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Maritime must look inland as part of digital transformation

Maritime must look to digitalise inland

The flow of goods across the global supply chain is dependent on digitalisation and nowhere is this more the case than the inland supply chain – an area where port authorities, carriers and terminal operators must pay more attention to if they are going to remain relevant logistics stakeholders.

Global chaos brought about by a multitude of factors, most notably the COVID-19 pandemic, has meant seaports have had to rethink their business models and become more aware of their position on the supply chain.

The same challenges are currently faced by inland logistics actors, but by working together hubs on land and by the sea can make the supply chain more efficient and sustainable through digitalisation.

According to Mikael Lind, Professor in Maritime Informatics, Chalmers University of Technology and Research Institutes of Sweden (RISE), the biggest supply chain challenges today are “rooted in a lack of visibility”. While disruptions cannot be avoided entirely, good visibility allows affected stakeholders to take action where necessary.

Inland hubs supporting seaports

Speaking to PTI in early 2021, the Utah Inland Port Authority (UIPA) said that the issue of data visibility is felt hard in the US, where the domestic supply chain has come under substantial pressure due to increases in demand for consumer goods.

According to the UIPA “long fragile supply chains along with data visibility issues” are among the major hurdles facing the US, echoing the thoughts of others who believe improving digital infrastructure to be the long-term solution.

The UIPA described inland ports as “a release valve” for the supply chain as they are very often located in areas with fewer land and capacity constraints. Additionally, inland ports offer proximity to rail and highways and alleviate congestion and enable improved capacity for storage and services.

The UIPA has recently signed an agreement with the Port of Oakland, one of the three major West Coast ports under siege from container import demand, in order to improve the flow of trade between sea and land.

The cooperative agreement will focus on cutting congestion through the inland logistics corridor by optimising on and near dock rail systems and improving consistency of rail deliveries. This was followed by a similar agreement with the Port of Long Beach.

Consequently, the UIPA announced plans to develop a 5G/LTE network to enable visibility into logistics data and relieve pressure on seaports and the supply chain.

Emphasising the importance of visibility, Lind said, “A lot of attention is now paid to seaports to have them developed towards becoming multi-modal transport hubs. The same challenges are faced by inland supply chains.

“To extend the waterborne supply chains to inland ports means that even more sustainability is brought to the transport chain.

“The alternative is often to utilise more of truck-based transports which causes congestions interfering with the use of roads for transporting people.

“One of the bigger challenges for inland ports is however that the canals being used by ships transporting the goods on inland waterways provides constraints in the flexibility of how to move. Associated to seaports established along the coastline, most often there are larger flexibility for ships to navigate.

The main challenges on the route to visibility are end-to-end integration and data exchange, Lind explained. “This requires first of all the willingness to do so but also standardised protocols and connectivity between the systems.”

Major industry stakeholders have sought to meet this challenge by forming multi-party bodies to work on standards for the sharing of digital data, such as the Digital Container Shipping Association (DCSA).

Ensuring visibility

Crane cargo market and finance economic background

Wolfgang Lehmacher, Anchor Group, said supply chain management is about “ensuring fluidity” at seaports and beyond. This fluidity, according to Lehmacher, ranges from the ability of stakeholders of all kinds to handle and receive cargo.

“Ensuring fluidity requires synchronization and this requires visibility. Hoping that everything will be alright is not a good approach to supply chain management,” Lehmacher said.

“Knowing is the key to the efficient and timely movement of goods. Visibility enables dynamic synchronization, which means continuous adjustments to the realities that emerge and are observed in their evolution by all actors involved.”

Agreeing with the importance of inland ports for the supply chain, Lehmacher described them as a “buffer and overflow sites” that ease pressures on seaports by freeing space on the coast through “speedy onforwarding cargo from the seaport and sequencing the arrivals”.

“This can be best be performed through visibility. It is a kind of chain reaction: when seaports know their space availability, and when they inform inland and dry ports as well as receivers when huge amounts of cargo are arriving everyone can make their decisions.

“Seaports can decide to temporarily store cargo in the port or move it to a dry port, dry ports know how much space they need, and they can inform importers but also potentially ask exporters to hold back their cargo to have enough space for the incoming containers. Visibility makes it easier to do all that.”

Lehmacher said digitalisation is a “prerequisite” for fluid movement of goods, and that visibility enables “dynamic synchronisation” and decision-making.

Inland digitalisation is so important that not utilising smart technologies makes upgrades at the port, such as terminal automation, of “minor value” Lehmacher said.

Matthew Wittemeier, Senior Manager, International Marketing and Customer Relations, Inform, said ports and terminals are now evaluated not only by their immediate supply chain connectivity within their surrounding environment but also to the hinterland.

“As a result, the way inland, sometimes called intermodal, ports and terminals operate is increasingly important to the broader supply chain,” Wittemeier said.

“As the intermodal terminal’s volumes grow, so too will their complexity and digitalisation, through a robust operational software system is the first stop on meeting the needs of that growth and increased complexity.”

Speaking at the Container Terminal Automation Conference 2021 (CTAC 2021), Inform’s Senior Vice President and Board Member, Dr Eva Savelsberg, said a lack of digitalisation in the hinterland is negatively affecting the rest of the supply chain, even though seaports are investing heavily in smart technologies.

“It is just as important to strengthen these hinterland chains and make [inland ports] as automated as seaports,” Savlesberg explained.

Supply chain challenges are not just limited to increasing demand but also include so-called ‘black swan’ events, such as the obstruction of the Suez Canal in March 2021 and the COVID-19 outbreak at the Port of Yantian, China, in June.

There are also other issues to consider such as weather disruption, the evolving socio-political landscape and the threat of  cyberattacks, according to Wittemeier, and these have forced maritime and intermodal stakeholders to think more about the supply chain and resiliency, and subsequently have invested in artificial intelligence (AI).

“Maritime and intermodal terminal operators are in a position where they need to build resiliency over simply infrastructure that enables them to respond in real-time to unforeseeable events and AI based optimization is the key to this puzzle,” he said.

“This optimisation is built on top of a digital foundation, as such, we have seen an increasing appetite for digitalization and would continue to expect this trend to continue.”

Wittemeier said port and terminal operators in the maritime space are stepping up to these challenges and proving to be “highly innovative”. Inland ports have followed the example of major seaports in focusing on turnaround times.

“There are terminal operators who have been very forward thinking, even starting decades ago with the topic of digitalisation and now moving toward automation by leveraging optimisation, AI and machine learning,” Wittemeier said.

One such operator is DP World, and speaking to PTI it said the ports of Rotterdam and Antwerp are key in their efforts to overcoming inland supply chain challenges.

“[Rotterdam and Antwerp] both have an extensive network of intermodal transport connections which includes rail, inland shipping, and road, and they are ideally located in the Rhine-Meuse-Scheldt delta, therefore offering excellent inland waterway connections into Germany, Switzerland, France, the Netherlands, and Belgium,” DP World told PTI.

“Both ports also have an extensive rail and road network, allowing many destinations in Europe to be reached within 24 hours.”

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