May 2017

The Digital Age

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It’s high time that the port and logistics industry embraces the age of digitalisation, finds Carly Fields.

Disruption is coming, whether the ports and logistics industries like it or not. Speaking at Multimodal in the UK, Troels Stovring, chief executive of Twill Logistics, the in-house 'digital freight forwarder' of Maersk-owned global freight forwarding and logistics provider DAMCO, laid the immediacy of the threat bare. He said there is a one-on-one correlation with the amount of money invested in technology in a sector and its vulnerability to disruption. With $5bn invested in the supply chain and logistics in 2016, this industry has reached its tipping point.

Innovator, disrupter, engineer and strategist, Chris Surdak coined the term ‘Jerks’ in his description of that threat. Speaking at Navis World, he explained how he draws on the physics definition of jerk, meaning an increasing rate of acceleration. “If you’re in an elevator and it does that sickening bounce, that’s jerk. When you slam on the brake of your car, that’s jerk. It’s very discomforting and it’s very disquieting.”

That instantaneous change in force is also extremely disruptive to the systems that were previously the exclusive domain of traditional engineers and designers. Uber and Airbnb are just two examples of ‘jerking’ industries.

“What Jerks do is they use information to put other people’s capital to better use,” says Mr Surdak. “Shipping is pretty capital intensive so if I wanted to jerk the industry, all I have to do is use information to use your capital better than you are. That’s all Uber did. That’s all Airbnb did.”

Building a network

That the industry needs a disruptive force is becoming widely accepted. In a recent survey commissioned by Navis of 150 maritime and logistics companies, 59% said that there was poor co-ordination between all participants across the supply chain; 92% said real time access to information was very important to improve efficiency; and 70% believe this industry lags behind in terms of adopting technology and digitalisation.

“How ready is our industry to really embrace the age of digitalisation? We are totally ready,” says Navis chief executive and president Benoit de la Tour.

“Winston Churchill said that failing and failing again and again and keeping your enthusiasm is how you end up doing great things. I still have my enthusiasm and I still believe that we have a fantastic opportunity ahead of us,” says Mr de la Tour. “I’m not going to lie to you, it is true that our industry is somewhat conservative and bringing change is not simple. There is a lot of resistance to change management, there are a lot of habits to work as silos, and there is no culture of collaboration. There is always the feeling that things can be developed better internally. So, we have to overcome that.”

While Navis is better known for its terminal operating systems solutions, in the last three years its investments have been around software solutions.

Of those investments, XVELA is certainly the prime focus and after three years of incubation and prototyping, the platform is now ready to be launched. There is, acknowledges Mr de la Tour, a reluctance to change, but with strong commitments from ocean carriers, courtship of Maersk and the imminent signing of an undisclosed alliance to the XVELA platform, Navis believes the time is now for its cloud-based stowage collaboration platform.

He’s stresses his desire for XVELA to remain an open platform and not a Navis solution. “The way we believe XVELA can work is if both ocean carriers and terminals can see benefit from it. There is so much productivity that you can gain by improving terminal operations. We see 2017 as the year that we build the network.” 

Big data solutions

Another information-based start-up already making waves in the logistics industry is ClearMetal. Fronted by Adam Compain, ClearMetal is a predictive logistics company using a different approach and set of technologies to solve two age-old problems in the industry. First, overcoming complexity and uncertainty across the supply chain and second, dealing with outdated IT infrastructure.

Employing a detailed focus on data coupled with machine learning and artificial intelligence – all customised for the shipping industry – ClearMetal’s tool predicts the way that customers and partners will behave, and consequently how shipments will move across the world.

“On the data problem, we’ve built a platform that is essentially able to organise freight data, make sense of it, sequence it properly and prepare it to be used by very intelligent machines and algorithms,” said Mr Compain. “That means predicting all things related to container bookings and movements well, and also giving a platform that makes sense of freight data and allows companies to innovate on top of that.

“Almost every decision a port makes is based on a prediction of some kind already. That all really depends on the prediction of container flow or arrival landside and quayside as well as the activity level that will result in the port from those flows.

“What Clearmetal does is predict the flow of containers across the world, including in and out gate at every particular port, and with that information we can give ports a better read on what will arrive by land, or by sea, by load, by container type, when and how, and that allows ports to manage labour, equipment and yard optimisation.”

The technology can see both up and down stream, predicting different ports of call and arrivals. “So, if there’s a delay, we’re able to predict a lot better when that final arrival time at that certain port will be.”

This industry is, he says, “virtually untouched” by such sophisticated technology. And given the current state of the industry, it’s in desperate need of new approaches.

Mr Surdak agrees. He says that the disruptive change is coming. “Rewrite your books. Based upon my need for intimacy, immediacy, etc., I’ll pay more to get that stuff right away. Crossing the ocean is the slowest part of the value chain. If you can cut that in half, that’s hugely valuable.”

AUTOMATION ALONE ISN'T A FIX-ALL

Navis believes that automation isn’t the panacea that some believe it to be. It should know, it’s had more involvement with automated terminals than any other TOS provider. But the road block in too many cases is the lack of relevant skills and capabilities.

Navis has utilised its ATOM lab to help its customers build capabilities around automation, and to help its optimisation team really get into the details of automation. While there are comparatively few terminals at full automation, there are between 50 and 70 terminals closely watching performance levels, according to Navis’ Benoit de la Tour.

Automation also needs to be brought to another area to tackle inefficiencies: stowage planning, he adds. “It is inefficient today – perhaps a couple of billion dollars of waste across the whole container chain - so what can we do to make that stowage more efficient, to fill more vessels, to make sure the whole capacity is used and have less of those boxes that are never where they’re supposed to be on the stowage plan?”

Navis is working on automating stowage planning and expects to come up with “something that is pretty revolutionary for carriers” by the end of the year. “We are working very closely with people that are industry experts - they do planning for a living,” says Mr de la Tour.

Navis is also still planning to help smaller terminals in the future, one of Mr de la Tour’s goals when he took on the president role last year. However, other priorities have to come first. “We have to prioritise what we do and helping smaller terminals is still on my ‘to do’ list.”