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IAPH on ports

IAPH on Ports

Patrick Verhoeven, Managing Director of the International Association of Ports and Harbours (IAPH)


The physical manifestation of international trade, ports have always been markers of civilisation. They have also often been locations for technological innovation – paintings of medieval Bruges show the enormous timber latticework crane which loaded and unloaded the textiles that were the foundation to the city’s riches.

Today, ports are just as important as they always have been, bustling hives of activity where raw materials and finished manufactured goods begin and end their journeys.  But like every other technology-dependent infrastructure, ports are seeing significant changes.

Successive industrial revolutions have seen animal-and man-power replaced by steam, diesel and electricity. Now, in the throes of the fourth Industrial Revolution, cyber-physical systems are starting to make their presence felt in ports as they are in factories. At the same time, like every other major industry, ports are faced with the pressures of reducing their impact on the global environment.

Patrick Verhoeven, Managing Director of the International Association of Ports and Harbours (IAPH), identifies the battle against climate change as the most important driver of change that will affect the port industry over the next two decades.

“Shipping is being forced to reckon with its use of oil as its main energy source, because of its large contribution to carbon dioxide emissions. There is quite a potential out there for the ports industry to invest in energy transition and develop themselves as energy hubs.” The ports sector hopes to achieve full decarbonisation of shipping by 2050.

Ports are an essential component of the energy sector. “They provide the fuel, they provide the bunkering” he says. “They are not just maritime transhipment hubs. They have a potential to play a major role as hubs for the energy transition.” Although not yet a global trend, ports are beginning to explore the potential to act as bunkers for low-carbon fuel such as hydrogen which could eventually power significant parts of the maritime industry.

There is also an increasing need for ships to be able to plug into the electricity grid when they are docked, to make use of onshore power and reduce the need to run on-board generators, which contribute to poor air quality around ports. Investments in renewable energy near ports will make this process cleaner in the future, a trend that has already begun for many ports. Along with this is a desire to use data to optimise the “port call” so the ships don’t have to spend long periods waiting before cargo can be loaded or offloaded.

However Verhoeven aspiration for the future of ports as energy hubs is bigger than this. “Ports have a major role to play in the encouragement and development of circular economies” he says. “A port is a community of different actors. Of course, you have the maritime activities of terminal operators, ship agents, pilots and towage services, but most ports are part of industrial clusters, logistics facilities, even housing. There are possibilities to reduce emissions by bringing these actors together to create energy efficiency systems and utilise locally generated renewable power. Port authorities can play the role here to build communities around ports and that is something we are starting to see pop-up in the front-running ports”.

Digitising ports

Second only to energy transition and emissions reduction is digitisation. “A number of ports today already call themselves smart ports because they use technology and data sharing to improve the efficiency of their operations” says Verhoeven.

He identifies Hamburg, Rotterdam and Antwerp as leading examples of this, while Barcelona, Valencia, Los Angeles, Montreal, Vancouver, Singapore and Busan are also at the forefront of this trend. Verhoeven hopes that by 2040 a complete global network of smart ports will exist.

 Digital data exchange between ship and shore is already mandatory under International Maritime Organisation (IMO) rules. “But we also have to be realistic, only a third of the ports we surveyed fulfil this obligation today, another third is in the process and another third hasn’t even started yet. So we’re clearly a long way from the smart port concept.”

Ship to shore data exchange is only the first part of digital transformation, he said. “It builds on to create a maritime single window, a port community system where a lot of the cargo related data is exchanged in digital form. And then it transforms further into a smart port concept where the innovative technologies that we've seen developing over the last years is integrated in an entire management of a port ecosystem. And that includes, of course, automation and the use of sensors to provide new data and insight.”

The Port of Singapore, one of the most modern in the world, handling 130,000 vessel calls every year, launched this year a scheme to accelerate digital initiatives such as electronic Bills of Lading, and announced the successful completion of this technology which it said demonstrates the interoperability between digital trade platforms. The test involved Singapore and the Netherlands shadowing a live system from Qui Nhon in Vietnam to Rotterdam via a transhipment in Singapore. This showed that the bills of lading documentation process could be accelerated from an average of 6 to 10 days with hard copies to less than 24 hours using a digital system, despite the use of different digital platforms in the three ports involved.

“It’s interesting to see that the front running ports on digitisation are also the front runners when it comes decarbonisation.” Verhoeven said, “I think come 2040, we will see a much wider network of ports who are much more advanced in both.”

Responding to global megatrends

The changing nature of international trade is always likely to have a major effect on ports. Currently, Verhoeven said, there are worldwide major ports on all the inhabited continents, but also quite a lot of small and regional hubs. “If you look at the future of the industry, what are our trade flows going to be like? Are we going to stay with the main global arteries that we know today, like those linking the Far East to Europe, or see more regional development? A lot of people in our industry are looking at this, especially with the current supply chain crunch. Will that last? What will be its lasting effects? Will we, for example, see more development around those regional hubs with more short sea shipping rather than deep sea shipping? It’s clearly a trend where the jury is still out as to whether that is going something permanent or not,” he explained.

Whatever happens, ports of the 2040s will need to be more resilient. “We’ve already seen a number of shocks in the 21st-century, and this is likely to become the new normal, whether it’s extreme weather events or cyber-attacks.”

Once again, Singapore provides an example of this. It is in the middle of one of the biggest transformations in its two-century history as a port, with the building of Tuas, a container “mega port” in the western part of the citystate. This will see Singapore regain its place as the largest container port in the world, which it lost to Shanghai in 2010. Tuas, when complete in 2040, will be able to handle 65 million container units per year. Although the first stage is months away from full operation, in October 2021 it opened its storage area early to help relieve bottlenecks in the supply chain. This has helped it to assist in reducing delays caused by events such as the grounding of the container ship Ever Given in the Suez Canal and port closures in China owing to COVID-19, playing a role in global resilience in the face of new shocks.

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