In the container terminal sector the software landscape is clearly visible; terminal operations require a terminal operating system (TOS).
When scouring the market for a system, there is a choice of products across the whole price and functionality range and a host of consultants to help procurement and delivery. The marketplace also benefits from having a significant number of major global terminal operators who wish to standardise their processes.
The bulk and general cargo sectors are so diverse that the marketplace for TOS systems is still not clearly established. A survey of the sector would reveal numerous terminals using spreadsheets, others using in-house or bespoke packages and a few using proprietary systems from established, specialist providers. Because of this diversity, few software companies have been able to establish a global footprint, although the industry’s understanding of the advantages of using proprietary software is finally beginning to change.
So why are proprietary systems becoming more prevalent when Excel spreadsheets or in-house systems have been acceptable up to now?
The trouble with spreadsheets
Spreadsheets are cheap, amazingly versatile and can perform complex calculations, which is why they have been used by the sector, however they also require high levels of manual data entry and are prone to human error. Spreadsheets also tend to serve compartmentalisation of duties, meaning that if you want to know something, it is necessary to go to the person who ‘owns’ the spreadsheet. Because of this compartmentalisation there are often several ‘versions of the truth’. Bulk cargo inventory is measured in many ways at many points along the supply chain and can change due to:
- Moisture loss/gain.
- Accidental co-mingling.
- Inaccuracy in weighing equipment and draft surveys.
- Poor recording of paper weigh tickets.
These variabilities create intrinsic deviations, which mean that the poor performance of a spreadsheet-based operating system is rarely tested. Only when a serious issue, such as cargo loss or cross contamination, occurs does an audit take place and it is here that the spreadsheet system fails to provide an adequate audit trail, exposing the terminal operator to claims and compensation.
Spreadsheets also fail to reap the benefits of integration to other systems, such as weighbridges, control and finance systems, which greatly enhances the quality of the data and significantly reduces the administrative burden of data entry.
A company usually develops an in-house system when they consider their requirements to be complex or unusual or where the IT department is perceived as a fixed cost to the business and therefore a ‘cheaper’ option.
When considering terminal operating systems, the ‘we do things differently’ position is difficult to support, simply because shipping is a global business handling the same modes of transport and cargos using the same methods and commercial agreements around the world. Therefore, although there are small localisations, such as tax, language and customs, specialist TOS systems are well-proven to manage the workflows required to receive, store and deliver cargo.
Off-the-shelf will therefore provide most of the core functionality in a stable and bug-free condition whereas the in-house development will consist of a very large new body of work with all the inherent testing and de-bugging requirements.
One area where the off-the-shelf product significantly outscores the in-house option is the future development of the product. The off-the-shelf vendor will continually develop and improve the product based on other client’s requirements and their product roadmap. These improvements and enhancements are released to existing customers, often at no cost. The vendor will also make strategic new releases to move their product forward in line with technological developments and market trends. The in-house team will also make enhancements to the system but the client bears the cost for this and it is very difficult for the in-house team to make strategic technological advances, which ultimately leaves the client with an obsolete platform and the need to start again.
TOS in action
As a direct reflection of the diversity of the sector, the following examples each have specific but different business cases for implementing systems although all using the same core functionality.
Saldanha Bay iron ore terminal, South Africa
Saldanha Bay is located on the Western Cape 140 km northwest of Cape Town, owned and operated by Transnet Port Terminals, and was opened in 1976. The terminal handles 60 million tpy of iron for mining houses from the Northern Cape, and loads between 25 – 30 ships per month for exports. It is the deepest natural water terminal in South Africa, averaging 21.5 m draft with no dredging and has a typical open stockyard arrangement with tipplers, stacker reclaimers and belt conveyors. Cargo arrives by rail and each train is around 4 km long containing 34 200 t of iron ore.
Although inventory management is important at Saldanha Bay, the real business case is having the capability to use real-time data to measure and improve the operational performance of the terminal. This is achieved by the TOS system being fully integrated with the control systems at the terminal. Real-time data is used in the TOS to plan, execute and optimise the processes of unloading trains and loading ships. Operational and management teams have a minute by minute view of events allowing them to make rapid decisions, re-plan and ensure that the terminal throughput is optimally managed. Each morning the management team uses reports from the TOS system to review the previous day and set new objectives for the operators. The reports contain details of equipment outages, vessel related delays, waiting times and other variances which are discussed and acted upon.
Maintaining the optimal performance of the terminal satisfies the objectives of the cargo owners and ensures that the terminal is not a bottleneck in the mine to end-user supply chain.
Port of Tilbury grain terminal, UK
The Port of Tilbury grain terminal is a busy import and export terminal based on the Thames estuary in England. The terminal handles more than 1 million tpy and although the terminal wishes to optimise processes and handle vessels as quickly as possible, the real business case for implementing a TOS system was to enable the terminal to implement robust inventory management and traceability processes. The terminal handles many different grain and oilseed commodities, for numerous customers; all bound to enter the human food chain. To complicate matters further, the terminal has almost three hundred storage bins and more than one thousand conveying route permutations.
At this terminal, the TOS system is closely coupled to the control and weighing systems to ensure that storage and separations rules, defined in the terminal’s standard operating procedures, are rigidly adhered to and that the tonnages in each bin are always accurate. This allows the terminal to avoid mistakes and to comply with quality assurance and food law requirements.
As a byproduct of this robust inventory management, the terminal derives further benefits, such as optimisation of space, allowing the terminal to handle more cargo and the ability to automatically generate all invoice line items for storage, handling and services despite the complex commercial agreements prevalent in the grain sector.Customers of the terminal are updated on a daily basis on their stocks and movements by the TOS system automatically sending email reports to the pre-defined distribution list.
Diversity and conservatism in the bulk and general cargo sector has created an environment where proprietary terminal operating systems are not yet the de-facto option for terminal operators. However, the speed of recent technical developments allows these systems to deliver irrefutable business cases across a broad range of bulk operations, through:
- Reduced demurrage.
- Increased throughput capability.
- Lower admin costs.
- Reductions in claims for losses and cross contaminations.
- Ensuring that all activities are billed.
- Improved customer service.
Spreadsheets or custom built, in-house systems cannot achieve these levels of performance and, despite the perceived low initial costs of these options, the container sector approach, where TOS systems are an intrinsic part of the business process, is easy to justify. Recent developments, which allow TOS systems to be hosted in the cloud and delivered as a service, also remove the barrier of high initial purchase cost, clearing the way for small terminals to share the benefits.
Adpated from an article written by David Trueman, TBA Doncaster.
Read the article online at: https://www.drybulkmagazine.com/special-reports/21062017/bringing-tos-into-view/