The APSN forum focus on digital innovation and port connectivity, hosted by APSN and co-hosted by the National Port Authority of Peru, was held in Cuzco, Peru on September 24, 2019. 120 participants from the relevant authorities, port and shipping companies and institutes attended the forum. Both Mrs. María Jara Risco, the Minister of Transport and Communications of Peru, and the Chairman of the Board of the National Port Authority of Peru delivered opening remarks at the opening ceremony. Mr. José Bustinza, Senior Official of Peru for APEC, delivered a keynote speech titled, “Connectivity and Digital Innovation in APEC’s Vision Group.” Mr. Zhang Baochen also delivered a keynote speech titled, “Development Trends of Intelligent Shipping and Smart Ports.” Other distinguished speakers included representatives from Peru’s Ministry of Transport and Communications, the National Port Authority of Peru, the World Bank, APM Terminals Callao, Jurong Port Pte Ltd. Singapore, HKSAR’s Marine Department, Hong Kong Container Terminal Operators Association Ltd., Korea Maritime Institute, COSCO Shipping Ports Chancay Peru, Qingdao Port Automated Terminal, and Saigon Newport Corporation—SNP, Viet Nam. The forum focused on digital innovation trends in supply chains and digital innovation initiatives at ports.
This year’s APSN Forum has aroused heated discussions among participants on the development of digital innovation in supply chains and the practice of digital innovation in ports. Topics included: the key role of smart shipping technology in solving industry problems, the growth of the global middle class market and supply chain 4.0, which is important to the e-commerce customers—fast shipping or cheap shipping?, cyberattacks—the great threat of the 4th digital revolution, small and connected next-generational multiple purpose port, and the role of government in digital innovation, etc. These discussions will guide future digital innovation in the port industry and promote the interconnection of ports in the Asia-Pacific region.
Smart shipping technology is the “Golden Key” that will modernize the traditional shipping industry
Mr. Zhang Baochen, Chairman of the Academic Committee at China Waterborne Transport Research Institute, delivered a keynote speech, titled “Trends Towards Digitalized Ports and Smart Shipping.” Mr. Zhang summarized the five main elements of smart shipping system as follows: smart vessel, smart port, smart navigation support system, smart shipping service, and smart shipping supervision. He argues that smart shipping technology is the “golden key” that will help the traditional shipping industry solve future problems. Intelligent shipping technology will help the traditional shipping industry to get rid of its heavy reliance on human resources, promote safe and green shipping, improve shipping efficiency, and reduce shipping cost.
The port equipment should be developed in a digital, networked and intelligent way. A fully automated system can help collect data and receive feedback in real-time. The big data technology and intelligent expert diagnosis technology can be used for early warnings of machinery failure and intelligent maintenance of port equipment. Mr. Zhang shared several cases applied to commercial intelligent shipping: intelligent control system of container terminal gate, unmanned straddle carrier, the world’s first unmanned port truck, 5G smart heavy truck, management and control platform based on the Internet of Things for port collection and distribution, online port energy management system, collection system according to the bill of lading number system for container port, remote safety monitoring and diagnostic system, and structure health and safety supervision system.
The Growth of the global middle class market and Supply Chain 4.0
Mr. Biju Ninan Oommen, Senior Ports & Maritime Transport Specialist at The World Bank, delivered a speech on “Digital Innovation Trends in Supply Chains.” The global middle-class market is growing slowly in advanced economies and growing rapidly among emerging market economies.
The middle-class market in the U.S., Europe, and Japan is projected to grow at only 0.5% per year, compared with annual growth of 6% or more in China and India. Currently, there are 33 megacities on the Earth, with another six on the way by 2030. By 2022, there will be 2.8 billion internet users and 28.5 billion networked devices and connections. The top 10 countries ranked by retail e-commerce sales are China, U.S., UK, Korea, Germany, France, Canada, India, and Russia. The concept of Technologies of Supply Chain 4.0 is about IoT, Big data analytics, 3D printing, advanced (autonomous) robotics, smart sensors, augmented reality, blockchain, artificial intelligence, cloud computing, etc. Data and analytics are important to decision making. At present data analysis is being used in 50% of the decision-making in transportation and logistics, which will grow to 90% within the next five years. The next-generational port of Singapore includes unmanned aerial vehicle, autonomous ship, E-navigation, maritime sense-making system, next-generation vessel traffic management system, green and community-oriented port, automated terminal, just-in-time planning and coordination system, maritime single window, automated quay cranes, automated yard cranes, and automated guided vehicles.
Which is important to their e-commerce customers——Fast Shipping or Cheap Shipping?
Dr. Sung Woo Lee, Deputy President of Port & Logistics Research Division at Korea Maritime Institute, delivered a speech titled “Global Supply Chain Trend——Transportation Mode Changes in the E-commerce Market by KMI.” In his remarks, he pointed out that the growth of e-commerce is far outpacing the growth of overall retail sales and will reach $4 trillion by 2020 with e-commerce sales projected to increase from 10%(2017) to nearly 15%(2020) of total retail sales worldwide. Despite strong growth in the US e-commerce market, China’s share is nearly double that of the US. China is the biggest e-commerce country with high growth. Cross-border e-commerce is expected to expand at a 25% annual growth rate in the coming 5 years. More than 60% of all cross-border e-commerce shipments are inter-continental. The preference for shopping on a smartphone has increased from 14% in 2016 to 29% in 2018. Consumer surveys from 41 countries around the world claim that one fifth (20%) of respondents shopped online once a week on average. Amazon, Alibaba/AliExpress, eBay and Wish account for 64% of cross-border e-commerce.
As for the customers of E-commerce, which is more important to them—fast shipping or cheap shipping? Survey results indicate that they want both. 84% of cross-border goods bought online are under 2kg and half of the goods bought weighed only 500g. On product weight, air express average shipment size has dropped by 20% due to the impact of increased e-commerce shipments since 2010. On product category, the top 5 delivery commodities are clothing, electronics, health & beauty, jewelry & watches, books, and media. Regarding shipping mode, 80% of cross-border B2C shipments are sent via air, but cross-border B2C sea shipments mode will increase in the future.
How should we manage delivery time? Consumers expect low shipping fees, so e-commerce sellers must do everything they can to minimize order fulfillment costs. Meanwhile, for online retailers, the average cost to fulfill an order is 70% of the average order value. Consumers want to receive goods quickly, but without increased costs. How should suppliers manage the last mile of e-commerce delivery? Merchants can apply new technologies such as the algorithms and analytics currently used by companies like Uber & Google to connect couriers with merchants. In the next 2-5 years, new technologies will continue to emerge, such as drones and automatic delivery vehicles. The application of large data and AI arithmetic technology makes cross-border freight cheaper and faster. Automated ports centered on hardware such as robots and UAVs and digital ports centered on software such as AI, big data, Internet of Things, and block chain technology are changing the container port industry. The rising labor costs and technologies progress promote the construction of automated container terminals. Container terminals should build operation centers to speed up the transport of goods. One new trend is to add e-commerce-related operation centers to port supply chain management.
Putting digital innovation into practice in global ports
Mr. Javier Lancha De Micheo, CEO at APM Terminals Callao, delivered a presentation titled “Basics and Technology.” Global container ports are working together to develop unified standards for the DCSA. IBM is developing its E-commerce system for ports. Canadian ports have developed a port truck reservation management system. Amsterdam is developing big data single-window platform. Lisbon is using block chain technology to develop its online service platform, and China’s port industry is also developing block chain related service technology modules. In order to achieve timely arrival and sustainable development of port services, it is necessary to conduct studies on macro-level strategic policies of customer demand, labor-intensive industries, compliance, and other factors. Leaders need to understand the current situation of industry and technology, and follow the problem-oriented thinking to resolve relevant issues.
Cyber attack- the great threat of the 4th digital revolution
Mr. Roger Bernedo Boado from Perú delivered a speech titled “Growing threats of the 4th Digital Revolution.” He began his presentation with an alarming infographic showing the shocking scale of cyber-attacks on businesses. Nearly all of the famous companies and organizations around the world have been attacked by hackers including but not limited to the FBI, Facebook, NASA, SONY, etc. The latest variety of cyber-attacks on terminals include malware, ransomware, and crypto-jacking. Network threats include cyber hijackers, cyber killers, cyber pirates, cyber terrorism and cyber. Regarding data security, the “dark web” has been increasing its services with significant independence and attacking social networks to extract personal information and steal personal identities. Thus, it is necessary to be prepared in the following aspects: create a culture on information security, include drastic sanctions on working regulations, get ISO 27001, 20000 and 31000 certifications, establish emergency protocols in case of cyberattacks, hire ethical hackers’ services, determine the security gap, and invest in security tools and security services.
Smart & Connected Nest-Generational
Mr. Lee Jek Suen, Vice President of Strategic Planning at Jurong Port, gave a presentation on “Jurong Port’s Journey towards Business Innovation and Digital Transformation,” where he posted the question , “what is a Next Generation Multipurpose Port (NAMPP)?” He stressed that NAMPP ports are smart & efficient, digital & business-friendly, and safe, secure & sustainable ports. Jurong Port has improved business integration through digitalization and connected to the external trade and logistics IT ecosystem. Their enterprise data hub will enable real-time monitoring and trend analysis. The keys to smart & connected NGMPP are standards and policies, interoperability, and digital collaboration platforms.
Digital transformation for future port
Ken Chan, CEO of COSCO SHIPPING Ports Chancay Peru, delivered a speech on “Digital Transformation in Future Ports.” Digital transformation is not simply the application of new technolgies, but rather, it is the fundamental transformation of port operations, management, and even business model driven by a new generation of information technology. Digital transformation is, essentially, an industrial revolution which consists of three levels as follows: Level one—Equipment/Operation automation/digitalization; Level two—Digitalization of the port community (e.g. Small ports in Abu Dhabi, Khalifa Port Project and Xiamen Ocean gate 5G pilot program); Level three—Digitalization of the whole port ecosystem. In Abu Dhabi, Khalifa Port Project includes fully automated yards, the innovative single cantilever automated RMG, intelligent gate system, quay cranes with remote control capacity, and yard trucks with capacity for future driverless operation. In China, Xiamen Ocean gate 5G pilot program includes intelligent planning, driverless driving, crossing, smart tally, central control supervision platform, and remote control platform.
Synergy effect is developed between the Single Trade Window platforms in Guangdong and Hong Kong.
Jessie Chung, Chairman of Hong Kong Container Terminal Operators Association, delivered a speech on “Digitalization in a Hong Kong Port.” Digitalization in Kwai Tsing Container Port (HK) includes electronic release orders, remote-controlled rubber-tyred gantry cranes, various operations systems and application of blockchain. Kwai Tsing Container Port also has the world’s first remote-controlled RTGC automated stacking system. Each crane is equipped with 58 monitoring cameras and integrated into a database to work out where and how the containers can be grounded and stacked. The working environment of crane operators has also improved by switching to indoors crane cabinet. The efficiency and productivity has improved more than 20% compared to the previous manual mode. The Hong Kong government has also developed the Trade Single Window system to provide a one-stop electronic platform for import and export trade documents. In 2019, the Guangdong government also adopted the Trade Single Window platforms to create a synergy effect between Hong Kong and Guangdong.
Some innovations in the Qingdao automated container terminal
Mr. Li Bo, the Operation Manager of Qingdao Port Automated Terminal, gave a presentation on “China’s Practice of Scientific and Technological Innovation in Qingdao Port’s Fully Automated Container Terminal.” Qingdao port has initiated AGV automatic cycle charging technology which is the world’s lightest of its kind with unlimited endurance. The port also has initiated a "Pinning with One Click" system, which ensures that all equipment can be automatically anchored within 2 minutes. Other technological innovation includes the unequal length backreach double trolley STS and the first automatic container twist locking robot, which are all the first initiatives of its kind.
EU blue economy and blue growth Vigo
Capt. Jaime Barandiaran Laca Crew Manager, Safety Coordinator of DPA, CSO & PFSO IMO Professional Maritime Casualty Investigator Ership Grupo——Spain, Peru, delivered a speech on “E.U. Blue Growth, Port of Vigo Project,” subtitled “Port digitalization, competitiveness, efficiency, and sustainability.” He presented a report on the EU's Blue Economy, which indicates a wide range of interlinked, established and emerging sectors. In all, 75% of Europe's external trade & 37% of trade within the EU is seaborne, the sea and the coasts are drivers of the economy. The blue growth plan issued by the European Union in 2012 proposes to incorporate the concepts of intelligence, sustainable development and inclusive growth into the European 2020 plan. Moreover, the European Commission set up a long-term strategy to support sustainable growth in the marine and maritime sectors as a whole. Captain Barandiaran Laca ended his speech with an example of how these Blue Growth object are being implanted at Port Vigo in Spain, which aims to become an interconnected, innovate, green and inclusive port.