Seven building blocks for the port of the future

06 July 2020

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This article was originally published in FTD magazine

The pace of change and number of disruptions continues to increase. There is of course COVID-19 and the path to economic recovery that we need to think about. However, we also need to take into consideration the energy transition, innovation, digitisation, shifting trade patterns and other changes. Where do you start when preparing your port for the future in a disrupted environment?

Traditionally, ports have been crucial nodes in the world’s international supply chains. As those supply chains have become increasingly fast, flexible and responsive, the role of ports has been transformed. Geographical location is no longer the only factor that counts. The speed, efficiency and reliability of transport flows, as well as the ease with which they are handled, are just as important. How quickly can goods be forwarded after a vessel docks at the port? The port of today is a hub that handles not just cargo but also data. Information comes in from a range of sources: from shippers and shipping companies, from port authorities, terminals, customs and supervisory authorities. A port’s appeal as a hub depends on how good we are at linking these different sources. The effective coordination of data flows improves efficiency, transparency, predictability and lead times. The port of the future will be a vital digital connection in multiple chains – many of which have already become predominantly digital themselves

Agility

The port of the future will also be an agile port. Freight flows are changing at breathtaking speed. Markets are shifting as the middle classes in regions across the planet – not just in China and India – expand rapidly. Some ports are becoming more important, while others are seeing changes to their existing revenue models. The increased focus on climate change will drive a transition in the storage and handling of fossil feedstocks and fuels as we turn to alternative products.

Changes in the flow of goods are a potential threat: a port cannot simply move to a different location. But new trends and developments also create new opportunities: to make the most of the energy transition, or to establish a position in the sustainable and digital supply chains of the future. Capitalising on these opportunities requires, first and foremost, agility – and the ability to identify opportunities and convert them into new revenue models.

Smart ports

The ports of the future will be smart ports. They will be able to respond effectively to the demands of a changing world. They will be entirely digital and climate-neutral. For example, they will be powered by offshore wind, and work with carbon-neutral vessels, sustainable industry and a circular economy. They will be digital ports where realtime data makes operations predictable and safe. There will be no waiting times for ships. Ship visits will be as fast and efficient as pit stops. There will be greater transparency, predictability, efficient operations and logistical chains. By making the most of artificial intelligence, blockchain and the Internet of Things, these ports will cut emissions, and save time and money.

For your port, this future may be just around the corner and you may be wondering what comes next. But there are also ports where this transition has not yet begun, where this future may seem distant – or even unattainable. But they will also need to prepare for the future, whatever it may hold.