Digitalization of the cargo terminal
Nowadays growing competition and challenging economic conditions force many of port terminals, especially small ones to take 3 essential actions in order not to enlarge but simply to continue their work, and those actions are:
- to cut costs
- to attract more customers
- to increase return on capital (increase productivity)
Trying to satisfy points 1 and 3, terminals are likely to come to the point when they start to lose customers only in case they are not a monopolist of the region.
Let me explain why.
One may cut costs by digitalizing a terminal. Digitalization of the terminal certainly has advantages for the owner, like:
- Accurate time tracking of employees
- Reducing the number of errors and search time during cargo delivery, loading, and unloading
- Instant document preparation
What is needed for this:
- Install a modern TOS (Terminal operating system), the cost of which is about from 10,000 to 100,000 euros
- Configure the system for yourself and implement it. It may take from 1 to 12 months
- Teach employees how to use it – from 10 days to 3 months
And the key point: it’s necessary to make customers and freight forwarders work in a foreign system to operate the cargo. That is the main challenge to face, as customers immediately ask what benefits do they get by operating in the terminal’s system, the answer to this question is extremely complicated:
- The system gives the customer an access to the online cargo status. But 50% of customers are not interested in this a lot since the cargo is either cheap, either insured or already sold
- We can reduce the price for transshipment only when we are convinced that TOS really works
- Instant paperwork may be of interest because the financing of the client depends on it. But according to statistics only 30-35% of the cargo goes under the letters of credit.
It turns out that it is guaranteed to involve only 50-60% of clients into the ecosystem of the terminal, and the remaining 40% of customers won’t transmit data to you via the system. I would repeat that this is true for small and medium-sized terminals, which mostly work on the spot.
As a result, doing better for yourself and reaching goals, you may push away some of the customers. Therefore, having installed an expensive system will not work to attract and transfer customers to digital copy at once: you have to start from distant approaches, and processes can be launched in parallel, they only complement each other.
1. It is necessary to clean up the input so that the terminal starts working rhythmically since balanced work increases productivity by 10-15%.
Many terminals suffer from congestion at certain hours, and at the end of the working day, they often stand idle. For them, it is necessary to adjust the traffic of cargo arriving at the terminal. It comes as no surprise that with railways traffic flow rhythm comes to the fore. Only having traffic flow predicted the infrastructure operates properly.
Give your clients the opportunity to have an accurate transporting plan, and they will lower their costs and / or increase revenue. And you will benefit from creating the right work schedule. As soon as you start working in such a join, customer satisfaction will increase significantly: in 1-2 months clients will experience significant savings, and freight forwarders will try to send the customer to you – as you are being predictable and accurate.
2. At the same time as providing normalization of traffic flow, you can digitize incoming documents. It is still impossible to make a client’s accountant retype the invoice or CMR into the port system. In general, try to get the accountant to do something else, even if you are the owner, the brother and if you have a black slash in karate: to be hit with a ledger hurts a lot, trust me. And you still need digital information to make custom, tax, agents, customers reports.
You may find a solution in a recognition system (machine vision), for the current time, the recognition cost depends on the type of document and costs from 0,10 euro per 1 page. For example, the recognition cost of a document set: CMR + Invoice + packing list is about 0,30 euros, and the recognition speed is a split second. For comparison, it will take about 10-15 minutes to retype the data manually into the accounting system, to your own archive or to customs report, and this is at least 3-6 euros salary, not including associated costs. Using a recognition system you should leave a person to verify recognition results, but this is only 2 hours a day, and this could be a regular not overpaid accountant.
After completing these 2 steps (they can be started at the same time because they complement one another perfectly), you are finally ready to install the system that is responsible for terminal automation:
- You have accurate inbound cargo planning
- You have incoming electronic document traffic from all clients
Customers are pleased with the acceleration of processes and the absence of errors in the documents, while you have already begun to save costs.
Now you may begin to build internal processes corresponding to harmonized external.
You may have a free trial of a solution for managing cargo traffic – an electronic queue, just click here . If you are interested to look at the OCR – the service of recognition of transport and logistics documents DIGIdock please follow this link