The Heart of the Matter

Ports are at the heart of the shipping industry, and will be the centre of its digital ecosystems says Wärtsilä’s Matteo Natali 

There is arguably no greater ecosystem in shipping than the port. It’s the hub of all activity, the point at which ship, shore, cargo and carrier meet to form the onward chain. It is a central node in the supply chain, a melee of activity that is central to the moving of all goods.

As we shall see later in the issue, ports are undergoing a major transformation as part of the digital revolution that is sweeping through the industry. Naturally, improvements to efficiency are a focal point, and with so many stakeholders the port’s role is very much at the heart of a digital ecosystem.

There are few organisations better placed in the industry to talk on this topic than Wärtsilä. Its reputation for providing marine solutions is second to none; of particular interest to the topic of ports are its developments in the fields of intelligent vessels and smart voyage systems. We spoke to Matteo Natali, General Manager, Port Business Development at Wärtsilä to get his views on how ports are developing and how Wärtsilä plans to meet those needs.

What is the biggest priority for ports currently if they are going to meet the future demands of the shipping industry?

I think efficiency and sustainability, just like the rest of the industry. When it comes to efficiency, new digital technology now allows the industry to improve efficiency, not just within the individual stakeholder of the maritime domain system or within the terminal, but at an ecosystem level throughout the value chain. One of the ways to improve the terminal decision is connecting vessels and terminals and improving the interface between the two. 

It is not cut and dried though is it? What applies for one might not apply to another.

Of course, and this is just an example between terminal and vessel. The same applies to all the other stakeholders as well. Port is quite a general term. Port doesn’t actually mean anything. What is a port? It is a space in which we have the port authority, we have the terminal operator, we have the pilot association and we have the tug associations. We have the agents, we have the chief operators, we have the cargo owners, we have the logistics companies, and so forth. So far, all these companies have tried to boost efficiency at an individual level. Now, the trend we see is that the efficiency, there is an attention to the efficiency at ecosystem level. There’s more and more focus on the interaction among those stakeholders. So that of course, is an element of efficiency.

“When it comes to efficiency, new digital technology now allows the industry to improve efficiency, not just within the individual stakeholder of the maritime domain system or within the terminal, but at an ecosystem level throughout the value chain”

Data sharing is an issue between the port stakeholders isn’t it? Why is that?

New digital solutions bring an increased possibility for data sharing and exchange, and for building new businesses and business models at the top of the data exchange. These will of course disrupt ways of working that have been in place for centuries, so it is fundamentally a cultural issue. There are well-consolidated practices and roles within the ports, that will be very difficult to change. 

We have the technology to share data and to improve the operation throughout the value chain, but it will ultimately be down to the industry to adapt and accept change. New technology offers transparency across operations, which is often perceived as a scary word. New processes and tools have to be implemented which will be beneficial in the long run but require some immediate effort. An example of this; in order to enable just-in-time operations, the port needs to provide the ship with a certain recommended time of arrival, based on the berth availability and other set of factors like tug or pilot availability. Many ports today are not able to generate the recommended time of arrival as they operate on a first come first served basis, so have no berth planning at all. Having vessels queuing out of the ports, and emissions and traffic congestion, are not perceived by the port. So, in many cases first come first served ports don’t see enough incentive to implement dynamic slot planning. 

Another barrier that we have identified is demurrage. In voyage charterers, owners and charterers agree on a certain time of arrival at the destination port. Once the vessel arrives, the shipowner issues the so-called notice of readiness. After that, the charterer has a certain period of time, so-called laytime, to unload the cargo and free up the vessel. If the laytime is exceeded, the charterer must pay a penalty fee to the owner, the demurrage. This offers the owner no incentive for slow steaming to arrive “just-in-time”, unless we can demonstrate the potential fuel savings which could compensate for the lost demurrage. This is something that we can now do, and that we must do. 

Our role as technology provider, and our role in the industry, is to create awareness of the huge benefits that everyone would have through sharing information and collaborating with others.

The idea of a digital ecosystem is quite apt in that respect, isn’t it?

Yes, it is. As a technology provider, Wärtsilä is constantly seeking new ways to further improve efficiency, sustainability and safety in the maritime industry. Throughout the decades, ships have become super-optimised, and it is now very difficult to make a step-change in efficiency through conventional product development. So, we started to address inefficiencies also at ecosystem level, which means, in the interaction between the vessel and its surrounding environment. 

Since 2017 we have taken concrete steps to address this problem. Our unique portfolio now puts us in the position to automate the communication between ship to shore, limiting the burden on the crew, and securing that “JIT” advantages are captured both in terms of CO2 reduction and fuel savings. We can combine the port-call optimisation with voyage optimisation, energy management, trim optimisation and several other technologies, which act as a value multiplier for the customer and the environment. 

Basically, the Wärtsilä Smart Marine Ecosystem is about developing the intelligent vessel, connecting into the intelligent port, and really improving efficiency of the interaction between the two. Let’s start from the intelligent vessel. The intelligent vessel, first of all, is not necessarily the autonomous vessel. An intelligent vessel is a one that is ultimately more efficient, more reliable, more sustainable and safer, as a result of digital technology. The objective is to increase the crew’s situational awareness and allow them to take much better and informed decisions, cooperating in a more efficient, sustainable and safe way.

Is that why Wärtsilä bought Transas?

The acquisition of Transas was absolutely central to all of this. This has enabled us with unique capabilities in the market in terms of route and ecosystem optimisation. Transas, now a Wärtsilä company, is market leader in; simulators (with over 5000 simulators installed worldwide), navigation systems (over 10000 vessels equipped with Transas ECDISs) and VTS (with over 300 VTS’s in over 100 ports).

“An intelligent vessel is a one that is ultimately more efficient, more reliable, more sustainable and safer, as a result of digital technology”

With our new portfolio, through the acquisition, we can also offer a fleet operating centre, to monitor ship operations and performance of a certain fleet. The value multiplier consists of combining these four elements into one connected ecosystem so that, for example, a vessel can exchange route with the VTS through the navigation system And the same can be done, for example, between the ship and the fleet operating centre, and specific scenarios can be reproduced at a simulator for training purposes, and so on. I think that with the acquisition of Transas, we have, I would say, the world’s most advanced capabilities in terms of e-navigation and data exchange for optimisation of operations at ecosystem level.

Finally, theses developments are not just economic, are they? 

Not at all. As mentioned earlier, sustainability is becoming increasingly important for many reasons. Environmental regulations are becoming more stringent and more comprehensive. While ports are growing fast, usually close to urban areas, all port-related emissions have a direct impact on the local community. People do not want to see smoke coming out of stacks, they don’t want to see too many vessels waiting at anchor because they know that those vessels are polluting. They do not want to see congested ports and they do not want to hear noise or vibrations. Ports are going become greener and greener, and more respectful for the community they are surrounded by. This is becoming an increasing concern for ports, as well as a differentiating factor that may eventually also impact their competitiveness.