The digital logistics game
– Encouraging open data cooperation to build the supply chain of tomorrow
“Digital” is the word of the (every)day. If you are not part of cyberspace, you are essentially pulling out the port development plug. Many Argonauts are sprinting for what seems to be the golden fleece of our times, irrespective of the industry involved, namely replacing the old way of management thinking with the future-attuned mindset. That and, of course, the right tools to walk the talk. However, the race is more of a marathon, requiring careful planning rather than rushing headlong into what was glittered by the silver-tongued marketing hotshot.
The goal might sound straightforward: to digitalise the operational and administrative works of a port. Yet, what are the most essential and valuable digital instruments to put into play? Is it all just ‘nice to have stuff,’ or can you better your port business with digitalisation, perhaps also lowering the carbon footprint for good measure?
The digitalised logistics game zone
The elephant-in-the-room-obstacle is the somewhat conservative and protective way of thinking, which still exists within the port sector. There is this fear of giving away too much information, “the family silverware,” instead of trying to understand the benefits of being with others part of an ‘open code,’ that is, putting those ‘knifes and forks’ to exemplary work. The goal should be streamlining the A-to-B-to-C data chain, making this source open to everybody in the logistic ecosystem. Or the ecotech system, if you please. Getting that what-when-where-how full awareness, and even more, a way of simulating and predicting future operations and movements should be something to strive for.
Let us use some imagination. What if the future business in shipping, road haulage, rail, airline, and port operations – the movement of goods – was a digital game run from different global and regional control centres, and the information stream was an open set of players and variables. The business – trading – would not be the business itself but a digitalised game zone. Almost like a casino or a strategy video/board game where you bet on certain events based on what you think will be the outcome. However, the difference would be in skill, not random luck, as true knowledge and experience with processing open logistic data would differentiate players. Ultimately, we would witness digital twins run by Artificial Intelligence (AI) playing with each other to sort out the best outcome of getting goods overseas. That way, perchance, we could avoid “cancelling Christmas” because the global supply chain is, at present, ill-fortuned.
Sure thing, but maybe it starts to sound more of science-fiction than your daily glamourless logistics. Or does it? The ‘Big Picture Challenge’ is that there is not enough accurate data on cargo movement, without distinction for the used transport mode – or ports for that matter.
It is common knowledge that vessels spend some 30% of their life cycle at quays instead of ploughing the seven seas. Naturally, ships have to berth to load- or unload the freight; still, more often than not, they idle waiting for the goods to arrive, there is not enough service supply in the port, or because some black swan has decided to turn things on their head. Media coverage is packed to the brim about container ships stuck here and there, but tramp and bulk traffic are also plagued by subpar vessel-cargo alignment. Compare it to the airline business, where the ideal turnaround for aeroplanes is a maximum of two hours on the ground, with low-cost carriers staying for one hour (or even less).
Coordination and supply of land transport can add insult to injury, to mention the hunt for empty containers only. Weather is also a factor that can be rough to incorporate because of its unpredictability (surely, climate change won’t make things easier in this regard). Again, unprecedented events, long-standing as the current pandemic or one-offs such as the Ever Given incident, disrupt the logistics chains, shredding the schedules of ports, cargo owners, and carriers. The impacts of the Suez Canal jam are still with us today.
Perhaps one should think of the logistic chain as a single entity comprising all chains – not just one item going from place A to B. It is, however, easier said than done, as the human factor comes into play. We cannot simply control all cargo or vessel movements as an agent, broker, or stevedore. We, therefore, end up concentrating on a few operations we can wrap our heads around. And since everybody is doing the same, we finish with relatively inefficient logistic chains. That is not all. Cargo owners and shippers are very reluctant to try to search for different or more competitive logistic routes. “Why risk a seems-to-be working system, when you do not have good enough information about the alternatives?” It shouldn’t be the way of thinking, in any case!
Back in the port, one focuses on the operative and administrative functions and how to digitalise them. The challenge is that the way things operate in a harbour is split up into many single operations or operative entities, each more or less siloed. Without having the whole ongoing picture, there is no complete understanding of the processes, thus integrating and making them digitally workable. Also, not every operation and process are worth digitalising – but you must see the forest through the trees to discern what-why-and-how will be better of by making it digital. The most critical issues for ports are time and place. One wants to maximise berth, warehouses and storage area usage. You want to plan to be efficient since time is of great essence. The port needs to move the machinery as little as possible to save time and energy and minimise its carbon footprint. One also wants to know the (exact) arrival and departure times of vessels, vehicles, and cargo to effectively coordinate processes, including maximising the input of human resources.
A fairly long way to go
Sensor data, identification, and timestamps are the most valuable information in digitalising the logistic chain. Ideally, you would want to know in advance when the cargo is planned to leave point A heading for the port at point B – and when it leaves in real-time. Cargo owners or shippers would like to know when the vessel arrives, while the receiver at point C wouldn’t mind knowing when the delivery could be expected. Those handling the cargo at different stages within this process are busy wanting to know when it is their turn to do what, when, and where.
It is a complex system that is nowadays administrated via telephone and email or local communication modes. Somebody might still be using a telefax… As things stand today, the described mixture cannot be handled efficiently on a bigger scale. And that is why digitalisation will come in handy.
Unfortunately, there is not yet a fully-ready system that would ‘talk’ with everybody on the same level and share the information equally to anybody connected. There is no coherent approach to dealing with all these challenges. Every player is just learning to transform port management and cargo movements into a digital information stream. And even if there are many providers of digitalized systems, some specifically catering to ports and a few of them very much ahead of others, we still have a fairly long way to go. It goes beyond high-tech, too; there are many other third-party issues (think insurance policies, legislation, business protection rules, cybersecurity) in need of careful consideration.
The field in front of us is still full of unturned stones. AI and automated logistics chains? Reliable timetables? Widespread data sharing? Pure sci-fi? Brace yourself!
The fun begins
Honesty is the best practice, they say. That is why this read poured much cold water on the transport & logistics status quo. It is because I firmly believe we are – should be! – going towards a digital and automated logistics ecotech system.
Yet, the system won’t set up itself; cooperation is pivotal. It isn’t very sensible if stakeholders are trying to gain a competitive advantage by developing closed systems. The intention behind it seems obscure – is it better service for the customers or tethering them so they will think twice before seeking an alternative? This way, we will achieve nothing, just repeating the past, but in a more refined, digitalised way.
There are steps taken with the Maritime Single Window and the Single Window Environment for Customs on the EU level. Several national and crossborder projects have picked the gauntlet of addressing data exchange for better freight traffic. There are the Finnish-Swedish EfficientFlow, Fintraffic’s Vessel Traffic Services, the recent teaming up of the Finnish next-gen logistics tech-pioneers Awake. AI and Youredi, or the fastest growing Finnish IT company Unikie whose PortActivity App is used in almost every port in Finland, to name but a few. Atop that sit solutions that enable even smaller ports to tap into the digital revolution: automated warehouses, digital twins, and terminal operating, traffic and port management systems.
Interestingly, getting that digital and automated logistics ecotech system online will be just the start. The fun with building specialised digital operative and administrative tools for the needs of a specific stakeholder, such as ports, will begin. Yet, no sooner than all 21st century Argonauts board the e-Argo. Let the game begin!
Author: Patrik Hellman, CEO the Port of Kaskinen.
(Article was published in Baltic Transport Journal 5/2021, pages 32-33)