Tech providers try to illuminate chronic marine terminal black holes

Tech providers try to illuminate chronic marine terminal black holes

Container ship at port.

The tech enhancements could have potential benefits for importers in terms of better visibility of their cargo from the vessel discharge process to the out gate process, and for exporters in terms of better gauging the best time to deliver laden boxes to terminals. Photo credit: Shutterstock.com.

The infamous silos that afflict the management of containerized goods are hardly ever more apparent than at the blurry point where container terminals meet the rest of the world.

That’s prompted a new generation of technology providers to take aim at that chronic visibility black hole, shining a light on those interfaces where marine terminal operators (MTOs) have inconsistent access to information outside their facilities from drayage operators picking up available containers and dropping laden export boxes. These technologies are also attempting to allow beneficial cargo owners (BCOs) and their designated third-party logistic providers and drayage drivers to enhance their currently limited view of what is going on inside the terminal.

The enhancements could benefit importers by providing greater visibility of their cargo from the vessel discharge process to the out gate process, and help exporters better gauge the best time to deliver laden boxes to terminals.

Terminal versus BCO tasks, and data, differ

The traditional data divide between terminals and shippers can be partially attributed to the nature of systems that have developed for those parties. Terminal operators tend to invest in terminal operating systems (TOSs) to optimize their operations inside the terminal, and BCOs most often invest in transportation management systems (TMSs) to optimize the flow of their goods. Neither of those systems, however, are well equipped to give insight into the other.

Which is why a new generation of technology providers are aiming to smooth over the rough edges, to allow better collaboration between terminals, BCOs, and even ocean carriers.

“In my previous role [with a leading TOS provider], I led multi-million, multi-year TOS implementation projects within the four walls of the terminal,” said Nishant Pillai, vice president of sales in the Americas for the software-as-a-service technology platform 1-Stop Connections. “Every cargo terminal I worked with, there were two consistent messages: how can I get visibility of cargo beyond the four walls of my terminals, and how can I deploy a solution within weeks and not months or years, that’s in the cloud and not cost prohibitive. They’d say, ‘I’m in a reactive mode. I have assets in my yard and I’m reacting to when cargo arrives via landside or vessel side operations, which is impacting my productivity.’ This is part of every leading port or terminal’s digitization roadmap.”

That reactive mode applies to both export cargo arriving at in-gates, and import cargo arriving by vessel. The increasing size of vessels puts additional demands on terminals to accurately predict how much labor to deploy and when to deploy it.

“They want to apply their limited resources in areas where they see the biggest bang for the buck,” he said.

Part of the intent of Sydney, Australia-based 1-Stop is to help MTOs manage those outside variables more effectively through their existing TOSs. The company’s platform has been implemented in 16 terminals in its home markets of Australia and New Zealand, as well Southeast Asia, most notably in the global terminal operator International Container Terminal Services, Inc.’s flagship facility in Manila.

The platform is designed to enable ports and terminal operators to control the flow of cargo into their facilities (via a module called the Vehicle Booking System) and provide them with more visibility for arrival of incoming cargo, which has a number of knock-on effects, Pillai said. For one, it helps MTOs better plan yard operations, cargo handling equipment, and staff their facilities properly.

That helps reduce the amount of unproductive yard moves and re-handling of containers, which has a direct impact on MTOs’ bottom lines. And the more streamlined terminal operations are, the shorter truck wait times outside and turn times inside the terminal become, helping drayage provider drivers become more profitable.

“Most truckers want to drop off and pick up a container or cargo and want to do that as many times in a day with the least amount of waiting at the gates or in the yard,” Pillai said. “Freight forwarders, truckers, and BCOs can receive information directly from the platform via email or apps on a tablet or smartphone with actionable information should there be any deviation from the predetermined appointment.”

Currently, the way a BCO would most likely receive information about its container status in a terminal is via an electronic data interchange message (specifically a 322 message). That 322 is, in most cases, sent by the terminal operator to a steamship line, which sends it to a BCO (or the BCO’s designated party) through one of a number of software companies that provide visibility to their customers, such as INTTRA, GT Nexus, or CargoSmart. For others, there’s another layer, with the shipper getting the status message through a web portal that’s integrated with the TOS.

Pillai said the aim is to streamline that process through application programming interfaces (APIs) with the terminal, viewable by outside parties through the company’s platform. That approach would theoretically have commensurate value for the terminal as well, since those parties would be providing information about their arrival. The system has 200 configurable global parameters and pre-built APIs to master data sets in the market that integrate with TOSs and proprietary terminal systems.

“The freight forwarder or trucker inputs information to the system, and that allows the terminal to pre-clear the truck, which saves the trucker time,” he said. “Then the terminal knows how many trucks are coming per hour, and then they can plan the yard and labor. As a terminal operator, if I can reduce re-handles by 10 percent, I am able to improve my bottom line by reducing my operating costs.”

The idea that TOSs are needed to operate a terminal is well understood, “but so much more can be done to improve collaboration and information exchange between the key stakeholders in a supply chain. TOS vendors in the market have either been acquired by global terminal operators or they have focused their future investments on a niche,” Pillai said. “That niche being, where is the biggest bang for the buck, and that’s in automation. But the total investment needed for an automated terminal is in the millions of dollars and technology solutions are still evolving as we speak. We still have a long road ahead in terms of how all the disparate systems work seamlessly and can be scaled effectively to make an automated terminal profitable.”

There have long been ancillary technologies that have attempted to redress the limitations of TOS technology, especially booking and appointment systems, as most TOS vendors have focused on improving the core product with a limited foray into collaboration tools. But the newer set of systems to emerge are setting out to better leverage cloud-based, mobile-friendly technologies that easily connect to TOSs via APIs.

“For a legacy TOS implementation, about 25 to 30 percent of the budget needs to be reserved to meet local customizations or to integrate with existing systems,” Pillai said. “That’s a huge percentage of a $3 million to $4 million system.”

Portchain — using AI to help terminals, carriers optimize their assets

Portchain, a Copenhagen-based technology startup founded by a trio of McKinsey alums, is taking on a different terminal interface — with container lines.

The company is building a platform that uses artificial intelligence (AI) to optimize planning of terminal assets, while allowing carriers to better manage schedule disruption. The platform Portchain is building aims to better connect the two set of parties through data sharing and predictive insights.

“We’re using AI to optimize assets, to help planners make more informed decisions,” said Thor Thorup, chief commercial officer and co-founder at Portchain. “The question for these planners is, how do I maximize my assets when there are literally millions of outcomes?”

For instance, the system would help a vessel operator know in real time if a delay on a sailing should compel it to skip a port call, change the rotation, or call a port as planned. The AI comes in by cutting down the time it takes to come to a conclusion on such a matter. As Thorup put it, many times a carrier will come to a conclusion on a course of action, but too late to impact the vessel call in question.

"And by then the situation has resolved itself, but not optimally,” he said. “The idea is sharing and exchanging information between the terminal and carrier so they can plan the port call in real time. A lot of information is exchanged through phone and email, and that’s very inefficient.”

Like with 1-Stop, Portchain doesn’t have designs on replacing a TOS.

“We don’t want to go in and replace the TOS,” Thorup said. “We want to work with existing systems and link up via APIs with the TOS or vessel planning system.”

Portchain, which has received $2.5 million in seed funding (primarily from the European Union and Danish Maritime Fund) has run a pilot in Antwerp where it approached a carrier and terminal in parallel. The company told JOC.com it sees this as one of a few ways it can get a foothold with potential customers, but will sometimes require an approach at individual terminal level, or at an MTO headquarters level.

“There are some variations among terminals, but if you have some concrete benefits to offer them, you can have a discussion,” said Niels Kristiansen, CEO and co-founder. “There’s a need to invest in information infrastructure beyond manual planning. If you’re able to increase the terminal utilization by 5 to 10 percent without any more resources, that allows the terminal to reduce idle capacity they’re paying for.”

He said the goal is to allow the terminal to “redeploy the idle capacity” and “maximize the throughput or minimize the cost depending on the terminal.”

“The value prop to the carrier is that the terminal is able to handle the vessel more quickly,” Kristiansen added. “We’ve been surprised how open minded carriers are to working on innovation. They’re investing in startups. The biggest barrier is that these problems we’re trying to solve, we’re faced with skepticism that they can even be solved.”

A key data point for Portchain is the vessel schedule, the company told JOC.com.

“It's one of the key pieces of information the terminal uses to optimize their assets,” said Anders Olivarius, chief product officer and co-founder. “The issue today is there are a lot of actors around the port call that need to know when things change. Then they need to know when things are updated. It’s so basic in everything that happens in shipping. Today, there’s not a single source. The carrier has a schedule, and a terminal has a version of that schedule. One part of this is around sharing the reference schedule in real time. When there’s a disruption, it manifests itself in delays and then you’re faced with a wealth of options. Aside from deciding to call or skip the port, there are a number of other data points you need to make that decision.”

That could include the vessel characteristics, the characteristics of the port and terminal, and availability of third parties that enable the call.

Crux Systems, a provider of in-terminal visibility, is another company that emerged in recent years. Co-founded by Eric Klein, a veteran of the TOS provider Navis, the company has set up a platform to enable shippers or their representatives to determine the location and status of any container in any North American container terminal.

Klein saw this as a vital missing link in the visibility chain, and so he worked with a number of individual terminals to get direct data feeds on container status. For those terminals where there’s not a direct feed, Crux uses other sources of data to narrow down the container location. The data are designed to feed in a shipper or forwarder TMS, and Klein said the company is in discussions with several TMS providers to provide a native integration.

Like 1-Stop and Portchain, Crux ingests and provides data via APIs.

Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric.