Ports are taking significant strides with digital transformation and are starting to declare themselves as “smart.” The result is impressive gains in operational efficiency, regulatory compliance, and customer satisfaction. Smart ports have the opportunity to establish themselves as logistics information exchange hubs serving their regional transport ecosystem.
As ports digitalize their processes, they establish foundations for providing benefits to other participants in the transport ecosystems. A landscape of new revenue-generating information services enabling carriers, shippers, and other players to significantly improve their operational predictability, efficiency, visibility, and capacity utilization is now opening.
In the article “Smart Ports: On the move to become Global Logistics Information Exchange Hubs,” four industry experts elaborate on some of the smart-port trends, and how the emergence of the smart-port concept exemplifies the need for the port to redefine its role to meet its customer demands. This article is co-authored by Hanane Becha, TRAXENS & UN/CEFACT, Mikael Lind, RISE, André Simha, MSC , and Francois Bottin, CMA CGM.
Data-Powered Operational Gains
Ports and supply chains involve thousands of independent companies and individuals depending on each other’s policies, plans, and actions to make the right business decisions and run operations effectively. The smart port uses digital data streams to boost collaboration, align activities, and make decisions that improve vital processes across its operations. Some emerging smart-port trends are:
- Smart technologies are informing about conditions and the utilization of physical infrastructures, such as roads, bridges, railroads, depots, terminals, warehouses. For example, cost-effective sensors are transmitting real-time data about operating conditions. Enabling the port to identify needed maintenance or repairs and avoid unplanned downtime proactively.
- Digitally connected cargo handling helps ports to increase their handling capacity and productivity by ensuring that stacking cranes, straddle carriers, forklifts, and other equipment are correctly maintained and operate at peak efficiency, including the automatic identification and detection of containers.
Introduction of Collaborative Decision Making (CDM) systems for intermodal traffic to enable just-in-time arrivals and just-in-time provision of services
“Transparency creates competition – competition creates larger markets“
The goal for the Norwegian government is to transfer at least 30% of all road-cargo over a distance 300+ kilometers to rail or Shortsea by 2030 and 50% by 2050. The latest forecast in the Norwegian transport plan indicates growth in cargo-transport of 290 million tons in 2050 – 80%, which will be transported by road. The Norwegian national transport plan forecasts growth in freight transport of 290 million tons by 2050. 80% of this cargo is assumed to be transported by road. The increase corresponds to a 100 km long continuous number of trucks every day —a significant set-back to the ambition of transferring goods from the road to the sea, comments Jørn Askvik Managing Director Shortsea Promotion Centre Norway.
“Decision support systems need to address both operational efficiencies as well as customer need for easily accessible and transparent information – supporting all phases of the customer journey.”
Jørn Askvik, Managing Director Shortsea Promotion Centre Norway
-The challenge is to acknowledge that the customer decision process is not only a decision between different competitors but also an assessment of risk. A customer using road-based logistics with success will evaluate Shortsea as an operational risk – “Why change something that ain’t broken.” Time spent identifying and assessing alternative solutions is part of the transaction cost for the customer. Lack of transparent and readily available information will create barriers for change, regardless of operational efficiencies. The “disruptive” player in the Shortsea Shipping world will be the one who provides relevant and accessible information allowing for decisions based upon comparisons on relevant criteria, says Jørn Askvik.
Redefining the role of the Port
A port is an ecosystem within the broader self-organized ecosystem of the global shipping industry. Both systems depend on distributed collaboration and coordination. The interdependence creates a demand for capabilities to utilize the necessary blend of data from others within the port to optimize operations. Each actor in a port needs to contribute to and access up-to-date situational awareness to achieve a collective and mutually beneficial level of efficiency. A port is a series of production systems as its various actors each conduct routine operations for ships, passengers, and cargo handling. The effectiveness of these production systems, and their integration, is critical to a port’s success.
The digitalized future port does not only provide physical services but also digital services.”
Mikael Lind, Associate Professor and Senior strategic research advisor at RISE
Ports are thus emerging to become important information exchange hubs deploying data captured from shipping lines, trucking, and logistics, and off-dock storage providers to increase the efficiency of the overall maritime transportation ecosystem. The emergence of the (digital) smart port concept exemplifies how a port needs to apply a systematic approach to framing its purpose to continually redefine roles to meet the changing needs of its customers and actors.
To be conceived as a transshipment hub, the port needs to define its position as a multimodal hub to all the different modes of transport. The situation as a multimodal hub means that the port will capture much information associated with episodic visitors and the cargo/passengers that they are carrying.
The emphasis in the debate on port optimization has been on the port being a consumer of information to provide value in (physical) service provision. Given that the port needs to collaborate and coordinate highly integrated with the transport chain, the port should become a proxy to gather data thus creating opportunities to become the provider of information to the other parties in the transport chain.