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Highlights
- Burgeoning demand and stressed supply chain have caused traffic jams at ports across the world, with the impact trickling down the entire value chain.
- Growing container volumes, combined with labor and truckers’ shortage, are likely to cause a lot of pain to the supply chain. Connected or smart ports will enable optimal solutions to ease this pain.
- Smart ports, enabled by innovative digital technologies, capture real-time information for better decision-making and facilitate a collaborative approach, making operations efficient and ensuring workplace safety.
In this article
In this article
Ports face traffic jams
How would you feel if your online order to make an important upcoming event grand is delayed because traffic jam at the nearest port hampers its movement?
What would your reaction be if you find store shelves empty, making you re-live the initial days of COVID when the global pandemic severely affected the movement of goods and services?
With customers rapidly embracing e-commerce, demand and supply worldwide have been in a state of non-equilibrium. Burgeoning demand and stressed supply chain across the world have caused traffic jams at ports, with the effects trickling down the entire value chain.
During COVID, as dozens of container ships were stuck at ports in the US West Coast, companies that relied on supplies from Asia faced a tough holiday season, and big retailers in the US had to charter vessels amid supply crunches. Traffic jams near shipping ports, thus, contributed significantly to the supply chain disruption across the world.
Smart ports will ease congestion
As the world economy grows, it is predicted that global container volumes will increase by about 18 per cent between 2021 and 2024.
This increase, combined with labor and truckers’ shortage, and congestion at shipping ports, is likely to cause a lot of pain to the supply chain. Connected or smart ports will ease this pain by helping plan optimal solution for such a scenario.
A smart port is connected, autonomous, and enabled by innovative digital technologies. It aids better decision-making by capturing real-time information, thus helping stakeholders improve the day-to-day processes and ease the supply chain. It also enhances security and workplace safety, facilitates collaborative approach, and saves energy, thus providing more functionalities than in the current scenario.
Smart ports also promote sustainability. The ports community has also realized that by embracing automation and digital connectivity, the shipping industry will be able to achieve the target set by the International Maritime Organization to reduce emissions from international shipping by 50% by 2050 from the levels recorded in 2008. At the 26th UN Climate Change Conference of the Parties (COP26), speakers from ports around the world underlined the need for green and smart ports.
Positive impact on stakeholders
Smart ports will have a positive impact on the shipping industry comprising cargo owners, shipping lines, terminal operators, trucking companies, rail freight operators, and industrial operatives at large.
Powered by artificial intelligence (AI), cloud, big data, internet of things (IoT), and blockchain, the ports will act as a digital node in the global supply chain. They will redefine the processes that move cargoes and services and make them more effective, efficient, and economically competitive.
Security and workplace safety at ports also get a boost as each process is tracked and monitored with smart technologies.
New tech will enhance efficiency
Emerging technologies like 5G, digital twin, drone, autonomous vehicles, and hyperport (using hyperloop) technology programs will enhance the efficiency of smart ports.
At the Smart Ports: Piers of the Future 2021 event, Port of Barcelona announced that they have partnered with renowned tech and telecommunications companies for using 5G and AI to improve tracking and monitoring of vessels that dock at the port. Ports from across the world also explained the innovative technological initiatives they have been adopting to improve operations. The port of Antwerp, for instance, implemented a drone management system in their facilities; the port of Busan’s Chainportal, a blockchain platform, changed the management of the port by providing greater process transparency, and the port of Hamburg showcased the greater traffic optimization capability they achieved with quantum computing.
Figure 1: How smart ports will promote sustainability
Digitalize to compete
Ports are rapidly innovating business operations and implementing digitalization to gain competitive advantage.
Smart ports improve efficiency with automated ships and vessels connecting stakeholders to ports, thus reducing congestion, pollution, and ultimately saving time and money. But when it comes to adoption of technologies, the one-size-fits-all concept doesn’t apply here.
To reap maximum benefits through cost optimization and to deal with workforce challenges at ports, the entire ecosystem consisting of terminal operators, trucking companies, railroads, shippers, logistics companies, and freight forwarders need to embrace automation and be connected to remain competitive in the shipping industry and at volume.
To establish the connected ecosystem, a collaborative model with governance and policies needs to be developed and distributed proportionally across the port value chain.
Digitalization and greater connectivity are inevitable to make smart ports of the future agile, robust, and resilient. This requires high up-front capital investment to realize the full ecosystem benefit and also mitigate cybersecurity challenges. Investments in smart ports are essential to make the most of the value-driven potential of intelligent, connected, transparent, and stakeholder-focused systems that contribute to a better and sustainable future.
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