Competition among ports in Gulf Cooperation Council (GCC) countries is expected to heat up as operators chase larger shares of the region’s growing logistics sector, according to figures quoted in an article written by Dr. Naser Al-Tamimi [1]for Arab News. Currently, there are around 37 seaports (major and minor) operating across the GCC: 21 in Saudi Arabia, nine in the UAE, three in Oman, and two each in Qatar and Bahrain. The total capacity of these ports combined amounts to more than 50 million TEU (Twenty-foot equivalent unit) annually. Some estimates project that more than $36 billion of investments committed for greenfield schemes and port expansions by 2020.
Luis Ortega, Managing Director for IFS Middle East, Africa and South Asia, says the projected growth in cargo volumes in GCC ports as well as the planned investments in capacity expansion bring opportunities for these ports to invest in technology that reduces operational costs, boosts utilisation of existing infrastructures, enhances productivity and streamlines business processes. However, many ports in the region are still battling with challenges such as insufficient container storage space, long container dwell time, a rapid increase in container traffic as well as restrictions in inland transport infrastructure given the recent crisis with Qatar and lower oil revenues.
In the recent Digital Change Survey commissioned by IFS covering 750 professionals across a range of industries, 80% saw themselves as ‘enabled’, ‘enhanced’ or ‘optimized’ to leverage digital transformation. Even more impressively, 89% said they had ‘advantageous’ or ‘adequate’ funding in place for digital projects—a clear acknowledgment that the time of disruptive technologies is here, and that the vast majority of firms are realizing that they need to invest.
Driving innovation and efficiency
Vincent Elfring, Director at IFS business partner Envecon, says: “Middle East ports face the same major challenges as ports elsewhere in the world: a trend towards bigger vessels as; a need to improve productivity, reliability and safety using automated systems; and consolidation of shipping lines, which increases competition between ports to retain and attract fewer, newly-merged shipping lines customers.”
As the industry squares up to these challenges, it should look for ways to leverage technology to drive innovation and efficiency, says Elfring. “Projects where we have worked jointly with IFS in Europe, South East Asia, Africa, Middle East and Latin America highlight the fact that an industry once known for conservatism is now starting to seize the opportunities of digital transformation,” he adds.
“Many port operators worldwide are investing in robotics—including remotely operated quay cranes, automated stacking cranes, driverless shuttle carriers and retrofitting existing equipment with modular automation solutions—for higher productivity and reliability.”
Other technology areas with increased interest are trade and customer internet portals, cloud hosting, business intelligence and analytics and distributed ledgers like blockchain for storing and sharing documents within the supply chain.
ERP/EAM—a digital foundation
Taking full advantage of these digital technologies begins with rolling out enterprise resource planning (ERP) and enterprise asset management (EAM) systems tailored to the specialised needs of the industry.
Elfring pointed out, “Port and terminal operators worldwide are increasing their investments in ERP solutions. They understand the value of having an integrated solution to manage the planning, execution and continuous improvement of their business processes. We also see more demand to connect and integrate these ERP solutions with suppliers, customers and the port authorities.”
For ports and terminals, optimal use of assets is a key factor in high performance. Ports and terminals are increasingly based on the concept of driving assets to the maximum, while improving performance in the yard, quayside and gate arena. The end-goal is to continuously improve berth moves per hour and gross moves per hour. A well-designed IT solution can keep assets from ageing by implementing regular maintenance basis to keep machines in good shape without jeopardising operations.
Maintenance cost of assets is one of the biggest operational expenses in any port and terminal, next to concession fees and labour cost. The basic requirements of a terminal could be monitored by an off-the-shelf EAM—however, traditional ERP and EAM have often failed to deliver desired business outcomes in this highly specialised industry. Thus, the industry needs software designed for its vertical requirements.
Ortega added: “We can leverage data to improve predictive maintenance, reduce mean time between failures, cut asset management costs and increase service levels. Our solutions are designed for asset intensive industries such as ports and terminals, with a view to maximising productivity, reducing maintenance costs and downtime, and enhancing ROI. The next generation of Internet of Things technologies will enable us to take this to the next level. We are collaborating with Envecon for capturing real-time sensor, controller and location data from all major terminal assets like quay and yard cranes, and terminal tractors.”
Elfring concludes: “Middle Eastern ports need to manage their assets in a way that ensures high productivity and improves reliability while delivering service levels that match the best in the world. Ensuring this requires a well-designed IT platform that provides them with the visibility, scalability and performance they need to cater for the rapid pace of volume growth in the region’s commercial ports.”
