Supply Chain

Bringing ports into the digital age

Today’s consumers expect fast shipping times and low costs. In order to cater to their needs, retailers are increasingly integrating logistics technology to innovate the process.

That said, ports have up until now remained unthreatened by disruption. They will always be an established partner for retailers because of the unlikelihood of new entrants and the geographic monopoly they have. There’s also the fact that retailers don’t want to build their own ports, as that requires so much time, expense and expertise.

However, this doesn’t mean ports can avoid innovation altogether – they have to compete against each other as well as against the potential of disruptive entrants. Below are three of the main ways ports can become more efficient and stay relevant.

1. Move to full data transparency

Move to full data transparency

The move to full data transparency is a contentious issue, with some existing parties fiercely protecting the status quo. It’s not uncommon for freight forwarders to charge premiums, using the lack of data transparency as a way to cover up inefficiencies. As truckers get paid by the hour, long wait times translate into more money. In Long Beach, the average wait time for truckers hovers around 100 minutes, and it’s not unheard of for them to wait up to 8 hours and leaving without a container.

The problem is that port authorities tend to be passive when it comes to innovation, functioning more as landlords rather than investors.

However, as automation reaches more terminals, data is becoming increasingly accessible. With a smarter digital infrastructure, terminals can speed up supply chains and offer a more transparent service to customers. The Port Authority at Rotterdam is a good example of a port that’s conscious of innovating – it spends more than $2 billion a year upgrading physical and digital infrastructure and operations.

2. Automate your ports

On the face of it, automating a port seems like a pretty costly option. For example, it costs around $600 million for OOCL to move their newly-opened terminal at Long Beach, California from diesel, manpowered cranes to fully-automated electric cranes – with a large IT expenditure on top of this.

In the short term, this might appear to be unnecessary spending but in the long run, making these updates will save ports an enormous amount on labour costs. Ports that run on software work more efficiently and free up resources for other tasks.

Source: Supply Chain Digital

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