Time for Ports to Embrace Change

By Gene Seroka
 
Recently, it was suggested that we need to ask hard questions about the Port Optimizer. To address these, it is important to first pose a broader question: Are we collectively willing to be the change we want to see?
 
Ports are in the unique position to facilitate transformational change for the global supply chain. Artificial intelligence, blockchain, the Industrial Internet of Things, and other next-gen technology will redefine the way cargo and services move through the physical environment of a port complex. If we responsibly harness their potential, these advanced solutions can position ports as trusted partners in digital infrastructure… just as we are in physical infrastructure.
 
Would this set a precedent? Absolutely. Ports are publicly accountable agencies serving at the confluence of the maritime supply chain.  It is for this central reason that ports are best positioned to drive the evolution from merely offering physical infrastructure to offering an integrated mix of physical and digital infrastructure.  This mix adds value to port operations and creates a new data-rich environment from which everyone in the industry – from shippers to receivers and from innovators to laggards – can benefit.
 
It all starts with data.  The digital transformation to smart ports requires enabling the highest use of available data while respecting the proprietary nature of that data.  It means creating industry-wide recognition of the value of data, of capturing it, and turning it into actionable insight across the end-to-end supply chain. 
 
In Los Angeles, we have taken the first steps in this digital transformation with the Port Optimizer information portal. After issuing an open request for proposals in 2016, the Port selected a relative outsider to our industry, GE Transportation (GET), to bring in new capabilities and a broader perspective.  Together with GET, we are developing a prototype solution that addresses information-sharing needs identified through countless hours of public engagement, stakeholder feedback and user discovery. Even today, as we expand features and functionality, we continue to develop the portal as informed by the experience of these participants.
 
Our portal is designed to give businesses greater visibility and line-of-sight planning capability. As a result, cargo owners, shipping lines, terminal operators, trucking companies, railroads and other businesses receive a two-week head start to plan operations and allocate resources, all thanks to data sharing.  And, because the providers of data define the uses and ownership of their data, concerns about data misuse are unfounded.  Your data remains your data.
 
Simply put, think of the portal the same way you think of a bridge. The movement of a container involves both the physical transportation of the box and the timely transfer of information about that box.  A bridge is a piece of shared physical infrastructure that allows businesses to efficiently move the box; the portal is a piece of shared digital infrastructure that allows businesses to efficiently deliver information about the box.  All the while, the box and the information remain the property of the owner.
 
To continue the analogy, just as ports spend their funds to provide shared physical infrastructure – like a bridge – ports should now fund shared digital infrastructure. That’s why we invested $13 million in this initiative; and it’s why we provide incentives for our customers to use our mix of physical and digital infrastructure. 
 
We know that transparency and collaboration are key to becoming a trusted partner in digital infrastructure. At the Port of Los Angeles, we are proud of our history of open collaboration on environmental, security, and supply chain optimization initiatives.  These efforts have served as models around the globe.
 
The Port Optimizer is no different. It was essentially crowdsourced by the ports and industry partners in the wake of supply chain disruptions in 2014-15. Collaboration started with the San Pedro Bay Supply Chain Optimization Working Group formed with the Port of Long Beach under the auspices of the Federal Maritime Commission (FMC). Shippers, carriers, marine terminal operators, truckers, railroads, and organized labor joined in that effort, motivated by a shared sense of urgency to avoid future disruptions. Similarly, the FMC’s Supply Chain Innovation Teams and the Commerce Department’s Advisory Committee on Supply Chain Competitiveness convened sessions focused on data and information sharing.
 
Outreach to actual data owners yielded critical insights on data security and integrity. Cargo owners are rightfully concerned about protecting their data.  So while making all data publicly available sounds like good policy, when dealing with proprietary industry data, subject to federal protection (such as the SAFE Port Act), it’s a non-starter. That’s why the Port Optimizer uses channeled access and operates on a comprehensive and secure application platform with ISO 27001-based controls, such as encrypted data protection, access controls, proactive monitoring and stringent retention policies.  It’s the right thing to do and it’s explicitly what our data providers have requested.
 
Ironically, the special interests posing these “hard questions” are the same current San Pedro Bay technology providers that have been unable to bring forth the solutions that are needed today. The truth is the hard questions about the Port Optimizer have long been answered. Concerns about security, transparency, and use of data have been addressed through a robust and collaborative process.  Today’s Port Optimizer is a reflection of what our stakeholders want and what they don’t want.    
 
So, in my mind, the real question is this: Are we prepared to be the change agents to usher in the digital age of maritime transportation?  Speaking for one port, I say yes.  And to facilitate our digital transformation, I have and will continue to offer a hand of partnership, in a genuine spirit of collaboration, to anyone that wishes to make the journey together.
 
Change is hard.  We must work to ensure those negatively impacted by change can make the transition.  But to those who would foment fear to protect the status quo, and to those who raise the specter of “data monopolies” while themselves sitting on data fiefdoms, I say this: Change is coming.

Gene Seroka is the Executive Director of the Port of Los Angeles.