When asked about infrastructure needs at our global ports, most experts mention dredging deeper waterways to handle larger ships, or better access to rail and inland distribution lines. One growing need that is often overlooked is the capacity of our ports’ IT infrastructure. As advances in smart electronics and control systems are quickly finding their way into international shipping, the need for more effective data and physical IT infrastructure required to properly handle the growth is ever-increasing.
In the years leading up to 2008, shipping companies were placing orders for massive ships, capable of carrying more than 18,000 containers each. But with the 2008 financial crisis and other economic issues in the United States and Europe, the high trade volume was unsustainable and left many transportation companies digging into their pockets for cash. While not a long-term (or new) solution, transporters began slow steaming to save costs and maximize capacity, but that created a new set of issues.
It became quickly apparent that there’s only so much you can do out on the water to increase profitability and position a company for future growth, leaving it up to shipping companies and our ports to find ways to increase efficiencies and stay competitive. The first step in moving forward is addressing the aging IT infrastructure at our ports. Most of the world’s largest and busiest ports were built to handle ships and communications systems that are now decades old. For an industry that transports approximately one third of the world’s goods and exceeds $400 billion in economic value, upgrades to handle the sophisticated systems being adopted by the large shipping companies are critical. In some cases, it means updating software or installing physical upgrades such as high-speed fiber optic cables, while in others it means updating onsite data centers to handle the increasing amount of monitoring and control data being produced.
Today, the most sophisticated ports utilize GPS systems and complex logistics tracking for auto-loading and monitoring activity within the port. In turn, the transport of refrigerated goods has seen a tremendous increase in IT capacity as control and monitoring systems are housed within each reefer to not only monitor ambient temperature, but also the system status and performance of the refrigeration compressors. This data is shared in real-time with on-board engineers and with home base terminals at ports giving everyone the ability to monitor and react in real-time to any change that could damage goods and result in lost revenue. Where once data checks were made and recorded by humans, now machine to machine communication monitors, controls, analyzes, reports and stores massive quantities of data around the clock. It has enabled our port systems to operate more efficiently, safer and in better communication with all aspects of the supply chain. But it also means an immediate need to plan for and enhance the ability to maintain and capitalize on that data.
Other industries have had similar evolutions in recent years. Companies like FedEx and UPS revolutionized the use of big data to enhance their businesses and produce additional profit and customer satisfaction. With their vast array of high-tech data centers and analytics, they are as much IT companies as transportation companies. While maritime shipping is no stranger to data, we’re also seeing examples of smart electronics changing the landscape and driving the need for a more data-driven approach to transportation.
For example, at Port Tanjung Pelepas (PTP), a port in Malaysia that sees approximately 8,000 refrigerated shipping containers per month, operators are using a software from Emerson called REFCON to monitor incoming and outgoing cargo, provide real-time data to customers, and provide controls and monitoring for individual containers carrying temperature-sensitive goods, such as pharmaceuticals and food. Before using REFCON, all reefers were monitored twice daily for temperature records and every four hours for continued power. This manual approach created a drain on resources that could have been better spent providing technical maintenance or repairs. With the application of smarter electronics and monitoring systems comes better data for shippers, customers and controllers – allowing for quicker and more effective revenue decisions.
The Emerson solution, however, reaches far beyond the individual port. The REFCON port systems, like the one at PTP, as well as similar systems installed on the container ships, are able to connect to a cloud based solution. This solution, called myREEFER, allows data from containers to be consolidated across ports, ships and the land segment of the transportation cold chain, and allows shipping lines and other container operators full end-to-end transparency in their container operation.
Through the availability of data, Emerson is providing value-adding services, which helps the customer in making the right operational decisions and act upon any unexpected events. Thus the solution provides a number of benefits, including improved cargo quality, reduced operational costs, improved personnel safety, improved documentation, reduced human errors, energy savings and CO2 reductions.
Ports around the world may be at low tide now, but they should prepare for rising seas in the immediate forecast. Should a port upgrade physical infrastructure to handle larger ships or invest in IT upgrades to become more efficient?
In reality, it is much quicker and easier to upgrade an IT infrastructure than to reconfigure a port. In addition, new processes applied from enhanced IT and smart electronic upgrades can have a direct and immediate impact on operational efficiencies with existing ship traffic resulting in faster profitability. It is of course important to make necessary physical upgrades to plan for the future, but as 2008 showed us, the future is never certain.
The most successful ports in the future will be those that find smart ways to use the growing abundance of data coming from shippers and manufacturers along the supply chain. Having the capacity to handle that data is the first and most important step to ensuring a port is properly positioned for a profitable future.
Palle Joergensen is managing director of Emerson Climate Technologies – Transportation Solutions, located in Denmark. For more, visit www.emersonclimatetechnologies.com.