Majority of Global Ports Are Missing Out on Digitalization
While advocates of digitalization predicted strong gains as ports and the logistics chain realized the benefits of the new technologies, it appears much of the advancement has been limited to the largest ports. While digital technologies are being promoted as a tool to improve productivity, reducing the movement of paper and even direct interaction in the age of COVID, the majority of ports are yet to get the new technologies and the increasing digital divide is creating new risks for shipping and logistics.
Of the 4,900 ports worldwide, the majority are yet to introduce digital technologies even for the most basic of functions reports Innovez-One, a provider of port management software. They report that 80 percent of ports continue to use manual, legacy solutions. Beyond not having the capabilities to use digital technologies such as an eBill of Lading, they report that ports are still relying on spreadsheets or even something as simple as a whiteboard to manage critical marine services such as towage, pilotage, and launch boats.
The digital divide becomes increasingly clear when looking at the large, tier 1 ports with the profile and financial capabilities to realize the benefits of digitalization, while many tier 2 and smaller ports have not had the capabilities to incorporate digital technologies to replace manual, paper-based processes. In addition to the inefficiencies, it creates a higher potential for delays, late payments, increased fuel consumption and emissions, reduced revenues, and even safety concerns stemming from a lack of traceability
“The current dynamic reflects the often-messy reality of port operations, which is a blend of high-tech digital and paper-based, manual processes sitting side-by-side,” says David Yeo, CEO of Innovez-One. “This causes issues in relation to interoperability, where systems are not talking to each other properly, which is impeding effective execution. However, it also highlights the fact that while global supply chains are becoming increasingly automated, of which ports are an integral part, the majority of ports still overwhelmingly rely on person-to-person systems.”
However, Yeo believes that this current dynamic does not need to continue and that the vast majority of ports are unnecessarily missing out on the opportunity to reap the benefits of digitalization, particularly when affordable technology, with a fast return on investment, exists and is readily available. Specifically, utilizing smart technology and AI models to optimize and solve complex last-mile towage and pilotage challenges, and in doing so, creating a fair and level playing field within the global ports’ marketplace.