7 May 2020

As digitalisation continues to develop and both ports and terminals consider additional ways to build flexibility and resilience into their operations, we have taken a closer look at some of the key questions that are rising in the industry particularly with regard to technology. 

In this summary, we have compiled the most frequently asked questions that we believe will help drive inspiring and insightful conversations around smart port developments and also highlight any grey areas. 

Technology sounds great, but what are the real-life benefits for my operation?

Without real-life examples of how different technologies can enhance how a port functions, it is difficult to make decisions about the right approach for your own operation. It’s important for a port operator to gain an understanding of how technology concepts like automation, electrification, digitalisation, the internet of things (IoT) sensors or artificial intelligence (AI) can improve the day-to-day running of a port. Seek out independent advisers who can explain what you stand to benefit and how, rather than overwhelm you with product sales information.

Crucially, too, it needs to make sense in the context of the unique processes, geography, mix of stakeholders and staff in your own operation. 

Some technologies don’t come cheap – how do I decide which tools will bring the most value to my port? 

No port is in the position to roll out every technology option immediately. To create your smart port strategy, you need to slice through the hype and understand which tools bring the best value against any investment of time and expense. That means gaining a true insight into the potential benefits of the top tools available. Those benefits may come in many forms, including efficiency, speed, environmental impact, customer service or cost reduction. 

Some elements are very cost-effective, such as additional-sensors, and data-modelling but being aware of the overall value to the business is important. 

I’m a supply chain manager – we’re investing to improve our performance to meet ever-growing customer expectations. What are ports doing to help us deliver on our objectives?

Ports are of course a vital link in the supply chain and as such, are increasingly pushed to deliver new data and integration. More data means better visibility of cargo, reducing lead-times, while new technology speeds up port processing to reduce delivery costs or delays. 

Supply chain managers will seek out the most efficient port partners and potentially re-route goods to take advantage of better transparency and transit times. As a result, the most successful ports will be those that can respond rapidly to their customers’ demands.

Both supply chains and ports stand to gain from smart port strategies. The key is to understand what all stakeholders are looking for and act holistically.

How can technology help my port reduce its environmental footprint?

The pressure is mounting for all transport operations to reduce their environmental impact as the world races to limit climate change. Every port and supply chain organisation has a role to play, so becoming a greener port is a vital strand of a ports’ technology strategy.

Initiatives to drive better environmental performance include providing shore power, the electrification of port equipment and the adoption of renewable energy sources. Technology will prove invaluable in enabling ports to measure their energy consumption, air quality emissions and in managing data to gradually reduce impact. 

I thought our port was already smart – what do you mean by ‘smart’ ports?

This question is raised a lot. For us smart ports are about using technology tools to support the people in making better decisions and more efficient processes. Specifically, this could involve looking at the equipment or data a port has and using it in the most effective way possible to extend the life of its assets. 

But it’s more than simply looking at new technology and thinking ‘that’s smart’ – it’s about improving your operations by applying informed strategic and tactical decisions. For instance, it is possible to understand real-time location and availability of port equipment and people for optimizing workload of cargo operations. And that can help your port to operate better.

Nevertheless, this is a question that still needs to be asked – and frequently – to ensure that you have a rounded view on how and where ‘smart’ can affect port operations. Technology is not static, so you need to stay informed.

How can I quantify the return on investment (RoI)?

Whatever the industry, even the most basic IT investments need to have specific ROI criteria set against them. Given the fact that smart port projects characteristically see returns in the long term, this can be a challenge when seeking funding.

Port managers should view their investments in smart port projects as an investment for the future. These project costs are usually recovered over time by a more cost-efficient business operation, but there are also strong drivers in the regulatory management of a port, to comply with safety, security or environmental regulations. A secondary benefit here could also be that shippers may be attracted to re-route their cargo-flow through a more technologically advanced and cost-effective port, yielding greater volumes in the future.

In the long run, smart technologies offer competitive differentiators which can significantly increase efficiency while reducing operating costs – thereby providing RoI. 

Making technology investment decisions based on RoI is undoubtedly important but asking for best practice examples grounded in tried and tested situations is also essential.

But isn’t automation inevitable? How do we maximise the opportunity available to us?

With so much technology available to port operators these days, and the pressure to reduce operating costs, it could be said that automation of equipment and processes is inevitable. There is also a lot of data already available in a digital format and that will continue to increase. The value of that data ultimately lies in how it is used; metrics, including KPIs, provide the visibility to make better decisions which can inform the opportunity afforded by automation

Productivity improvements are vital, but not at the cost of other measures of equipment resilience, safety or environmental damage. Using data more effectively can bring true return on investment by doing more with the resources currently available to you, perhaps with automated processes, or with decision-support tools for human managers. These returns might mean reducing labour costs, identifying ways in which maintenance could be better scheduled, or outsourcing some of your port’s key functions. So, it is essential that ports ask questions not just about the traditional KPIs already in use, but also develop new metrics that support a future-view of managing the business.

What kind of partner should I look for to help deliver our smart port projects?

The need to obtain unbiased advice is always on the minds of those funding any new investment. Of course, smart port projects are not just about technology but also about business processes.  

Operators could for example consider partnering with independent   advisory companies who can oversee the project in its entirety, to ensure that all new systems work seamlessly together – to merge the value of having numerous different software or equipment providers involved to execute business change. 

Here, the capabilities, experience, track record, etc are all standard indicators to examine when seeking such a partner. But making the leap to ‘smart’ does not happen overnight. So, it is also important to ask and understand whether these partners have the mindset and committment to grow with you on your smart journey. 

Should I be working towards creating a digital twin of my port?

We know that this is also a question on a lot of operators’ minds as they look to the future. The benefit of creating a digital twin is that it can replicate, predict and prescribe specific functional aspects of your port processes, equipment and operational performance. One example is predicting and prescribing the impact of using green energy sources within the port to manage the power peaks of supply and demand.  

So, should you be working towards creating a digital twin of your port? All indications suggest that this is a technology concept that could become commonplace within the next ten years. By starting to explore today the possibilities and potential digital twins could offer your port, you will certainly be on the right track to making the most of this opportunity.    

Get in touch with our team of experts today to find out how we can help you in your journey to become a smarter port.

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