Jack of all trades

What’s on the wish list when it comes to Terminal Operating Systems (TOS)? “We would want a TOS that gives us a competitive advantage; we look for providers that we can trust, that give us optimal services, a scalable, high-performing and responsive software,” says Afzal Khalfay, vice president of IT at DP World.

“We also look for adaptability and the ability to work with other providers so that we can have solutions that satisfy our multiple requirements. Last, but not least, cost also plays a major factor in our choice-making process with regards to TOS. Naturally, a TOS has a direct impact on the efficiency and performance of a port – which, in turn, impacts costs of operations.”

A challenging list, then, for the providers – whose customers have always been cost conscious but never more so than now.

“Controlling costs is a primary driver of innovation,” says Michael Schwank, president of Tideworks Technology. “Terminal operators have always kept a close eye on cost, even more so in the past couple of years. The goal is to do more with the same or even fewer resources in terms of infrastructure, equipment and staff.”

A number of Tideworks features fit into that category, he says. For example, in gate automation and centralisation – automating the capture of as much information as possible, including container number licence plate number and driver’s licence number; and utilising the internet to conduct as much business as possible before a truck arrives at the terminal, for example to avoid trucks coming to the terminal to pick up a box that hasn’t cleared customs, or enable a cargo interest to pay demurrage online, making it faster for the truck to be processed at the gate.

Kaustubh Dalvi, Master Terminal director at Jade Logistics, says: “In the current challenging economic conditions, there is more demand than ever for improving efficiencies. Terminal operators are essentially looking for a single, reliable and scalable platform for managing their IT requirements. This has expanded the boundaries of a TOS beyond the usual and into peripheral subsystems or functions that previously interfaced with the TOS.”

One such area is invoicing, he says, where terminal operators are looking for a system that has the necessary automation to calculate charges for services offered in real time as transactions occur. “This significantly reduces the rework and administration overheads that are involved in manual invoicing methods and, most importantly, mitigates the risk of revenue leakages associated with human errors. In addition, if the TOS is able to electronically process the invoices through to customers – i.e. e-invoicing – then it is a big tick in the box on the terminal environment performance along with the associated cost savings.”

DP World uses various TOS from different vendors, as well as its own in-house systems; the variation depends on the location as well as specific requirements of each terminal, says Mr Khalfay.

“A joint solution offers us the flexibility to adapt to the different requirements of our terminals. With more than 60 terminals in six continents, a single solution does not necessarily meet all our requirements, particularly our location-specific requirements.

“When we are considering a TOS, we like to look at a combination of products that satisfy our requirements at all ends, and a mix of in-house and third-party solutions does the job.”

Both in-house and third-party systems have advantages and disadvantages, says Jade’s Mr Dalvi.

“However, by engaging with a third-party vendor for the supply of a TOS, the terminal operator is able to concentrate on its core business/competencies and leave the maintenance and/or enhancements of the TOS to the vendor.

“A TOS vendor who has global experience in various types of port operations, backed with a good mix of technical and industry skills in its team, will bring immense value and provide the critical thought leadership to the terminal operator that is necessary to get an external perspective.”

In the case of home-grown systems, the terminal operator has to employ and maintain a dedicated team of skilled resources, and is responsible for the fixed and variable costs, HR and admin overheads, points out Mr Dalvi. “In-house systems can also experience situations when users make frequent and inconsistent system changes which, if not controlled by robust SDLC [software development life cycle] processes, could affect the system’s stability and maintenance costs.

“Frequent and inconsistent changes made to the system can also result in the system growing in unwanted complexity, size and redundant code, making it difficult to implement the system at subsequent facilities.”

At Tideworks, Michael Schwank says the main advantages of a third-party system include cost, speed, lower risk and focus. “It costs a great deal of money to develop a system, maintain it, support the user base, and run the IT department needed for this,” he says.

In terms of speed, a terminal operator typically can start up with a third-party system in a matter of weeks or months, he says, whereas an in-house system project is ‘more often measured in years’.

Where a third-party system has been proven to meet the customers’ needs through previous installations, an in-house system may or may not end up working as expected, says Mr Schwank. Finally, focus: developing and managing a system can be a major distraction from the terminal operator’s core business.

However, he says, an in-house system might make more sense for some operators, particularly when the operation is ‘very unique’.

“We support a terminal operator’s discussion of this option, as it leads to a set of important questions, such as: What will it cost us to maintain the system if we build versus buy, including personnel, infrastructure and training, among other factors? What are the step by step processes for each part of the operation? Where can the terminal adapt or improve processes even without upgrading technology?”

There are also questions of cost of customisation and support of licensed software, whether the vendor of such software will be around in five or ten years’ time, and whether this software will be developed to keep up to date with technology.”

When Tideworks has replaced legacy systems in the past – often in-house developed systems – it has incorporated established processes into its own system, particularly when those processes are based on regulatory or program requirements, says Mr Schwank. “This offers a terminal operator the best of both worlds – a proven system with a strong support team and the ability to tweak the system as needed to meet unique operating requirements.”