This article was originally published on International Shipping News.
The coronavirus pandemic will hopefully speed up the digital transformation of the global sea port community, changing the role of sea ports from passive landlords to a driving force in the ongoing digitalization of the maritime industry, says Christian Köhl, Sales Manager at maritime analytics and AIS company, GateHouse Maritime.
Back in the good old days, sea ports functioned as landlords to the global transportation and logistics industry as well as companies dependent on swift and efficient transportation of goods. However, as global trade is transforming, the role of sea ports is changing as well.
As supply chains are growing ever more complex and rules and regulations on environment and safety in and around the port area are tightened, the ports of today face a myriad of challenges. This has transformed ports to service providers and an active part of the supply chain, servicing its many stakeholders with everything from coordinating port calls, environmental management, ship to shore operations as well as administrating commercial and industrial real estate.
In their traditional role as landlords, size and capacity was the key to success in the port industry, but because of the development described above, efficiency is now the decisive factor. This has only been underlined by the ongoing COVID-19 pandemic that has left many ports grappling with how to handle the impact of the economic crisis.
The corona pandemic has shown just how reliant companies and countries are on resilient and efficient supply chains with full visibility in the air, at sea, and on the road.
Lack of information can lead to problematic delays that can potentially set back, compromise or ― in the worst case ― eliminate the value of shipments. According to a report by Trelleborg, 41 percent of vessel stakeholders miss their slot over 20 percent of the time, and 20 percent say that the average overdue period at their facility is more than six hours. The many delays are unfortunate for the individual stakeholder but can also lead to bottlenecks that affect the entire supply chain.
That is why the emphasis on efficiency should have intensified the digitalization and automation of the sea port industry. Data-driven insights will allow ports to estimate the exact time of arrival of vessels and plan accordingly. This will also allow stakeholders (e.g. sales, operation department) to adjust their operations and resources. However, according to reports by both Deloitte and Trelleborg, the port community has been hesitant to invest in new technologies. That is a shame. In my opinion, ports – or smart ports – are the gates to the future of the maritime industry.
Despite the hesitation, a market report by MarketsandMarkets projects that the digital smart port solutions market will reach $5,3 billion in 2024 with a CAGR of 25 percent from 2019, suggesting that smart ports are on the rise. This development is already beginning to show in the community. Last year, the Port of Valencia launched iTerminals 4.0, a project funded by the European Commission’s Connecting Europe Facility (CEF) program that aims to digitize port operations and adopt new technologies, and over the past couple of years, other sea ports in Europa, the US and Asia like Rotterdam, Antwerpen, Hamburg, Los Angeles, and Singapore have also initiated digital projects.
The port community is slowly embracing new digital technologies; digitalization will enable reduced costs through optimization of port operations, make ports more eco-friendly, and open up for new business opportunities. Those who do not digitalize now might very well lose customers to those willing and able to turn a crisis into a springboard towards the digitalized future of the maritime industry.
Hopefully, something good will come out of the current economic crisis as the demand for cost-efficient operations will ripple through the supply chain, thereby forcing ports to speed up this digital transformation.
Image via Hellenic Shipping News