As part of our exclusive series in partnership with Port Technology, INFORM’s Matthew Wittemeier caught up with Kevin Martin, Principal Port Operations and Technology Consultant at Royal HaskoningDHV, to talk about his view of the port and terminal industry and where we might be headed over the next two decades.
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MW: The purpose of the book 2038 is to explore today’s emerging technology and its impact on the future. What technologies do you see today that will impact the future of port and terminal operations?
KM: The ongoing development of technologies that underpin Big Data will have the most significant impact, and that concept will provide an incredible opportunity. I believe that ports are quite behind the curve in terms of using data to look at their operations and getting real benefits to transform them. It’s about changing the traditional port-operator model from an operator who uses data to a model in which an operator uses technology, driven by data, to optimize the provisioning of the port services.
At the moment, the challenge is that ports are just familiar with traditional business intelligence and a lot of them still apply the traditional costs as a reference point. That’s stopped us from moving forward as an industry with data.
MW: We’re going to circle back to data in the year 2025. What sort of technologies are you looking at if ports were better able to leverage their data? What technologies do you think they’d then be able to utilize?
KM: The digital twin is a concept that we’re really interested in at Royal HaskoningDHV. At the moment, the ports are focusing on individual assets and getting insights into the operation of equipment and buildings and so on. There’s a sort of predictive capability in terms of equipment failures, but what we find really interesting is the idea that you start to capture that data, and you can then begin to model that and simulate events. When this happens, you start to move into the prescriptive world. Then, you’re looking at various courses of action that might happen and are better able to choose the best course of action. I think that’s where ports would get a real competitive advantage.
I don’t think it just has an impact on assets and operations or on your environmental footprint. It gives ports the opportunity to completely transform their business model. I can see a time when ports operate entirely differently from the way they do now. They’re still in that traditional “This is how we’ve always worked, and that’s how we’ll continue” model. I think there are lots of organizations out there that might not even be in the port space at the moment, that are thinking, “We could do that differently, and we can do that better.”
MW: You’re roughly describing the “Amazon effect.”
KM: Yeah. I was trying not to mention the Amazon effect.
MW: That’s okay, we can mention it. Do you think the port industry is ripe for the picking in that regard? Do you think there will be players that are able to come in and take over, or is this industry too asset- and infrastructure-heavy?
KM: Yeah, so that’s the interesting thing. It is asset- and infrastructure-heavy, but if you start to think of situations where you could have a company that does not want to invest in all the assets, and they say, “Well, we don’t want to invest in a huge amount of straddle carriers, or RTGs, or other equipment,” maybe they bring in a partner company. They could have the manufacturer come in and directly operate the equipment and they could be doing a kind of rental model. “You can come in and do the operations. We’ll rent you the space. It’s up to you as a provider of craneage or equipment services to maximize your opportunities.”
MW: That’s interesting. That’s actually a notion we address in our book 2038, whereby these major equipment assets are no longer purchased, they’re leased on an as-needed basis.
MW: We’re going to cycle back to data now. In our book 2038, the mid 2020s saw our industry solve many of the competitive challenges around data sharing and collaboration. Given that our industry right now – as you’ve noted, and I think as INFORM has broadly talked about – is really behind the curve in terms of data sharing and data standards, is that a likely outcome? Do you think we’re going to solve those challenges in this decade?
KM: I think we can. There’s definitely an opportunity to do it. I’ve had an opportunity to join a lot of webinars recently and many people are talking about this. People in influential positions at various ports talk about data sharing and the need to do it. It’s about actually starting to “walk the walk” instead of just “talking the talk.”
The software that these ports currently use is not geared up for data sharing. You don’t have APIs in these big systems. They’re not designed for easily sharing data with other ports, or even allowing somebody the capability to build a kind of digital service over the top of that. That needs to happen. There needs to be strong conversations with the software vendors as well. It’s a problem we see right across the supply chain.
MW: And who leads those conversations? Is it the consultants? Is it terminal operators? Are we saying we need the three big terminal operators to say to the two big TOS providers that this is the way it’s going to move? Do software developers have invested interests to prevent that?
KM: There needs to be an incentive. There’s a real potential for the customer here. If the customer voices it strongly enough, and I think they already do, somebody needs to sit up and take notice. You often see that kind of, “Where’s my stuff? Where’s my container?” And that old story that you can track your toothbrush from the Amazon warehouse to your door, but you can’t track it from the manufacturer in China to the Amazon warehouse nearby. The customers are really starting to strongly voice their concerns and opinions, and the supply chain needs to take note of that. That said, there are so many people involved in the supply chain, it’s really difficult to get that conversation going.
MW: You said there’s a misunderstanding about what data to share. Is there a common starting point that you see?
KM: Well, if you look at the Port Call Optimization Task Force, they’ve made good inroads in sharing information related to vessel movements. Maybe there needs to be some kind of industry-wide task force looking at cargo movements and looking at all the various system providers and all the various actors. It’s a huge undertaking, so maybe it does need some of the global giants to come together and say, “This is what we’re going to do. We’ve done it for vessels, now we’re going to do it for cargo movements,” and grab that one and run with it. It could be transformative for the industry if they did that.
MW: Absolutely. That brings us into the year 2030. The impact of technology is used as a frame in 2038 to look at many of the social issues we’re all familiar with, like automation and job loss, as well as more technological ideas like the ethics surrounding the development of advanced computing systems. What social challenges do you think we’ll be facing in a decade, familiar or new?
KM: I don’t think we’ll see that much change.
If you take AI and machine learning, it’s maybe good at one particular thing, but it’s not good at a broad scope of things. It can certainly be used to feed information to a human, who can then apply that in a contextual way to make the right decisions.
But I still don’t think it’s going to take people out of their jobs. What I do think technology does, though, is potentially free them up from all those mundane and repetitive tasks and take them into much more creative opportunities, opportunities to dig down into data, to find new opportunities, new business opportunities. That gives people the potential for a greater sense of value and sense of contribution. We’ve been chasing technology for many years, trying to keep up. I think it allows us to take a step back and use it to our advantage rather than trying to fight against it, and that has a profound effect on mental health. We know that the challenges, and the pace of life nowadays, have accelerated so much because we’re so desperate to use every piece of technology. That spills over into your personal life as well. I think it can have a profound effect if we really start to use it sensibly and to our advantage.
MW: As a consultant, have you seen or experienced a port where you have recommended an IT system be installed actually do that? And the aim, of course, is perhaps to free up time. Is that what the port does? Do they tend to retain those staff, or do they look at the cost-cutting measures?
KM: Yeah, it’s interesting … I have proposed solutions and given them a business case, and the first thing they’ll say is, “This doesn’t save any staff.” And I say, “No, that’s right.” Because what I think has happened in the past is that ports have got themselves to a point – and lots of businesses do this, it’s not just ports – but they get themselves to a point where they’re running an incredibly lean operation. They’ve gotten to the point that people are actually doing more than they’re capable of, which goes back to what I just spoke about.
KM: As such, the first steps are actually in putting in systems that ease that pressure. So, potentially, you don’t make any savings immediately because all you’re doing is getting yourself to a point where the people that you have are able to cope with the workload, rather than immediately thinking about cost-cutting. But I think we’re still in that environment where it’s all about the financial plan and five-year cycles – return on investment. “How much am I going to save by spending this amount of money?”
MW: I’m going to segue from there into the idea that our industry doesn’t exist in a bubble. The environment, physically and politically, has real impacts on our industry. COVID-19, and as well, political shifts, are making us all double-think our reliance on global trade. We’ve got trade wars happening, COVID-19, threats of actual wars … Do you see these broader sociopolitical aspects impacting globalization? And do you think that’s going to have an impact on our industry?
KM: I don’t think so. I think people are still going to consume things. This would be true even if you say, “I’m going to stop buying stuff that’s made in China, and I’m only going to buy stuff that’s made locally.” For me, it would be here in the UK. By the end of the day, whether it’s made in China or made in the UK, you still need resources to make that thing. So, if you’re not shipping the goods, you’re going to be shipping the resources that you use to make the goods. I think there’s a lot of cards in play. Political agendas are sometimes driven by individuals rather than by the collective good; it might just be one man’s desire. I don’t think it’s going to impact the supply chain as such. We might see a shift of activities, but as I say, the movement of goods will still continue in some shape or form.
MW: The environment is certainly noted as one of the major benefactors of COVID-19, and whether that’s short-term or long-term-lived, we’ll see. It’s also the year of the IMO’s new regulations for SO2 emissions in diesel fuels. Do you think some of the stick approaches that we’re starting to see being used in our industry to promote more environmentally friendly operations will work? Or is there a better approach to trying to green up our industry?
KM: I think it’s a blend between carrot and stick that’s required, don’t you? Actually, I commented on this not that long ago in a report for a client. And what I noticed was that governments are really pushing the domestic agenda, the shift from petrol- and diesel-driven cars to electric cars. They don’t seem to be making the same incentives available for the shipping industry even though the shipping industry is noted as the worst polluter. And it’s curious why they’re not doing that. It’s curious why they’re expecting the industry to shift of its own volition. Because, let’s face it, car manufacturers would still make dirty, smelly diesel engines if nobody had said, “You need to do this” and then there was also a kind of drive from the consumers as well.
So, I guess there’s a consumer-led thing, where consumers need to be a bit more aware of the green footprint of the products they’re buying. And maybe they can voice their opinions and apply some pressure. Governments need to get on board and support industry to do it. They’ve demonstrated that they’ll work with industries to do it. They’ll apply sticks where necessarily and apply carrots where they can. I think they need to do the same with the shipping industry. So, the big sticks are, “These are the limits within which your engines must work,” but they need to also provide help to switch to alternatives as well.
MW: So we’ve reached the year 2038. You’ve shared some great insights throughout our interview. In a minute or so, what’s the one thing that you think the readers should take away from this interview? What’s the pearl of wisdom you want to leave them with?
KM: We’re being presented with a unique opportunity right now. COVID-19 has forced a dramatic shift on us all, and we’ve seen organizations that were hugely resistant to any kind of technological change adapt to it in a matter of weeks because the business now must rely on it. I think they should absolutely grasp that momentum that they now have and keep moving forward. They’ll see some profound effects on their business as they start to really grasp that technology.
Who is Kevin Martin?
Kevin Martin is Principal Port Operations and Technology Consultant in the Smart Ports team at Royal HaskoningDHV. Kevin has over 20 years’ experience in the port industry, gained across a diverse range of cargo and container terminal operations. A creative digital thinker with a passion for disruptive technology, Kevin has a strong track record in the design and delivery of integrated port systems.
What is 2038: Future Visions?
2038: Future Visions is a series of interviews with leading maritime logistics professionals who share their view of what our industry will look like in the year 2038. It is brought to you in partnership with Port Technology. 2038: Future Visions builds on the award-winning book 2038: A Smart Port Story, which INFORM published in 2019.
What is 2038: A Smart Port Story?
2038: A Smart Port Story explores the terminal of the future and the intricacies of technology and its impact on both the port industry and society. Join Douglas as he unravels the mystery around an incident at the Port of Reykjavik that sees an AGV collide with a human, leaving their life hanging perilously in the balance.
2038: A Smart Port Story explores the terminal of the future and the intricacies of technology and its impact on society and our industry. Join Douglas as he unravels the mystery around an incident at the Port of Reykjavik that sees an AGV collide with a human, leaving their life hanging perilously in the balance.
More from the World of 2038 – The Athena Interviews
The Athena Interviews is a series run in 2019 in which INFORM’s Matthew Wittemeier interviewed the main AI character from 2038: A Smart Port Story, Athena, about a broad range of topics surrounding AI. In an interactive video format, readers/viewers are introduced to Athena as together they explore thought-provoking questions about the future of logistics, technology, and AI.
Missed the beginning of The Athena Interviews? You can pick it up from the start at PTI Exclusive: Athena Q&A Part 1.