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How will digitisation change port operations? Sue Terpilowski OBE March 2017 OpPORTunity - The role of a port today? • Ports have always been an inhomogeneous, but closely intertwined network of shipping companies, terminals, ship brokers, freight forwarders, Port Authorities, and other commercial companies in the port industry. • Processes have been similar for years or decades and are gradually being optimized by IT, but never completely changed. • Digitalization will fundamentally change the value chains within global logistics chains. • Transparency of information relevant to all processes of the supply chain. This information must be integrated into a shared platform where it is analyzed in order to identify optimization potentials. • Participation in the network of connected ports offers ports around the globe the opportunity to jointly influence the ongoing transformation in ports worldwide. Vision of the future 2060 4 generations of ports 1. The first generation port is a loading and unloading port (until the 1960s) 2. The second generation port is an industrial port (until 1980s) 3. The third generation port is a logistics / supply chain port (post 1980s) 4. Smart digital ports (now and the future) digitised port, a Port 4.0 Deliottes Chart Leading people becoming interested/involved – everyone wants a piece of the cake? • • • • • • Google Silicon Valley Uber Amazon IBM KPMG How is it going to be paid for? Ports and digital – 3 eco systems Planning management Port management Cargo management Currently Currently Currently • Haven’t got the access to the data to best manage terminal operations for profitability and efficiency. • Cargo information infrastructure isn’t at present transparent • VGM – no need to change BoL, what is really in the box? • Lack of operational intelligence to provide the ‘smart’ analysis for decisionmaking processes. • Lack of visibility for the different stakeholders. Insufficient and inaccurate information for critical container – what is in them, the real weight. • Container tracking is limited. • Traffic and trade flows work independent of each other • Some earlier adopters but in isolation of each other Definition of Smart Port Smart Port means: • Developing port solutions to address the current and future challenges faced by seaports including spatial constraints, pressure on productivity, fiscal limitations, safety and security risks and sustainability. • Developing supply chain solutions - extra services like savings in time, security, traceability, etc. Improving these drivers for both sides is where the quick wins lie for ports. • A true smart port will need to take advantage of its position in the supply chain to add value with the improved use of the data generated by the embedded IoT infrastructure. • A fully developed smart port can use it gained insights for new business model generation. Smart Ports today • Today’s digital port solutions focus on efficiency improvements like traffic management systems, improving flow throughout the port area, automation, reducing costs or digital invoicing (customs) by improving lead time. • Port authorities must rethink their orthodoxies about value creation and value capture. • High need for transparency and integrity control (right products, at the right time, place, quantity, condition and at the right cost) along the supply chain • End consumers are asking for detailed shipment tracking to have transparency in real time • Business customers are asking for integrity control especially for sensitive goods • Logistics companies need transparency of networks and assets being used for ongoing optimisation of efficiency and network utilization Ports and the supply chain the digital future? Terminals Shippers and cargo-owners A global trade digital framework • Terminals will have the necessary information to optimize performance, storage, better handling and to manage effectively capacity, performance and costs • Will gain the data and have application platforms giving visibility and better control, enabling them to plan and manage stock levels and production lines productively. • Some earlier adopters but in isolation of each other – at present no one can see how to make money from it • Provide vital data to the ecosystem • New revenue streams • Security and safety improvements • New clients of ports and terminals • SaaS entrants might make the change VISIBLE, SMART, CONNECTED CARGOES – DO PORTS HAVE A CHOICE? “Maersk Line has over the past years equipped more than 270,000 refrigerated containers or ‘reefers’ with Remote Container Management (RCM). This technology allows us to track in real time the exact position of the container, its temperature and humidity and potential off service. We went live operationally in Q3 2015 but are already seeing potential for the wealth of data available. RCM enables greater visibility over cargo, and more importantly, a significant reduction in damaged cargo.” Vincent Clerc, Chief Commercial Officer, Maersk Line IOT AND THE CONTAINER SUPPLY CHAIN TODAY – WHY DO IT? Dumb, dark and disconnected” cargo and assets Little real time visibility and control over cargo and assets are the rule No meaningful “hard” data for more real time operations Increasing business complexity Regulatory, security and other issues increase the complexity of cargo and asset management Operational issues such as trans-shipment resulting in longer transit times/more hand-offs Alliances/VSAs are resulting in higher cargo and asset operational complexity and risk – 25 carriers and their shipper clients exposed to Hanjin collapse Slow rate of industry technology adoption BCO adoption has been consistent but data is mostly defacto...dataloggers Shipping lines starting to adapt to new technology and see commercial gains from it – Maersk is a leader though ROI is the rule… Maritime 4.0 • Maritime 4.0 (or interconnected maritime players, systems, and vehicles) is directed towards shipping and ship building • Modern vessel operation needs to make use of the massive data available to become more efficient. This may result in a paradigm shift, e.g. intelligent voyage planning instead of highspeed journeys, and a reduction of operational costs an vessel turnaround times in seaports • Smart shipping and Big Data are the most important elements of future shipping • Benefits like improved fuel efficiency, reduced port stays or a better network design can be achieved by collecting and analysing vessel data using flow meters, control and alarm systems, sensors, or time stamps • Antonymous ships the future? Maritime 4.0 and Port 4.0 REALITY OF M2M IN CONTAINER SUPPLY CHAIN Figures today: Reefers – Approximately 300,000 of 1.5M reefers Dry – Approximately 30,000 of 12M dry containers Chassis – Limited adoption Tanks – Approximately 5,000 out of 400,000 Maersk Mediterranean Shipping Company (MSC) and CMA CGM Invested in a cloud-based container monitoring system from Traxens that will include 4.5 million containers, representing nearly a quarter of the world’s ocean vessel containers. The company will retrofit existing containers with devices containing GPS and sensors that will relay data via cellular signals and their own proprietary mesh network. “Our business model puts shipping lines at the centre of deployment and shippers at the centre of usage,” says Tim Baker, Traxens director of marketing and communications. “Shipping lines will soon order containers from the manufacturers requesting that they be delivered in the ‘smart’ version.” Customers will access data through smartphones, web browsers, ERP and TMS systems. The data will include GPS coordinates, temperature, vibration, shocks, door openings, movement, internal temperature, humidity and air pressure. “Users will have the option of buying data from these containers on a trip-by-trip/container-bycontainer basis,” says Baker. “Further down the road, we will have a simple web interface where any shipper can subscribe to data from any single container on a single trip. We have some interesting challenges to rise to before we get to that stage.” Cyberlogite SmartLink has set up its connection with the customs in nine EU countries of the UK, Germany, France, Belgium, the Netherlands, Greece, Spain, Italy, and Portugal, and completed the work of setting up its interface with customer’s newly developed shipping company operating system. Thus, it is possible now to file an EDI document created in a customer’s system with customs in Europe. M2M/IOT IS GOOD FOR ALL STAKEHOLDERS • Shipping lines want M2M/IoT data for greater operational control/maintenance and repair data • BCOs want box location and cargo temperature data • Lessors want box location and potentially impact data • OEMs want equipment performance/M&R data • Freight forwarders/logistics/ gov’t entities want box location, security status • But who is going to pay for it? • What part can ports play – when they hold vital data and knowledge? Hamburg Port Authority - smartPORT strategy Port of Hamburg - smartPORT project was launched in 2015 The focus is on infrastructure, traffic flows and trade flows; HPA is developing the concept step by step and aims to present it through concrete projects. • Through digitalisation and automation, critical port logistic processes can be tracked in real time • Port infrastructure management across different transport carriers will be raised to a new level • The future port will have to become an Internet of Things: sensors, networks, and fast, reliable processing of the data with the aid of in-memory computing, for example, will provide an exact picture of logistic events at any time. In this way, Big Data will create new planning guides and make port logistics more efficient • Ports ‘think big, start small’ – the smart ports idea does not need to be implemented all at once SINGAPORE AND IBM The future But who is going to create the open source platform? Will BCO’s pay for it? Is there a real commercial need? Will it be security – financial Driven? Thank you