Abstract
Efficient and optimized port operations are required to keep up with the enormous pressure on the maritime supply chain caused by the rising demand for global goods. To achieve optimized and efficient port call operations, digitalization of the entire process is of the utmost importance. This case study thus analyzes the digitalization of port call operations in the maritime supply chain. We explain the port call operations, the inefficiencies of the traditional way the process is done and how digitalization can help reduce the inefficiencies. We then take the example of a port in Rotterdam, Netherlands and how they developed a platform called PortXchange and helped digitalize the port call operations, thus making the maritime supply chain resilient, efficient and fast. This case attempts to familiarize the readers with the dynamics of port operations, to assess the operational strategy taken by the Rotterdam port for developing the digital platform and to determine the competitive advantage it provides the users.
Keywords
Introduction
Ports are an integral part of the maritime logistic system, which is the backbone of international trade. The United Nations Conference on Trade and Development (UNCTAD) reported that in 2020, 815.6 million TEUs 1 of containers were handled in ports (UNCTAD HANDBOOK OF STATISTICS, 2020), and 10.7 billion tons of cargo volumes were traded worldwide (UNCTAD, 2021). As demand for global goods increases, maritime trade volumes are projected to triple by 2050 (Matson, 2021). Given the increased international trade, a competitive environment has evolved, and so has the customer’s expectations. This requires more reliable, fast, transparent, and cost-efficient transport services. Hence, this is where optimization of port call operations (port call optimization) becomes important.
The term “port call” refers to a ship’s scheduled stopover at a port for cargo operations. Port call optimization focuses on establishing procedures and technical infrastructure in a given port to facilitate quick turnaround times for the ships through standardized, safe, and secure communication in real-time. This process aims to encourage just-in-time (JIT) arrival, reduce idle waiting time for the ships and ports, and enhance the predictability of the ship’s arrival and departure times, thus improving the planning process, better capacity and resource utilization, etc. A key aspect of optimizing the port call processes is leveraging digitalization and collaborative data sharing. Through digitalization, stakeholders involved in a port call operation can share data easily, thus, reducing uncertainties, improving coordination, and increasing reliability. Among all ports worldwide, Port of Rotterdam is a pioneer in using digitalization techniques for port call optimization. The Port of Rotterdam, named the smartest port the world, in 2019 launched a digitalized platform called PortXchange, a collaborative vessel and terminal planning platform for optimizing port operations (Gill, 2019). The platform provides all the stakeholders with a standardized and unified platform for exchanging information regarding the port call operations. This platform aims to reduce the idle time for ships by promoting JIT, thereby improving operational efficiency and lowering carbon emissions, which is an imminent move towards decarbonization in our current era. This case is set against the backdrop of Port Rotterdam creating PortXchange and using modern digitalization technologies to turn traditional port operations into an advanced, smart, and connected port for efficient and sustainable trade.
Port call operations
A port call is a collaborative and complex process in which numerous parties, such as the port authority, shipping line, terminal, and nautical service operators, collaborate to safely and efficiently bring vessels into the port, operate them, and bring them out of the port. There are mainly three stages to a port call operation, from when the ships arrive at the port until they depart. The stages of port operations are defined below:
Stage 1. The arrival of the ships
This stage involves the ship’s navigation and berthing at the terminal of the port. The port authorities, border control, and other nautical logistic service providers such as pilots, towing tugs, mooring rope operators, etc., are key members in handling these operations. The use of pilots is mandatory in most ports because they are expert local port mariner who assist in bringing ships alongside the terminal. They are knowledgeable about the local port anomalies such as tidal fluctuations, water depth, traffic conditions, local rules, and hazards such as wrecked ships and dangerous waterbeds caused by reefs, and so forth. Prior to the ship’s estimated arrival, its local agents submit all necessary information, such as the ship’s details, cargo details, estimated arrival and departure times and the type of cargo operations (loading or unloading) to the terminal authorities beforehand for planning purposes. After the ship arrives at a Pilot Boarding Point (PBP) near the port, the master (captain) requests pilot assistance to bring the ship alongside the port when the terminal is ready. With the assistance of tugs, the pilot maneuvres the ship to the terminal for berthing, mooring, and anchoring. These operations require ship-to-port coordination and proficient navigational skills from all parties involved.
Stage 2: Ship operations at the terminal
At this stage, the ship arrives and is berthed at the terminal. All necessary paperwork is completed and the actual operations of the ship (loading or unloading) begins. This is a crucial juncture for the efficiency of the ship and the port operators. They share an equally significant role in monitoring, measuring and optimizing the results in terms of time, safety, profitability, and efficiency.
Stage 3: Departure of the port
After the ship’s operations (loading/unloading) are completed, the master requests the pilotage services from the ports. The ships are then unberthed from the terminals and safely guided out of the port limits with the assistance of pilots and tugs back to the Pilot Boarding Point, from where they sail to their next port.
Inefficiencies of port call operations
Many international ports continue to operate on a first-come, first-served basis, resulting in inefficiency and a negative carbon footprint. Thousands of ships being handled in a single day at port makes it quite tedious to properly plan the operations, which results in extensive layout timings. According to a recent study of maritime movements, in nine European ports, cargo ships of various types spend around 60–70% of their port time at a berth. However, only 40–65% of berthing time was utilized for actual operations (Lind et al., 2019). Disruption at a single port has a cumulative effect on subsequent ports. The following problems could result from delays in ports: • Delays can cause traffic congestion, affecting the port’s productivity. This causes the ships at the berth to work longer and the ships waiting for the berth to wait longer, thus forming a queue. This cost the ports and the ship charterers
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a substantial amount of money in the form of demurrage charges. • The ships may skip a port visit due to the added delay, resulting in a lower quality of customer service. This could interrupt the planned supply chain and make it difficult to satisfy the customer’s demand. • A ship asset becomes idle while waiting, thus reducing its efficiency. • Ships must steam faster and burn more fuel to meet their original time slots, thus reducing energy efficiency and capital productivity returns. This results in increased CO2 and NOx emissions, negatively impacting the environment and can lead to navigational incidents as all ships hurry towards the ports.
Thus, if the port call operations are not optimized, it may lead to huge efficiency, profitability, and environmental loss. Hence, port call optimization has become imperative for all players. An optimized port call operation necessitates high levels of coordination and communication among all the stakeholders involved. Various regulatory bodies and maritime organizations like International Maritime Organization (IMO) 3 and International Task Force Port Call Optimization (ITPCO) 4 have made optimization of port call operations a top priority on their agenda. One of the initiatives proposed by these bodies to tackle the challenges of port call operation is through Just-in-Time (JIT) arrival.
JIT focuses on the concept that a ship “arriving at the exact time for port call operations” will reduce the idle waiting time and thus the ship’s emissions. It is also intended to increase the asset utilization of shipping lines and improve return on investment in ships, crew, and other assets. In order to implement JIT, transparency in data sharing is essential. On one side, the port operators need to know when a ship is expected to arrive so that they can prepare for its arrival. On the other side, the ship needs to be informed if the desired arrival time would support an immediate start of port operations on arrival. This could be achieved through the digitalization of the port call operations.
Digitalization of port call operations and its challenges
Digitalization can help reduce the impact of volatility by providing more rapid and accurate communication among the stakeholders, resulting in a better understanding of how to manage the resources. Additionally, digital networking between international ports offers opportunities to enhance safety within the entire chain of the maritime industry. It will have a positive impact on the productivity of the stakeholders involved.
Unfortunately, the maritime industry is not an innovative industry; it is a conservative industry. This makes it challenging to digitalize the industry. Even though there is a necessity for digitalization of port operations, most of the ports continue to rely on manual and paper-based operations, resulting in a polarized port environment. This leaves the ports exposed to all kinds of inefficiencies. The following are a few challenges that the industry faces when implementing digital solutions: • Lack of trust. Stakeholders are hesitant to divulge their internal information as most data is market sensitive. Trust in data exchange, acquisition, and monitoring must be created. • Lack of understanding. Many managers do not understand the digital infrastructure and how to operate them. Since they are focused on internal systems, moving to an inter-organizational scale requires a better understanding of what matters when working with other organizations in the chain. • Different goals and objectives. Since digitalization requires cooperation between organizations, this may result in a clash of objectives and perspectives on achieving these objectives. • No standardization of the information language. There is no standardization of the information structure because each party speaks its own language. In one company itself, there could be three different systems. For example, one system may refer to China as “China,” another as “Mainland China,” and yet another as “People’s Republic of China.” Thus, it becomes difficult to connect the different systems. • There may be a lack of infrastructure and resources in the organization, which hinders the digitalization process. • The managers or employees may resist change as they are comfortable with the existing process.
Despite all these hindrances, it is necessary to implement a digital solution for fast, reliable, and unified port call operation. Many ports have been working on developing a digital solution for port call optimization. Port of Rotterdam is one such port that created a platform called PortXchange, which has effectively optimized port call operations and worked with many ports worldwide to make them efficient.
Port of Rotterdam––PortXchange
The Port of Rotterdam in Netherlands is the third-largest port in the world and the largest in Europe (KaranC, 2019). Every year, 130,000 ships enter and exit this port. They handle around 468 million tons of cargo and eight million containers (Campfens, 2019). The port’s dominant position is owed to its exceptional accessibility for ships. The Port of Rotterdam Authority oversees and develops the port and is responsible for the safe and efficient processing of all ships. The port aims to be the world’s smartest port, using digital technology to transform from a physical to a complete digital port. Rotterdam port is investing a lot of money in smart containers, trucks, autonomous cranes, self-driving ships, etc., and aims to complete the project by 2030. As part of its vision to be the world’s smartest port, Rotterdam Port developed PortXchange, a platform designed specifically for optimizing port call operations.
PortXchange
The Rotterdam port authority first launched the company PortXchange Products BV (“PortXchange”) in August 2019 (Gill, 2019). This organization was established to offer the Pronto platform and applications to ports and ships worldwide. Later, both the company and the platform were renamed to PortXchange. Shippers, nautical services, agents, terminals, and port authorities can all use this centralized platform to share real-time data regarding port calls. They connect and standardize all the operational data from all the stakeholders involved in a port call and create a single point of truth. PortXchange was built for Rotterdam, but it could be used for any port, regardless of size. The platform can be used on a computer, laptop, or mobile phone.
PortXchange uses Machine Learning modules to forecast and notify the organization of potential changes and scheduling issues. It replaces reactive planning and allows users to proactively plan activities before a problem occurs. PortXchange assigns the ships’ timeline on the platform as soon as the estimated arrival time (ETA) is known. The dashboard displays real-time information on the status and program of the events. Users can monitor and adjust as needed. The platform is compatible with computers, tablets, and smartphones. Users can choose to receive warnings and notifications for status changes or planned issues. Additionally, using the PortXchange, it is possible to estimate carbon footprints and potential emissions savings during the ship’s transit.
Before the launch, PortXchange conducted a trial at the APM terminal in Rotterdam port along with Maersk, the shipping agent Inchcape Shipping Services (ISS), the towing services Svitzer and Fairplay, and the local pilots of Loodswezen (O’Dwyer, 2020). The trial’s main objective was to check the platform’s performance. A baseline assessment of 177 ships revealed that, on average, ships wait 47 min after cargo handling to depart the terminal. They discovered that the average idle time fell from 47 to 32 min after using the platform. Similarly, the Mediterranean Shipping Company has claimed that using this platform has improved its efficiency from 91 to 95%.
The platform benefits the stakeholders in the following way: • Gives a complete picture of the port call process: from the last port of departure to the next port of arrival. • Reduction of idle time for the ships, thus improving productivity. • Enable JIT shipping, thus improving the efficiency of the port call operations and reducing our CO2 and NOX emissions. For example, when a delay is noticed, such as when a terminal is not free, the ship can slow down its speed, thus saving fuel. This can reduce carbon emissions and save thousands of euros in fuel costs. • Reliable and more accurate Estimated Time of Arrival and Departure (ETA and ETD). • Based on real-time data, shipping lines and ports can optimize their schedules. • Timely alerts and notifications to respond quickly to any deviations from the initial plan • Reduce traffic congestion at the port entrance, resulting in a reduction in navigational accidents.
Implementation of the PortXchange
PortXchange platform is implemented in the ports in four steps:
Step 1: Standardization of data. In the absence of standardized data, information among various stakeholders cannot be exchanged. Hence, the first step was standardizing the data for all the players. For this, PortXchange follows the industry standards set by the International Task Force Port Call Optimization. This enables port authorities, terminals, and shipping lines to translate their events into standard communication, allowing everyone to communicate in a common language.
Step 2: Infrastructure digitalization. In the next step, they digitalize all the available infrastructure in the port, like terminal, anchorage, operation building, etc. They integrate AIS (Automatic Identification System) data into the platform to gather information about the ships in real-time. They also install IoT (internet of Things) sensors throughout the port area to create a digital version of the port and collect and integrate these data into the platform. These data include shipping lanes, terminal locations, pilot boarding places, ETAs, water depth and weather conditions, etc. These data help to perform real-time monitoring of all operations.
Step 3: Automation: They automate the operational tasks for faster operational time and to minimize human errors. For example, the platform could automatically send notifications to ships, nautical services, port authorities, etc., about upcoming operations, enabling them to prepare accordingly.
Step 4: Optimization: The ships and the ports can optimize their operations with the information available. They use machine-learning algorithms to evaluate when something will happen or deviate according to the plan. This promotes a shift from proactive to reactive planning, improving the port operations’ efficiency.
Moving forward
The pressure on the maritime system is increasing each day, driven by the demand for basic and necessary goods, both consumer and commercial. The current pandemic has also exacerbated the situation. Given these scenarios, none of the parties involved in the maritime system can afford idle waiting times due to the inefficiencies caused by any of them. Hence, capitalizing on this situation, PortXchange aims to offer the platform to all the ports and shipping companies worldwide over the next few years. In addition to container shipping, PortXchange is beginning to target the bulk and liquid bulk markets. In addition to the nautical service providers, they plan to work with surveyors, water-based service providers like waste and wastewater collection services, and suppliers on shore to include them in the platform.
Discussion questions
1. Assess the operational strategy of the Rotterdam port for development of PortXchange. 2. What competitive advantages does PortXchange bring to its stakeholders? 3. Discuss the merits and disadvantages of proactive strategy versus reactive strategy. What benefits does the proactive strategy give to PortXchange users? 4. Assess PortXchange’s growth in the pandemic. Could more have been done?
Footnotes
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
