Digitalization is not a goal in itself – it must create value for the terminal

Norbert Klettner, Vice-President of the Terminal Industry Committee 4.0 (TIC4.0), on the first global benchmark study on the digital maturity of terminals

TIC4.0 has been committed to standardizing data and interfaces in the port and terminal world since 2018. With international members, the association develops standards to make terminal digitalization easier and more sustainable. Boston Consulting Group (BCG), together with TIC4.0 now has systematically measured for the first time how digitally mature terminals actually are globally. BCG conducted, analyzed, and anonymized the survey. The study results were presented and discussed for the first time at the TOC in June.

Author: Norbert Klettner, AKQUINET

Mr. Klettner, how is the study structured?

Together with BCG, we developed a comprehensive questionnaire with more than 100 questions – spread across core processes of a terminal: yard operations, gate and landside flow, external stakeholder integration, horizontal transport, vessel and port call operations, and equipment automation. Many questions are aimed at the planning and operations team. But we also developed specific questions for CEOs and CIOs to include all perspectives. This is a self-assessment by the participants, but the precise questions provide good guidance.

How many terminals participated?

30+ terminals from all regions of the world took part in the survey: Asia, the Middle East, Europe, Africa, North and South America. The range includes medium-sized to very large terminals. The terminals also have various orientations: from transshipment to gateway terminals. It is planned to repeat the study again in the future to make developments visible. Also, the target is to gradually increase the number of participants – of course.

What are the key findings of the study?

One of the most important results: There is no “typical” level of digitalization. The range is very wide. Some terminals are already highly digitalized and automated in many processes, others are still at the beginning. Interestingly, neither size nor region clearly determine how mature a terminal is. And: It is not always sensible or necessary to strive for the highest level of maturity – Level 5 – in all dimensions. What counts is what is strategically and economically value for each terminal.

How does the study help terminals in concrete terms?

The study offers terminals orientation:

• Where do we stand compared to our peers?
• Where is there still potential?
• And where is investment most worthwhile?

Terminals see their own results directly, and also how they compare to an anonymized group of terminals in their region or size. Especially for small and medium-sized terminals, the study shows that digitization is not an “all or nothing” issue, but about targeted improvements where the effect is greatest. It also helps to provide arguments for the board or management. After all, digitalization is not only a technical, but above all a strategic issue.

What role do standards like TIC4.0 play in this context?

We developed the questionnaire together with BCG on the one hand. On the other hand standards are the key to driving digitalization sustainably and efficiently. If every terminal defines its own data and data meaning, it becomes expensive, complicated, and inefficient. TIC4.0 has been working since 2018 to develop standards that enable “plug and play” integration of data – no matter whether for cranes, TOS systems, or business intelligence solutions. Interest in these standards is growing, as the discussions around the study also show.

How are terminals reacting to the results of the study?

We as the TIC4.0 association did not have direct engagement with terminals, as the study is anonymous to TIC4.0. But we know that simply filling out the questionnaire can be an “aha moment,” because the questions make terminals aware of where they stand in terms of digitization and where there is still potential. The results also trigger internal discussions: Do we really need to reach Level 5 everywhere? Or is a medium level of maturity sufficient for our business model in certain processes? This reflective look at their own situation helps many set the right priorities.

In your view, what are the biggest hurdles in the digital transformation of terminals?

The biggest challenges are less about technology and more about organization: investment cycles in the terminal business are long – an equipment investment is often in the range 15 to 25 years – and digitalization projects must be integrated into these cycles or retrofit is needed. Sometimes budgets and know-how on how to start are lacking, especially at small and medium-sized terminals. Often also accepting that digitalization brings transparency is a hurdle in organization. It should not be underestimated that digitalization must also be strategically anchored – it needs the backing of top management and clear goals.

What are your hopes for the future of the study?

Clearly more terminals should participate and to enable more targeted and detailed regional comparisons. Same time giving a better overall view on the industry. And we hope that the study will continue to help raise awareness at the board level and promote investment in digitalization. We call for more terminals to join the benchmark and contact BCG on this matter.

Last but not least I’d like to thank the whole team that is working hard on the benchmark study as well as the related whitepaper.

Thank you to: David Parlongue, Johannes Distler, Rodrigo Garcia Escudero, Rahul Sanghvi, Andrew Newsome, Seddik El Fihri, Thiago Cardoso, Dorota Korenkiewicz, Max Muehlemeyer, and Boris Wenzel

Thank you for the interview, Mr. Klettner!