Times are tumultuous in today’s maritime shipping world and major shipping lines are looking for new ways to maintain profitability as container prices drop. We are seeing more organizational restructuring, new mergers and alliances, and spending cutbacks. Additionally, we are also seeing more joint-ventures between shipping line and terminal operators.
The role and importance of the terminal operator is evolving quickly. Terminal operators must find new ways to enhance productivity, solve terminal bottlenecks, and think outside the on-premise server. One facet of this new era is the introduction of new technology and startups seeking to help terminals not only deal with today’s issues but to also predict the problems of tomorrow.
Terminal management can no longer afford to only focus on the now. Instead, management must optimize for the future and think longer term. The choice of terminal operating system (TOS) is a mission-critical piece of any terminal operation, and terminal operators should be thinking about which system would best optimize and update their port. Just ask IHS Markit about terminal productivity at the top 30 terminals being down 7.5%. The time to optimize for the future is now.
Here are five factors to consider when selecting a Terminal Operating System (TOS).
1. What are your Main Pain Points?
Think about the main pain points of your day-to-day terminal operations. Here are some helpful questions you can ask yourself and your team to narrow them down:
Are we getting the data and reporting we need quickly enough?
Chances are, you’re not. In today’s tech world, there are software cloud capabilities that can drastically reduce the turnaround time for these data and reporting requests. When you factor the amount of individuals involved in the process and the salary or wage these team members are paid, you are typically paying a high cost for idle time. You may just be losing $3K per user in wait time. (See our TOC presentation: How would Google manage a container terminal?)
How are we currently measuring productivity?
Terminals need to maintain a predictable level of productivity to keep shipping lines on schedule. Beyond establishing this predictability, shipping lines want to visit and do business with ports that have set the bar high for productivity. They want to get in, and get out.
Is our current TOS or system hard to use?
Every person on your team should be able to quickly acquaint themselves with your terminal operating system and be able to teach their peers. The “hidden costs” here to factor in are training time and onboarding time for existing IT/TOS staff as well as the stevedoring team using the platform. Opt for a solution with a strong user experience and an easy-to-use interface.
Is interfacing with your accounting and billing system a pain?
Beyond just saving your accounting and finance team time and work, you can increase your revenue through shortened revenue cycles. If you’re able to generate a pro forma invoice on the spot, integrate with your billing system, and bill the shipping line immediately, you can drastically reduce all the paperwork, people, and time it takes to generate revenue.
If you have a TOS: Do you feel as though the price you pay and the strength of your relationship with your current vendor are a match?
Consider all your options. Simply because it’s the industry standard, does not make the solution right for your terminal. Assess your vision for where you want your terminal(s) to be now, and 3, 5, 10+ years from now. Is the business interest of the TOS provider truly in line with your own business? The system provider’s vision ought to be in line with your needs. There needs to be an immediate impact on your business now, as well as in the future. From one terminal, to many. The system needs to be able to grow and scale as your organization does, solving your problems along the way - not dictating how you should run your operations with the TOS’ own functionality.
Create a list of your current pain points and place them in order of importance. If the TOS you are considering is not solving a high amount of your existing paint points, remove it from the consideration list. It’s very rare that a terminal will find the perfect TOS solution, but aligning your goals with an agile provider who can hit the majority of these needs and quickly tailor the solution to fit is a great start.
2. Is the TOS Cost Efficient?
The overhead and additional costs required when implementing a TOS system can easily become unreasonable. These systems tend to be expensive and require a serious investment in technical infrastructure - some of which will be difficult to scale. It’s not easy to simply “add” a new on-premise server. There are hardware, software, and IT personnel costs that a buyer ought to consider.
We love IT, but when it comes to outdated languages, not so much. The market for specific TOS technical talent is small and these professionals are in high demand as often the languages used on traditional TOS systems is outdated and years old. A modern TOS is built using high-tech languages that are being used today by the best companies (ex. Google, Twitter, Facebook, etc.) - not 12 years ago. Developers aren’t cheap as it is, but finding one that speaks an old TOS language or integration, is going to cost you even more.
The key here is to think big picture, and beyond the data room and one server you must currently maintain. What happens when you want to see data across your terminals or open up a new one? How many additional servers will you have to buy and when? What sort of redundancy and backup measures will be necessary to maintain? Find one that is flexible and can grow with you, not hinder your growth.
3. Does the TOS Improve Customer Service?
In the logistics chain, there are many stakeholders and the TOS ought to facilitate and enhance communication between those stakeholders. Shipping lines need an EDI, your consignees want to know where their containers are, your truckers need to be able to know when to hit your gate, and the port authority may want to see your terminal’s increase in throughput in line with their own strategic plan.
Seek out systems that allow you to easily create permissions and grant access to those when and where they need it. Terminals must facilitate transparency and build confidence with their existing customers to win new ones.
4. Does the TOS Increase Traffic Capacity?
It’s important always to be improving terminal operations, especially with data. However, what’s more important than the data is what you do with it. Whether you’re monitoring moves-per-hour in real time, pulling a report on truck turnaround time for all of the last quarter, or making sure there are enough reefer plugs, the prospective TOS must allow you to monitor key aspects of your business.
Once the patterns in operations start emerging, you can create new processes, pull and analyze data, and enable your team to move more quickly. This is why reporting functionality and business intelligence is so critical. A great TOS will give you more visibility into what’s happening at your terminal and allow you to use that data to make strategic decision. Your terminal’s productivity increases, your stevedores begin communicating and operating as more of a unit, and you ultimately can move more ships, faster. If the ships are getting bigger, but your terminal’s productivity remains the same, are you fully maximizing your financial benefit from this trend?
5. Is the TOS Optimized for the Future?
Technology does not progress at a linear scale as we humans like to think - it happens exponentially. We will have self-driving cars in our lifetime after we have been driving like stooges for the last 100 years. We went from having a computer take up an entire room to having supercomputers in the form of smartphones in our pockets. We went from very little smartphone service to 98% of the world having 4G connectivity. Technology progresses exponentially, making what we perceive as the impossible, possible.
So why would you spend an inordinate amount of money on a TOS system and infrastructure that more than likely won’t be relevant in just a few years? How long does the organization plan to support your TOS purchase? Will the money I am spending now be worth anything in 5 years? These are all questions that must be considered and ask of any TOS provider.
Take Time to Choose the Best TOS for your Terminal
Each terminal operating system out there has its pros and cons. What’s most important, however, and easier said than done, is finding the right solution that will fit your terminal now and forever. The TOS must be flexible and grow and scale with you. It must be easily adopted, cost-effective, and able to be incorporated into your terminal’s regular operations quickly. Think carefully, ask many questions, and think long term and most importantly:
Where will your terminal be in 5 years? Find out how Octopi’s TOS can improve productivity in your terminal with a free demo.
For another great resource on the subject, see the piece titled 'How to Choose a TOS' by Richard Willis on Port Solutions website blog post.