The disruption caused by the covid-19 pandemic has shined a spotlight on the global supply chains that play a critical role in the smooth functioning of the global economy. Unexpected factory closures in different countries interrupted crucial supply links, causing shortages and delays in deliveries. Now the risks of a second and perhaps third wave of Covid-19 infections—as well as the risk of a new pandemic down the line—have to be added to the already prominent risk of protectionism as potential shocks to global trade.
Companies can—and should—react in two ways: Make their supply chains more adaptable and resilient; and make the entire global supply chain more efficient.
Digital technologies will play a crucial role. Wärtsilä, the Finland-based technology leader in marine and energy market technologies, understood this early on and has stepped up its efforts for the digitalization of the maritime sector. To more quickly ramp up its capabilities, Wärtsilä has also relied on acquisitions such as that of Transas in 2018, a specialist in marine navigation solutions that has become a key driving force in the company’s marine digitalization strategy.
The latest result of this strategy is the recent launch of Wärtsilä Navi-Port, a new technological solution that connects a ship’s navigation systems to the port.
Navi-Port exemplifies how digital technologies can yield substantial cost savings by addressing basic inefficiencies that are extremely simple to identify but equally hard to solve. In the case of maritime transport, ships often arrive at their destination only to find that the port is not yet ready to receive them, either because there is no free berth where they can offload the cargo, or because there is no tug available to pull the ship in, or because other crucial port services are already operating at full capacity. The arriving ship is then instructed to wait at anchor outside the port. The wait can stretch for a significant period of time: studies have estimated that container ships spend on average 6% of their time at anchor. This results in wasteful fuel consumption, unnecessary emissions, and port congestion that can in turn cause safety risks.
Wärtsilä’s system enables Just In Time arrival: as soon as it becomes clear that the port will not be ready to receive a vessel at the original Estimated Time of Arrival (ETA), the Navi-Port system communicates an updated ETA to the ship’s navigation system, which can then reduce the vessel’s speed accordingly to meet the new ETA.
This results in lower fuel consumption for the ship; reduced emissions both during the trip and at port, and reduced congestion and greater safety at port. The communication works both ways: in cases where the ship is delayed for independent reasons, informing the port authorities will enable them to better organize their operations.
The main challenge lies in ensuring the coordination of a significant number of different stakeholders, including the multiple authorities responsible for different operations in the port. Some ports already have fairly sophisticated digital systems in place to share information and coordinate operations across the different entities operating on-shore—others less so. A greater degree of coordination at the port can translate into greater advance notice to the ship in case of delays—and greater advance notice translates into bigger savings. In all cases Wärtsilä works with the port to optimize the communication with the ship’s navigation system.
Wärtsilä has already launched a number of successful pilot projects with major ports around the world. The benefits can be substantial. In a white paper, Wärtsilä estimates that advance notice of ETA delays on long voyages can yield fuel savings of as much as 10%. Wärtsilä’s team also estimates that for the port of Singapore, optimizing Just In Time arrivals for the last 72 hours for 50% of arriving vessels could save $160 million a year in fuel bills and 1.6 million tonnes of CO2, equivalent to the emissions of 340,000 cars.
The magnitude of these potential savings, and the success of Wärtsilä’s pilot projects, should help accelerate the deployment of the system. Dmitry Rostopshin, Wärtsilä’s General Manager for Ship Traffic Control and Management Solutions, points out that the adoption of a new system like this suffers from the classic chicken and egg problem: ports have a greater incentive to adopt it if more ships have already embraced it and viceversa. So as more ports and shipping companies experiment successfully with the system, this should encourage more participants to jump in.
We are still in the early stages of the digitalization of the marine industry, and Wärtsilä is very aware that the potential system-wide benefits would be maximized by a single common standard across the industry. If different ports and shipping companies adopt incompatible communication platforms, so that some ships can only efficiently “talk” with some ports but not others, lack of interoperability will negate a large part of the potential efficiencies. Wärtsilä has therefore adopted a very open approach, and is part of the International Port Call Optimization Taskforce to help maritime authorities and industry players converge to a single common standard.
Eventually, this will lead to the full digitalization of the maritime sector: ports will be able to schedule the offloading, loading and servicing of ships based on a dynamic digitally-enabled planning system, rather than on a first come, first served basis. This in turn would ensure greater efficiency, predictability and speed in the departure of offloaded goods from the port to their on-land destination, which will accrue additional efficiencies throughout the supply chain and the road and rail transport system (unpredictable delays at ports are a major issue for rail and truck transport). Ship owners and operators in turn would leverage the greater predictability of arrivals and departures at ports to improve their fleet management.
All this will need to be underpinned by continuous strengthening of cybersecurity—already a top area of focus for Wärtsilä. As on-board navigation systems and port management systems become more comprehensive and sophisticated, digital communication systems between ports and ships become ever more important gateways to be protected against cyber-intrusions.
Global supply chains are under stress, and the global trading system will suffer a major hit from the current recession. The silver lining is that the combination of temporarily depressed global trading volumes and heightened need for cost savings and efficiencies creates the perfect backdrop for accelerating the adoption of digitally-enabled solutions like the ones that Wärtsilä is championing. This stands out as one more example of how digital-industrial technologies will be crucial to enable the productivity gains and costs savings that the global economy will desperately need in the years ahead—as well as accelerating progress towards more sustainable economic growth.