INTELLIGENT VERTICAL: TRADE AND LOGISTICS
growth, its sea ports will be key to ensuring
that success. However, African ports face
the primary challenges of under-developed
infrastructure and inefficient operations,
leading to significant losses in potential
revenue. According to PWC, of the 72% of
world container throughput commanded by
developing countries, Africa collectively only
sees 1%. A hypothetical improvement from
1% to 3% would increase the economic
value of trade by sea by a magnitude
equivalent to the GDP of certain African
countries. There is clearly a need to drive
improved performance at African ports if
we are to take advantage of the economic
promise that the future holds.
One of the key differentiating factors of
leading global ports is the extent to which
they have adopted emerging technologies.
For example IoT-driven smart logistics
platforms and advanced analytics solutions
that manage container theft, predict
the failure of key equipment, and reduce
downtime in real time, thereby increasing
port throughput and protecting profit
margins. By contrast, outdated technology
and manual processes remain a burden for
African ports with most operators still relying
on ageing equipment, disparate systems and
a siloed approach to handling core processes
and operations.
Moving forward for Africa’s ports
What’s holding back our sea
trade success?
The primary challenges shared by most
African ports are long cargo clearance times;
under-developed basic port and hinterland
infrastructure; usage of dated equipment
and low levels of automation; and container
and cargo theft.
To help address some of these challenges,
global donor organisations are funding
the development of various African trade
corridors. This is witnessed in the significant
investments that are going into port
infrastructure capacity expansion, including
parking lot expansions, deepening of canals
and the widening of basins. Infrastructure
investment is however only one piece of the
puzzle required to handle more cargo in a
more efficient manner.
The key to efficiency is for ports to
do more with their existing resources,
particularly those focused on moving
cargo. By optimising the utilisation of
these resources, ports will not only improve
their cargo throughput but also become
more profitable. According to SAP global
performance benchmarking, ports that
leverage technology to drive productivity
improvements have a 36% higher operating
margin than their peers. As an example, in
Asia where ports are largely automated,
the turnaround time for vessels – the time
it takes to port, offload cargo, reload, and
depart – can be as little as 7 hours compared
to the 5-day average for an African port.
Cargo vessels can also spend a full month
longer in an African port than they would in
an Asian equivalent.
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To address the challenges and overcome
some of the prevailing inhibitors to their
success and growth, African ports are
embracing various technologies to achieve
performance improvements realised by
their counterparts in other geographies.
In pursuit of such performance excellence,
African port authorities have identified two
top-level goals: increasing port throughput
and improving terminal operations. To
increase port throughput, port authorities
are considering ways to accelerate the
flow of goods through their port by
reducing congestion in the value chain.
By leveraging hub logistics, transportation
management solutions, and connected
warehouse offerings, port authorities
can accelerate the rate of information
exchange across the multiple stakeholders
in the port value chain, and unlock the
ability to conduct real time performance
monitoring of key assets. This enables
them to track profitability at an asset level,
enabling them to identify potential new
business opportunities. As an example, the
Hamburg Port Authority simplified logistics
and truck park management with SAP Hub
Logistics, and was able to reduce idle time
for carriers, improve its traffic management
system, and achieve a higher turnover
of traffic from 9 million containers to an
eventual 25 million.
To improve terminal operations, African
ports need to adopt automation as a
means of standardising and simplifying
port operations. In addition, these ports
require a centralised approach to managing
processes, enabled by a single platform
for all automation efforts. This will allow
“
ONE OF THE KEY
DIFFERENTIATING
FACTORS OF
LEADING GLOBAL
PORTS IS THE
EXTENT TO
WHICH THEY
HAVE ADOPTED
EMERGING
TECHNOLOGIES.
them to handle unusual circumstances by
pre-empting potential business disruption,
recommending remediation actions and
facilitating communication between
stakeholders across the port value chain, with
no duplication of efforts or messaging.
Realising Africa’s economic potential
With 30% of the world’s remaining mineral
resources and approximately 60% of the
world’s uncultivated arable land on the
continent, Africa’s relevance in the global
food and resource transportation value chain
is significant. The success of Africa’s ports
and associated transport networks is critical
to Africa’s conversion of economic potential
to economic success. To adequately
facilitate greater trade with the world,
African ports need to embrace innovation,
automation and simplification. By investing
in the right business solutions that offer
end-to-end transportation management,
connected warehouse management, vessel
and container track-and-trace, and among
other things, improved hub logistics, African
ports can take a step closer toward enriching
the continent. n
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