Digital transformation is a crucial turning point in port management, operation, and exploitation, particularly in the context of the ongoing Industrial Revolution 4.0. Through cloud computing, various components in the logistics chain, including import-export businesses, ports, shipping lines, banks, container terminals, inland ports, logistics service providers, transportation companies, and government agencies, are seamlessly connected.
Questions like "How much will it cost?", "Will our data be safe?", and "Why change if our current system is working fine?" may arise. However, it's worth noting that cloud services have evolved significantly, and with the right approach, the technology can offer exceptional security and cost-effectiveness.
Some common issues in logistics
Why Should Port Terminals Adopt Cloud Computing Services?
The maritime and logistics industry is a crucial link in the supply chain, intimately connected with other sectors such as transportation (all modes), import-export, manufacturing, customs, etc. Consequently, a physical device with regular memory capacity would never be sufficient to store all relevant information.
According to statistics from the Vietnam Maritime Administration, during the period from 2015 to 2022, the throughput of goods through seaports nearly doubled, averaging 8.4% growth. In which, the growth rate of container cargo averaged 11.9%, reaching over 243 million tons (approximately 25 million TEUs) by 2022.
In Q1/2023, Vietnam's seaport throughput exceeded 165 million tons, with container cargo alone accounting for nearly 53 million tons (approximately 5.1 million TEUs). Faced with such rapid growth in throughput, there is a rising demand for storing and processing critical data related to import-export of goods, transportation methods, transactions, warehouse conditions, daily volume of outgoing shipments from warehouses, etc.
Applying cloud computing in port management and operations is like a lifeline for this industry. A cloud repository can store and manage such huge real-time data, making business operations more straightforward, reducing time constraints, and enhancing efficiency.
Port terminals that have leveraged this technology are reaping impressive benefits during the Covid-19 pandemic crisis. They are successfully maintaining business continuity and resilience, with their workforce seamlessly operating from remote locations. On the other hand, less fortunate ports have been caught unprepared. Businesses that have not yet transitioned to cloud computing may have understandable concerns in management and operation.
Digital transformation is transforming port management through technology integration
1. Sharing Information
Information sharing has always been crucial for human progress, but our utilization of information systems to support this concept has been slow to catch up. This is evident from the multitude of software systems tucked away in internal company networks. Cloud computing presents an ideal solution for breaking down data silos and unlocking the vast and mutual advantages of information sharing. With built-in safeguards, sensitive company data remains protected, reducing the risk of exposure.
2. Reducing Costs
Some industry-specific off-the-shelf softwares often come with a steep price tag, while custom development entails both high costs and considerable risks. A fundamental principle of Software as a Service (SaaS) is to provide quality software at an affordable price for many users, usually through a subscription model. SaaS solutions typically include software updates and upgrades at no extra cost, and the subscription fees often include a satisfactory level of customer support.
Furthermore, these ports can reduce costs significantly as they no longer need to invest heavily in on-premise infrastructure or bear the expenses of maintenance. They can also avoid the need to hire round-the-clock management and technical teams. Instead, ports can leverage a combination of cloud infrastructure and utilize the expertise of cloud service providers' specialists.
3. Work From Anywhere
Cloud computing allows your workforce to work from anywhere, presenting a compelling business case that extends beyond navigating the pandemic crisis. Global trends have been shifting towards more flexible work arrangements. Offering a work-from-home option can be a significant selling point for businesses seeking to attract top talent. Flexible working has also been proven to enhance job satisfaction and boost productivity. Moreover, with a cloud-based system, you can effortlessly integrate external contributors, such as agents, stevedores, and others, into your work environment.
4. Safe and Secure Data
Cloud providers have made significant investments in enhancing the security and reliability of their systems. Advanced security features, such as multi-factor authentication, encryption, and access control, have become nearly standard across the industry. The potential consequences of a security flaw or hack on their systems would be disastrous for a cloud provider's reputation, leading to a strong commitment to maintaining constant vigilance and ensuring the utmost data security for their clients.
Combining cloud services empowers your business with the ability to scale the terminal infrastructure according to the current demands. This approach is significantly faster and often more cost-effective compared to the traditional practice of purchasing and managing on-premises technology, which requires maintenance and upgrades. Cloud providers benefit from economies of scale, providing added advantages for port terminals.
Cloud computing enables real-time data access, enhancing supply chain visibility
Benefits of Leveraging SaaS Solutions in Logistics
One notable application of cloud computing in logistics is Software as a Service (SaaS) solutions. SaaS applications are designed to be lightweight and modular, with a clear division of functions. Companies utilizing SaaS gain advantages from a nimble and robust IT infrastructure, better equipped to cope with the challenges and uncertainties in the global supply chain post Covid-19.
SaaS solutions are a significant milestone in the management, operation, and exploitation of seaports, especially during the Industry 4.0 revolution. Through cloud computing, SaaS softwares intelligently connects various components of the logistics chain, including import-export businesses, seaports, shipping companies, banks, container terminals, inland ports, logistics service providers, transportation, and government agencies. This creates an intermediary operational center, enabling real-time processing of online services.
The first application of SaaS that we would like to mention is the cloud camera surveillance system, such as vCloudcam by VNG Cloud, which brings superior benefits in port monitoring with advanced AI features (Motion Detection, Facial Recognition, People Counting, License Plate Recognition, Abnormal Behavior Detection...), enhancing security, improving management efficiency, and optimizing port operations.
Furthermore, many logistics softwares ensure authentication and identification of all participants in the system. It also facilitates the issuance of legally valid electronic documents (e-invoice, electronic delivery order - EDO, etc.), meeting the needs for digitalization and information security for businesses. For import-export companies, accessing and utilizing services like transportation through an app for calling trucks with reasonable costs and time, cargo insurance, and financial services such as export contract financing and import-export payments are made possible.
Meanwhile, transportation companies benefit from more efficient transportation as they can find return trips when delivering goods to ports. Specifically, the container booking feature, similar to Grab/Uber models, allows truck owners to find additional return trips, reducing costs and minimizing traffic congestion on critical routes near the port area.
Companies can also interact with empty containers, handle loading and unloading at the terminal, extend storage, and make payments using their business cards, eliminating the need to go to the physical locations. The system automatically recognizes containers, enabling quick queries of their status, online image viewing, and container quotation.
SaaS solutions has empowered logistics operations
Not only does SaaS support businesses, but it also aids government authorities. Shared data empowers these agencies to enhance their management role, obtain accurate information for cargo statistics, traffic density, and make decisions related to port infrastructure management. With the cloud software, Customs authorities can effectively monitor information related to foreign containers entering and exiting ports, as well as domestic cargo and container operations within Vietnam. The system also issues red alerts for scrap containers that have not been cleared.
For port authorities, the SaaS software provides a comprehensive overview of cargo information with real-time reports on cargo throughput. It also depicts the destination and timing of exports, integrated with transportation services. Furthermore, some softwares can be integrated to monitor all empty containers and process all containers from shipping lines, allowing government management agencies to easily supervise the process. And such critical data can be stored in the cloud and quickly synchronized in real-time.
In conclusion, digital transformation is not merely the future; it has already become a firmly established business standard. Cloud computing, in general, and SaaS, in particular, have created a breakthrough in port management and logistics, delivering efficiency, time savings, and enhanced management capabilities in the processes. The cloud system plays a crucial role in optimizing logistics operations and fostering the sustainable development of the industry.