Tag Archive for: digitalization

The challenges of digitalization and its impact on training activities in transport and logistics

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Written by: Xavier Lluch i Oms, Consultant in Transportation, Logistics & Information Systems & Professor at the Escola Europea

For many years now, companies and all kind of organisations have improved their information circuits by mechanising, or computerising, etc.

Progress, so far, has been implanted inside the organisations, facilitating the transfer of information between different departments. Commercial departments, operations (transport-warehouse, etc.), and administration, among others are but some examples. In this aspect, applications have evolved from the first ones that comprised a single function (billing, accounting …) to those that seek to solve communication problems holistically for the entire company. Commonly known as “Enterprise Resource Planning” (ERP) , the different existing ERPs compete amongst themselves, but their goal is always to solve the question of information circuits inside the companies. ERPs are solving the need to re-enter data between different departments or functions of the companies above all.

There have been attempts to resolve communications between companies, but they have always been limited to specific business partners. Companies can exchange data but can hardly do so with other commercial partners in general as each connection requires specific agreements. Nevertheless, there are exceptions, such as:

  • Port Community Systems
  • Various initiatives fostered in the maritime world, especially between shipping companies and administrations, within the framework of the “maritime single window environment” (SWE).
  • Some communication subsystems such as the “Automated Identification System” (AIS) used in maritime navigation.
  • Some initiatives in the air world, thanks to IATA standards
  • The contracting platforms or loading exchanges, although each one with its own communication standards.
  • The electronic invoice, to the extent that it has been imposed by public administrations.

All these attempts have not progressed further. This was partly due to the power limitations of data management, but above all due to the lack of complete standardization; making it so that each implementation requires either a manual link or a complicated series of steps of adjusting communications.

In recent years the landscape has begun to change with the EU initiative to constitute the Data Transport and Logistics Forum (DTLF), a true standardization working group, which has set up the conditions for the promulgation of the (Electronic Freight Transport Information) eFTI regulation in 2020.

The implementation of the eFTI regulation (EU) 2020/1056/ is a significant step towards the use of digital exchanges of information in the transport sector. We may be on the verge of a radical change in communication, similar to the introduction of the ISO TC 104 standard in 1961, which opened the gate to the universal use of containers in the transport industry.

The possibility of having standards and an operational architecture within the E.U. creates an enormous playing field. We can now replace paper with the cloud to support or store transport data, and consequently we shall no longer talk about transport documents but about datasets.  At the same time, the possibility to access a much larger market database more efficiently opens infinite new possibilities to organise transports and new business models.

Electronic transport documents within the EU will become widely used and will save a lot of costs, and the increased added value in operations opens a new conception of transport flows.

ERPs will become less significant, (as we will no longer talk about invoicing or accounting programmes ). The new question will focus not on how we enter data but how we manage it.  New business models will appear, based on the possibilities of accessing large amounts of data and organising operations more efficiently.

The speed of adoption of changes depends largely on the attitude of public administrations, which set the rules of the game between companies. But the process is unstoppable and countries that do not follow them will lose competitiveness.

In a mid-to-long, term similar progress shall be extended to the full commercial chain, comprising not only those involved in the logistics or transport chain strictly, but a larger array of actors  (buyers, sellers, administrations, banks…). Technology now allows for highly innovative ways of working, but the complexity of the participants and their divergent interests greatly hinder their adoption.

These new working methods pose medium-term challenges both in the organization of companies and in the training needs of their employees.

A digital cultural background will be required in data exploitation processes. Computer security, digital signatures, data certification and protection, contracting and management of databases, organization of information, legal issues related to electronic contracting, communication systems between companies, and many more that we can now only imagine.

But even if information systems will change, the basic problems will still exist: The lost shipment, the vessel that does not sail as planned; the erroneous declaration of customs; the interpretation of trade rules; incidents of all kinds in transport; compliance with financial commitments; the fight against fraud; the increase in complexity of customs regulations; questions related to the massification of B2C trade, etc. Standardization will not solve everything and a professional transport skill will always be required.

In the next five years companies will probably start to implement some changes, in preparation for what seems a likely horizon:

  • Accentuation of sector concentration, (horizontal and vertical), accessing the large shippers.
  • Disappearance of companies due to absorption into larger groups.
  • Displacement of traditional companies towards market niches, either by transport specialities (pharmaceutical, dangerous goods, temperature controlled transport, hanging clothing, among others) or by routes or geographical areas, or by ancillary services.
  • Emergence of new companies with cloud services: Online contracting, load exchanges with complementary services, among others.
  • In customs clearance, accentuation of the changes initiated with the new customs code and with the expected ones, more centralized clearance, new roles of customs representatives, increased legislative complexity, discussion of the “trusted trader”, changes in e-commerce…
  • Emergence of the companies based on new models (such as Usyncro, Ontruck, Widoit,…)
  • Evolution of data entry solutions such as ERP.

Training activities should reflect the changes expected in the transport industry and specifically in the information flows. Training in logistics should include the foreseen technologies and tools in the training programmes, and some basic concepts in IT with which trainees should become familiar, such as electronic signatures, technologies and concepts related to information (data, metadata, protocols related, databases…), etc. IT Technologies are becoming more and more present in transport and logistics operations. However, it should not be neglected that the transport business requires to be familiarised with all “traditional” operational aspects involved with international transportation and commerce, from Incoterms to payment methods, to packaging and palletisation, customs regulation, international and national transport, insurance conventions, and so on.

The eruption of IT technologies and new and better transport means are contributing to an increase in volumes and to “commoditising” operations. Nowadays there are less uncertainties, less incidents, but it should never be forgotten that international trade is always subject to a number of legal and operational challenges and professionals should be well aware of the consequences of contracting in one way versus another. At the same time the increased volumes of international trade are originating complex problems (including customs issues) that require deeper and more significant professional skills.

Digitisation is inevitable!

And it is up to us now to ensure that we keep up with it, and that we can train our workforce with existing, new, and emerging skills to stay on top of the game.

Container ship in Port

The road towards sustainable port operations

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This month, in anticipation of our annual summer school on port operations, we thought we would tackle the topic of sustainable ports, with a break down of practical measures being taken by ports to reach net-zero emissions in the next three decades.

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Written by: Lidia Slawinska, Consultant

In recent years, smart and sustainable have become interchangeable when talking about the future of transport. With the goal of working towards a more connected, intelligent and sustainable world, port authorities and port operators across the globe have been actively working in line with the UN’s 17 Sustainable Development Goals which work to improve financial and social inclusion, support humanitarian efforts, facilitate access to education and to health services, and to combat climate change. All partners have agreed that this is necessary to help build a sustainable world for future generations – and actors involved in transport operations have a particularly large part to play.

The IMO has predicted in recent years that maritime transport will continue to increase over the next decades, culminating with a rate 250% higher in 2050 than what we see today. Knowing that maritime transport already contributes nearly 3% of the world’s greenhouse gas emissions, it is evident that the industry needs to change to ensure that the increased rate does not counterbalance any global sustainability efforts.

Ports play a key role in the development and maintenance of efficient and supply chains, and therefore they will also play a key role in their redesigns to make them sustainable in the effort to achieve net zero emissions of shipping operations by 2050. One way that ports have started to do that is to invest in electrification.

Ports as energy hubs

Container operations at the Port of Rotterdam

Container operations at the Port of Rotterdam

The concept of having ports used as energy hubs for the shipping world is an enticing one. Imagining that the infrastructure could serve as a sustainable operation, with electrified terminals, reach stackers, loading cranes, etc., and then knowing that the onshore power supply points could also help maintain low emissions of vessels in port and at sea is very appealing. Digitalisation will be the enabler of this process of bringing electricity closer to the different intermodal transport modes through ports – through electrification processes – and will open doors to new innovative solutions, alternative business strategies and intelligent controls. Connected carries, cargo and people will make sure that transport transactions are transparent, traceable, and trustworthy. Ports can serve as the energy hubs that make all of this possible.

Electrification

Electrification is already spreading through the shipping world. It can be done to ships to make sure that they consume fewer fossil fuels and therefore lower their carbon footprint. Other forms of transport, as well as the supporting infrastructure provided by ports, if electrified, can substantially help increase the sustainability of maritime operations. As an added bonus, electrified ports also emit lower noise pollution, therewith improving their relationships with the neighbouring cities.

Electrification is also inextricably linked to sustainability. As more and more carriers invest in either fully electric or hybrid motors, ports are expected to offer onshore power supply stations, which in turn puts more demand on the creation of relevant infrastructures. As a result, those ports that invest in the innovative infrastructures transform into important nodes with substantial power needs which would need to be taken from a nearby electricity grids. This is because visiting ships, regardless of the duration of their stays in the port, will want to recharge their batteries to make sure that they have enough energy for subsequent transport legs all the while getting energy to support their stays in the ports themselves. As a result, ports will become large electricity consumers, ready to cater for both large and alternating load requirements – all of which will depend on the stability of the electricity supply.

One example of a European port that has successfully incorporated electrification efforts is that of the Port of Tyne in the Northeast of England. Its electrification projects, among other initiatives that helped it win the UK Clean Maritime Operator Award in 2020, have contributed to the cutting of the port’s fossil fuel consumption by 260,000 litres, reducing energy use by 2.3 million kWh and eliminating more than 1,500 tonnes of carbon dioxide.

New technologies moving ports closer to full electrification

Alongside onshore power supply points, there are other technological developments that are helping ports on the path towards full electrification. One such development was recently announced by Hyster Europe, during the TOC Global Showcase. Having spent years working on zero-emission container handling solutions, Hyster’s catalogue of port equipment that utilises lithium-ion batteries and other fuel cell technologies got more extensive. Having partnered up with Capacity Trucks, Hyster is now working on the creation of electric, hydrogen and automation ready terminal tractors. The most interesting part of these developments is the use of hydrogen fuel cells – something that the company has been investing in and working on since 2017.

The Ports of Auckland Ltd is another example of bringing ports closer to the innovative and sustainable solutions of tomorrow. With an impressive goal of reaching zero emissions by 2040, the port operator has incorporated a wide range of solutions including automated straddle carriers and expanding the terminal’s overall annual capacity. Alongside this, the port has invested in fully electric tugboats, built by Damen Shipyards and powered by Echandia’s E-LTO batteries, which can sustain more than 70 tonnes of bollard pull.

Etug at the Ports of Auckland

Credit: Damen Shipyards

More efficient port management

Apart from investing in new technologies to reach their sustainability goals, ports also need to optimise their port processes and operating procedures to improve turnaround time, decrease time spent idling in ports, and therewith improving the overall maritime transport operation. Digitalisation is key in this – as ensuring smooth and reliable digital connectivity between all transport operators can only help make the planning and follow-throughs of any processes more efficient.

5G is already being tested to try to increase the speed of data exchanges between different transport parties, with the Internet of Things, AI, and digital twins set to help increase the overall reliability of port operations, and therewith contribute towards efficient port management models.

Concluding thoughts

It is not a secret that the maritime sector accounts for around 3 percent of the word’s total GHG emissions. As most the world’s transport relies on the maritime route (and the current trend shows the number increasing significantly in the next 3 decades), it is imperative for any actors involved in maritime operations to make sure that fossil fuels are eliminated (to the extent that it is possible) and substituted (or complemented by) renewable alternatives. As maritime transport does not exist without ports, bringing sustainability to them seems like a necessity to help greenify the sector. Electrification and digitalisation are two such steps that ports can take to work towards that goal – and therewith ensure a clean and green supply chain that supports our globalised world.

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The YEP MED training was carried out largely online using the Google Meet platform

148 students join the first YEP MED fully digital international training in Barcelona, Tunis, Civitavecchia and Beirut

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The YEP MED training programme based on simulated enterprises allowed students to practice international trade operations using a real-life Enterprise Resource Planning (ERP) platform

The first fully digital international training of the YEP MED (Youth Employment in the Ports of the MEDiterranean) project kicked-off last week in four different port communities: Barcelona, Tunis, Civitavecchia and Beirut. The training course finished on the 31st of May 2021. Each port community was responsible for bringing to life a simulated freight forwarding operator and execute international trade operations between the participating countries.

Thanks to the digital tools, a total of 148 students from the four port communities took part in this unique course. The global coordination and organisation of the project was overseen by the Escola Europea, lead partner of the project, whilst local project partners gave national level support. At the international level, participants could interact with students from other Mediterranean countries and support each other in the export operations they need to design, plan and manage as part of the training. Alongside having a widely international character, the student group also featured a high proportion of women in its midst – who formed around 41% of all participants. Making it easier for women to access employment in the Mediterranean transport sector is one of the key bastions of the YEP MED initiative.

This course was the first of the series of the 2nd stage of the YEP MED training. The first stage comprised vocational training (VT) courses that offered an introduction to port logistics and operations. This second stage gives the students an opportunity to gain practical experience and to gain a global understanding of the port-logistic operations first-hand through the use of a newly designed virtual platform that replicates a real port community in the virtual sphere. The students need to work together to design and prepare transport operations that freight forwarders regularly carry out by accessing the Port Virtual Lab. This virtual reality created by the Escola Europea allows students to interact with different companies that are involved in the process of an import / export operation: shippers of several industries as real-life substitute customers (Play Fine Fruits, Play Fine Clothing, Play Fine Cars, Play Fine Pharma, Play Machine Tools, and Play Chemicals), transport operators such as a shipping line, a rail operator or a haulier company (SDG Lines, Port Railway, Play Haulier), customs related entities such as customs brokers and customs administrations (Play Customs Agent and Play Smart Customs) and a Port Community System (MedTrade). You can find out more about these theoretical companies by going to the Port Virtual Lab site.

The Simulated Practice Enterprise is a methodological didactic strategy of “Learning by Doing” – through a digital lens. With the ERP system provided by Click & Cargo, the Escola Europea and its partners have worked to develop a digital environment that promotes simultaneous and integrated development of functional competencies of organisational management (social, human and business) based on a methodological-didactic simulation system that allows for contextualized and experiential knowledge. At the same time, the Click & Cargo system contributes to the vocational guidance of students and the employability of graduates through the creation of role-playing assessments and specific tasks representative of the world of work.

“From the point of view of knowledge to be transferred to the students, the training succeeded in achieving the objectives for which it was developed. The content of the sessions is very satisfactory insofar as it offers very varied technical knowledge to be able to use the Click and Cargo. Technical knowledge well founded by theoretical knowledge in international maritime trade techniques. On the educational level, the succession of sessions has been well studied ensuring the progression of the knowledge produced.” – Mr Anis Romdhani, lecturer from Tunis

An additional benefit of the YEP MED training courses is the unique benefit gleamed from the international community of teachers. Thanks to the collaboration of more than 30 teachers from Technical and Vocational Education and Training (TVET) centres and professionals of the sector, the students were presented with a distinctively multicultural and very experienced teaching staff – which further added to the authenticity of the heterogenous Mediterranean training.

“In these two weeks, I had the opportunity to meet students from Beirut, Ortona, Barcelona and Tunis. We have learned how import and export shipping works through the Click&Cargo ERP platform. We have learned and increased our knowledge in the logistics sector with the collaboration of professionals who explained the different procedures and aspects. I found it very useful and interesting for the students who want to continue their career in the sector”. – Flavia di Capua, student from ITS Caboto (Italy)

These YEP MED VT2 and VT3 digital international training courses will take place over the early summer months, concluding before the autumn months and paving the way for the next stage of the training model – the integration of the successful participants in local companies through apprenticeships that will complete the dual training model.

For more information about the YEP MED project you can contact Concha Palacios from the project office at concha.palacios@portdebarcelona.cat or head to the website.