The marine freight industry has historically relied on intuition and “traditional” (look-back) data to inform its operational and investment decisions.
While markers such as transit times, revenue per TEU and cost per voyage are undoubtedly important metrics, they are limited in terms of their ability to make accurate forecasts and sound business decisions.
In contrast, big data – which is derived from aggregated market indices and IoT (internet of things) devices, such as sensors – is a powerful tool in port call and supply chain optimisation; enabling a combination of historic, real-time, predictive and prescriptive modelling, that yields reliable results.
“Given the complex business models and large cost bases of ports and marine freight organisations, this industry particularly lends itself to non-traditional or big data insights”, says Allan Gray, GM of Operations at Fremantle Port – ahead of the IHMA Global Port & Marine Operations Conference.
“Used effectively, these analytical tools have the potential to significantly improve fuel economy, supply chain logistics, transit time and voyage profitability”.
Fremantle Port is currently leading the charge in terms of modernising and digitising its operations. Though IoT and big data are not new concepts, they have until recently largely escaped the marine sector; predominantly being deployed in industries such as telecommunications, banking and retail.
Mr. Gray says the time has come to start taking big data more seriously, to help meet organisational and sustainability objectives; and improve the ocean freight balance sheet.
“There are some serious efficiency gains to be made”, Mr. Gray continued. “With big data we can look at the real-time effect of factors such as shipping movement, truck movement, rail land-use, and empty container use; and make better-guided decisions in terms of how we deploy logistics parks, distribution points and berths.
“In turn this will help us meet business objectives and tackle issues such as port congestion, emissions and fuel economy”.
“The key is to determine what problem we want to solve and what metric we want to realise; and then deploy data to (literally) visualise and assimilate the outcome of an operational or investment decision related to that problem.
“For example, if we want to change one of our truck packing areas, big data enables us to determine how much traffic this will generate; where it would occur; the noise, environmental and social impact; and literally create a heat map of the emissions and congestion. From this, we can better assess the viability of the decision.
“We can also visually demonstrate these sorts of scenarios to the board and wider community, and get everyone on board with our decisions.
“The possibilities are really endless. We no longer have to make decisions based on emotion; we can quantify anything and everything. It’s all about being creative and asking the right questions. Because, as we are learning, big data provides us with a reliable and quantifiable answer to almost any question”.
Allan Gray is to present at the IHMA Global Port and Marine Operations Conference – due to take place 23-26 March 2019 – where he’ll talk more about Fremantle Port’s Digital Journey.