The Oft-overlooked Maritime and Ports Sector is Changing — and You can be Part of It

11 February 2021 — The maritime and ports sector is an integral part of the global supply chain infrastructure, and will probably remain so for some time. Even with the advent of air freight, ocean-going ships have continued to play a prominent role in international trade and commerce. There is simply no more efficient or effective way to transport halfway around the world large, non-perishable goods in bulk.  

Despite this, the importance of maritime logistics and transportation is often overlooked in daily life. As consumers, we are familiar with the concepts of supply and demand, but we may gloss over what happens between production and purchase: getting the goods to market.

The ability to transport goods across markets has a great impact on consumers, not just in terms of availability at local retailers, but also cost of production and affordability. Very simply, availability translates into this practical scenario: if there is nothing on the shelf, there is nothing the consumer can buy—end of story. Cost of production meanwhile is linked to economies of scale, meaning that per unit cost typically decreases with a higher number of units produced. Thus, if a producer has access to more markets, it can produce more units, at a lower cost, increasing affordability.

So far, this discussion has been focused on simple economic theories. Things get more complicated when considering the costs of transportation and storage (i.e. logistics). If the cost to move goods to a far-flung market or the cost of holding them in a warehouse or store is very high, both producers and consumers will be affected.

A similar effect can be observed where the efficiency of logistics systems is involved. How quickly and smoothly products can be moved from a production or storage facility to a storefront can have a great effect on markets.

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Look to the panic-buying of toilet paper in 2020. There was not exactly a shortage in production—factories were producing the same amount as usual, and consumers were not actually biologically inclined to use up more toilet paper. However, because there was a sudden unanticipated upsurge in demand (mainly due to anxiety and fear), shelves were emptied. Because the shelves stayed vacant for a period (initially because stock could not be moved onto them fast enough), consumers perceived that there was a shortage, and started to buy even more in case they ran out. A vicious cycle was created and perpetrated until production and logistics capabilities caught up with consumer behaviour.

This phenomenon, while out-of-the-ordinary, might still have been predictable or at least more effectively addressed. Modern technology enables sales and movement of stock to be tracked closely, and if this were connected to an analytics system tied to an automated distribution network, it may have been possible to replace the stocks on shelves relatively quickly, putting to bed any alarm consumers might have about their next visit to the loo ending with an empty cardboard roll.

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Implementing such a system would require expertise in a number of areas. A familiarity with logistics processes would lay the foundation for this (for example to advise what can be changed and what has to remain the same). Engineering, programming and user experience/user interface design are then necessary to actually build a system. Then comes the matter of training and how to effectively deliver it to users (including change management). Maintenance and upkeep of the system is also key—scalability and customisability would allow the system to be adjusted to changing needs over time. Since the system would incorporate analytics, data analysis would come into play, probably also requiring some level of understanding of automation, artificial intelligence, machine learning and the like.

Imagine if this system existed as a macro set-up, actually being implemented on a large-scale industrial level, integrating vertically with other systems owned by producers and retailers, meaning that they are networked and exchanging information in real-time. Imagine also if the system were capable of analysing data, recognising patterns and predicting what is likely to happen weeks, perhaps months downline.

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This is the promise behind the fourth industrial revolution, Industry 4.0. Already, efforts are being made to implement digital technologies into maritime, port and logistics operations. A start-up from the Port Innovation Ecosystem Reimagined @ BLOCK71 (PIER71)’s Smart Port Challenge (SPC) 2019, Ship Supplies Direct, was in 2020 awarded S$50,000 in grant funding from the Maritime and Port Authority of Singapore (MPA) to continue development of their near market-ready marine logistics and supply chain solution. The company reported that their pilot project with PSA International had achieved up to 30% reduction in delivery costs and up to three hours less waiting time per delivery.

The technological advancements in the sector will likely not be confined to operations. Training and development will see advancements as well, especially with the advent of simulation as well as virtual and augmented reality. Another start-up from PIER71, Kanda, has developed a training simulation using virtual reality that will allow shipping crew to practice a safety procedure without risking their lives or damaging equipment.

As the maritime and ports sector embraces more such digital technologies (and the solutions begin to mature), the need for skilled manpower, future-savvy change-makers and visionary leaders will increase. The workforce in the sector must upskill and upgrade in order to keep pace with developments. Apart from professional training, more formal qualifications such as academic degrees will serve as stepping stones towards greater career development.

Just as there is room for individuals to improve and grow, the same can be said for the sector as a whole. As noted in the introduction, shipping has continued to be relevant in the modern global economy, and will remain so in the foreseeable future. The sector may have to weather many inevitable disruptions to come, be they of the technological, economic or pandemic variety, but it will still be a major component of international logistics—even if it continues to stealthily remain in the background of mainstream society’s consciousness.

 

 
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11 February 2021