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Maritime ports serve as a natural test bed for blockchain ecosystems

Testing smart city concepts, technologies and operations in a semi-confined setting

As detailed in TBR’s most recent Digital Transformation: Blockchain Market Landscape, maritime ports present an intriguing test bed for blockchain technology, given three intertwined elements essential to successful blockchain adoption. First, ports rest at the center of a diverse ecosystem, with players engaging directly on varying cadences, with different technologies and IT infrastructures and collaborative as well as competing needs — in short, a place messy and competitive enough to warrant a comprehensive solution to restrain complexity and digitize trust. (And if you do not believe ports can be messy, corrupt places, watch the second season of HBO’s “The Wire.”) Second, governments typically have a strong interest in port operations, either running them as quasi-governmental entities or regulating and overseeing them to advance national security and local and/or regional economic interests. For blockchain, as has been made clear in this report, government involvement can accelerate adoption. And third, with their diverse landscape of actors — shipping companies, trucking companies, freight forwarders, inspectors, stevedores, even local fire and rescue units — maritime ports are self-contained mini-universes, like small cities, a characteristic that pulls together the diverse ecosystem and government interest into a useful whole, for the purposes of blockchain.

As TBR noted previously, “The Port of Oulu has taken an approach shared by most municipalities looking to become a smart city — start small, but with a large, long, deep vision, and build incrementally … a port like Oulu’s, which is both small enough to be manageable through a disruptive digital transformation and large enough to be replicative of a larger port’s ecosystem and challenges, could be an ideal place for connectivity and emerging technology vendors to experiment and prove out the use case for bringing one of the most fundamental infrastructure environments fully into the digital age.”

Some blockchain consultancies have been experimenting with these ideas, as we noted here: “For EY, a firmwide approach to addressing every element of trade — including supply chain, tax and regulatory compliance, blockchain solutions, in-port IoT, connectivity to inland regions, and real-time shipping data — comes together under its NextWave Global Trade Initiative, a white space for EY to build cross-border, cross-service-line and cross-industry solutions.”

As is clear from both the Oulu and EY examples, blockchain can only be part of a port’s digital transformation, not the entirety of it. In line with the concept that a “rising tide lifts all ships,” connectivity, IoT and analytics round out the picture (cloud and cybersecurity should already be there), making blockchain an essential component, if not the most easily adopted or most transformational (arguably IoT sensors on every element of a port — with supporting analytics and insights — would more rapidly lead to streamlined operations, even if blockchain-enabled tracking and trade-based financing would lead to longer-term value).

Even recognizing the limitations, for blockchain services vendors, maritime ports may provide an essential opportunity to test solutions in diverse, yet manageable, ecosystems while partnering with governments or quasi-governmental institutions that will be critical to wider blockchain adoption. If the use case appears limited, consider the more than 50 ports that exist between Duluth, Minn., and the Atlantic Ocean. Blockchain-enabling that supply chain archipelago could be a massive use case and spark wider adoption across the enterprises interacting with every one of those ports.

For further details about blockchain in the context of digital transformation, IT services and consulting, see TBR’s most recent Digital Transformation: Blockchain Market Landscape, which includes use cases, vendor insights, and client pain points and needs.

Global trade and maritime ports: How EY tackles both with digital transformation and data

Bringing expertise, technology and experience to the business of running a port  

TBR has covered EY extensively, reporting on the firm’s evolution in both technology and global operations, most recently in a special report that noted, “EY has rapidly evolved its technology consulting practice and its overall value to clients around emerging technologies and is now addressing scale, standardization of quality across the globe, and sustained investments in innovation and the ecosystem through its common global strategy and practice architecture.” The wide-ranging discussion with Jonathan Beard and his colleagues reinforced that assessment, particularly in the way EY emphasized its opportunity to apply its industry markets expertise and technology capabilities to an ecosystem in need of rapid digital transformation.

The firm, according to James Wainwright, has been building on its NextWave Global Trade Initiative with its own assets and intellectual property, harnessed to long-developed understandings of the maritime industry, and pulling together its global technology consulting expertise. While the Global Trade Initiative is still a work in progress, EY has clearly made a commitment to play to its own strengths, move rapidly in an evolving market, and become a critical, trusted link within the broader ecosystem. Heading into the latter half of what has been a horrible year for everyone, EY’s specific challenges will reflect the headwinds across the maritime port and supply chain markets overall: coping with the pandemic, growing in a turbulent global macroeconomic climate, and investing in the right technology to solve the knottiest business problems.

To set the stage, Port Optimization solution Lead Wouter van Groenestijn noted that there exist “many suboptimalities in ports” and the operators, port authorities and others in the ecosystem collect vast amounts of data but very rarely tap into it. As an example, EY cited workforce planning — ensuring the right people are on location exactly when needed, based on a ship’s expected arrival — can be enhanced through data management, AI and analytics, provided the data is collected and used properly. With skills and experience combining vast and constantly evolving data sets, EY can play a role in addressing specific run-the-port problems, which span multiple ecosystem players, such as operators, shippers, regulators and freight-forwarding companies, and have a direct impact on operations and profitability.

In addition to providing expertise around data, EY serves as a useful ecosystem hub as it is a trusted partner to all the stakeholders within a port. TBR has heard multiple variations on this idea that maritime ports contain vast complexities with overlapping interests, jurisdictions and business models, reinforcing the need for a neutral party to handle shared concerns such as data. Optimizing that data then comes from, in EY’s estimation, knowing what to look for, which only comes through experience working with maritime port clients and their ecosystem clients and partners.

In mid-July TBR continued looking at the digital transformation parallels between maritime ports and smart cities by speaking with a team from EY’s Global Trade Initiative about the firm’s efforts with port authorities and broader port ecosystems. Jonathan Beard, partner, Strategy and Transactions, Hong Kong; James Wainwright, senior manager, Financial Services Advisory, London; Wouter van Groenestijn, associate partner, Strategy and Transactions, Singapore; and Lynn Dike, associate director, Brand, Marketing and Communications, London, described EY’s initiatives and solutions in the context of a wildly uncertain market. The following reflects that discussion and builds on TBR’s previous reporting on this space.

Traditional ports and quantum computing: The now and the future

Principal Analysts Geoff Woollacott and Patrick Heffernan are each publishing a piece this week that touches on the business of digital transformation. Geoff focuses on the massive change expected from quantum computing as the business applications begin to catch up to the science. In his opinion, “Quantum is on the cusp of delivering economic advantage. The achievable impact is real today in what can be described as Horizon 1 application use cases. Horizons 2 and 3 will be as much a function of taking existing quantum algorithms that operate with a certain precision under the current fidelity of Noisy Intermediate-Scale Quantum (NISQ) Systems and applying them to different use cases requiring greater precision delivered from higher fidelity, and ultimately fault tolerant, quantum systems to deliver economic advantage to the activity in question.” Patrick’s blog looks at a specific use case for digital transformation, Port Oulu in Finland, where he notes, “a port like Oulu’s, which is both small enough to be manageable through a disruptive digital transformation and large enough to be replicative of a larger port’s ecosystem and challenges, could be an ideal place for connectivity and emerging technology vendors to experiment and prove out the use case for bringing one of the most fundamental infrastructure environments fully into the digital age.”

Additional assessments publishing this week from our analyst teams

DXC Technology’s leadership, headed by new CEO Mike Salvino, is actively pursuing strategic alternatives for three of DXC’s businesses — U.S., state and local health and human services; business process services; and workplace and mobility — that do not fit the company’s focused strategy for the future. DXC will leverage these three businesses, which account for roughly 25% of the company’s total revenue, to unlock value through potential divestitures to strategic or financial buyers or a spin-off.” —  Kevin Collupy, Analyst

Cisco Customer Experience expands its partner network, particularly with technology-led vendors, to incorporate hardware solutions and support contract generation around these solutions. Integrating automation capabilities will enable Cisco Customer Experience to maintain profitability while increasing the delivery range of solutions to new clients. We expect the company to continue strengthening its partner relationships to accelerate its portfolio transition; however, Cisco Customer Experience could face challenges differentiating its offerings from those of its peers, as they also leverage partner technologies to grow market share.” — Analyst Kelly Lesiczka

“With markets, portfolio offerings and people at the center of its Strategy 2025 initiative, BearingPoint is expected to continue to grow its management consulting revenue beyond 2019 and gain opportunities in its five segments of focus: data-driven banking operations, unified commerce, automotive operations, next-generation public services and digital twin business. BearingPoint is developing its organization in Europe and establishing the foundation for its business development in the U.S. to address growing client demand and enable European organizations to become global companies.” — Elitsa Bakalova, Senior Analyst