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| Alexander J Scarcelli |
| Purdue University |
The outbreak of the COVID-19 pandemic severely impacted the maritime supply chain, highlighting an urgent requirement for improved efficiency in port operations to meet the increasing demand. Considering that over 80% of global goods are transported by sea, the pandemic delivered a formidable setback to the international supply chain Gu (2023). The pandemic, while affecting multiple dimensions of maritime trade, particularly strained port operations. A notable number of ports were evidently unprepared to counter events like epidemics, causing a marked reduction in cargo throughput. Further, prevailing economic circumstances and governmental regulations amplified these challenges, inhibiting ports from adapting to the spike in online shopping and thereby leading to pronounced delays and reduced profitability.
An Introduction to Smart Ports
Before the pandemic, most ports focused on updating their physical infrastructure, often overlooking their digital counterparts. However, in the wake of the pandemic, most modern ports have embraced the potential of data analytics. By harnessing the power of big data, ports have not only enhanced their efficiency but also bolstered their resilience and profitability. Furthermore, incorporating state-of-the-art data solutions can help ports prevent congestion, minimize delays, improve overall safety, and minimize their economic impact. The growing emphasis on data-driven port solutions has given rise to the concept of the "smart port." However, there is no set definition of what makes a port “smart.” According to Karaś(2020), “the idea of Smart Ports is not only management of technological processes but also digitalization, increasing the efficiency of operations in ports, integration of ports with cities and acquiring energy from alternative sources”. Modern smart ports are generally equipped with the latest high-level port technologies, strive for full automation to prevent possible disruptions in the supply chain, can manage and appropriately use large amounts of data, and can be flexible and adapt to economic shocks. Smart ports typically outperform traditional ports in terms of efficiency and quality. Moreover, they provide a competitive edge while promoting environmental responsibility. All in all, if modern ports want to operate and compete as efficiently as possible, the incorporation of big data is needed to operate smoothly and prevent another maritime trade collapse.
Using Data for Operational Optimization
With the recent pandemic demonstrating that most ports were unequipped to deal with operational shocks, making better use of the data already available to ports has become critical. According to Wouter van Groenestijn, “most ports and terminals collect vast amounts of data about how they are performing. But it’s often not used in a way that reveals why problems are occurring, what might happen, and what to do about it. And it only gives a partial picture because it doesn’t involve everyone in the port ecosystem” van Groenestijn (2021). This underutilization of data leads to inefficient productivity and can result in delays and port congestion. For instance, most ports rely on estimated departure times to inform ships when it’s safe to leave. However, these estimates are often inaccurate and subject to frequent changes. These inaccuracies can have a domino effect, causing delays in towage and lock operations, leading to port congestion and further delays. However, smart ports have begun to work around this problem by incorporating machine learning technologies. Machine learning technologies can make use of the data from individual vessels to understand how they have behaved historically and how they are likely to behave in each situation. According to Groenestijn, these insights can improve departure time accuracy by as much as 20%, enabling port employees to plan schedules more efficiently van Groenestijn (2021). Moreover, the use of big data and machine learning allows ports to forecast demand, optimize berth allocation, crane assignments, and efficiently manage resources, such as equipment, labor, and energy, ultimately reducing waste and downtime.
Risk Management
In addition to operational inefficiency, the pandemic also exposed flaws in ports’ risk management practices. As delays and congestion hours pile on, ports risk substantial operational costs and even the loss of key customers. To mitigate these risks, ports must gain a deeper understanding of the causes of congestion. Utilizing information available about each vessel entering and departing the port, such as overall vessel length, smart ports can analyze key congestion areas and identify the underlying causes of significant delays. Furthermore, by running simulations, smart ports can determine the optimal schedules for vessel movements within the port, making efficient use of available space. Smart port technologies can also become instrumental in curbing smuggling and theft. For instance, smart ports can employ anomaly detection techniques to flag suspicious activities, such as drug smuggling or theft.
Innovation and Competitiveness
Additionally, ports that have adopted analytics and machine learning tend to outcompete traditional ports. These smart ports not only enhance their operational efficiency but also leverage their data assets to collaborate with other maritime stakeholders and companies, such as technology providers, research institutes, and regulators. For example, a smart port could utilize cutting-edge information technologies to expedite and secure contracts faster than competitors. By utilizing blockchain technology, a port can secure smart contracts and receive almost instantaneous transactions. Additionally, new technologies, such as deep neural networks, offer more accurate forecasts and real-time solutions According to Dorota Owczarek, smart ports that efficiently manage vast data can receive long-term forecasts directly instead of relying on a series of predictions, each based on the previous outcome Owczarek (2022). This allows smart ports to outcompete traditional ports that rely on single machine learning algorithms and time series methods Shipping (2023).
Sustainability
With an increasing emphasis on environmentally friendly supply chain solutions, smart ports are minimizing the environmental impact of shipping. By utilizing data to enhance operational efficiency, smart ports can reduce their environmental footprint by ensuring that the port operates at maximum efficiency. For example, ports can use environmental analytics to monitor and manage their emissions, waste, energy, and water consumption. Additionally, improved database management allows for more accurate analysis of a port’s environmental impact and total emissions, making it easier to communicate with regulators and government officials to ensure compliance with environmental standards.
Global Leaders in Smart Port Innovation
As the concept of smart ports gains momentum in the maritime industry, numerous countries are making significant investments in port technology. The Port of Gdynia, for instance, has implemented one of the most advanced guidance systems globally: the Global Navigation Satellite System - Real Time Kinematic. This system was implemented at the beginning of 2019 and allows for the visualization of ship movements with extreme precision, down to the centimeter. Moreover, the system supports the work of captains, which requires extreme precision during difficult weather conditions. Implementation of the system allows for maneuvering the ship not only with limited visibility but also prevents congestion in the port itself. Meanwhile, the Port of Antwerp, a hub for European chemical trade, has developed the iNose device. Over 23 iNose devices have been strategically installed throughout the port to measure and monitor changes in air composition.
This allows the port to analyze its impact on the surrounding air quality, preventing over-pollution and ensuring a safe working environment Johnson (2020). Additionally, British Telecom has partnered with Gorilla Technology Group to develop an innovative Container Identification and Container Damage Detection solution. While traditional manual inspection methods are inefficient and prone to human error, the new solution can accurately and rapidly identify containers, track movements, and detect any signs of damage or tampering. This new technology will optimize operations and improve the overall efficiency of ports, eliminating the need for manual container inspections McCabe (2023).
Outlook
As information technology continues to expand, smart ports are better able to adapt to meet current demand. AI, blockchain, and process automation are being integrated into ports worldwide to streamline maritime trade. Just as recently as 2022, the global Smart Ports market size was valued at USD 1954.88 million. It is projected to reach up to USD 6577.04 million by 2028. Leading companies in the field include IBM,
Siemens, General Electric, and more. However, the growth of the smart port industry also presents challenges. The large amounts of data being gathered will mean ports will need to constantly maintain their database systems, possibly resulting in high costs as new systems are integrated. Moreover, the transition to full automation poses a risk of unemployment for physical laborers within the sector. While creating a fully automated port may make for a more efficient process, it also will cut out many human-operated aspects of traditional port operations. Finally, perhaps the biggest risk of all is cyber security. With an increasing reliance on technology, the risk of cyber-attacks grows. To prevent such attacks from completely disrupting port operations, ports will need to invest significantly in cyber security and backup systems to prevent significant financial loss.
Overall, to meet the growing demand, ports all over the world are adopting the latest technological and data applications to keep their operation running efficiently and better prepare ports to face the problems of tomorrow.
References
van Groenestijn, W., 2021. Is data the next port of call? https://www.ey.com/en_gl/global-trade/is-data-the-next-port-of-call. Accessed: 10-23-2023.
Gu, Y., 2023. Impact of covid-19 epidemic on port operations: Evidence from Asian ports. Case studies on transport policy 12. Johnson, S., 2020. Ports Primer for Communities. Technical Report. United States Environmental Protection Agency.
Karaś, A., 2020. Smart port as a key to the future development of modern ports. TransNav the International Journal on Marine Navigation and Safety of Sea Transportation 14.
McCabe, S., 2023. Gorilla technology enters strategic relationship with british telecom for ai-powered innovative smart port solution. https://finance.yahoo.com/news/gorilla-technology-enters-strategic-relationship-120000180.html. Accessed: 10-23-2023.
Owczarek, D., 2022. Maritime trends: Why is ai-based predictive analytics the next key change driver in the shipping industry? https://nexocode.com/blog/posts/maritime-trends-ai-based-predictive-analytics-in-shipping-industry/. Accessed: 10-23-2023.
Shipping, A.C., 2023. How can ports use big data and analytics to improve decision making and performance? https://www.linkedin.com/advice/0/how-can-ports-use-big-data-analytics-improve#:~:text=For%20example%2C% 20ports%20can%20use,and%20reduce%20vessel%20turnaround%20time. Accessed: 10-23-2023.
Acknowledgments: We would like to thank Harsh Anand for taking the time to review this article. Photo credits goes to Timelab for the header photo and Johan Taljaard for the footer photo.