Smart Port Establishment to Foster Global Maritime, Land, and Air Logistics Data Flow
Smart Port Establishment to Foster Global Maritime, Land, and Air Logistics Data Flow
The source text is in Chinese. This English version is for reference only. In case of any discrepancy between this English version and the Chinese version, the Chinese version shall prevail.
The Government will launch the Port Community System (PCS) next year. The PCS will leverage artificial intelligence, big data, and blockchain technologies to facilitate maritime, land, and air logistics data flow, and foster the interconnectivity of information flow with ports in the Mainland and overseas. Given numerous logistics enterprises have established individual logistics data platforms, what is the significance of developing a PCS?
PCS Establishment Smash "Information Silos" in Logistics Sector
With a diversified industrial culture, the logistics sector comprises enterprises operating across various segments. For the sake of confidentiality and commercial interests, information systems among the enterprises are not seamlessly accessible, resulting in issues such as fragmented information and a lack of unified data standards, which form mutually disconnected "information silos". As a result, cargo owners encounter difficulties in tracking cargo throughout the entire logistics process, complicating inventory management and supply-chain oversight, and increasing the costs for financial institutions in verifying trade information. Consequently, overall trade costs remain consistently high.
The PCS is a vital infrastructure that bridges these "information silos" for the logistics sector. Since the 1980s, customs authorities worldwide have promoted electronic customs-clearance procedures to cope with increasing cargo flow, which has constructed the initial prototype of the PCS. With rapid advancements in information technology, the PCS functionalities nowadays have significantly expanded to encompass real-time monitoring of liners, terminals, trucks, and containers; electronic customs declarations; data analytics; and cargo tracking. Through data-collection mechanisms and blockchain technology, the sector can access comprehensive logistics data, enabling detailed analyses of cargo flow trends and precise demand forecasting. Moreover, cargo owners can track cargo status with the platform around the clock so as to reduce management costs and further streamline and optimise the supply chain structure. In addition, trading partners and financing banks may also verify trade information through the platform to minimise risks associated with erroneous lending.
Commerce as Pioneer, Government as Leader to Overcome Sector’s Barriers
Obviously, the existing smart logistics platforms of the sector have already possessed certain functionalities of the PCS. Nonetheless, examining the development process of the platforms reveals that the success or failure of a smart port platform largely hinges on its attractiveness to encourage extensive industry participation and stakeholder engagement, thereby enabling the full establishment of the community system. Given the considerable volume of sensitive commercial information including in logistics data, many industry-led logistics community systems in the past encountered difficulties in securing the trust of other enterprises. For instance, the digital logistics platform TradeLens, jointly launched by European shipping firm Maersk and IBM in 2018, ceased operations two years ago due to inadequate involvement from industry stakeholders.
It is believed that the significance of the Government-led PCS lies not in functional innovation, but rather in promoting the broader adoption of smart logistics —— handling commercially sensitive data with a higher degree of neutrality and confidentiality, the Government can break barriers in between. If the Government-developed PCS establishes a confidential, secure, and reliable mechanism for information exchange among the platforms in the sector, and incorporate structural flexibility to accommodate interfaces with diverse systems, it will likely attract the sector to exchange information through the PCS, and resolve the current impasse.
Add Revenue Sources via Value-added Services; Collaborate with the Commerce to Promote Smart Logistics
Moreover, given the current constraints on public finance, the PCS platform must achieve long-term break even. Noteworthily, many successful platforms typically offer their services free during the initial stages to attract sufficient users and traffic. For instance, the Mainland’s National Public Information Platform for Transportation and Logistics (LOGINK) has been providing enterprises with free services and has already brought over 400,000 enterprises nationwide into the platform. It can be observed that the success of such systems depends largely upon their prevalence and degree of industry adoption. Basic services must, therefore, be provided without charge.
However, to alleviate the burden on public finance, it is suggested that the authorities examine the possibility of incorporating fee-charging value-added services into the platform, such as artificial intelligence software, which supports users in data analysis, the investigation of competitors, supply-chain optimisation, and financial risk management.
It is additionally anticipated that the authorities will seize this opportunity to enhance the promotion of smart logistics applications, including electronic bills of lading (eBL). Escalating international political tensions and fickleness of trade and tariff policies have brought supply-chain intellectualisation onto the agenda. For example, Presidency of Donald Trump of the United State (US) previously suspended tariff exemptions for goods valued below USD 800, substantially increasing customs-clearance procedures. Consequently, millions of shipments accumulated at customs checkpoints and imposed significant burdens and disruptions on cargo owners, logistics providers, and even the US customs. Although the US authorities promptly reinstated the original exemptions, this incident underscored the escalating risks associated with trade policies.
It is noticed that eBL technology can not only expedites the process of cargo collection, but also automatically generates documentation required for customs clearance, effectively mitigating the risk of delays caused by the fickleness of trade and tariff policies. As e-commerce platforms expand overseas, the full application of eBL across air, land, and maritime transport will significantly enhance the resilience of enterprises’ supply chains.
The authorities are recommended to strengthen collaboration with other platforms in the industry to promote diverse smart logistics solutions, for supporting the local logistics sector in responding to future uncertainties. The authorities should also endeavour to achieve seamless integration between various systems in system design, collaboration, promotion, and other areas, and actively broaden the scope of cooperation partners to connect with countries and regions along the Belt and Road through the application of the Internet of Things, facilitating data flow of logistics, information, and capital among Hong Kong, the Mainland, and Belt and Road countries, and thus creating business opportunities for local logistics, finance, information technology, and service industries.
In summary, not only is the establishment of the PCS a critical measure to bridge the logistics sector's "information silos", but it is also an instrumental initiative to promote industry intellectualization and enhance competitiveness, ultimately fostering the prominent role of Hong Kong’s logistics sector in global competition.
The source text is in Chinese. This English version is for reference only. In case of any discrepancy between this English version and the Chinese version, the Chinese version shall prevail.
The Government will launch the Port Community System (PCS) next year. The PCS will leverage artificial intelligence, big data, and blockchain technologies to facilitate maritime, land, and air logistics data flow, and foster the interconnectivity of information flow with ports in the Mainland and overseas. Given numerous logistics enterprises have established individual logistics data platforms, what is the significance of developing a PCS?
PCS Establishment Smash "Information Silos" in Logistics Sector
With a diversified industrial culture, the logistics sector comprises enterprises operating across various segments. For the sake of confidentiality and commercial interests, information systems among the enterprises are not seamlessly accessible, resulting in issues such as fragmented information and a lack of unified data standards, which form mutually disconnected "information silos". As a result, cargo owners encounter difficulties in tracking cargo throughout the entire logistics process, complicating inventory management and supply-chain oversight, and increasing the costs for financial institutions in verifying trade information. Consequently, overall trade costs remain consistently high.
The PCS is a vital infrastructure that bridges these "information silos" for the logistics sector. Since the 1980s, customs authorities worldwide have promoted electronic customs-clearance procedures to cope with increasing cargo flow, which has constructed the initial prototype of the PCS. With rapid advancements in information technology, the PCS functionalities nowadays have significantly expanded to encompass real-time monitoring of liners, terminals, trucks, and containers; electronic customs declarations; data analytics; and cargo tracking. Through data-collection mechanisms and blockchain technology, the sector can access comprehensive logistics data, enabling detailed analyses of cargo flow trends and precise demand forecasting. Moreover, cargo owners can track cargo status with the platform around the clock so as to reduce management costs and further streamline and optimise the supply chain structure. In addition, trading partners and financing banks may also verify trade information through the platform to minimise risks associated with erroneous lending.
Commerce as Pioneer, Government as Leader to Overcome Sector’s Barriers
Obviously, the existing smart logistics platforms of the sector have already possessed certain functionalities of the PCS. Nonetheless, examining the development process of the platforms reveals that the success or failure of a smart port platform largely hinges on its attractiveness to encourage extensive industry participation and stakeholder engagement, thereby enabling the full establishment of the community system. Given the considerable volume of sensitive commercial information including in logistics data, many industry-led logistics community systems in the past encountered difficulties in securing the trust of other enterprises. For instance, the digital logistics platform TradeLens, jointly launched by European shipping firm Maersk and IBM in 2018, ceased operations two years ago due to inadequate involvement from industry stakeholders.
It is believed that the significance of the Government-led PCS lies not in functional innovation, but rather in promoting the broader adoption of smart logistics —— handling commercially sensitive data with a higher degree of neutrality and confidentiality, the Government can break barriers in between. If the Government-developed PCS establishes a confidential, secure, and reliable mechanism for information exchange among the platforms in the sector, and incorporate structural flexibility to accommodate interfaces with diverse systems, it will likely attract the sector to exchange information through the PCS, and resolve the current impasse.
Add Revenue Sources via Value-added Services; Collaborate with the Commerce to Promote Smart Logistics
Moreover, given the current constraints on public finance, the PCS platform must achieve long-term break even. Noteworthily, many successful platforms typically offer their services free during the initial stages to attract sufficient users and traffic. For instance, the Mainland’s National Public Information Platform for Transportation and Logistics (LOGINK) has been providing enterprises with free services and has already brought over 400,000 enterprises nationwide into the platform. It can be observed that the success of such systems depends largely upon their prevalence and degree of industry adoption. Basic services must, therefore, be provided without charge.
However, to alleviate the burden on public finance, it is suggested that the authorities examine the possibility of incorporating fee-charging value-added services into the platform, such as artificial intelligence software, which supports users in data analysis, the investigation of competitors, supply-chain optimisation, and financial risk management.
It is additionally anticipated that the authorities will seize this opportunity to enhance the promotion of smart logistics applications, including electronic bills of lading (eBL). Escalating international political tensions and fickleness of trade and tariff policies have brought supply-chain intellectualisation onto the agenda. For example, Presidency of Donald Trump of the United State (US) previously suspended tariff exemptions for goods valued below USD 800, substantially increasing customs-clearance procedures. Consequently, millions of shipments accumulated at customs checkpoints and imposed significant burdens and disruptions on cargo owners, logistics providers, and even the US customs. Although the US authorities promptly reinstated the original exemptions, this incident underscored the escalating risks associated with trade policies.
It is noticed that eBL technology can not only expedites the process of cargo collection, but also automatically generates documentation required for customs clearance, effectively mitigating the risk of delays caused by the fickleness of trade and tariff policies. As e-commerce platforms expand overseas, the full application of eBL across air, land, and maritime transport will significantly enhance the resilience of enterprises’ supply chains.
The authorities are recommended to strengthen collaboration with other platforms in the industry to promote diverse smart logistics solutions, for supporting the local logistics sector in responding to future uncertainties. The authorities should also endeavour to achieve seamless integration between various systems in system design, collaboration, promotion, and other areas, and actively broaden the scope of cooperation partners to connect with countries and regions along the Belt and Road through the application of the Internet of Things, facilitating data flow of logistics, information, and capital among Hong Kong, the Mainland, and Belt and Road countries, and thus creating business opportunities for local logistics, finance, information technology, and service industries.
In summary, not only is the establishment of the PCS a critical measure to bridge the logistics sector's "information silos", but it is also an instrumental initiative to promote industry intellectualization and enhance competitiveness, ultimately fostering the prominent role of Hong Kong’s logistics sector in global competition.
