This was the conclusion of Drewry at its latest Quarterly Port Sector Briefing, where the key message was that ecommerce is here to stay, so terminal operators need to pay more attention to digitalisation to maximise the benefits of activity.
Eleanor Hadland, senior Analyst in Drewry’s Ports and Terminals practice, said: Ports have a direct role to play in respect of the ecommerce supply chain.”
Drewry believes there are port growth opportunities which the maritime research consultancy has divided into physical infrastructure and digital infrastructure.
The shift to ecommerce is increasing demand for warehousing space and ports are well positioned to meet this demand.
The ecommerce shift is an opportunity for operators with a port-centric logistics model. This model works best for ports “with a populous hinterland and large land resources”, explained Hadland. Cost savings can be made for larger retailers by reducing the first mile of distribution costs. Compressing the supply chain at the point of entry can removing a costly inland move that may not be required.
There are opportunities for older city ports to provide urban logistics solutions. Many retain multimodal transports links that could be adapted to serve the eCommerce market. This could also help green the industry.
Digital infrastructure
The drive for operational efficiency has seen investment in digitalisation. “Digital initiatives have become service lines in their own right.”
Hadland highlighted PSA International’s data smart approach. “PSA was quick to identify that achieving further efficiency gains related to the physical movement of goods through its terminals was intrinsically linked to improving the performance of both the financial and regulatory or compliance flows associated with the goods.”
The drive for end-to-end supply chain visibility will require ports to address data flows as well as cargo flows, the shift to eCommerce reinforces the business case for port centric logistics, and failure to invest in digital connectivity could result in loss of physical connectivity, summarised Hadland.
eCommerce growth
China is the largest eCommerce market in the world. India and Indonesia are key markets due to their populations and mobile technology appetite. Initial growth in Indonesia has been centred around airports, but as more inventory is held in the country rather than Singapore, ports will benefit too, said Hadland. SEA’s delivery barrier to growth will also help drive logistics infrastructure investment which will help ports. “We see the emerging markets as having very strong growth potential,” she said.
Inland ports, including barge and rail connected ports are critically important for ecommerce, well positioned and already integrated in the supply chain network. “Digitalisation is just as important at an inland port as it is a main seaport,” pointed out Hadland. Although, she noted, they are often trading domestically. She added HAROPA’s recent merger has put it in a position to invest in ecommerce-based distribution.