The resources and tech to become a smart port are unevenly distributed – and it’s causing a dangerous gulf in shipping, writes David Yeo, group CEO of Innovez One.
Digital solutions have been at the forefront in tackling the disruption from the coronavirus crisis across the world, and ports have been no exception. The Port of Vigo, for example, has adopted software that enables easier compliance for boat landings and the marketplace to sanitary requirements by quickly adjusting the number of arriving vessels and vendors accessing the market, and ensuring that they’re socially distanced.
The rapid rollout of the systems, and the need for them in the first place, reflects the messy reality of port operations, a blend of high-tech digital and paper-based, manual processes sitting side by side. It highlights the fact that, even though they are an integral part of the global supply chain that is becoming increasingly automated, ports around the world still overwhelmingly rely on person-to-person systems.
The first and last miles of a journey at sea are weak links in the global logistics chain
This is reflected within ports themselves and the sector at large. While the phrase ‘smart ports’ has been common parlance for years, the benefits of digitalisation remain the preserve of only a few, major, ‘Tier 1’ ports, with the profile and financial muscle, creating an unfair landscape within the port sector. Indeed, a vast majority – over 80% – of ports are in the ‘Tier 2 and below’ categories, that generally speaking, do not have access to this kind of digital technology, or certainly believe it is out of their financial and technical capabilities. This leaves them not only vulnerable to disruption from the second wave of coronavirus but perhaps more importantly – given the hope of an impending vaccine – less able to compete in an increasingly digital world.
As an industry, shipping is still playing catch-up with the large transport and logistics players (aviation, road transport, etc.) when it comes to adopting digital solution applications; and this is particularly prevalent in the port sector. According to the consulting firm Deloitte, only the top few ports around the world can be said to be achieving the current working definition of a ‘smart port’.
This cannot go on. It seems that a vast majority of ports have been unnecessarily denied the opportunity to reap the benefits of the digital dividend. Particularly when affordable technology, with a fast return on investment, exists and is readily available.
One area where there are important gains to be made is in marine port services for the last mile – specifically, towage and pilotage. It’s also the area where the divide is starkest between digital haves and have nots. This crucial first and last mile of shipping is dominated by manual, paper-based processes, and Excel spreadsheets for many tier 2 and below ports. The 20% of ports for whom this is not the case have often been able to rely on their own in-house software.
This gap means that the first and last miles of a journey at sea are weak links in the global logistics chain. When a ship makes a port call, the marine services provided by pilots, tugboats, and pilot boats need to be scheduled and dispatched for the safe approach of a vessel into the port. A vast number of scheduling considerations need to be evaluated, including matching a pilot with a suitable license, finding a suitable number of tugboats to provide the power to move the vessel, weather conditions, tide considerations, and others.
Innovation and software have so far however focused on the land-based side of operations. Marine Services at ports often lack the digital technology necessary to optimise the heavily manual and paper-based processes that define towage and pilotage operations.
This failure to digitise the marine side of operations, in particular in towage and pilotage solutions, can ultimately cause the risk of delays, payment delays, and increased fuel consumption and GHG emissions. In particular, towage operators can make substantial savings of their annual fuel costs (and associated emissions) by reducing the mileage of tugs while saving annual maintenance costs of their towage vessels.
Digitalisation has the potential to dramatically change the competitiveness and profitability of ports, as well as positively impacting one of shipping’s greatest challenges; its sustainability. As the sector touts Just in Time arrivals as making an immediate impact in shipping’s decarbonisation dilemma, you cannot expect ports to implement cutting-edge solutions when relying on just manual processes. However, there is no reason why every port should not be a smart port; it should be for the many, rather than just the few – and the last mile is an excellent place to start.