rotterdam 100 - final report - por and cgi

A LOGISTICS NIGHTMARE

Port of Rotterdam and CGI

ABSTRACT

Together with the help of the Port of

Rotterdam and CGI, we have worked on the

idea of using the Microsoft Power BI

dashboard-ing tool to create a dashboard

which will help the port in analyzing and

interpreting the available arrival data of

vessels and trucks.

The team

Team: Alex Ejiofor Irina Mihaela Damian Kimberley Hermann Lars Suanet Luan Nguyen Thanh

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Table of Contents

Introduction ................................................................................................................................................. 2

Business case ................................................................................................................................................ 3

a. Analysis Phase ................................................................................................................................. 3

b. Solution ........................................................................................................................................... 5

The Process .................................................................................................................................................. 6

How we came with this solution .............................................................................................................. 6

How we worked on it ............................................................................................................................... 7

Business canvas model (BCM) ................................................................................................................. 7

Innovation ................................................................................................................................................ 7

Benefits .................................................................................................................................................... 7

Feasibility ................................................................................................................................................. 8

Conclusions and recommendations ............................................................................................................. 9

Appendix .................................................................................................................................................... 10

References .................................................................................................................................................. 17

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INTRODUCTION This paper is a report on the solution proposed by the team to solve the logistic problem that the Port of Rotterdam (PoR) has with the “traffic” congestion of different vessels trying to dock, and trucks trying to reach the port. This issue is caused by the inefficient transmission of data and information between the parties.

Every day, there are 20 deep-‐sea vessels, 6000 trucks and 100 inland vessels that come to the PoR to transport 22,000 containers (TEU) from, and to, the hinterland. A large amount of data is transferred daily within the Rotterdam Port, but if there is any delay in the transmission of data, it can cause a slow response, or even delays in the delivery of the transports., which will affect the entire chain of operators. The congestion comes with costs of time and money, for the Port as well as for the stakeholders, leading even to loss of clients.

In order to solve this congestion problem, the team has come with the solution for the Port of Rotterdam to use a tool that will collect all related information from the daily activities that directly influence the work flow within the port, and have the same tool read the collected data, display patterns of behaviour and eventually forecast operational scenarios. As a result, the Port of Rotterdam will be at the leading edge of optimal logistics.

Due to limitations of the project, our team will use an existing 3rd party dashboard-‐ing tool in order to create the dashboard that will display the necessary information.

We will continue the paper by showing, step by step, how we reached the proposed solution, describing the solution in more details and showing how the Port of Rotterdam and the Rotterdam city will benefit. In our work, we have applied the CGI SPION framework, the business model canvas, along with the value proposition model in order to analyse the situation, the possibilities and the final outcome.

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BUSINESS CASE The CGI SPION framework helped us in analysing the situation as it is now, the problems that the PoR is facing and the impact of those problems. This framework, however, does not only provide an analysis, of the business case, but also includes the best solution and it takes into account the utility of the solution as well. a. Analysis Phase

S – Current situation The port area is more than 126 km2. Approximately 30,000 seagoing vessels and 110,000 inland

vessels visit the port of Rotterdam every year. The Port itself acts as a hub in which a large amount of information is exchanged daily between parties and terminals.

P – Problems (issues) A major problem that the Port Authority is facing is the misalignment between the estimated

time of arrival (ETA) and the actual time of arrival (ATA) for the deep-‐sea vessels, which leads to delays of the barges, the inland vessels and the trucks, in the end causing high traffic congestions.

Also, another issue is that many of the vessels coming into the port do not provide correct actualization for their location and ETA. Parties don’t share information with each other because they don’t see the value of it.

I – Impact The consequence of the differences between the ETA and ATA is that the vessels can no longer

dock as scheduled and they will have to wait at the entrance of the port for a docking slot to become available. In addition, other vessels behind them might be affected by these delays as well, triggering a series of cascade effects:

-‐ Economic (additional costs are encountered for many of the parties involved): • Costs for holding containers that are not picked up in time (approximately

€45/day/container) • Costs of the waiting time for the vessels that are late to depart (€1000/day for a

deep-‐sea vessel that contains 14000 TEU and 350 meter lengths; in addition, the vessel itself also encounters additional operating costs)

• Costs for losing clients; clients (vessels/shippers) who were deferred from Rotterdam have moved to Port of Antwerp or Port of Hamburg as alternative options, leading to a decrease in the revenue stream (in 2014, for example, Hapag-‐Lloyd and OOCL, rerouted 7 ships that normally would each pay approximately €20.000 harbour fees to the Port Authority and together create a turnover of €1 million/year for the terminals in the port. A business case scenario for the total costs the Port Authority encounters due to delays is depicted bellow: In order to calculate losses of the Port, we can look at the following example. We assume that there are 2 deep-‐sea vessels that are late to depart from PoR (out of

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20 vessels coming to the Port daily), leading to 1000 containers that are “stuck” in the Port for two days. The callsize is 2000. The table below shows the calculation of related costs

# Type of losses One time A week

(3 times/week) A month (12 times/month)

A year

1 Holding containers (45 x 1000 x 2) 9,000 EU

27,000 EU

324,000 EU

3,888,000 EU

2 Late departure (1000 x 2 x 2) 4000 EU

12,000 EU

144,000 EU

1,728,000 EU

3 Addition cost of hiring people for cranes (2 people/crane)

(2 x 4 x 2 x 60 x 48) 46,080 EU

138,240 EU

552,960 EU

6,635,520 EU

4 Addition cost of hiring people for vessel (1person/vessel)

(2 x 1 x 60 x 48) 5,760 EU

17,280 EU

69,120 EU

829,440 EU

TOTAL

64,840 EU

194,520 EU

1,110,080 EU

13,080,960 EU

As it can be observed in the table, the clients have to pay unexpected costs for the congestion in PoR. This leads to unsatisfactory services for and is is also the main reason of customers to go towards using other ports.

• Costs for hiring people via external companies. On a regular basis, there are 2 people working on the cranes and 1 person for the vessel. The labour cost is of €60/hour/person. The number of cranes depends on the callsize which is the amount of movements needed to serve the vessel. A more explicit example is is showed in the following table:

# Callsize Number of cranes

1 1500 3 2 1500-‐2000 4-‐5 3 >2000 6

− Social (causing tensions and issues between everyone involved) − Environmental (the carbon footprint of the port’s activity is increasing).

Environmental costs are a result of environmental damages/nuisances (health costs, material damages, biosphere damages, long-‐term risks) (Korzhenenvych, et al., 2014). In the scope of this project, air pollution costs, and climate change costs will be taken into consideration. These mainly include carbonaceous soot (also referred to as black carbon), nitrogen oxides (NOx), sulphur dioxides (SO2), carbon monoxide (CO), toxic

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volatile organic compounds (VOC), in particular benzene and 1,3 butadiene, some polycyclic aromatic hydrocarbons (PAH), and heavy metals (Korzhenenvych, et al., 2014). These types of costs are specified in the handbook on external costs of transport for European Commission issued in Jan, 2014. For the Port of Rotterdam, the main means of transportation are inland water transport and by mainland roads (for heavy goods vehicles). Appendix 1 and 2 present a detailed review of air pollution costs and climate change costs specially for inland water transportation and road transportation. Depending on each situation, number of vehicles and types of vehicles, we refer to the table in the appendix in order to make the calculation of the environmental cost for the Port of Rotterdam.

b. Solution

O – Solution In order to tackle this problem, we have worked with CGI and the Port Authority and used a dashboard-‐ing tool which will collect data from multiple sources, processes the data and via a customized dashboard will show, in real-‐time, where the vessels are and when they will arrive at the port, in order to optimize the port’s planning system and reduce waiting time.

For reaching this goal, our group designed a road map as follows: − We paid attention to historical data in order to gain insights, and understand the current

problem; − We analysed the reasons why PoR does not have an exact arrival time; − We searched for useful existing information (Marinetraffic database, Portbase etc.); − We used the Microsoft Power BI dashboard-‐ing tool to interpret the data and visualise it

in a way that it is both understandable and helpful to the Port of Authority employees. The dashboard that we created, was built using Microsoft Power BI. Microsoft Power BI is a very

comprehensive program that lets you both analyse data and interact with it in a very intuitive way. By playing with the data and all the different options we had to visualize it, we quickly came to a mapping of which we knew it would directly enhance both our and the port’s understanding of the data that we had. We aligned all the pieces of data and created the dashboard within the program.

What is great about this implementation, is the fact that the dashboard can be easily accessed from different devices like PCs, laptops, pads and smartphones. This makes the dashboard a transparent solution, easy to monitor, in real time at any time.

We have included in the paper a print-‐screen of the dashboard, which can be seen in Appendix 3.

N – Necessity (utility) The purpose of the dashboard is to show the ETA and ATA of deep-‐sea vessels in real-‐time. Through the dashboard, the Port is able to coordinate services for trucks, barges and vessels. Thus, it is necessary to create this dashboard in order to reduce the congestion which at the moment has a large impact on the Port, from both a financial and an environmental point of view.

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THE PROCESS During the 24-‐hour creation battle, we have identified the main problem, which was the efficiency loss within the port. The cause of this problem, among others, was the inadequate information sharing between individual parties within the port environment. This problem resulted in abnormalities in cargo processing, congestion in transition between parties and low customer satisfaction. The solution mandate for our project leaned towards the utilization of big data to solve this issue.

The draft solution we came up with during the 24-‐hour creation battle took into consideration the fact that convincing individual organizations within the port environment to share data more adequately would not be possible. After some research, it came to our knowledge that there were various sources of data available which we could easily access and utilize.

Our solution involved collecting data from various sources to which we would have access to (such as the port authority’s database, the AIS information system and marinetraffic.com).

Using the ETL technique, data is extracted from these sources, transformed into a common “language” and loaded into a data warehouse, from where the relevant data will be filtered and displayed on a dashboard. Primary functions of this dashboard will be the display of a sorted list of incoming vessels over e specified time period, the scheduled arrival time of those vessels, the real-‐time calculation of the arrival times of vessels approaching the port and the difference between scheduled and calculated arrival times.

How we came with this solution During the 24 hour creation battle we pondered on various methods on how we could solve the problem of efficiency loss. We looked at ways to improve real time information sharing between parties in the port environment, we thought about creating a separate information sharing network/ website where all information will be collected and managed. But the port already developed several initiatives similar to that and have not recorded enough successes plus we wanted a new and innovative idea.

Then we thought about utilizing the “internet of things” concept, whereby we would connect various vessels, containers, machinery and other port equipment’s to the internet to relay data on current developments, therefore increasing efficiency in the port. But that idea had various setbacks and technical issues which would take more than the duration of the project to figure out.

After careful deliberation and research, we agreed on the utilization of big data, data compilation and warehousing and using an interactive dashboarding tool to formulate our solution. Members of our team had experience with software engineering and data warehousing and it could be achieved within the given timeframe so we unanimously decided on the dashboarding solution.

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How we worked on it During the course of the project we had several meetings with representatives of the Port Authority, data scientists, consultants and programmers from CGI and also did our own research to find out the best way to proceed with our solution. Together with CGI and the Port Authority, we decided to use a tool to create a custom dashboard into which we will load 3rd party data from marine traffic, port base, AIS system and other external and internal sources. Given the physical distance we also had many Skype calls, and communicated intensely in our WhatsApp group. In general, in every team there is a team leader, but we did not have one. We are a group of young people with diverse skills and backgrounds, having high ambitions and entrepreneurial spirit so having a team leader was not necessary. We worked by consensus and relied on an open communication every time we would reach an impasse. Business canvas model (BCM) While analysing this situation through the Business Canvas Model we were able to spot the Key activities and stakeholders involved in the activities of the Port Authority. These are significantly important in helping the Port deliver its Value Proposition. Based on the BCM we came to realize the importance of automatizing the processes in the port, the important of data and the role of each stakeholder. More details on the BCM can be observed in Appendix 4. Innovation The innovation of this idea lies in bringing a new, technological component and data analytics, into the daily operations of the port. In order to reach to this point we examined all other initiatives executed by the port to solve this problem. One major aspect of our project is that the dashboard uses real time data to create a forecasting model that can be used to accurately predict certain activities in the port which the port was not able to accomplish with previous initiatives. Benefits Using such a tool brings benefits to the Port Authority, the terminal owners, the shippers, and the city of Rotterdam. These benefits can be categorized as follows: logistic, environmental and economic. Logistic

• A better cluster governance -‐ is an emerging and extensive trend in which the port authority assumes leadership in activities previously outside its jurisdiction, including setting up inland terminals and logistics zones (directly or in partnership), developing strategies to monitor and improve port and supply-‐chain performance, establishing port community systems, promoting environmental and social initiatives, being involved in training and education for port related employees, and facilitating relations with its surrounding urban areas.

• No more un-‐forecasted events/delays • Highly interactive

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• Transportation management -‐ including optimizing the choice of carriers based on service requirements and freight rates.

• Better inventory and logistics management -‐ including the tracking of containers from the port of origin to the port of unloading in Rotterdam, on the rail track and between origin and the final destination and flexible routing, storage and distribution as necessary.

• Faster discharging and loading of containers. • Data easily accessible -‐ increased productivity through faster turnaround of containers. • Better monitoring of the storage of containers (leading to increases in stacking area's capacity). • High level of accuracy of information – Visualization, leading to a better understanding of data and

seeing the patterns Environmental

• Lowering the vessels’ activity and time in the port leads to a lower consumption of fuel and of the carbon emission

• This project is in accordance and a tool in helping the Port reach its long-‐term strategy for 2030; • Sustainable practices

Economic

• Being economically and operationally efficient as well as by reducing costs for third parties, will help the port to keep its existing clients and attract new clients.

• Port diversification into the maritime energy sector using ports’ locations and connectivity to explore new opportunities for diversifying their activity and applying their operational and management experience to emerging sectors such as maritime renewables. This includes developing the skills and networks to fully maximize opportunities to benefit the local economy and secure jobs.

• Sustaining regional ports and developing local jobs; creating efficient and diversified ports and freight handling facilities makes the port more attractive and gives greater choice for freight movement. Activity includes benchmarking and implementing best practice in areas such as port security, safety, operational procedures and general management, as well as developing new markets and business opportunities to increase port traffic.

• Exploring access to commercial markets by sea Developing maritime connections between large transport hubs and regional ports to help provide a more efficient and robust transport network. exploring new shortsea services to encourage the shift of freight, including fresh produce and bulk cargoes, from road onto more sustainable modes of transport. Feasibility For proving the feasibility of our project we implemented our idea and developed a demo version. We used raw data from marinetraffic.com and a the Microsoft Power BI dashboard-‐ing tool. We were able to see all data displayed on a dashboard but processed and pointing out the delay of vessels as calculated by the third-‐party tool. Appendix 2 presents an image capture of the demo product.

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CONCLUSIONS AND RECOMMENDATIONS In the past years the concept of Data Analytics has become a major interest in the life of companies. It’s benefits usually lie in a better understanding of what is happening in the business world and with the activity of the company, but in this case, Data Analytics has helped us come with a solution that has a substantial economic impact, and even more, an environmental one. The carbon footprint generated from the activity of the Port has a high impact on the sustainability of the City of Rotterdam, as such, we are happy that in order to solve the logistics problem that the Port has in managing the arrivals and departures of the vessels in an optimal way. We were able to use the concept of Data Analytics, and present an analysis of the available data in order to understand what and when the issues start coming in. Also the Port of Rotterdam is happy to say that they are going to implement our idea and dashboard after the competition.

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APPENDIX

Appendix 1: Air pollution costs in heavy goods vehicles and inland water transport

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Appendix 2: Climate change costs

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Appendix 3: Dashboard print-‐screen

Screenshot of the dashboard demo.

1: Scheduled arrival of vessels, sorted per day; 2: Estimated arrival of vessels, sorted per day;

3: General information of vessels. sorted per day; 4: Location of selected vessel.

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Appendix 4: The Business Canvas Model

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REFERENCES

Stream International Freight (2011). Retrieved from: http://www.ce.nl/publicatie/stream_international_freight_2011/1173

Stream Personenvervoer Versie 1.1 (2014). Retrieved from: http://www.ce.nl/publicatie/stream_personenvervoer_2014/1478

Marine traffic data. Retrieved from: http://www.marinetraffic.com/en/ais/home/centerx:30/centery:15/zoom:2

Port Authority data. Retrieved from: https://www.portofrotterdam.com/en

Korzhenenvych, A., Dehnen, N., Brocker, J., Holtkamp, M., Meier, H., Gibson, G., . . . Cox, V. (2014)., Update of the Handbook on External Costs of Transport, DG Move report for the European Commission, London.

rotterdam 100 - final report - por and cgi

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