All Aboard for the Middle East’s Port Digitization

Ports and logistics companies need to harness IoT technology to enhance collaboration and port Operations, and develop digital talent. Kamel Al Ghossaini, Head of eSCM LOB – MENA at SAP, writes

Nearly thirty years after the Sharjah Container Terminal opened as the Middle East’s first modern port, Gulftainer, like many global port operators, faced significant challenges: how to handle growth, while remaining competitive in light of the rising cost of trade, tight labour markets, and infrastructure and regulatory constraints.

Many GCC cities are expanding or building new ports to meet the increasing throughput from post-Panamax ships, and Gulftainer, like many Middle East port operators, is turning to the Internet of Things (IoT) to drive value in the digital economy. By 2030, there will be at least 50 billion connected things and a value at stake of $14tn.

Using IoT solutions, ports and logistics companies can overcome challenges such as poorly integrated third-party software interfaces, difficult exchanges of data between subsidiary companies, and not enough transparency on supply chain silos. With sensors on ships, containers, trucks, and parking spaces, the entire supply chain – from docking to unloading to parking – can be quicker and more efficient.

At the Sharjah Container Terminal, Gulftainer developed a far-reaching digitisation plan that replaced the legacy ICT infrastructure to maximise its operations and deliver value, without having to physically expand.

On the back-end, Gulftainer deployed innovative solutions across enterprise resource planning, finance and payroll, and business planning and consolidation – providing real-time dashboards to enhance decision-making, employee productivity, costs, and sustainability, while supporting the UAE’s diversified economic growth.

Gulftainer also leveraged best practices from Germany’s Hamburg Port Authority, Europe’s largest port. Hamburg uses real-time connected logistics solutions on the SAP HANA platform to reduce total truck time by 5,000 hours per day, enhance throughput and environmental benefits, and prime the port to double capacity by 2025.

Collaboration at Sea Boosts Business

With global energy demand set to grow by one-third to 2040, the Qatar Gas Transport Company, Nakilat, is expecting to grow its liquefied natural gas (LNG) operations in the coming decades.

But going into 2015, Nakilat’s senior management realised that its legacy ICT infrastructure was holding back its competitiveness. In response, Nakilat’s long-term digitization strategy has consolidated its data centers and IT departments, while implementing new solutions across the cloud, mobility, and ship management.

For example, employees can access real-time insights on their mobile devices, and the boardroom can access mission-critical financial and ERP reports more promptly. Nakilat has more agility, innovation agenda, and advanced technology to fuel future business strategies.

Currently, Nakilat is doubling the bandwidth on its 67 vessels, providing reliable communications for employees to make video calls with colleagues, business partners, and families, along with automating tasks such as reporting, and providing highly secure data backup systems. Overall, Nakilat has reduced annual costs by 50%.

All Aboard for Digital Talent

In the Digital Economy, we are facing the rise of advanced technologies and digital-native Millennials entering the workforce. Ports and logistics companies not only need robust ICT infrastructure, but also public-private partnerships to provide a pipeline of skilled local talent to drive digitization. As automation continues, truck drivers and crane operators will be less important than data scientists and Chief Digital Officers.

Nakilat, for example, uses cloud-based talent management for scalable mobile apps for employee services and human resources executives, which have also increased productivity, performance, and collaboration.

At SAP, we’re committed to helping ports and logistics companies to simplify their IT, and free up time, money, and people to focus on innovation. Our Connected Logistics Platform enables collaboration across the ports and logistics ecosystem, boosting efficiency and effectiveness in the hub business of port authorities and operators.

With one research firm showing the Middle East’s logistics market reached $27bn in 2015, Middle East ports and logistics companies need to lay out their innovation agendas by 2017, or risk falling behind competitors.
Khamel Al Ghossaini is Head of Supply Chain at SAP MENA, which has more than 25 years of driving innovation in the ports and logistics industry.