Unlocking the Potential of Small Ports Through Port-Centric Strategies
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Unlocking the Potential of Small Ports Through Port-Centric Strategies

By Amr Fawzy

Introduction

Ports serve as critical hubs in modern supply chains and logistics networks. However, small UK and EU ports often lack the infrastructure, resources and visibility to realize their full potential (Pinelopi Kyranoudi and Nineta Polemi, 2023). Ports are key to community resilience, and measures such as physical infrastructure, planning, and financial strategies are necessary to ensure their ability to recover and withstand acute and long-term threats (Tschirky and Kral, 2022).

By embracing port-centric logistics, small ports can transform into efficient cargo and distribution centers. Strategies like smart concepts, planning optimization, training and digitalization streamline operations. Value-added services tailored to importers and exporters coupled with partnerships enhance the proposition (Valantasis -Kanellos, 2018).

Port-centric logistics (PCL)

Port-centric logistics (PCL) is a strategy that can help small UK ports realize their full potential. It involves using on-port facilities to handle all elements of inbound and outbound logistics, from storage to distribution and even full-scale manufacturing and production centres (Peel Ports Group, 2021).

This approach can enhance the competitiveness of supply networks by co-creating value and resources among actors in business networks (Valantasis -Kanellos, 2018).

A- Optimizing Port Operations

The first step towards advancement for small ports lies in optimizing their core operations. Holistic optimization for small ports involves a comprehensive approach that addresses all aspects of port operations to enhance overall efficiency. Here are some strategies that small ports can adopt:

  • Smart Port Concepts

Small ports can develop a smart port system that automates and integrates end-to-end port operations digitally without human intervention. This reduces port-user response time, improves port asset utilization, and enhances maritime logistics visibility (Min, 2022).

The Port of Felixstowe has agreed to buy 100 autonomous trucks which it believes will increase efficiency. In December, two of the trucks were introduced for a trial period (BBC, 2023). The port is believed to be the first in Europe to introduce autonomous terminal tractor units (ATs) into mixed traffic container terminal operations (Port Technology International, 2022).

Systematically organizing tasks, equipment, staff, and technology in such a way that operations are streamlined and waste (both time and resources) is reduced. For instance, effective berth planning takes into account the kind of cargo, vessel size, available resources, and the port's overall schedule to allocate the best berth for each ship (Ingenious, 2024).

The Port of Rotterdam take into account the kind of cargo, vessel size, available resources, and the port’s overall schedule to allocate the best berth for each ship. Additionally, they use Automated Guided Vehicles (AGVs) for container transportation within the port, which reduces human error and increases production (Envision, 2023).

  • Training and Digitalization

Training port staff and digitalizing manual paperwork ensures efficient, transparent, and more sustainable port operations. This includes digitizing physical resources and integrating them with the worldwide Internet network (Min, 2022).

The Port of Shanghai (Yangshan Deep Water Port) and Port of Ningbo in China are upgrading their hardware and aiming at achieving a semi-automated yard (Roland Berger, 2018). This includes digitizing physical resources and integrating them with the worldwide Internet network (Notteboom et al., 2022).

B- Enhancing the Value Proposition

Alongside optimizing operations, small ports need to enhance their value proposition for importers and exporters. To achieve that, small ports can consider the following strategies:

  • Improve Port Infrastructure and Logistics Performance

Enhancing the quality of port infrastructure and logistics performance can significantly benefit the economy of a country.

Port of Rotterdam have invested in improving the quality of berths, cranes, warehouses, and other facilities, as well as enhancing the efficiency of logistics processes such as cargo handling, customs clearance, and freight forwarding (Munim & Schramm, 2018).

  • Provide Value-Added Services

Ports can offer additional services that add value to the logistics process, such as warehousing, distribution, and value-added services like packaging and labelling (Munim & Schramm, 2018).

The Port of Singapore is known for offering a wide range of value-added services. These services have helped importers and exporters reduce their logistics costs and improve their supply chain efficiency (Okorie et al., 2016).

  • Foster Stronger Partnerships

Ports can foster stronger partnerships with importers and exporters by understanding their needs and providing tailored services. This can enhance the competitiveness of UK businesses and contribute to the growth of the national economy (Munim & Schramm, 2018).

Public-private partnerships (PPPs) in ports have become a means to manage port operations more effectively, as well as to develop new port infrastructure (The World Bank, 2022). For instance, the Port of Los Angeles in the United States has fostered strong partnerships with importers and exporters by understanding their needs and providing tailored services (Harvard Business Review, 2019).

C- Connecting to Regional Logistics Hubs

While independent operations have their merit, integrating with regional logistics hubs allows access to wider transport networks leading to inland locations. To achieve that, small ports in the UK can consider the following strategies:

  • Recognise Their Strategic Position

Ports are crucial nodal points in supply chains. Recognising this strategic position can help ports maximise their potential and transform into efficient hubs for cargo handling and distribution (Sindbæk, 2008).

The Port of Djibouti is a prime example of a port that has recognised its strategic position. Facing Asia and the presence of a deep water site, the port benefits from a strategic geographic position. Serving Ethiopia almost exclusively, the port is in high demand and the construction of an industrial zone attached to it amplifies its storage and transit capacity (Morgan Philips Global, 2021).

  • Develop Port-Centric Logistics

By developing port-centric logistics, ports can facilitate the seamless flow of goods through their facilities. This can reduce transit times and costs, and enhance the competitiveness of UK businesses (Sindbæk, 2008).

The Port of Barcelona in Spain and DP World in the Dominican Republic have created opportunities that streamline supply chains, reduce transportation costs, and more. This has allowed several global companies to achieve significant transportation cost savings, shorter lead times, and more streamlined supply chains (DP World, 2024).

D- Sustainability Best Practices

With sustainability gaining significant momentum, small ports can embed such practices in their port-centric agenda too. To achieve environmental sustainability, small ports in the UK can consider the following strategies:

  • Adopt Green Technologies

The UK government has provided funding to develop green technologies for ports and ships. This includes constructing electric vessels and charging ports, which can help reduce emissions and promote a new era of sustainable maritime innovation (DfT, 2024).

The Port of Shoreham in UK installed solar panels on port buildings as part of a renewable energy project to reduce environmental impact (Renewable Energy Magazine, 2021).

  • Implement Sustainability Management

Ports can embrace and embed sustainability management to promote more sustainable freight transport. This includes aspects of freight performance, port planning and reporting, and the use of sustainability management systems (Dinwoodie, 2018).

The Port of Los Angeles and the Port of Long Beach have shifted to non-motorized transport using alternative energy sources, which enables reducing emissions in the port vicinity. They have also generated opportunities for new productive activities and higher value-added services, improved management of resources thanks to collaborative platforms, and implemented real-time monitoring of sustainability performance indicators to improve strategies (United Nations, 2022).

  • Reduce Emissions

Ports play a significant role in international trade, and thus, contribute to greenhouse gas emissions. By implementing measures to reduce emissions, such as using cleaner fuels or electric vehicles for cargo handling, ports can significantly reduce their environmental impact (UK Research and Innovation, 2021).

The Port of Teesport in North Yorkshire, UK, is exploring how ports can harness the latest digital technology to reduce emissions. This port-based project explores how the latest digital ‘smart’ technology can help reduce both operating costs and greenhouse gas emissions. The port has aspirations to become carbon neutral by 2027 (UK Research and Innovation, 2021).

 E- Adopting Smart Port Technologies

Smart technologies provide small ports with data and visibility to optimize in real-time.

  • Implement Real-Time Tracking Systems

Real-time tracking systems can provide updates and notifications on the status of shipments. This data informs better decision-making when responding to unexpected carrier delays, reducing the risk brought on by these delays and helping manage capacity needs across different modes of transportation (Vizion, 2023).

The Port of Rotterdam in the Netherlands use IoT devices that report the position of a vehicle based on GPS coordinates and provide either intermittent or real-time location updates. This technology allows them to understand exactly where goods are at any particular time, so that transfers between supply chain partners are accurate and up-to-date (Blume Global, 2020).

  • Leverage Data Analytics

Accurate and timely data insight into market trends allows shippers to better anticipate the occurrence of risks. This can lead to faster response times, shorter wait times, reduced costs from demurrage and detention, and at the end of the chain, better customer satisfaction (Vizion, 2023).

The Port of Los Angeles in the United States has leveraged data analytics to detect abnormal behavior of vessels, piracy, accidents, and fuel consumption. They have also developed applications to enhance the collaboration between people on board and ashore (Cambridge University, 2023).

  • Predictive Analytics

Use of predictive analytics in ports and surrounding multimodal logistics for improved schedule estimation and related planning. This includes times and durations of various events and processes (such as vessel arrival times or cargo operations durations), resource requirements (e.g. bunkering, tug assistance), and future courses of action (for example destinations and future routes of vessels) (Ingenious, 2024).

The Port of Singapore have used sensors, GPS devices, RFID tags, and enterprise resource planning (ERP) systems to collect, process, and analyze complex datasets related to logistics management operations. This comprehensive approach has improved transportation, inventory, warehouse management, demand forecasting, and supply chain optimization (Acropolium, 2023).

F- Port-Centric Strategy Realisation

To achieve Port-Centric Strategy Realisation, small ports can consider the following steps:

  • Embrace Port-Centric Logistics

Port-centric logistics cuts out unnecessary legs within the supply chain by carrying out various functions at the port itself. This could include full processing, product finalisation, or simple storage solutions (Peel Ports Group, 2024).

The Port of Dubai, Port of Singapore, and Port of Panama have become distribution platforms servicing a region through the stocking of parts and finished goods, as well as assembly, customization services, and light manufacturing (Rodrigue, 2019). Another example is the DP World London Gateway in the UK, which is the UK’s most integrated logistics hub with its deep-sea port and rail terminal offering excellent accessibility to major trade hubs throughout the world (Abdulla, 2019).

  • Develop Strategic Models

Ports can develop strategic models tailored to their specific needs and circumstances. These models can help structure the development of smaller ports and align their operations with their strategic goals (Olesen et al., 2012).

The Port of Barcelona in Spain have moved from being a gateway to a supply chain integrator, by improving the infrastructure in land and building distributions centres (Olesen et al., 2012).

G- Supply Chain Resilience

To achieve Supply Chain Resilience, small ports in the UK can consider the following strategies:

Ports should identify potential risks and disruptions to their supply chains and develop contingency plans to mitigate these risks. This could include natural disasters, cyber attacks, or disruptions caused by geopolitical events (UCL, 2017).

The Port of Rotterdam have identified potential risks and disruptions to their supply chains and developed contingency plans to mitigate these risks (Marsh McLennan, 2020).

  • Invest in Infrastructure

Ports can invest in infrastructure that is resilient to disruptions. This could include facilities that can withstand extreme weather events, or digital systems that are secure against cyber attacks (Associated British Ports, 2020).

The Port of Singapore has invested heavily in infrastructure that is resilient to. Their investment in infrastructure has not only made the port more resilient but also more efficient and competitive (Mordor Intelligence, 2024).

  • Training and Capacity Building

Ports can invest in training and capacity building to equip their staff with the skills and knowledge needed to manage disruptions. This could include training in risk management, crisis management, and digital technologies (UCL, 2017).

The Port Management Programme by UNCTAD’s TrainForTrade provides technical assistance in various areas, including port planning, management and operations, logistics and supply chain management, port security, safety and environmental protection, and legal and regulatory frameworks. It also organizes training courses, workshops, and seminars, as well as conducts research and analysis on port-related issues. This programme equips port staff with the skills and knowledge needed to manage disruptions (TrainforTrade, 2018).

H- Customization for Diverse Operations

To achieve Customisation for Diverse Operations, small ports in the UK can consider the following strategies:

  • Recognise Diversity of Operations

Ports should acknowledge that their operations are diverse and can vary significantly based on factors such as the type of cargo handled, the size and type of vessels serviced, and the specific needs of their customers (British Ports Association, 2023).

The Port of Montreal have made efforts to attract women workers, acknowledging the need for diversity in the workforce (Ircha & Morency, 2020).

  • Develop Customised Operational Models

Ports can develop operational models that are tailored to their specific needs and circumstances. These models can help structure the development of smaller ports and align their operations with their strategic goals (Alamoush et al., 2021).

The Port of Rotterdam has developed a smart port architecture which has helped them structure the development of the port and align their operations with their strategic goals (Min, 2022).

  • Implement Flexible Infrastructure

Ports can invest in flexible infrastructure that can be adapted to handle different types of cargo and service different types of vessels. This could include modular facilities that can be reconfigured as needed, or digital systems that can be customised to handle different types of data (Associated British Ports, 2021). A clear example for doing that is Port of Singapore (United Nations, 2022).

 I- Collaboration & Knowledge Sharing

To achieve Collaboration and Knowledge Sharing, small ports in the UK can consider the following strategies:

  • Establish Partnerships

Ports can establish partnerships with other ports, logistics organisations, and stakeholders. This can facilitate the exchange of information and best practices, leading to improved port operations (Admiralty, 2023).

As mentioned earlier, Public-Private Partnerships (PPPs) in ports have become a means to manage port operations more effectively, as well as to develop new port infrastructure. For instance, Inmarsat, Cargotec, Shell, HHLA, and Wartsila launched the second cycle of the Trade & Transport Impact Program in search for 10 mature startups (McKinsey, 2018).

  • Join Networks

Ports can join networks such as EcoPorts, which aims to raise environmental awareness through cooperation and knowledge sharing between ports (British Ports Association, 2020).

EcoPorts is the main environmental initiative of the European port sector. The Port of Tallinn is one of the latest members to join EcoPorts (Eco Ports, 2024).

  • Implement Collaborative Technologies

Ports can implement collaborative technologies that facilitate information exchange and coordination among different stakeholders. This can include digital platforms, advanced tracking systems, and automated equipment (Practice Business, 2019).

  • Promote a Culture of Knowledge Sharing

Ports can promote a culture of knowledge sharing within their organisation. This can involve creating a collaborative workspace, offering incentives for innovation, building trust, and encouraging upward communication (Practice Business, 2019).

Companies like Amazon and Google have built a culture of knowledge sharing within their organizations. Although these are not seaports, they serve as good examples of how organizations can promote a culture of knowledge sharing. They focus on gathering ideas from external, internal, and shared experiences as vehicles for innovation (Proof Hub, 2022).

Conclusion

The strategic embrace of port-centric logistics can drive transformative change for small UK ports. It paves the path to becoming key nodes in modern supply chains – bringing growth, sustainability and competitive edge consolidation. By leveraging their unique position, small ports can embark on an advancement journey that strengthens trade and logistics across the UK.

 

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