the integral parts of the supply chain. The improvements on their operational efficiency, the increase in their security and safety and the enhancement of the connection between their digital tools with shipping lines’ technology systems have been at the forefront in the digital transition of the industry.

Software and hardware technologies have been in place for decades in container terminals especially, and most have implemented various generations of technology over the years to digitalise their operations and their operating data, according to the vice president and general manager of ORBCOMM at its container and port solutions sector, Al Tama.

Al Tama believes digitalisation will see port capabilities skyrocket, underlining that "the sky is the limit" for new technology.

“Terminal Operating Systems (TOS) software, automated land and sea gate systems, and remote monitoring of reefer containers have been in place for quite a while. Even fully or semi-automated terminals with unmanned cranes' handling equipment and vehicles have been around for a number of years,” explained Tama.

The digital progress has impacted significantly on port and terminal operations, such as container loading and unloading. Tama points out that the distribution of weight and the determination of the appropriate location to stow a containers onboard a vessel is nowadays calculated through software programmes. These systems have given a variety of advantages to terminal operations.

Reefer containers, for example, which include sensitive and high-value cargo, can be the last cargo loaded onto a vessel in order to remain on power at the terminal for as long as possible. Similarly, the refrigerated boxes can then also be unloaded first in the port of destination. This process aims to minimise “power off” time during the handling of the containers.

Additionally, the Internet of Things (IoT) devices on reefers monitor the power state and provide visibility to ensure that service level agreements (SLA) are kept with respect to plug in times, according to Tama.

Pascal Ollivier, chairman of International Association of Ports and Harbors (IAPH) data collaboration committee and president of a firm of digital trade logistics advisors, Maritime Street, argues that cargo visibility to port community stakeholders can be provided through the interoperability of a TOS, which he considers are key digital systems within the digital port environment, with other systems such as Maritime Single Window (MSW) and Port Community Systems (PCS), which he believes are critical information infrastructure for ship to shore communications and for those importing and exporting cargo.

Ollivier noted the following series of key performance indicators (KPI) for port efficiency in which digitalisation plays a crucial role.

  • the reduction of dwell time for beneficial cargo owners (BCOs)
  • the reduction of time and costs (documentary and border compliance) for trading across borders
  • logistics performance including efficiency on infrastructure, customs, tracking and tracing, ease of international shipment, logistics service quality and timeliness.

Tama agrees there are plenty of efficiencies driven by the digitalisation progress in the supply chain industry. Emphasising again the reefer container sector, he said that shipping lines with IoT devices can help automate the monitoring of those reefers on the terminal and alert technicians to perform an action when an exception occurs.

“Temperature checks at the terminal gate can also be automated for reefers that have IoT devices, with the line passing the information to the TOS software at the time the reefer container arrives at the gate,” he adds. Moreover, IoT devices can also provide data on plug-in times and power consumption to the terminal to help automate billing, according to Tama.

TT Club's comment

But here comes the first obstacle, according to ORBCOMM’s vice president, as there is the risk of contractual impacts with the potential change of the type of service performed by the terminals.

For Ollivier, however, the main challenge is just in time arrivals of ships through Port Call Optimisation where nautical, operational and administrative data are the foundation layers. “The International Task Force on Port Call Optimization is driving the way forward. The Digital Container Shipping Association (DCSA) also recently engaged in the JIT race, which is critical to ocean carriers’ efficiency and productivity in ports,” Ollivier told Container News.

Tama added that the just in time port call (JITPC) optimisation initiatives by various parties including the International Maritime Organization (IMO), JITPC team and DCSA are a push for digitalisation across the industry that will provide operational and environmental benefits to all parties by reducing ship waiting times, at anchorage outside the port to berth.

Despite the plenty and variety of benefits that digitalisation can offer to the ports and terminals, the vast majority of them are not using digital technology for even the most basic processes, according to Innovez One, a provider of port management software for the world’s busiest ports and towage operators.

In particular, the company stated that 80% of the 4,900 ports in the world continue to rely on manual, legacy solutions such as whiteboards or spreadsheets to manage critical marine services such as towage, pilotage and launch boats. “This leaves many ports commercially vulnerable and less able to compete in an increasingly digital world,” pointed out the software provider.

In addition to this, IAPH’s data collaboration committee chairman noted that only 50 countries around the world have a PCS in operation and the MSW has not been implemented on a large scale.

The hesitation of small and medium sized ports about PCS implementation has also been noted by the International Port Community Systems Association (IPCSA). The association said in a statement, "Although the principles of PCS are the same for every size of port, small and medium sized ports may have different drivers and varying levels of financial resources available. So while the larger ports enable operations through digitalisation, other ports often question where they should start and whether it is appropriate for them to implement a PCS."

In response to this uncertainty, IPCSA has created a set of guidelines to help small and medium sized ports to consider PCS implementation and the way to proceed with that.

The inability of ports to integrate technology innovations is mainly a result of financial difficulties, they are unable to afford the cost of the digitalisation transformation, a fact that creates a “polarised landscape within the port sector,” said Innovez One, which mentioned in its announcement that this dynamic makes the ‘last mile’ of a journey at sea a weak link in the global logistics chain, opening up risks of delays, late payments, increased fuel consumption and emissions, reduced revenues, and even safety concerns stemming from a lack of traceability.

“The current dynamic reflects the often-messy reality of port operations, which is a blend of high-tech digital and paper-based, manual processes sitting side-by-side,” commented David Yeo, CEO of Innovez-One, who added, “This causes issues in relation to interoperability, where systems are not talking to each other properly, which is impeding effective execution.”

Innovez One believes the solutions developed must be based on a strategic port framework with a set of common criteria with the aim of the creation of a “fair and level playing field with the global ports’ marketplace.”

Apart from the operational efficiencies that digitalisation can provide ports with, there are also significant benefits on the security and safety era. Ollivier highlighted the importance of the digital health security to the protection of port workers and crew members during the Covid-19 pandemic period. He said that the use of several technology devices such as drones, thermal cameras, wearables and digital ID are “key requirements” for social distancing and the remote health management, which is critical to crew onboard ships.

Tama gives another aspect of the security potential enhancements on the ports and terminals via digital and automated solutions. In particular, he believes that automated terminals with unmanned cranes and vehicles will give humans the chance and the ability to move away from the dangerous environment of being “on the ground” at the terminal. “Digitalisation and process automation efforts like automated truck gates, container ID and equipment diagnostics remove people from hazardous environments, allowing them to operate from a safe central location rather than in among moving containers, cranes and trucks,” he told Container News.

Ollivier said that the main risk for the ports which will not take any action towards digitalisation is to disappear from the map.

As for the next steps in the digitalisation process of the container ports and terminals, Pascal Ollivier considers it is important to address the digital divide between Northern and Southern countries regarding the port digital agenda and focus on the institutional framework to increase public private data collaboration in ports. The implementation of both PCS and MSW to a wider number of ports worldwide are top priorities for the digital agenda in the short term, according to Ollivier, along with cybersecurity improvements.

“In the second phase, ports will need to move towards Port Call Optimization for Just in Time Arrival of ships. Building on these foundations, next generation Port Management Systems (PMS) based on asset management and powered by advanced technologies such as digital twin, IoT, autonomous systems, artificial intelligence and 5G can then be implemented to move the needle towards becoming a full Smart Port,” added Ollivier.

The port digital agenda is a race that many of the ports under the Tropic of Cancer have not started yet, noted Ollivier and as stated by IAPH in June 2020, “this is an urgent call to accelerate digitalisation.”

At the same time, Tama expects the future will involve more data sharing with and from the terminals “as the push continues to make end to end supply chain visibility a reality.” ORBCOMM’s VP and GM said that technology systems have already been implemented in ports and terminals, while the pace is escalating. “The integration of data across disparate systems, including those outside the port, will continue to provide benefits in efficiency and foster greater automation,” he pointed out.

As increasing digitalisation applications, tools and projects are integrating into ports and terminals operations and the technology transition comes closer to reality, it is inevitable that the overall culture and the holistic approach of the ports will change.

With traditions of decades being replaced by new technologies, the role of the ports in the supply chain is expected to change through the digital transition according to shipping experts.

Pascal Ollivier believes that ports are moving from cargo hubs to digital hubs and that demands thinking digital first and physical second. “It is an important cultural move,” he highlighted, mentioning that the port of Singapore is already moving toward the future, which will require a more collaborative approach.

The Port of Singapore is an indicative case, according to Ollivier, having launched the Maritime Autonomous Surface Ships (MASS) Port Network with international port authority partners. The MASS Port Network was established in Singapore in August 2020 and the collaboration comprises port authorities from China, Korea, Japan, Norway, Denmark, Finland, Singapore and Rotterdam that will work towards achieving standards that enable communication between autonomous ships and shore.

Tama believes that digitalisation is expected to make ports and terminals more transparent enhancing their crucial role in the supply chain.

Over the previous year a substantial increase in online shopping, caused by Covid-19 lockdown measures, has altered the retail landscape. Ports have come across an unprecedented situation and are considering, in some cases, what action to take in order to manage the new trend.

This is the reason we saw the port of Barcelona to partner with Amazon, the port of Antwerp to implement its e-commerce strategy and DP World to develop BOXBAY, an intelligent high bay storage (HBS) system, which is like an outdoor highly automated warehouse. DP World has also developed the Cargospeed concept (Hyperloop), which is another futuristic concept geared towards the e-commerce era.

“E-commerce is one of the key drivers for the future of ports and digitalisation of all trade logistics-related processes,” commented Pascal Ollivier.

Despite the difficulties and the challenges that the shipping industry has already seen and the more obstacles that it is expected to face in the future, digitalisation is not a dream of the romantics anymore, but a reality which comes closer every day.

Technology systems and digital innovations will continue to be implemented in ports and terminals at an escalating pace. They are expected to improve their efficiency, accelerate the operational processes and enhance the security and safety issues.

There is no doubt that the complete digital transition of the ports sector is a matter of time. It is certainly a complex process, but the potential benefits it can provide all the stakeholders and parts of the shipping industry are important.

With ports effectively being the interface between the ocean carriers and the logistics teams that deliver freight to the customers’ door, their position is and will remain crucial. But, in order to remain relevant in the digital age, ports must accelerate the implementation of technology to maintain the pace of the digital transition and to remain relevant in a fast changing environment.

Antonis Karamalegkos
Managing Editor

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