Innovation, integration, and efficiency — Smart Ports are coming
Innovation is the key to navigating the uncertain waters of international ports and logistics in the post-COVID world.
While COVID-19 has focused minds on consolidation rather than innovation this year, the long-term priority of the sector in Australia remains the futureproofing of our ports.
In South Australia, if we look at some of our key customers in mining and manufacturing, we have seen huge progress on digitisation, data integration, and automation over the past five years. It is up us to keep pace with this innovation and ensure productivity and financial gains are not lost through the supply chain due to ports or logistics. In short, ports and especially vertically integrated ports and logistics businesses, must ensure they embrace all available technologies to optimise their operations.
In Europe and the US, the ports sector has already registered real progress.
The port of Antwerp is already pivoting to be a data company as well as a ports business, with a platform enabling supply chain partners to collaborate with
the port on API integration.
Projects range from digitised collaboration between participants involved in liquid and break-bulk cargo to the visualisation of potential transport and traffic issues on inland waterways around the port. The major European ports of Hamburg, Amsterdam and Rotterdam are also following suit. The unifying rationale is a drive for integration and efficiency to deliver smoother supply chains.
Australia is no laggard here. Ports are already undergoing proof of concept for a new Trade Community System, which leverages blockchain technology to link information between different actors in the supply chain.
In South Australia we are looking to decision-support platforms to improve predictive trade forecasting, and artificial intelligence to support the optimisation of container yard management. Other projects are also embedding automation. But there is much more to be done.
Australia ranks poorly on the World Bank’s “Trading Across Borders”, and a lack of digitalisation across the supply chain is a contributing factor. The federal government has made it clear that it expects the freight and ports industry to embrace technological innovation to limit the potential negative impacts of growing trade and to take up opportunities presented in the national Digital Economy Strategy.
But innovation is not free. There is significant capital expenditure needed to embed the technology needed to deliver Smart Ports and digital supply chains. Ultimately, as a service provider, some of these costs will need to be met collaboratively with customers but the long-term gains will benefit all.
At Germany’s Port of Hamburg for example, wide-ranging connected-port initiatives planned for implementation by 2025 will enable a doubling of capacity while simultaneously reducing operating costs for operators and logistics costs for cargo owners.
Regardless of complexity or cost, the switch to data-driven ports is coming. As we emerge from COVID-19 there is an opportunity for the sector to come together to discuss how an industry recovery strategy can be used as a platform to drive this shift coherently and collaboratively to Smart Ports and optimised supply chains across Australia.
The future of ports and logistics in Australia remains strong if the industry can embrace innovation
Clearly, commercial concerns will mean that not all innovation can be opened up to the market.
But generally, Australia’s ports and logistics sector has more to gain in opting for a collaborative approach to rolling out connected Smart Ports.
Increased and improved data sharing between industry players will be the foundation that all can benefit from.
A look at Europe, again, proves this point. In the Netherlands, the Port Community System, which has been in place since 2009, allows ports and supply chain partners to connect and share information across a national platform and database, saving participants time and money.
It has been a challenging year, but the future of ports and logistics in Australia remains strong if the industry can embrace innovation.
A “Smart Port” is not a rigid definition; each port will need to tailor its approach to its specific circumstances. But in each case, being willing to embrace data integration and innovation will be key. At Flinders Port Holdings we are actively looking at this challenge from our perspective and through the eyes of our supply chain partners. And we know others are doing the same.
Stewart Lammin is chief executive of Flinders Port Holdings.