FROM MAGAZINE: Port of Rotterdam is the front runner in digitisation and innovation
Port of Rotterdam, the largest port in Europe, has been supporting the supply chain companies to prepare for the consequences, if a no-deal Brexit happens. Speaking to Shalini Nair, Alexander Philipsen, business manager containers – deepsea
Port of Rotterdam, the largest port in Europe, has been supporting the supply chain companies to prepare for the consequences, if a no-deal Brexit happens. Speaking to Shalini Nair, Alexander Philipsen, business manager containers - deepsea & feeder containers, breakbulk & logistics explains that ample amount of investment can be done in digitisation but the core of business lies in developing a suitable physical infrastructure.
How will be the signing of the Customs Treaty between the Netherlands and India impact the Port of Rotterdam?
India has very much improved its business climate. We have seen an increase in import of pharma products and plastics to India from Western Europe, and expect this growth to continue between our port and India. One important factor which will push this relationship further is this treaty, which will definitely give a boost between both the countries trade. Hence, Rotterdam will benefit when it comes to sea freight. The treaty is all about the efficient exchange of customs information, save time and money. Once materialised, cargo can pass our borders efficiently.
If no-deal Brexit happens, what major changes do you expect in Rotterdam's business?
For us, the UK is the fourth largest trade partner after Germany, Belgium, and Russia, in terms of total throughput which accounts for 40 million tonnes annually. Brexit definitely will have an impact, which will affect the customs formalities and inspection - affecting ports, shipping companies, and supply chain system. For instance, if a German company has to ship via Port of Rotterdam to the UK, it must make sure that the documents are intact otherwise the cargo will not only be rejected at the port of Rotterdam but also in the whole supply chain. It is very important that everyone must prepare themselves for Brexit. The impact will be higher cost, delays, and disruptions at ports and terminals. Our port has estimated a volume loss of 2 percent or maximum up to 4 percent in the UK volume. In the long term, the impact is quite uncertain. One such scenario could be Commonwealth Cargo which is being transshipped in the UK may directly come to the port of Rotterdam, which could be an advantage for us. It is still a guess and depends on what kind of Brexit it is.
Due to Brexit, we need to make sure that process at the port is encountered with less disruption as much as possible. We have made additional parking space for trucks as they cannot enter the terminal till they wait for customs clearance. We do not want the whole line of trucks interrupting other cargo flows; it is not only concerned with the UK trade.
How digitising is changing the shipping business at your port?
We are moving in a phased approach for ports through Port Forward, which is not really a platform. It is a process of maturing in terms of digitisation. First of all, there is individual automation, where there are individual companies focusing on digitisation. The second phase is an integrated system in the port, where stakeholders in the port start exchanging information. In our port community system, there is separate application known as Pronto for a project called Port Call Optimisation - where shipping companies, agents, terminals and other service providers exchange real-time data to optimally plan, execute and monitor all activities during a port call based on standardised data exchange. The third phase is an integrated system from port to the hinterland, to integrate the systems. Here, inland barges, inland terminals, and inland service providers exchange information with Rotterdam providing us more transparency, reliability, and predictability.
Despite all this, we still feel there is a lot of room for improvement. Thirty percent of cargo is still not on time, shippers' still demand transparency, and for a single shipment 200 documents are needed - digitisation will change this scenario.
Our digital business solutions (DBS) department was established in 2018, focusing specifically on optimising logistical processes in the port and logistics chains passing through Rotterdam. Now we have 90 people working to develop a digital product to improve efficiency for our customers. We can also sell these digital products with a license to another port or terminal. We would like to think of ourselves as a front runner when it comes to digitisation and innovation. For Indian ports, we can develop such products as India has a high level of innovation and digitisation, there is a lot of potential in the country.
What are your future initiatives for the shipping industry?
As a port, you need to maintain your infrastructure. You can invest in digitisation but if your physical infrastructure is not proper then the entire business gets ceased. Port of Rotterdam can accommodate larger vessels on the main trades generating a lot of business. There is a lot of vessels coming at the same time, you need to process those volumes in a proper way, digitisation is one way. But also to keep our physical infrastructure up to date, we are building a dedicated container exchange road (CERs) to connect all the five terminals at Maasvlakte area to the port for smooth exchange of containers. This %u20AC175 million project is expected to be commissioned by Q1 of 2021. The CER will link the deep sea container terminals, empty depots, rail terminals and distribution companies at Maasvlakte. The project will reduce exchange costs between the various companies and further improve connections with the European hinterland.
Which markets have been the major drivers in contributing to your business?
In Q1 2019, we have handled a total throughput of 123.9 million tonnes. In 2018, we handled 8,635,782 of total containers and a total throughput of 468.9 million tonnes. Our 2018 growth was driven by China with commodities like clothes, reefer cargo, etc. Others markets which will continue to grow are Russia and Germany.
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