Smart ports are needed for shipping to recover from the pandemic
Seaports, which are a lifeline for economies small and large, have been hit hard by COVID-19 disruptions. Using smart technology will help them rebound and could usher in a new era of equitable economic growth.
Over 11 billion tons of goods were transported by sea in 2019. This was equivalent to more than 80% of global trade, and seaborne cargo transport is expected to increase in the years to come. Ports facilitate economic connectivity and growth, especially for island countries. That is how goods are cost-effectively moved to and from the rest of the world; and goods which are not available in the country become accessible for its people and businesses.
Ports are a lifeline for an island economy. More so during a disaster triggered by a natural hazard or a pandemic, when access to essential goods can be lifesaving.
Under normal circumstances, when a cargo ship arrives at its destination port, containers and other cargo are offloaded, logistics companies transport these to their warehouses outside the port and into the distribution channels as quickly as possible. More cargo moved means more revenue. It is a straight-forward business model.
The pandemic disrupted this model in many parts of Asia and the Pacific. For instance, Manila’s port became congested shortly after mobility restrictions were imposed in the city. Containers filled port facilities as yard utilization peaked at 98% in early April 2020, compared to the usual 60%.
Repeated congestion in developing country ports signals the need to transform, and the pandemic has only emphasized that using smart systems is an imperative. The good news is that many ports have already modeled the way forward, and local port authorities can look to the early adopters for examples that can be replicated.
The Port of Rotterdam Authority pioneered automated container terminals and automation in ports operations management in 1993. Complementary investments followed in infrastructure, information and communication technology and digital networks to support the new modes of operation. Today, there are 48 automated ports around the world and Rotterdam port is the busiest container port in Europe, with a total container throughput of 14.5 million 20-foot container units in 2020.
Smart ports use shared data platforms, machine learning and artificial intelligence to plan, manage and troubleshoot core port operations (such as vessel and truck traffic management, container stacking, warehousing, transshipments). Smart systems with artificial intelligence are increasingly used to help detect when thresholds in port operations are breached (e.g., cargo not loaded/unloaded within a certain number of days, cargo left in port facilities past due storage times).
They alert port operators and other stakeholders for remedial action, and monitor compliance for standard operations to swiftly resume. Smart systems can be particularly useful during a crisis when manpower is stretched, reactive decision-making under pressure can make matters worse, or when some functions must be carried out remotely.
Smart systems, with built-in responses for any likely scenario, can keep port operations moving forward. Over the years, smart ports have advanced beyond considerations only about speed, cost and cargo volume as a measure of operational efficiency. By using GPS-based piloting systems and artificial intelligence, smart systems now target just-in-time vessel and truck arrivals and departures.
This certainly helps lower costs for port users, but it also helps decrease the green-house-gas emissions as vessel dwelling time at ports is minimized. Further, there is a move to inform and synchronize smart port operations with fast-growing platform economies, e-commerce and big data analytics that have been revolutionizing logistics and supply chain networks.
The recent global health crisis has underscored that investing in smart port systems and infrastructure is no longer a question of if, but when. Following good practices of advanced ports, automation has already started in many developing country ports, with permit applications and payments slowly migrating to online platforms. This is a step in the right direction, but to future-proof port operations and processes we must go beyond the simple paperless transaction modality.
In Asia, many major ports have already taken steps to accelerate their smart port transformations. Busan Port in the Republic of Korea and Jurong Port in Singapore have partnered with telecom companies to roll out 5G and “Internet of Things” technology to facilitate faster exchange of data across port terminals. When trusted data are shared in real time, processes are faster, potential bottlenecks are identified early and addressed before they turn into port congestions.
Smart systems have, in fact, effectively protected port operations from supply chain bottlenecks triggered by the pandemic in 2020. Smart port operations were not affected as much, and they recovered faster compared to ports without smart systems in place. For instance, Rotterdam and Shanghai port operations (as measured in container throughput per quarter) recovered within one to two quarters, and they registered higher throughput by the third quarter of 2020 compared to the same period in 2019.
Singapore port showed a similar trend, with third quarter throughput levels coming very close to the levels registered the year before.
The last 30 years of global experiences have demonstrated that smart systems integrated into port operations and management can help improve port efficiency and create economic value. Smart ports are indispensable components of economic resilience and recovery through trade. And as the pandemic has undeniably shown us, the time to transform is past overdue.