Ronald Paul, chief operating officer of the Port of Rotterdam, has publicly called for the port to become “the centre of the logistics internet”. But what exactly does he mean by that?
According to program manager Mare Straetmans, logistics information is already available throughout the internet, which produces data and makes it available to everyone. However, as to whether this data is accessible and easy to use, is another thing all together.
“Right now, we can’t really speak of a single ‘logistics internet’. While the internet is used in the logistics sector, this is primarily for the operations of individual players. We now need to focus on actively linking our different interests and establishing interconnections so that we can use logistics in the same way as the retail sector does,” he says.
With the help of open and comprehensive data, it would be possible to put in place the most efficient supply chain possible, connecting vessels operating in the North Sea to, for example, a potential client in a shopping street in Munich. This would give a port such as Rotterdam a competitive advantage, because it makes more sense for a customer to choose that port over less internet-efficient rivals.
“We are completely convinced that by making better use of the internet, it would not only reduce the strain on the road network, but also allow ports to gain advantages over direct competitors by offering more intelligent solutions,” Mr Straetmans says.
Community feel
Asked whether the port authority envisaged the logistics internet as working in a similar way to an extended port community system, he says: “This is precisely what we do not intend to develop. Our concept of the internet does not involve a unified system that can be adopted by the logistics sector. We have no wish to develop a single system that we would then start forcing on other ports. Rather, our aim is to make our own data as accessible as possible to third parties (logistics companies, IT providers and start-ups), so that they can use our information for the benefit of their own activities. It is by being that open that we believe Rotterdam would start to generate more business.”
Nevertheless, he concedes that there is no way of predicting that Rotterdam will automatically generate more cargo than rivals going down the same path.
“What we can say is that the internet promotes efficiency in the logistics sector,” he says, arguing that by extending its use to the maximum possible, unnecessary transport movements would be reduced. This would be achieved by allowing companies access to the port authority’s semi-open communications system and therefore helping logistics providers to precisely locate the position of available empty containers in the hinterland.
“Some 40% of containers moving on the road in the port’s hinterland are empty! By better using the internet, this percentage could theoretically be cut – and drastically so in some cases. Think about it: by locating the nearest available suitable container, the amount of traffic moving between depots where empty containers are kept within the port could be reduced. And that also ultimately means fewer vehicles on the road.”
By the simple linking up of existing information networks, Rotterdam port authority would obviate the need to get caught up in investing massive amounts of money in additional information systems, with such projects notorious for running over budget, or simply never reaching fruition.
“In fact, the port authority doesn’t invest in international port community systems. We see our role in producing data and making this data available to parties that can come up with creative solutions for the logistics sector.”
Returns route
But where is the return of investment in such aspirations, both for the port authority and for the users of the logistics internet? Simple, says Mr Straetmans, it is to be found in increased logistics efficiency, increased sustainability and increased transparency. “Amsterdam and Rotterdam have adopted the same port community system, for example. We also encourage the national authorities and other Dutch ports to make use of it, because this helps further boost efficiency,” he says.
However, critics point out that even a unified logistics internet won’t necessarily guarantee that cargo will be moved faster and more efficiently around the globe. Mr Straetmans agrees: “Logistics needs data. We think the logistics sector needs to be more creative when it comes to handling data. Once this has been achieved, we expect to see efficiency gains to start accruing. That, in turn, should result in the cost of logistics dropping. However, as to who will be the first to benefit from that remains to be seen.”
Challenged as to why two terminals competing the same traffic in the Port of Rotterdam would happily share logistics information – particularly if one of them already has a competitive edge – Mr Straetmans notes that, if companies don’t share information/data, that data will simply become available through other channels. “So not sharing is not an option. Sharing only makes sure something happens sooner, which means a competitive edge relative to other ports or transport modes (such as rail). It’s no longer about what terminals aren’t prepared to share, but what they are prepared to share,” he says.
If terminals are legally obliged to transport a specific share of their cargo by rail, for example, it might well be interesting for them to jointly invest in the settlement of their rail freight or in the associated information management.
Finally, in terms of timescale in getting the market to accept such radical ideas, Mr Straetmans stresses that the team at the port authority has a mission. “We want to waken the logistics sector to the major advantages of using data. As a port authority, we have identified a number of opportunities in the field of accessibility, sustainability and commerce. We now want a new mindset to develop among the decision-makers in the sector to take best advantage of this. The notion that data equals power and that your competitive edge is determined by how much data you have is outdated. You’ll ultimately lose that battle. Instead, your competitive edge is determined by what you do with all the data available to you.
“Data is becoming ever more accessible. Those parties that are able to respond more intelligently, efficiently and decisively to that available data than their competitors will reap the benefits. The intelligent use of data will allow data to join pipelines, roads, rail and water as the logistics sector’s fifth modality,” he says.
– See more at: http://www.portstrategy.com/news101/port-operations/port-performance/logistics-internet#sthash.cBwHALXK.dpuf
