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Home Digital Series Two thirds of ports have not implemented FAL Convention

Two thirds of ports have not implemented FAL Convention

A survey by the International Association of Ports and Harbors (IAPH) on the application of the Convention on Facilitation of International Maritime Traffic (the FAL Convention), shows that two thirds of the respondents, mainly from wealthier nations, had still not implemented the electronic data exchange requirements 18 months after its implementation.

The FAL Convention, which became mandatory on 8 April 2019, lists the data that must be exchanged between ships and ports in order to be compliant with the global regulation agreed at the International Maritime Organization (IMO).

IAPH’s survey was conducted 18 months after the regulation came into force, in the autumn of 2020 and the results were published today. A representative sample of 111 ports of all varieties responded to the survey, with the results revealing that one third had not begun to implement the convention and another third had begun the process, but the systems were not operational, the final third had implemented the convention.

It is unclear from the report why so many of the wealthier states should have failed to meet the FAL Convention criteria.

However, in a recent World Bank webinar the executive director of the Port of Los Angeles admitted, “The COVID-19 crisis has provided an opportunity for ports around the world to assess how technology can improve our public health response and support economic recovery. We have to accelerate our efforts. At the Port of Los Angeles, we have been working on this port community system, the only one in the United States, for four years. I have called on the federal government to adopt a nationwide port community system. We have learned so much from our colleagues in Europe, Asia, and the Middle East. It is time to enable that technology in the United States. As the economy begins to re-emerge, data is going to drive our supply chain partners and us toward greater success.”

In effect, the FAL Convention was devised to support the transmission, receipt, and response of information required for “making the transition to fully-fledged maritime single windows (MSWs), for example: the arrival, stay, and departure of ships, persons, and cargo via electronic data exchange.”

Furthermore, 54% of those surveyed said that it would take another year before the FAL convention compliance requirements were met, almost two and half years after the regulation became mandatory.

According to the survey report, “The major barriers to conform with the FAL requirement for electronic data exchange are twofold: Firstly, multi-stakeholder interests in port communities and established practices and cultures need to be addressed in order to enable the sharing and reuse of data, which is key for achieving efficient electronic reporting and clearance of vessels, cargo, crew and passengers. Secondly, the legal framework is a barrier, as it can frequently depend on competing and/or overlapping public administrations and governmental agencies at municipal, state, or national level.”

The IAPH said that the low conformity rate amongst the ports surveyed emphasised the critical need to speed up the digitalisation process so as to better cope with crises such as the repatriation of crew during the Covid-19 pandemic.

As a result of the survey the IAPH has resolved to bring the issues to the attention of the IMO’s facilitation committee as well as developing a dashboard that will track the progress of the digitalisation process.

In a joint report by the IAPH and the World Bank, called Accelerating Digitalization: Critical Actions to Strengthen the Resilience of the Maritime Supply Chain, also published today, the partners underlined the importance of the digitalisation process following the lessons taken from the current ongoing pandemic.

“One of the key lessons learned early in the pandemic was the need to ensure business continuity of the critical supply lines, notably the maritime gateways, and the associated logistical chains,” said the report.

Developing business continuity requires industry to rise to the challenge, but importantly the political response must also be robust as the IAPH pointed out.

Dr Patrick Verhoeven IAPH managing director of policy and strategy, said, “the report’s short and medium-term measures to accelerate digitalisation have the proven potential to improve supply chain resilience and efficiency whilst addressing potential risks related to cybersecurity. However, necessary policy reform is also vital. Digitalisation is not just a matter of technology but, more importantly, of change management, data collaboration, and political commitment.”

All the actors in this arena must commit to the changes necessary, driving the discussions that will see the development of the next generation of port management systems that will see ports transition from cargo hubs to digital hubs through the ‘smart port’ concept.

A smart port is defined as, “An automated port that uses nascent technologies such as artificial intelligence, advanced analytics, internet of things (IoT), fifth-generation technology (5G), autonomous systems, digital twin, blockchain and other distributed ledger solutions as well as other smart technology-based methods to improve performance, economic competitiveness, and environmental sustainability. In an ideal smart port, all processes would be automated and connected via the IoT.”

One of the key effects of the global pandemic has been the increase in Europe and particularly in the US of internet shopping. Lockdowns in the consumer centres have meant that consumers have shifted online and many observers believe that this shift could prove to be permanent for many consumers.

That will require a change in the supply chains, moving fulfilment centres closer to consumers, while the digitalisation of that process will be critical to meet the demand.

Additionally, the report highlighted that a key benefit of digitalising land and sea operations is meeting the urgent needs to minimise human interaction while building resilience into supply chains against future crises.

“In many of our client countries, inefficiencies in the maritime sector result in delays and higher logistics costs, with an adverse impact on the entire economy. Digitalisation gives us a unique chance to address this issue,” noted Makhtar Diop, World Bank Vice President for Infrastructure.

Or as Patrick Verhoeven argues, "The technology is not necessarily the key issue. Digitalisation is not just a matter of technology but, more importantly, of change management, data collaboration, and political commitment. It’s not necessarily a question developing modern technology, its about ensuring existing industry and governmental bodies develop technical standards for administrative and operational data established and maintained by robust organizations such as ISO. Otherwise we will end up with a multi-tiered environment of private fee-paying 'toll roads' of data information and exchange between different parties versus a public highway used by all parties."

That means the most important elements to the FAL Convention and the digitalisation policy are not technological, but a need to shift from a competitive modus operandi to a more collaborative methodology and, critically, that requires political institutions to lead that transformation.

Nick Savvides
Managing Editor

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