Technology developments are aiding ports, but business models also need to evolve.
Port organizations are investing in a wave of new technologies from artificial intelligence to Internet of Things and blockchain. Technology companies such as IBM, Accenture and GE are actively working in the large ports like Los Angeles, Singapore and Rotterdam.
Beyond the proof of concepts we can see a trend: the development of port community systems acting as trusted digital shipping hubs.
The primary role of a port community system is to bring together administrative and operational processes, share data for the benefit of operators using port facilities and act as a single window for customs and cross-border agencies. Port community systems have been operating in this area for more than 20 years, with recent and key developments in North America working at the forefront of electronic shipping portals. They have been instrumental in addressing each challenge the industry faces whether automation, congestion, regulation, ecology or hinterland integration.
A perfect example is the Port of L.A. portal, which brings immediate value to logistics operators. According to The Harbor Trucking Association, drayage dispatchers now can reduce the number of websites used for harbor transactions. Operational data and automated processes are being developed.
While customs digitization may take a while, new technology developments are enabling port community systems to drive real operational efficiency improvements within port communities.
The mission of a port community system is not easy. Most initiatives must be conducted without disrupting local logistics businesses and regulated state funding schemes. Port community systems have been operating at the main European ports and some Asian ports, such as Singapore. Most significantly, U.S. West Coast ports joined the party over the last two years with their own large-scale portal projects. Latin America — with the port of Vera Cruz for instance — is also benefiting from improved security and customer experience brought by port community systems.
In another sign of expansion, the International Port Community Systems Association (IPCSA), which was founded in 2011 by European port community systems, has been growing its influence with new members from Asia Pacific, Africa, Middle East and Latin America regions.
The Port of L.A. is collaborating with GE Transportation and developing a $13 million-plus platform that aggregates port data and implements machine-learning technology to enhance transparency and improve efficiency of operations. They have involved terminal operators, shipping lines, truckers, chassis providers, railroads and cargo owners. The objectives are to provide a single window for shippers to get personalized cargo status updates and check ocean vessel schedules, enabling them to pay freight-handling fees, make appointments to pick up inbound goods, increase visibility, enhance real-time decision-making and optimize cargo movement through terminals in San Pedro Bay.
Similar initiatives have been conducted in the Port of Long Beach and Oakland with objectives on container tracking. The online portals are a response to supply chain operators who express challenges about the difficulty of tracking their containerized cargo door-to-door.
Ci5, the Cargo Community System of Marseille, provides activity monitoring and real-time information on the status of any cargo to simplify operational management and boost security, safety, predictability and reliability.
But are these port community system platforms going to go on the same route as many marketplaces connecting operators, sharing data and documents and bringing visibility to the supply chain? How is the digital shift going to play out for the ports in a landscape now dominated by multiple digital initiatives from large players whether carriers or terminal operators and shippers network?
As an example, at its Mumbai facility, DP World, working with Oracle and APM Terminals, is switching to paperless online delivery processes, enabling faster container movements and improved landside logistics.
This new digital interconnected environment could actually be considered as a threat for some port community systems as carriers, terminals and shippers now can connect with each other directly using their own proprietary platforms.
Let’s take the Port of Rotterdam and its engagement in multiple significant projects. It has implemented paperless container transfers with the participation from terminals APMT, ECT and RWG and has also made agreements with the Dutch Tax and Customs Administration. Another initiative is to equip the Port of Rotterdam’s entire 42-kilometer site to host connected ships.
Port call optimization is another field where it is actively working on setting standards such as depth and admission policy. The port community platform assists agents and other operators with a more transparent and efficient planning of services for ships, such as pilotage, use of terminals and bunker services, which improve the waiting time of vessels.
The opportunities for ports are in developing data sharing and security and building connectivity between stakeholders through trusted networks. These provide secured access to applications powered by third-party electronic service providers, whether they are local or international technology players.
NxtPort’s initiative in the Port of Antwerp demonstrates the trend toward data pooling and monetization through an information governance scheme. It aims to reduce operational costs for the participants and provide real-time information on performance, whether vessels or container movement flows. NxtPort could be seen as the new digital breed of a port community system, unifying data exchange through standard API and apps usually developed by local startups. It brings a new model, which allows players to monetize their data when shared on the platform.
The challenge of expanding port community systems to other ports may be more than just technical. As seen with NxtPort, business models need to evolve with ports moving from traditional landlords to the digital supply chain marketplace with the growing support of private sector and large technology company partnerships.
The involvement of port community systems are also at the core of the Maersk-IBM’s TradeLens data pipeline with the participation of Valenciaport and Port of Montreal. Other blockchain innovations are also expected from the cooperation of Samsung SDS and the Port of Rotterdam.
Many networks are being set up, but will this create efficiency if it is not standardized? Port community systems are involved in international discussions aimed at achieving standardization and trade facilitation. The World Trade Organization’s trade facilitation agreement is promoting a single window with discussions involving the United Nations, the International Port Community System Association and the World Customs Organization (WCO). These governmental trade facilitation initiatives aim to maximize the roles of ports and airports.
The recent call for standardization made by large shipping lines will certainly be welcomed and supported by these organizations and port community systems.
Source: International Port Community Systems Association
Philippe Salles is head of e-business, transport and supply chains, at Drewry Supply Chain Advisors. He may be contacted via email at [email protected].
