Ports: operation and innovation in testing times

The ports sector

Tim Morris shows how the crucial gateways to the UK’s well-being – its ports – are meeting, managing and capitalising on the challenges posed by Covid-19

The world’s largest container vessel, HMM Algeciras, made its maiden call in the UK on 14 June 2020. Capable of carrying up to 24,000 shipping containers, it is the equivalent of four premier league football pitches long and one wide. At 400 metres, it’s longer than The Shard is high. The ship berthed at London Gateway, a new build container port and logistics park on the banks of the Thames – a mere 26 miles downriver from the Roman, Anglo-Saxon and Norman docks built to accommodate vessels worlds away from today’s behemoths servicing globe-spanning supply chains.

Innovative working

A steel-carrying vessel and new bespoke warehousing at the Bristol Port Company.
A steel-carrying vessel and new bespoke warehousing at the Bristol Port Company. Photo: Bristol Port Company

The change and innovation is not just in the vessels themselves. London Gateway has fully automated, computer-controlled container stacking and storage facilities. The quay cranes, taller than the London Eye, are operated remotely from central offices. The vehicles delivering containers to and from the vessels are electric hybrids. And the handling of huge vessels in the relatively tight confines of the Thames was planned and practised in a 3-D immersive simulator.

Change and innovation in maritime and ports has been a constant imperative. And it will continue to be so. Both through the introduction of new technology and through the new ways of working – an aspect of innovation that is often overlooked, but crucial for delivering productivity progress.

Progress is not always linear, and can be spurred by unexpected interventions. As we survey the innovation seascape for ports in mid-2020, the UK’s major port operators see trends such as digitalisation and sustainability suddenly and rapidly boosted by the urgent requirements of first responding to, and now recovering from, Covid-19. A significant ‘accelerated evolution’.

Taking technology innovation first, the crucial developments are around automation and digitalisation – Industry 4.0 for the ports sector, with the much greater generation, organisation and utilisation of data a strong common theme. As with much successful innovation in the ports sector, the driver for innovation is the customer. In the case of digitalisation the imperative is to provide flexible supply chains for customers, unlocking shared value for customer and service provider alike.

While Industry 4.0 and digitalisation are well-known trends, we anticipate that the case for change and the demand for more usage will be accelerated by the Covid-19 pandemic. We anticipate that there will be a concerted effort to bring more resilience into supply chains, accompanied by a challenge to ensure that resilience is delivered without major productivity and cost penalties. One way of mitigating this tension is greater supply chain visibility – knowing where your cargo is, and then being able to make rapid decisions about changing routeing and storage. Ports are of course an intrinsic part of this data supply chain accompanying the physical goods, and the fact of their being a core node for not just physical goods but also data should open up opportunities for port operators.

Data and digitalisation

Container handling at London Gateway.
Container handling at London Gateway. Photo: DP World London Gateway

Looking at the operational foundations for customer-centred supply chains ports, data and digitalisation are already embedded in many key activities. Algorithms to reduce delay and waste should drive efficiency both in the ports themselves and in the supply chain partners. Data and monitoring should help pre-empt unscheduled maintenance. Development continues on building full ‘digital twins’ for ports operations.

The applications go beyond the traditional operational sphere, to improve the foundations of sustainable success: better data and data usage can mean lower emissions and better air quality; better utilisation of data could drive better safety performance. The ports sector is embarking on an ambitious major project to harness and pool more data across many operators and from other sources, not only to understand historical events better but also to anticipate key risks and thus reduce, or at least manage, them.

The ways in which port owners operate their ports and the ways in which colleagues work constantly evolve, driving the efficiency and productivity demanded by fiercely competitive regional and global sectors. Here, too, Covid-19 is likely to act as an unexpected catalyst for change.

The ports sector has risen to the challenges of the Covid-19 crisis with a tremendous response by the operators and staff of ports across the UK. There have been fantastic displays of flexibility and pragmatism in ways of working both in the ports and remotely. Staff absence has been very low. Ports have worked closely with shippers and cargo owners to provide solutions such as repurposing storage space. Ports have come together in new ways to share best practice on everything from keeping our colleagues safe and well to how we handle vessels with potentially infected crew. And we’ve worked as closely as we can with government at national and local levels.

All of this has meant that our ports – the UK’s main gateways with the world, handling 95 per cent of our international trade – have stayed open and busy. The food, medicines – and, yes, paper for the toilet rolls that we all rely on – has kept flowing in through our ports. While at the time of writing it is relatively early to say which of the changes caused by Covid-19 will become permanent rather than temporary, it seems very likely that the ways of working in the ports sector will change structurally. The increases in flexibility and responsiveness are allowing us to serve our customers better. The greater flexibility in work hours and work locations enabled by technology has meant that we have kept safe and productive while opening up benefits to employee and employer alike. And while some port roles and operations continue to require on-site presence, work from home where feasible now seems part of the future, even for well-established sectors like ports.

Structures and supply chains

HMM Algeciras, berthing with the aid of tugs at London Gateway.
HMM Algeciras, berthing with the aid of tugs at London Gateway. Photo: Andrew Bowen, Port Operations Director / DP World London Gateway

There are also likely to be structural changes in the industries we serve – changes that in many cases have been enabled by the wider digital revolution. In retail, for example, Ocado has reported seeing years of growth in the online grocery market condensed into a matter of months, and believes this will have meant a ‘permanent redrawing’ of the retail landscape. This will have its effects on the logistics supply chains serving retailers as well.

Although it may have seemed fashionable to call the Covid-19 aftershocks the ‘end of global supply chains’, those supply chains have in fact proven to be relatively resilient in the face of massive demand fluctuation. The lesson might be less about the end of global supply chains and more about the buffering or ‘nearshoring’ (the transferral of business to a nearby country) to build greater resilience, with ports not just providing a historical gateway role but also becoming strong contenders as locations for nearshoring facilities.

As a sector, we are factoring in more agility and new ways of working, underpinned by a strong digital infrastructure and data as integral to our ‘toolbox’ and customer offering. But, as has doubtless been the case since the Roman quay operators in Londinium, there is a critical role for strong trust-based relationships in getting the best out of technology and – as during the response to the pandemic – rapidly collaborating to solve unexpected problems, sometimes on a daily basis. The valuable role of technology in critical business situations is often found through informing and augmenting human decision making, not replacing it.

When the HMM Algeciras departed the UK in June it did so in perfect visibility and calm seas. But those are not the conditions facing the UK ports sector right now as we face the ongoing public health challenge from Covid-19, its economic fallout and the concomitant geopolitical uncertainty. But we nevertheless set sail with confidence in our ability to innovate, meet challenges and grasp opportunities as we have done since Roman times.

Tim Morris is Chief Executive Officer of UK Major Ports Group