Smart Ports in the Pacific

• Publisher: Asian Development Bank
• Year: 2020
• ISBN:
  9789292624286
• Topic: Economía
• Subtopic: Economía internacional

Maritime trade is an essential lifeline for the remote island nations of the Pacific, which rely almost entirely on imports for essential goods. This study aims to foster dialogue among governments and development partners on how to leverage smart ports to support trade, resilience, and more inclusive economic growth across the region. It examines practical applications of smart ports in the Pacific context and explores options to align international best practices with unique local features such as relatively small trade volumes, geographic isolation, and vulnerability to extreme weather events. The study makes recommendations on how to achieve short-term "wins" by implementing technology and business process solutions, and provides a strategic framework for developing more robust smart port ecosystems over time.

1. Introduction

This study was commissioned to assess and develop smart ports potential in the Pacific region, taking into account its unique features in terms of geographic remoteness, relatively smaller trade volumes mostly concentrated in the import of goods, and the weather conditions that disturb the logistics occasionally.

Port of Suva is the most extensive and busiest container and general port providing the maritime gateway to Fiji’s capital Suva. The Fiji Ports Development Project comprised wharf improvements at the ports of Suva and Lautoka, on the island of Viti Levu, the principal gateways for Fiji’s international trade. The project’s objectives were to achieve a stable macroeconomic environment; support trade, investment, and private sector development; and enhance the economy’s competitiveness through sustained improvements in port productivity.

2. Smart Ports Literature Review

Disclaimer:

The mention of specific companies or products of manufacturers does not imply that they are endorsed or recommended by ADB and Royal HaskoningDHV in preference to others of a similar nature that are not mentioned.

2.1 What Is a Smart Port?

A smart port can be defined as a port that ensures “no waste of space, time, money and natural resources.”¹ The port of the future is expected to be 100% electric, local emissions-free, and able to process more goods in less time. However, this vision can be tempered with practical limitations such as unavailability of funds to invest in new technologies. In reality, most ports would not be able to reach an ultimate smart port level of maturity and sophistication overnight. The journey to becoming a smart port typically comprises many steps in a gradual transformation to becoming a smarter port.

The following are drivers for adoption of smart port technology:

• Operational efficiency. Using smart technologies to increase productivity will help reduce operational costs and relieve congestion of vessels arriving and/or trucks leaving.

• Asset management. Technologies (e.g., sensors) that better monitor structural health or ways in which maintenance requirements can be minimized will result in reduced operational costs.

• Business resilience. Tools can be used to strengthen commercial business operations, to invest wisely in crisis management and business continuity, to be responsive to changes in port traffic and customer demands, and to provide robust service continuity (e.g., with cybersecurity) and staff capability and training.

• Safety and security. Specialized equipment, technologies, and systems can be applied to take over standard repetitive tasks, which will help increase operations safety. The same principle applies to smart security systems to reduce labor-intensive activities (e.g., container screening).

• Energy efficiency. Operational costs and environmental impacts are lessened by being more energy-efficient, particularly with electrification or on-site power generation. Energy efficiency does not mean reduced functionality.

• Environmental management. Following international global climate agreements, such as those that came out of the 2015 United Nations Climate Change Conference in Paris, governments at all levels (national, regional, and local) look toward ports to contribute to the reduction of greenhouse gas (GHG) emissions and other air pollutants. Port authorities are, therefore, compelled to adopt strategies toward more environmentally friendly operations.

Successful implementation of smart ports application can contribute to a wide range of benefits for ports and stakeholders, including

• improving customer service,

• enhancing occupational health and safety for port staff and users,

• reducing environmental impacts of port operations,

• becoming a better neighbor,

• boosting operational efficiency, and

• increasing profitability.

2.2 Evolution of the Smart Ports Concepts

The smart ports concept has been heavily influenced by the rise of Industry 4.0 (the Fourth Industrial Revolution) and its confluence with the internet of Things (IoT) (Figure 1).

Figure 1: Industry 4.0

Source: Asian Development Bank.

Industry 4.0 was originally led by the manufacturing industry. Since the First Industrial Revolution in the late 1700s, the discovery of mechanization and steam power propelled the shipping industry, and mass production was made possible. The introduction of computers and automation has enabled substantial efficiencies across industries. Today, we are amid Industry 4.0, a generation of cyber-physical systems bringing together digital, physical, and biological systems to control the full life cycle of the product value chain using big data and artificial intelligence (AI).

The IoT is a crucial development to interconnect individual computing devices. These devices can “talk” to each other through the internet. The IoT is often described as the concept of connecting physical objects to the internet. These objects will gather data through sensors. With internet connectivity, these data can be sent to cloud systems for storage or computing. Analyzed data can then be transmitted to users or other connected devices for collaboration and decision-making.

Since the port sector is an integral part of a manufacturer’s value chain, Industry 4.0 and the IoT have been introduced into the port operations as well, aiming at more efficient operations with less waste of space, time, and resources, resulting in the smart ports concept. The flow of goods in the supply chain is a key focus for smart ports, but the other roles that a port plays can equally benefit from smart initiatives—in asset management, environmental protection, and staff support.

The following are some examples of potential applications:

1. A vessel enters a port and starts berthing.

a. This terminal and the containers on the vessel make use of IoT technology. All relevant parties will have real-time insight into cargo and vessel arrivals. Human interaction on the ground is highly limited.

b. With the automated mooring systems, the vessel can berth safely and efficiently.

2. The port equipment is automatically directed to the right location to pick up the containers in the most efficient manner.

a. The container is scanned with radio-frequency identification (RFID) technology, and data of the container are transmitted to the cloud system.

b. The cloud analyzes and processes the information and transmits instructions to the port equipment to place the container in the most efficient location within the container yard.

3. The correct truck is loaded with the container and receives the same container data.

a. At the same time, data of the truck are transmitted to the cloud, which analyzes the performance of the truck. Based on deviations in the performance and the environmental and/or container data, AI systems can estimate the need for maintenance (predictive maintenance).

4. The vessel constantly receives the current status of the freight and can estimate the need to alert its operators when it is time to prepare for leaving the port.

a. The data are also shared with the port terminal system, which triggers the automated mooring system when approval has been given that the vessel can leave the port.

5. The containers will be shipped to another location or transported to the hinterland.

a. The cloud system gives an overview of the container locations.

b. When there is a request for a specific container, the rubber-tired gantry will automatically be directed to the right location to pick up the container and place it on the truck for export from the port. The client of the container will have real-time insight into the location and arrival times.

Thanks to the IoT, ports can operate smarter with a data-driven approach, resulting in better service to clients (vessel operators as well as end users), safer working environment, and higher efficiency. According to a report by Forbes,² it is estimated that the IoT will add $10 trillion–$15 trillion to global gross domestic product during 2015–2035 and that “the new rule for the future is going to be, ‘Anything that can be connected,’ will be connected.”

With the wide range of devices connected through the internet and the large amount of data that can be collected, it is becoming increasingly important that the value extracted from the data is maximized. The more value that can be extracted from data, the more efficient and economical the operations associated with that data can be carried out. It is by maximizing the value of data that ports and terminals continue to be competitive. The price of new technologies, such as IoT hardware and software, have declined, signifying that the use of data in port operations has a low-cost but high-positive returns on efficiency and service quality.

To further illustrate, the Port of Rotterdam has identified a step-by-step approach toward a digital port in one of their white papers.³ Digitization of ports can bring about process efficiencies in and between ports. This efficiency can reap benefits in reduced operational costs, thereby enhancing the competitiveness of individual ports. However, it is not realistic to expect all ports to survive this digitization era. The chance of survival depends on how well the port can share digital information within a system of connected logistics supply chain and ports. The Port of Rotterdam has identified four levels of “digital maturity” for a port cargo community (Figure 2).

• Level 1: Digitization of individual activities in the port
At this level, the individual organizations operating in the port digitize their processes so that they work more efficiently—e.g., by implementing a terminal management system to digitize the administrative and financial processes. Digitalization and automation of the port operations facilitates data collection, which enhances greater cost-efficiencies, safety, and environmental sustainability.

• Level 2: Integrated systems in a port community
Once individual activities in the port have been digitized, the next step in the digital maturity is the digital exchange of information within the port community. This exchange leads to reliable, efficient, and paperless dataflows, resulting in more efficient port operations. The focus in this level is related to securely sharing data. Cybersecurity and cyber resilience are key.

• Level 3: Logistics chain integrated with hinterland
At this level, the hinterland four players (importers, exporters, logistics hubs, domestic transporters) are involved in digital communication with the port community. This integration promotes sharing of real-time information on freight and vessel movements, facilitating better planning.

• Level 4: Connected ports in the global logistics chain
The port and its hinterland connections are extended to other ports around the world, forming a global network of interconnected ports. This network will al...