Cargo port background with data nodes in the foreground

Container gateways evolving from cargo ports to data portals

Container gateways evolving from cargo ports to data portals

March 2020

The role of container ports in the coming decade may well be defined more by their ability to serve as digital aggregators and disseminators of data than as conduits of physical cargo.

If that’s a drastic change for entities known more for their physical assets than their digital ones, it’s because the needs of modern global supply chains require more real-time data in fewer digital locations. Ports end up being the intersection for a lot of the providers and users of that data — e.g., those governing ocean freight, terminal, drayage, intermodal, and customs.

Digital initiatives are under way in virtually every major global container gateway, which in some ways presents another set of problems. Importers invariably deal with multiple gateways on both the origin and destination sides and managing a different portal for each is not something most of them are equipped to manage efficiently.

Ongoing projects at key gateways on either side of the Atlantic provide a glimpse into both the possibilities and the challenges individual ports face in serving as nodes in digital container supply chains. Those projects include a play on free flow at terminals in New Jersey and Baltimore and efforts in Antwerp, Rotterdam, Los Angeles, and New York-New Jersey to serve as data and application providers to shippers, forwarders, drayage providers, and container lines.

Connective intelligence

Ports America, the largest terminal operator in North America, is currently building what it calls a “turn time efficiency tool” to speed container pickup at its Port Newark Container Terminal (PNCT) and Seagirt Marine Terminal in Baltimore. The product is a version of the oft-discussed “free flow” concept — also known as “peel-off” — under which a core group of beneficial cargo owners (BCOs) and their trucking providers agree to pool their containers for each vessel call. When those containers are discharged from the vessel, they are segregated into a separate pile. Truckers working with any of those BCOs enter the terminal, proceed directly to the pile, and take delivery of the next container to come from the stack without regard to consignee or destination.

However, free flow is often limited by operational constraints. Vessel stowage is one hindrance, as participant containers must be stowed in the same cargo bay, and specific services related to individual containers or shipments, such as the ability to serve bonded warehouses, create further complications.

Ports America’s approach is to use existing technology in its facilities, such as radio frequency identification (RFID) and cameras in the terminals, married with an algorithm its internal team has developed to match drivers to boxes optimally. The data would then be provided via a portal for BCOs.

“RFID captures the driver so we know which importer that driver needs to move cargo for,” Joe Greco, vice president of containers at Ports America, told during an on-site briefing at the Port of Baltimore. “We’d have hot spots in the yard, looking at the position of those containers in the stack. The front end will be a forward-facing site targeted to BCOs or their dray representative. The portal would share all of the containers coming off for retailer X or shipper Y. It’s a completely different way from how terminals are working currently.”

The free flow product is an example of Ports America seeing its facilities as connective hubs where data can be collected and shared to optimize operations at a traditional sticking point in supply chains.

For instance, Greco said the terminal operator is working with a forwarder and a handful of BCOs to build what it calls its “PA Connect API” (application programming interface) for companies that have their own systems and would prefer port information to flow into their systems rather than having to go to the Ports America online portal to obtain it.

“Instead of them leaving their systems to look at our system, we use an API to push that information to them,” Greco said. “How we interact with the BCOs in terms of visibility and consistency is a differentiator and gives us stickiness.”

In an ideal scenario, the information flow is a two-way street with BCOs. “We could get information from the BCO if they’re willing to share, if they think it could help them get their container more quickly,” he said.

In a similar development, Port of New York and New Jersey terminal operators were due to launch a pilot program in March by which participating truckers and shippers would no longer have to log onto the port’s web portal, Terminal Information Portal System (TIPS), to pull container tracking data and would instead have that data pushed into their own software systems.

Avoiding system disruption

The use of APIs is critical to this change in the mindset of ports, supply chain technology advocates argue. APIs essentially allow systems to communicate with one another in a less rigid way than electronic data interchange (EDI) does. That enables ports to build systems that interface with those of shippers, forwarders, intermodal providers, and drayage companies in a less disruptive way.

That’s an evolution from a historical reliance, particularly in Europe, on port community systems (PCSs), portals designed to accomplish much of what is being discussed today. The difference is that PCSs generally require users to log into a single portal, whereas the current system structures focus on being whatever a user needs, whether that’s an online portal or a data feed via API.

In Northern Europe, the container ports of Antwerp and Rotterdam, a mere 60 miles from one another, are both headlong into vast strategic plans that follow closely the evolutionary pattern of PCS to digital hubs.

“The key is how efficient are you in getting [cargo] in and out of port, how much visibility can you give, how easy is it to interface with customers, how cost-effective are you?” Erwin Verstraelen, chief digital innovation officer at the Port of Antwerp, told during an interview at the port. “That’s the goal of digitalization. Handling ships, having land, those are givens for a port.”

The technology ecosystem at Antwerp, the key European hub for ocean carrier Mediterranean Shipping Co. and the second-busiest container gateway in the continent, is particularly broad. It encompasses the port authority and its internal initiatives; NxtPort, a third-party data hub in which the port has invested heavily; the Beacon, an incubator founded by the city, port, and the University of Antwerp to facilitate startups building Internet of Things (IoT) applications; and chainPORT, a joint initiative of 12 global ports founded by the Port of Hamburg and focused on knowledge and innovation sharing among Hamburg, Rotterdam, Antwerp, Barcelona, Busan, Singapore, Shenzhen, Los Angeles, and Montreal, among others.

NxtPort is a key cog in those plans. The entity is primarily designed to be an aggregator of critical terminal, berth, and hinterland data. Third-party software providers can either draw from the data to fuel their solutions or build applications on top of the data to benefit users of the port.

‘Catalysts’ for innovation

Similar to many port cities in Europe, Antwerp has become a hotbed of maritime startup activity. From Marseille to Hamburg to Rotterdam, a number of technology companies have sprung up to tackle discrete pain points in either port operations or containerized goods movement. Antwerp aims to facilitate those startup developments through frequent meetings and pilot programs.

“We as a port can be the catalyst to get a startup thinking about the possibilities and making the connections,” said Verstraelen.

He said Antwerp is focusing on what he called a technology’s “proof of value,” as opposed to “proofs of concept, which just shows the tech works.” The port will then experiment, to show how much of the innovation is rooted in actual operations.

“We are using the port as a platform by inviting the community to see the port as a catalyst,” Verstraelen said. “We believe in outside innovation, in surrounding yourself with people that feed you with what’s possible and find a use case. All these building blocks are starting to reinforce one another.”

In Rotterdam, the situation is similar. There’s PortXL, a technology incubator located within shouting distance of the port that also has branches in Antwerp and Singapore. The port itself has developed a portfolio of software solutions aimed at supply chain management for forwarders and shippers and port call optimization for container lines.

The supply chain system, called Boxinsider, provides vessel estimated times of arrival (ETAs) and container availability status via API. Pronto, the port call optimization tool, helps container lines and terminals minimize waiting time for vessels.

More broadly, Rotterdam is building Portinsider, a software-as-a-service (SaaS) port community system designed to be adapted for other port complexes that includes the supply chain management and port optimization aspects of the Boxinsider and Pronto existing tools.

Behind all of that is Portbase, the existing PCS for Rotterdam and other Dutch ports that was built on three elements: a central database of trade and logistics information from the private and public sector, a set of services available to all parties, and an application layer on which the port or other entities can build their own tools.

Interrelated initiatives

Portbase in Rotterdam is analogous to NxtPort in Antwerp, as well as Dakosy in Hamburg. Although the underlying investment approach and system architecture may be unique in all three, the common link is a desire for these large northern European gateways to serve as the digital connective tissue for their broader ecosystems.

But, again, one issue is how interrelated these systems are from a cargo owner’s perspective. That’s where initiatives such as chainPORT and an emerging “network of networks” concept being championed by the International Port Community System Association (IPCSA) come in.

While the individual gateways, whether in Europe or North America, are all vying to be the system that is eventually preeminent in global container supply chains, there’s also a recognition that there likely won’t be a single port-based platform to which every supply chain stakeholder subscribes. That places a premium on system interoperability and the ability for forwarders and shippers to build APIs or ingest API-conveyed data via their existing systems.

The roadblocks are not technical in nature; data sharing platforms have existed for years. The issue, port officials have told, is one of mindset.

There’s also the reality that, as one port community system expert put it, “North America is 15 years behind Europe when it comes to data sharing,” so there is asymmetry in intercontinental data sharing. Troubles with adoption of GE Transportation’s Port Optimizer platform in the Port of Los Angeles are just one example of this reality.

Despite an attempt this past year by the Port of Los Angeles to incentivize carriers to share more data and convince terminal operators, BCOs, equipment providers, and other stakeholders to do the same, there is still a strong belief among some companies in the private sector that their data should remain proprietary because it gives companies that possess it a competitive advantage.

“The notion of sharing data is simple, but it’s scary,” GE Transportation senior product manager Brian Hill said at an industry gathering in October.

In some ways, the approach taken by GE and the Port of Los Angeles is divergent from what’s under way in Rotterdam and Antwerp, which have both taken a more direct role in developing these data platforms. They also allow various third-party solutions providers to access the data, whereas in Los Angeles, GE is the sole private provider. In Rotterdam, for instance, two floors of the port authority’s offices are dedicated to the solutions engineering team, with nary a trade manager or carrier relations representative in sight. The office could easily be mistaken for one at a fast-growing technology startup.

Driving all of this activity is a distinct change in the port business model, from one that historically sought to serve strictly an authority or terminal’s direct customers — the container lines — to one that is focused equally on the needs of the cargo owners and those of its representative service providers.

The physical locations of ports and the crucial links they form in the global supply chain makes them natural places to serve as data hubs, and the intense competition among ports in geographic proximity means they have incentive to differentiate on digital capabilities. The only question that remains is whether shippers will face a fragmented or unified digital picture as these digital hub strategies mature.