International shipping How ports are becoming smarter

Shipping is the backbone of the world economy, transporting 90% of global trade. But as cargo volumes increase and consumers expect faster delivery times, port operators must embrace technological innovation to keep up.

Shipping is the backbone of the world economy – approximately 90% of global trade is transported by sea. (Photo: Shutterstock)

In 2017, the world’s busiest port, in Shanghai, processed 40.23 million containers – more than one every second. It regularly receives ships 400 metres long, each carrying thousands of containers packed with everything from shoes to cars to electronics being transported across the globe.

Shipping is the backbone of the world economy – approximately 90% of global trade is transported by sea. And the sheer amount of goods being shipped is increasing at a rapid rate. In 2017, it measured 1.83 billion tonnes, an increase of more than 40% in just seven years.

This puts pressure on ports like Shanghai and countless others. To keep pace, they must improve efficiency and increase throughput by embracing new technologies. Ports may have evolved significantly in recent decades, but some aspects of operations remain anchored in the past, dependent on manual and paper-based systems, says a 2018 report from the Boston Consulting Group (BCG). Making ports smarter will help eliminate or reduce the billions of dollars currently wasted in port and shipping business processes.

Move more, faster

Becoming smart means going digital. Internet of Things (IoT) technologies, big data, blockchain – the same innovations revolutionising many industries will help transform international shipping, enabling more goods to be moved more efficiently. Germany’s Port of Hamburg, for example, intends to double its capacity by 2025, without expanding its physical footprint.

Smart sensors in walls, buoys, roads and lifting equipment can help operators better manage their facilities. At the Spanish port of Valencia, sensor boxes fitted to 200 large cranes collect data on location, operational status and energy consumption. The information is shared with operators to identify bottlenecks and propose solutions, as well as reducing downtime with preventative – a task that can now be quickly carried out by drone. “The prototype’s developers estimate that it could shave up to 10% from operating costs,” says the BCG report.

Sensors are also helping storage become smarter. Currently under construction in California, Cool Port Oakland will enable real-time delivery scheduling and automatically regulate temperature for the food products stored across its 26,000 square metres. Tracking technology installed in individual containers ensure goods remain at the right temperature during transit, reducing wastage.

Connecting land and sea

Crucial to operational efficiency are the trucks and railways transporting goods to and from ports. Vehicle booking systems, number plate readers and GPS data give ports greater visibility of traffic and enable better planning, helping trucks and trains move through as quickly as possible. Not only does this reduce waiting times, but it can also help cut fuel use. At the Port of New York and New Jersey, a new GPS-based appointment system led to more than $5 million in fuel cost savings in 2017.

In the near future, autonomous vehicles will enable further efficiency gains, as well as improving safety and lowering operating costs. And these won’t just be on land: in Norway, work is already underway to construct the world’s first autonomous, electric-powered container ship, which is set for delivery in 2020. The Port of Rotterdam, Europe’s largest, says it aims to integrate autonomous ships by 2025.

The world’s smartest port?

Rotterdam is working closely with IBM in a bid to become the “world’s smartest port”, leveraging the IT company’s IoT and cloud technology. By creating a ‘digital twin’ of the port, it wants to replicate operations across the 42-square-kilometre site in a detailed virtual model. “This will help us test out scenarios and better understand how we can improve efficiencies across our operations, while maintaining strict safety standards,” the port says.

The port has also helped create RAMLAB (Rotterdam Additive Manufacturing Lab), the first 3D printing lab for seaports and shipping companies. The lab makes components such as propellers on demand at unmatched speed. “Where a traditional manufacturing process of a specific ship’s component usually takes six to eight weeks, we anticipate it can now be done in just 200 hours,” says the port’s smart infrastructure expert Vincent Campfens.

Smart ports are also more environmentally friendly. In addition to traffic management systems reducing engine emissions, motion-sensitive lighting in warehouses and access roads, can cut energy consumption significantly. Some ports now use drones to check waterways for oil spills.

Benefitting the whole supply chain

But the path toward smarter ports is not without its challenges. In a traditional industry like shipping, legacy processes may be tough to replace. And as the BCG report To Get Smart, Ports Go Digital emphasises, implementing such a wealth of new technology is “expensive, complex and disruptive.”

The benefits are significant, however, with smart ports potentially able to add real value in one of the most important links in the supply chain – helping move goods faster, safer and at a lower cost.

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