Advocating digital collaboration between shipowners to enhance competitiveness
Digitising collectively is a compelling move for businesses to remain relevant
The World Bank Group (WBG) and the International Association of Ports and Harbors (IAPH) jointly launched a report – revealing digital collaboration between private and public entities will yield significant efficiency gains, safer and more resilient supply chains, plus reduced emissions. Titled “Accelerating Digitalisation”, the report notes that maritime transport prevails as the backbone of world trade and the supply chain; with over 80 per cent of global merchandise distributed by sea.
Enhancing supply chain resilience
Digitising operations can facilitate smooth navigating of social distancing measures from the COVID-19 crisis. Another advantage of digitalisation is optimising supply chains’ resilience against future crises.
Makhtar Diop, World Bank’s Vice President for Infrastructure, remarked: “In many of our client countries, inefficiencies in the maritime sector result in delays and higher logistics costs, with an adverse impact on the entire economy. Digitisation gives us a unique chance to address this issue. Beyond immediate benefits to the maritime sector, digitalisation will help countries participate more fully in the global economy, and will lead to better development outcomes.”
Dr Patrick Verhoeven, IAPH’s Managing Director of Policy and Strategy added, “The report’s short- and medium-term measures to accelerate digitalisation have the proven potential to improve supply chain resilience and efficiency whilst addressing potential risks related to cybersecurity. However, necessary policy reform is also vital. Digitalisation is not just a matter of technology but, more importantly, of change management, data collaboration, and political commitment.”
The report further examined numerous technologies currently adopted by some from the world’s leading ports and maritime communities, which include big data, the internet of things (IoT), fifth-generation technology (5G), blockchain solutions, wearable devices, unmanned aircraft systems, and other smart technology-based methods to improve performance and economic competitiveness.
Bridging the gap
Though IMO mandated all member countries to exchange key data electronically, a survey revealed only 30 per cent of 100 responding ports are compliant. Main barriers hindering business digitalisation are weak existing legal frameworks varying from country to country, plus the general reception of the concept from both private-public stakeholders. Confirming the observation, the report noted many developing countries seek to improve policy frameworks, technical programs, skills development programs and financing initiatives that support entrepreneurship in the digital economy.
To address this misalignment, WBG offers support to developing countries through policy advice, research, and analysis—drawing on the best global knowledge along with targeted technical assistance to build capacity and develop human capital in client countries. It can also mobilise financing for clients at different stages of their digital development path, subject to application approval. Subsequently, WBG can facilitate financing in the form of concessional or semi-concessional finance, and possibly grants, to support agreed investments—either unilaterally or in partnership with private finance.