Meeting the challenge of smart supply chains
Decoding what smarter trade means and how we get there.
We talk a lot about “enabling smarter trade” at DP World. But what does that mean in reality?
It’s a way of introducing our vision for the future of ports and logistics. We believe digital transformation in our industry means harnessing technology to make physical infrastructure faster and more efficient, delivering a better service and enhancing transparency. Often, these efficiency gains improve sustainability and workforce safety too.
Of course, we are proud to be a business that is very much physical. At the end of 2019, we had 53,000 employees. During the previous 12 months we had invested more than $1.1 billion in capital spending across our portfolio. And we already had made very substantial investments in our digital transformation, to get more from our facilities and people—but there are still many great opportunities ahead.
A key driver of digital success will be the seamless integration of offline and online capabilities and the blending of digital and human talent. Consultants McKinsey agree. Earlier this year (2020) they published a blog post headlined “Digital supply-chain transformation with a human face”, which explained how successful projects needed to work in collaboration with people, not around or against them.
The stakes are high
The stakes have been raised by the Covid-19 crisis, which has meant end-users are already putting extra pressure on their logistics chain for reduced costs amid demand reduction. Digital transformation offers a way of meeting those challenges without cutting corners on service levels or resilience.
The BoxBay container stacking system, currently in late-stage construction at Jebel Ali Terminal 4, is a very physical demonstration of our drive to innovate. This fully-automated High Bay Store system allows containers to be stacked 11-high, but makes it possible to remove the container at the bottom without having to destack and restack the boxes above, a process that has wasted precious time throughout the shipping container industry’s 50-plus years of history.
BoxBay not only maximises the usage of precious port space, but it also facilitates the very intensive physical processes needed for fast turnaround of ultra large container vessels. The Jebel Ali facility is fully electric—no diesel fumes—and powered by solar.
BoxBay is a joint venture between DP World and German industrial engineering specialist SMS group GmbH and is a clear demonstration of how the physical and digital must work together. Stacking containers in a high rack with an automated crane is simple in concept, but the digital processes needed to turn this into an efficient system are highly complex. Landside is particularly complicated; any problems in getting boxes on and off trucks mean BoxBay could be a bottleneck.
Acquisitions and innovation
Earlier this year, we launched a range of digital platforms (SeaRates.com, LandRates.com and AirRates.com) to make it easier for freight forwarders and other businesses to make anywhere-to-anywhere bookings. This follows DP World’s acquisition of SeaRates in 2019. The launch was brought forward to help customers who were struggling with logistics amid the Covid-19 pandemic. All technological breakthroughs, however, cannot be made by one company alone. Logistics is by its very nature a connected system, and efficiency gains are only meaningful if implemented system-wide.
We are an enthusiastic supporter of industry-wide improvement, and that is why we have now completed the early stages of integration with TradeLens, a blockchain-based digital container logistics platform getting industry-wide traction. The system was developed jointly by AP Moller-Maersk and IBM to accelerate the digitisation of supply chains globally.
TradeLens is exciting, because it brings together not only shippers, port operators, and shipping lines, but also ports, intermodal operators, customs authorities, and even banks and other suppliers of trade finance. It’s the year 2020, but amazingly some of our industry still relies on fax machines and paper documents. TradeLens can replace these (and less-advanced digital processes) with a blockchain-based solution that not only revolutionises paperwork but also helps drive increased optimisation of physical freight movement.
We believe the industry pressures brought on by the pandemic will accelerate digital transformation. Yet, few can predict where digital transformation will take our industry in 10, never mind 20 years from now. Many of the technologies that are revolutionising the industry are still new; for instance, the first real-world implementation of blockchain happened barely a decade ago.
Even technologies that have been around for longer, such as artificial intelligence, which is already helping optimise many of our physical processes, are seeing their pace of innovation accelerate.
All of these processes are being given additional power by the wealth of data in our connected world, especially as the Internet of Things and 5G-linked devices create ever-more data. This wealth of data opens up additional opportunities for innovation and brings us closer to the interconnected world that some call “Supply Chain 4.0”.
However, whatever technology brings, our philosophy of using technology to enhance our facilities and people will stand us in good stead.