Smart Ports | Contents Smart Ports Point of View By Deloitte Port Services 00 Smart Ports | Contents Seaports are playing catch-up with the large transport & logistics players when it comes to developing insight driven solutions and IoT applications. 01 Smart Ports | Contents Contents Introduction 3 Need for Smart Ports is driven by industry challenges 6 From digital to smart 10 Challenges ahead 16 About the authors 18 02 Smart Ports | Introduction Introduction Currently, a tidal wave of technological innovation & integration is pushing industries and businesses to transform themselves in an effort to become more data, and insight-driven. The port industry is no exception. Being part of both larger transport projects remain isolated. At the equipment and requiring different and logistics (T&L) supply chains moment, ports in Western Europe types of products and services and in itself being a cluster of are leading the pack in these creates a complicated environment companies and businesses active in attempts. Although the Smart Port with multiple stakeholders. In the T&L sector, ports are in a and IoT initiatives are addition to heterogeneity of data, a unique position to fully grasp the commendable, there is still a long fear of transparency also remains a potential generated by these new way to go before we can truly speak major issue. Ports are typically high tech developments. of fully integrated ports that fully comprised of a cluster of competing capitalize on the potential of IoT companies. Within the wider T&L sector, and insight driven applications, in companies have begun other words true “Smart Ports”. Thus, they are often very hesitant experimenting with a range of to share information with a central connectivity and data-enabled Becoming a Smart Port means authority that has the ability to technologies. In aggregate, these developing solutions to address the aggregate and distribute the data technologies form the Internet of current and future challenges faced amongst the stakeholders involved. Things (IoT), which represents a by seaports including spatial In addition the interaction with the convergence between the physical constraints, pressure on surrounding environment, both and digital worlds, ultimately using productivity, fiscal limitations, ecological and social, adds an extra data as a source of value. These IoT safety and security risks and layer of complexity and opportunity technologies are being applied in sustainability. Today’s technological to Smart Port development. diverse settings, from last mile and business model innovations can transport optimization to warehouse be a driving force behind the Smart and transport management Port. systems. These developments have been accelerated by decentralized However, determining which networks that rely on the rapid technologies, how to implement availability and analysis of them and the way in which they can information. support the overall digital strategy of the port remains the main Seaports are playing catch-up with challenge. the large T&L players when it comes to developing insight driven It stands to reason that ports are solutions and IoT applications. The faced with a myriad of issues both current landscape offers some initial technical and strategic. The diverse attempts at enhancing value nature of a port, with a wide variety Transport management systems are propositions through technologies of companies and ecosystems, currently the number one IoT like automation but overall these operating different kinds of application in ports. 03 Smart Ports | Introduction One size fits all? A fully developed smart port can use it gained insights for new business model generation. However not all ports have the potential to integrate fully with their surroundings. Some ports might lack infrastructure or physical integration with their surroundings or might simply not have the scale required to perform the necessary investments. The determination of which level of digitization that can be achieved should be performed on a case to case basis. 04 Smart Ports | Introduction 05 Smart Ports | Need for Smart Ports is driven by industry challenges Need for Smart Ports is driven by industry challenges Ports operate within a supply demand model which is similar to the traditional T&L industry. On the supply side the Port Authority provides land for rent, services to clients as well as a regulatory framework. 06 Smart Ports | Need for Smart Ports is driven by industry challenges The demand side is comprised of “Smart ports are the both logistics supply (warehouses, NxtPort transport providers, terminal only ports that will operators) and demand (industrial survive.” The port of Antwerp focuses its sites, stowage companies, etc.) and strategy of operational is therefore vastly different from the improvement on NxtPort, an prof. dr. Olaf Merk traditional T&L setup. information sharing platform for companies such as BASF, MSC, The three challenges can be When assessing the availability of Katoen Natie, DP World and PSA. countered by a set of solutions technology in seaports, one must The objective is to become a self- focused on automation and understand the demand supply sustaining data-commercialization information services, such as IoT. balance. Seaports are often company that will gather, ‘landlords’, their business model centralize, store, analyse and Operational excellence revolves on supplying land and exchange data from a wide variety The primary challenge driving IoT in services to demand parties like of logistic actors. Other parties seaports is operational excellence. terminal operators and companies which can join the platform in due From a supply side, namely port acting in the T&L sector. Therefore, time include customs, food quality authorities, capacity, efficiency, there is an important distinction control, other governmental reliability, support and costs are key between technological innovation on agencies and IT application drivers of value proposed to the a terminal level and on a port level. developers. clients (for e.g. terminal operators). A full port based IoT implementation On the demand side port users should benefit both the port users might want extra services like as well as the port authority itself. savings in time, security, traceability, etc. Improving these There are three main challenges drivers for both sides is where the driving the need for smart ports: quick wins lie for ports. The importance of this challenge is 1. Operational excellence mirrored in the current IoT 2. Migrating activities (challenging implementations in ports. Today’s external market) digital port solutions focus on 3. New business opportunities efficiency improvements like traffic management systems, improving These challenges stem from the flow throughout the port area, tendency to measure success based automation, reducing costs or digital on traditional parameters like size invoicing (customs) by improving and throughput. However, Western lead time. ports are no longer only competing for the number one spot in global However, the need for IoT and traffic figures. Ports in Western smart ports is not only driven from Europe are faced with a a business perspective. Today we concentration of ports in a also see other trends, which will stagnating mature market where force ports to be proactive and efficiency and protection of market shape their environment instead of share becomes central. This reacting to market fluctuations. necessitates a strategic shift, where size is no longer the primary focus, but rather efficiency and smarter operations. It is no longer the largest port that will survive but the smartest port. 07 Smart Ports | Need for Smart Ports is driven by industry challenges Migrating activities Finally more indirect developments The second challenge driving IoT in drive the need for Smart ports. Portbase and seaports is migrating activities. The These include the increased focus automated need to be smart is also driven by on sustainability, generated from a challenging external market stronger interaction between port terminal environments. Focusing on Europe, and city, by regulations based on we observe a shift of spending sustainability and environmental Within the port of Rotterdam two power away from the traditional targets and by social pressure. main technological feats have Western regions, GDP growth is been accomplished, aimed at stronger in Eastern Europe while New business opportunities locking cargo streams to the port. cost of living is lower. Many of the The third challenge driving IoT in First, the nationwide Portbase EDCs, traditionally located in seaports is the development of new initiative, in existence since 2009. Northwest Europe, are moving their (data-driven) business models. IoT Portbase Port Community System activities further east. This could applications provide more added is the digital connection to smart result in a subsequent shift in local value than only updating existing Dutch ports. It is a combination of shipping networks, putting added frameworks and streamlining an application layer, platform and pressure on the ports which are established business models. In information database. The system currently market leader (Rotterdam, order to maximize potential of promises concrete savings in time Hamburg, Antwerp and insight driven solutions, port and money through bilateral Amsterdam). authorities must rethink their connections and information orthodoxies about value creation exchange. On a global scale, shifting