“PORT COMMUNITY SYSTEMS.FACTOR IN PORT’S COMPETIVENES”

Javier Gallardo MartínezDeputy Managing DirectorPORTIC Barcelona S.A

The Actual Ports situation

• More competitive market for the Ports. Ports should achieve an attractive logistic position inside the international commerce

• More decision and negotiation power in hands of “end users ports”. Standards ports costs and logistics services allow them to negotiate

• Shipping companies concentration's process. “Efficiency Less Ports more Offers”

•Differentiation: Excellent Services & new added value Services.

•Global Logistic. “Door to Door – JUST IN TIME”

•Efficiency. “ More value &

services with less resources”

Port Communities need new solutions to help its companies to improve its competiveness and the right use of Information Technologies can help the Ports to achieve its objectives very efficiently

Information flow in a traditional logistic chain

Aduana

Agente Aduana

Autoridad Portuaria

Consignat.TransitarioBanco

Terminal Estiba

Transporte terrestre

Exportad.

Servicios Paraduan.

Capitania Marítima

Sociedad Estiba

Aduana

Agente Aduana

Autoridad Portuaria

Consignat. Transitario Banco

Terminal Estiba

Transporte terrestre

Importad.

Servicios Paraduan.

Capitania Marítima

Sociedad Estiba

Armador

Barco

The information flow in a Port follows no standard document and non written and obsolete process. The new IT advantages & tools are not normally being using to improve the global efficiency of these circuits.

Port Community System (PCS )

Customs Agent

Customs Agent

Customs

Customs

Customs inspection offices

Customs inspection offices

Shipping Agent.

Shipping Agent.

Inspections Services.

Inspections Services.

Customs Inspection offices network

EDI

Freight Forwarder

Freight Forwarder

Stevedors

Stevedors

PCS System

Importer Exporter

Importer Exporter

Shipping company

Shipping company

Banks

Banks

Land Transport

Land Transport

Insurance

Company

Insurance Company

Air lines

Air lines

Handling Company

Handling Company

Airport

Authority

Airport Authority

Airport master’s

office

Airport master’s

office Air Authority Network

OthersOthers

Port Authority

Port Authority

OthersOthers

Harbour master’s

office

Harbour master’s

office Port Authority Network

Railway Railway

Deposits

Deposits

The PCS works as neural point and enables the communication and the integration of the different systems that interacts in a PORT.

PORT COMMNUNITY SYSTEM ‘S OBJECTIVES

• Simplify and automate the procedures of documentary interchange related to the goods traffic.

• Create information services for logistics agents and for their final

customer.

• Help the agents to overcome the technological and economic barriers of access to new services.

• Progressive implementation of electronic commerce services in the logistics Community

• Simplify and automate the procedures of documentary interchange related to the goods traffic.

• Create information services for logistics agents and for their final

customer.

• Help the agents to overcome the technological and economic barriers of access to new services.

• Progressive implementation of electronic commerce services in the logistics Community

Improve the competitiveness of the Port and the logistic chain

Not only a Technological Project

To establish a PCS in a Port ,not only technical aspects should be considered. It is important to analyze how the Port Community is organized to determinate the priorities in the Business Process Reengineering, which services should be developed and mostly the organization and the business model of the “institutional framework” that will be in charge of running the system. In any case there are some PCS principles will be followed for the success of the project .

Port Community PrinciplesImprove overall CompetivenessNeutral / Non ExclusiveTransparencyEasy Access and UseRespect Local Laws

Institutional FrameworkCommercial EntityCommunity EntityGovernment LEAD

Community AnalysisNumber of members of the Community.Distribution of the members in the activities.Local or international companies.Preexistent Systems in the Community.IT Knowledge.“Community Feeling”

Technical Point of View

Value Added

Services

Standard Protocols

Message Brooker

Business Point of View

The PCS system should cover most of the process that happen inside of a Port. Process among Private Operators are more difficult to implement than Private/Public Operators. It is CRITICAL to keep in mind the overall competiveness of the system but no entity ought to feel a" Looser”. The import/export “end user” have to notice the advantages of the new system, more information, security, transparency

The PCS system infrastructure are built over well known and IT standard technical protocols in the community ( communication, security, formats). The message broker is in charge of rules the “message interchanging”. Thanks to the message interchange valued added services can developed, cargo and vessel tracking, truck’s fleet optimization, inventory and warehousing system.

no

30%

yes

70%

information

services 30%

doc exchange

serv26%

other

6%

information

services + doc exchange

19%

financial

10%

electronic

invoice9%

Financial services and electronic invoice are offered in few cases. Information

services are the most common services offered (49%) Although the

difficulty of offering documentary exchange, it is offered by almost 45% of

cases.

Questionnaire on PCS: Presentation of Preliminary results

What kind of services is the PCS offering?

Did the Port undertake a process of re-engineering of processes in order to develop the Documentary exchange services?

70% of PCS declared that a process of re-engineering of processes was undertaken when building the PCS.

In most cases, it still continues.

yes49%

no44%

no answer7%

Questionnaire on PCS: Presentation of Preliminary results

Do you charge the PCS use? In 44% of cases, the use of PCS is

financed by public administrations or by the Port authority.

In the cases that the use of PCS is charged, there are several criteria: (number of messages sent, per byte,

per subscription,…)

Port Authority30%

Port Authority + other(port

community,customs,..):

19%

Customs4%

Port operator / private36%

Government/ Ministry

11%

Which entity/ies own the PCS currently?

In 64% of cases PCS are owned, partly or totally, by a public entity (Government/Ministry, Customs or Port authority)

Port Community ‘s Hazards

DIFFICULTIES

• Change management project

• The Selling Process

• Ensure ROI Company

• Establishment of new procedures

• Information Access

DIFFICULTIES

• Change management project

• The Selling Process

• Ensure ROI Company

• Establishment of new procedures

• Information Access

The PCS implantation is quite hard, it is drive as IT project in the beginning, but in fact it is a change management project across a port community and it requires a great COORDINATION work. The services should be sold by (paid /used) someone to the port’s companies it requires a great effort of selling and marketing activities. Companies apart from “buying the service” need to make an inversion in IT projects and change its internal procedure to take profit.The maritime activity is ruled by old procedures that have been designed long time ago and change these procedure is hard to do without the definition of a clear leadership. The agreements are should be achieved by all. Forum of experts have to be constituted to discuss and agree the news rules and procedures.Most of the companies are afraid of who is going to get access of the information. The system and the companies in charge must guarantee the security of the information.

Port Community ‘s Profitability

ECONOMIC RESULTS

INCOME (TOTAL SAVE COST)

TOTAL MESSAGES (Year) = 9.000.000 msg

Total Save Cost per Message = 3 €

INCOME ( TOTAL SAVE COST) = 27.000.000 €

COST

CAPEX= 7 M €

COPEX = 1.5 M €

ECONOMIC RESULTS

INCOME (TOTAL SAVE COST)

TOTAL MESSAGES (Year) = 9.000.000 msg

Total Save Cost per Message = 3 €

INCOME ( TOTAL SAVE COST) = 27.000.000 €

COST

CAPEX= 7 M €

COPEX = 1.5 M €

OTHER RESULTS

• Time’s reduction of the total PORT operation.

Time in terminal.

Time in queues.

Administration time.

• Transparency , Traceability -> Security.

• Port Community Cohesion.

OTHER RESULTS

• Time’s reduction of the total PORT operation.

Time in terminal.

Time in queues.

Administration time.

• Transparency , Traceability -> Security.

• Port Community Cohesion.

The ROI of a PCS is very significant if we take in consideration the “save cost “ of the administration of no “retyping” the information. But we can considerate it “peanuts” if we compare of with other issues that are improving due to the PCS ‘s use. Time reduction is the point for a Port Community if we succeed to reduce the stay of the cargo in terminal we would increase the terminal productivity. Other example could be the reduction of the time queue of the trucks, it can be achieved if use the PCS to preannounce the arrival of the trucks to the terminal. The effects of a PCS can be shown to import/export and also to other Logistic Operator across the world. The PCS helps to theses operator to trace the cargo and do operations.

CONCLUSION

• PCS is port community project with the support of Port Authorities.

• PCS is a change management project. Not only IT project.

• Business Organization in charge of the system is critical.

• PCS is a very high profitable project and adds great value to port’s image.

• PCS is port community project with the support of Port Authorities.

• PCS is a change management project. Not only IT project.

• Business Organization in charge of the system is critical.

• PCS is a very high profitable project and adds great value to port’s image.