international conference on science, management, and

© 2018 International Conference on Science, Management, and Engineering 2018

International Conference on

Science, Management, and Engineering 2018

Transforming Maritime Logistics with The Power of Information Technology

Hanif Arief Wisesa1*, Felix Hui1, Sally Wilson1 1Department of Infrastructure Engineering, The University of Melbourne

[email protected] (*Corresponding Author)

Sari Wahyuni2

2Faculty of Economic and Business, Universitas Indonesia

Abstract

Ports are an essential component of a portal cities’ critical infrastructure set. Ports are both a doorway to commerce with other regions as well as an enabler of development within the city and its surroundings. Therefore, a highly productive and competitive port will be the key to accelerating such development. Advancements in Information Technology (IT) and automation have become critical drivers for increasing the productivity and competitiveness of ports to work more efficiently, which in turn may reduce both costs and time. This paper examines the power of Information Technology to transform maritime logistics in Indonesia using Australia as a reference point. Both countries incorporate Information Technology in their strategic plans, with Australia focusing on increasing automation and Indonesia developing the Indonesia National Single Window. In this study, important data regarding Information Technology in ports were gathered using online surveys. Focus group discussions and in-depth interviews were conducted in Melbourne, Jakarta, and Surabaya. The information extracted from these activities, is then used to examine the issues relating to application of information technology in maritime logistics. The challenges and obstacles to implementing IT in ports in Indonesia are also examined. The study found that maritime logistics productivity can be boosted by: having a vehicular booking system that can optimize port-road connectivity by optimizing the allocation of timeslots for transport resources; an integrated common platform that enables

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different stakeholders and service providers to work collaboratively; the vision and importance of the smart city concept and the important role of IT in maritime logistics; and lastly, skill, capability and capacity building in this area. The study shows that creating and sustaining long term competitive advantage rests heavily on the management’s understanding of these critical issues facing their ports and their will to solve the problems that arise from these issues.

Keywords: Ports, Logistics, Information Technology, Port Competitiveness, Port Productivity

1. Introduction

In the recent years, Indonesia has been experiencing major economic growth. According to the Indonesia Economic Quarterly review by The World Bank, the Indonesian Real GDP annual percent change in 2017 reached 5.1% and is expected to reach 5.3 percent in 2018 (World Bank, 2018). The review recommends that Indonesia needs to allocate more spending on key sectors, such as infrastructure, health, and others. Logistics also played an important role for Indonesia’s economic growth. A study conducted by Reza (2013) that analyzes the relationship between logistics growth and the economic growth in Indonesia has further strengthened the argument. In the study, the author used time series correlation analysis between the Indonesian GDP and the logistics (sea and rail) volume from 1988 to 2010. In addition, the author also compared the Indonesian GDP with the logistics volume from sea, rail, and air combined from 2003 to 2010. The results show that there is a high correlation between the volume of logistics with the Indonesian GDP. The author also stated that due to the geographical location of the Indonesian archipelago, which is very strategic, it needs to develop a modern logistics network to seize the opportunity in attracting customers.

The World Bank publishes a biannual Logistic Performance Index (LPI), used to measure the logistics performance of a country compared to other countries. The index measures six different performance indicators from the countries’ logistics: customs, infrastructure, international shipments, logistics competence, tracking and competence, and timeliness (World Bank, 2018a). In the 2018 ranking, Indonesia ranks 46th in the world on the overall logistics performance (World Bank, 2018b). Amongst the ASEAN nations, Indonesia is ranked fifth, behind Singapore, Thailand, Vietnam, and Malaysia. Between 2014 to 2018, the performance of the six ASEAN nations, Singapore, Thailand, Vietnam, Malaysia, Indonesia, and Philippines, fluctuated. As an example, in 2014, Indonesia was ranked 53rd on the LPI ranking, which decreased to 63rd in 2016, and then increased again in 2018. Other ASEAN nations

Hanif Arief Wisesa, Felix Hui, Sally Wilson, and Sari Wahyuni 3

shared this trend, except for Malaysia, where the country’s score kept decreasing. The 4-year LPI of the six ASEAN nation can be seen in Figure 1.

Figure 1. The 2014-2018 Logistic Performance Index of six ASEAN Nations. (World Bank, 2018b)

Compared to Australia, Indonesia has a lower Logistic Performance Index, with a score of 3.75 and 3.15 in 2018 for Australia and Indonesia respectively. Indonesia is most behind in the customs and infrastructure sectors. Indonesia has a customs indicator rank of 62, whereas Australia is 7th in terms of customs. The customs indicators measure the efficiency of customs clearance. In terms of logistics timeliness, which relies on Information Technology, Indonesia is ranked 41st, whereas Australia is ranked 21st. Therefore, there is the need for a system that can increase the efficiency of the port.

Since the early 21st century Information Technology has been critical to the efficiency of ports. A study conducted by Kia et. al (2000) examined the importance of Information Technology in ports, specifically on managing the systems that transmit and process information to port operators. In addition, the authors also assessed the role of Information Technology on improving the cargo handling of a terminal. The authors compared two different terminals, one equipped with electronic devices in the terminal and one without. These electronic devices include microwave technology, tagging technology, barcode scanner, radio frequency system, and voice recognition technology. According to the simulation results, electronic devices fitted on the port positively affect operations. One of the most highly impacted operations is on the waiting time of the straddle carriers by the elimination of the search time for correct slots. The authors estimated that with these electronic devices fitted, Australian ports could save approximately $180 million dollars per year.

According to a study by Lee-Partridge et. al in 2000 on the Port of Singapore Authority’s (PSA) experience in implementing Information Technology at one of the world’s busiest transshipment terminals, four success factors in managing IT in ports were found. These success factors are: business that drives IT investments, synchronize business with the IT masterplan, maintain a scalable and lean IT infrastructure, and drive IT innovation and creativity. The PSA has invested hundreds of millions of dollars in IT in order to increase their Information Technology capability by integrating the port’s main operation, which included Berth Planning, Yard Planning, Ship Planning,

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Singapore Thailand Vietnam Malaysia Indonesia Philippines

4-Year LPI

2014 2016 2018

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and Resource Allocation. This improved port operational efficiency as the port users’ shipping requirements can be quickly dealt with.

In addition to having the IT systems and infrastructure implemented inside the ports, the adoption of the technology throughout the supply chain which the ports are involved in is also important. This is because an international port is one of the most critical components of a supply chain. Ports serve as the interface between the land transportation on one side and the sea transportation on the other side (Rodon et al., 2008). Therefore, the ports must facilitate activities not only from the sea side, but also on the landside. Lai et. al. (2006) investigated the effects of institutional isomorphism on the adoption of IT in the supply chain. The authors first discussed diffusion theory by Rogers (2003), which is the communication of innovation in a social system. However, they mention that this theory has a flaw, which is that the members within the group could choose whether or not to adopt the technology. The authors mentioned that considerations of institutional isomorphism should be taken into account when talking about the adoption of IT. This institutional isomorphism includes coercion, mimesis, and norms. Mondragon et. al. (2017) applies the idea and investigated the effects of institutional isomorphism on seven different ports around the world. The authors conclude that policy and IT adoption are greatly influenced by pressure from government institutions and dominant organizations that run the ports.

Collaboration between firms in a supply chain is also important to share knowledge regarding technological innovation. In 2012, Wang and Wang (2012) analyzed the relationship between knowledge sharing, innovation, and firm performance. The authors surveyed and analyzed the responses from technological firms in China. Their research results showed that tacit and explicit knowledge might contribute directly to the operational performance of a company or indirectly through innovation quality or innovation speed. Related to Porter’s strategic value (Porter, 1996), Alsaad et. al. (2018) investigated the factors to obtain value creation in Supply Chain Information Technology. The author used questionnaires to obtain data from pharmaceutical firms. The research confirmed that collaboration with IT is important for creating business value. Information sharing, resource sharing, and collaboration dimensions are the main factors that contribute to the IT value creation in a supply chain. However, jointly formulating the knowledge creation does not contribute highly to the value creation. One specific system which requires collaboration between parties is the Vehicle Booking System. In 2009, Davies et. al investigated Vehicle Booking Systems for loading and unloading activity in the port (Davies, 2009). The author assessed different Vehicle Booking Systems at ports in four different countries: Australia, Canada, United Kingdom, and the United States. The authors assessed both the improvement and the drawbacks of each of these different Vehicle Booking Systems. The authors found that the implementation of such systems will reduce truck queues at the terminals. However, there are also things that could hinder the operations, such as the added complexity of the system and fleet management issues.

Aside from the relationship between the ports and its supply chain network, the ports must be able to utilize its resources in the process of implementing IT. Human resources are especially important in ensuring successful IT implementation. Management style, such as the attitude towards the implementation of the system and manager personality is very important in the implementation of an Enterprise Resource Planning (ERP) System (Sheu et. al., 2004). In addition, the technical skills of the labor at the company also affects the implementation of the system (Sheu et. al., 2004). Bresnahan et. al. (2002) mentions that skilled labor is complementary with several changes at the firm level, one of which is IT. This correlates with the labor demand of the firm. Quaadgras et. al. (2014) proposed and investigated four commitments which maximize the business impact from IT. These four commitments include strategic-choice making, development of a digital platform, working smarter with information, and action-oriented assessment. The authors mention that these commitments must be consistent and long-term in order for IT investments to be effective.

Bower and Christensen (1995) define disruptive technology as a technology that seems to be unattractive at first, but picks up in popularity as the feature usability increases over the years. These types of technology have caught many companies off guard. To prevent this, companies should decide whether the new technology has the potential to


become disruptive. In addition, the performance trajectory of the technology should be measured to identify where it will peak. Afterwards, the company should determine the market and develop the technology.

One of the concepts of technology utilization that has become a buzzword in recent years is the concept of the Smart City. Wills and Aurigi (2018) mentions that there is no one definition of a Smart City concept. According to the authors, the concept of Smart City changes depending on the current technological advancement. Coallier (2016) mentions that Smart City is a system of systems, where it integrates smaller sub-systems into a more powerful and unique large system. Utilizing Internet of Things in Smart Ports is also becoming increasingly popular, where various sensors, such as Radio-Frequency Identification (RFID), Light Detection and Ranging (LIDAR), Fiber Bragg Grating (FBG), and Infrared radiation sensors are installed at the ports for various uses (Yang. et. al, 2018).

In this study, we look at the implementation of different types of Information Technologies in Ports. We examine IT that is needed by ports to increase efficiencies in operations. In addition, we also look at the challenges of implementing these systems in ports. Proposed solutions on how to address these challenges are also presented. The paper is organized as follows. This section discussed the background and presents some related literature. The next section describes the methodology used in this study. The third section articulates the results and findings. The discussion section discusses the findings and provides some possible strategic solutions to each of the problems.

2. Methodology

In our study related to Efficient Facilitation of Major Infrastructure Projects with a focus on port planning and development, we utilized four different methodologies to obtain data which included investigating the role and importance of technologies in Ports. First, we conducted a literature review in order to identify relevant IT implementation in ports and to identify the problems that exist in ports which might be solved through the implementation of IT.

Following a review of the literature and discussion with both Indonesian and Australian researchers working on the study, an online questionnaire was developed. The link to the survey was sent to key port stakeholders and people with relevant experience on ports in Indonesia and Australia.

Focus Group Discussions (FGD) and In-depth Interviews related to port planning and development were conducted both in Indonesia and in Australia. The FGD was held in Jakarta, Indonesia in 2017 where 26 people from Government Ministries, State Owned Enterprises, senior port and terminal executives, finance, banking, transport, construction, fund managers, private associations, and logistics/procurement attended the discussion. In Australia, the FGD was conducted in Melbourne with eleven port stakeholders. The in-depth interviews were conducted in Surabaya, Indonesia. The respondents were officials working in various organizations in port operations in Surabaya.

Data from the online surveys, FGDs and the in-depth interviews were analyzed quantitatively and qualitatively. This paper focuses on findings related to IT.

3. Results and Findings

The findings from the online survey indicate that from the perspective of the key port stakeholders, Information Technology plays an important role in improving the operations of the port. This was also the case from the FGDs that were held in both countries. This section discusses some of the areas perceived to be important by the participants

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of the FGDs and the in-depth interviews. It also highlights which sectors still need improvements, even though Information Technology has been implemented there.

3.1. IT for Port Road Connectivity

One of the questions from our survey asked about where investment should be directed to improve the operations of the port. Based on the responses from the Indonesian survey, the respondents unanimously agree that it is very important for investment to be directed to road connectivity. Road connectivity has been a major problem in the operational aspects of Indonesian Ports. According to one of the experts from the Focus Group Discussion held in Surabaya, Indonesia, 57% of Indonesian ports loading and unloading activities are conducted in Tanjung Priuk Port, Jakarta. The majority of the container trucks that load or unload the container on the port originate from the Eastern Corridor. The movements of these trucks account for approximately 30% of the total logistic movement to and from the ports of Indonesia.

In addition to the problem where the operations of the port are hindered by the uneven volume of vehicles coming in and out of the port, there is also a problem with the composition of the trucks entering and leaving the port. According to an expert, one of the problems in a major Indonesian container port is that only 5% of trucks enter and exit the ports loaded. This creates major inefficiencies in the operation of the port, where vehicles pileup and congest the area around the vicinity of the port. The respondent further mentioned, that by using Information Technology to create a vehicle appointment system or vehicle booking system, such as the one used by the Singapore Port Authority, that would oblige trucks to be loaded to and from the port and would be an effective solution to overcome this problem.

As mentioned in the previous section, we also conducted in-depth interviews with key port stakeholders in Surabaya, Indonesia. Based on our interview, there is a need for a Vehicle Booking System for the port. This need is driven by an uneven distribution of the time that trucks come in and out of the port. They mention that the port is empty, which means no/few trucks are present, during the morning, and starts to get congested late in the afternoon. They believe that the Vehicle Booking System will be able to control this uneven distribution.

Scheduling the arrival of trucks will also increase the efficiency of the port from the operational standpoint. This is done by having the ability to organize and order which containers are to be handled first in the yard. The Vehicle Booking System helps the operator to determine which container needs to be loaded onto the truck first to be transported out of the port. By doing this, the Yard Occupancy Ratio (YOR), which is the ratio between the occupancy of the yard and the capacity of the yard, will be reduced. The YOR number is frequently used by Indonesian ports to measure their performance. The lower the YOR of the port, the higher the performance.


Having a low YOR number will also benefit the port container handling rate. When the YOR is very high, there will be tall stacks of containers inside the yard. If the number is low, then there will be less shifting, where a container is shifted to load another container, that occurs to access the container. Minimizing the shifting process will affect the operational cost, as there will be less effort and time required by the operators to access the containers. Therefore, according to the experts, the aim of the Vehicle Booking System in one of the Indonesian ports is not only to free the port and the hinterland surrounding the ports from congestion caused by the trucks, but it also increases the operational performance of the port by a better organization of container storage and movement inside the yard. The diagram and benefits of the Vehicle Booking System can be seen in Figure 2.

Figure 2. Vehicle Booking Systems

Similar to Indonesia, the response to the level of importance of developing areas in order to improve port operation in Australia found the need to invest in road connectivity is considered very important. However, unlike Indonesian Ports, most Australian ports, such as the Port of Melbourne, have already implemented Vehicle Booking Systems. From the Focus Group Discussion in Australia, one of the participants mentioned that the IT in Australia goes beyond the Vehicle Booking System, it is also a Community System.

One of the Australian port stakeholder respondents stated that compared to The Port of Rotterdam, one of the most advanced terminals in the world, in Australia there are an average of three times more messages that are being transmitted per container than in the port of Rotterdam. This means that there is three times more information being communicated per container in Australia. In addition, one participant also mentioned that the time window for the trucks to come and load the container is approximately five minutes. This suggests that the vehicle booking system and the community system work really well in managing the movement of the containers to and from the ports.

However, although Australian ports have successfully implemented vehicle booking systems and community systems, the problems of congestions inside the ports still exist. This is because the opening time of the Distribution Centres (DC) in Australia have not change since the 1970s. This static change of opening times has not kept up with the massive growth of containers being handled at the ports. Regarding the handling rate, according to one of the experts at the Melbourne FGD, it shows an increase up until 6 o’clock at night. However, the handling rate drops afterwards, and returns to a straight horizontal line, due to the operating hours of these distribution centres. This is also backed up by one of the respondents from the Australian online survey, where the respondent mentioned that

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the cargo owners do not operate 24 hours a day, whereas the ports and shipping lines work constantly 24/7. Therefore, the supply chain is not optimized.

3.2. Integration of IT

Integration of Information Technology is one of the challenges that exist when developing an IT infrastructure. Not only does this IT system need to be integrated between each division within a port, but also externally to other external parties, such as trucking companies, customers, etc. One of the Indonesian survey respondents who works for a Government-centric corporation mentioned that port development must be done simultaneously and integrated. From the Indonesian FGD, one expert mentioned the importance of IT standardization between ports in terms of the billing system, container handling, and other operational activities to increase collaboration with international ports. Another expert mentioned that the IT also needs to reach the manufacturing sector, so the manufacturers do not need to apply for documents anymore.

A number of Indonesian container terminals are integrated with the Indonesia National Single Window. The Indonesia National Single Window (INSW) is driven by the fact that the logistics cost in Indonesia contributes to 24% of the GDP (Kementerian Koordinator Bidang Perekonomian Republik Indonesia, 2017). The INSW system aims to reduce the administration time related to the import and export activity of Indonesia. In the system, the status of the dwell time, productivity per terminal, and many other functions can be monitored. This system is also integrated with customs, where the incoming ships will send RKSP (planned arrival of transportation means), which will be forwarded to the customs by the terminal. Therefore, this system also helps with the integration of IT in Indonesian ports.

However, even with the implementation of the INSW to shorten administrative work, there are still issues associated with customs which cause the delay of goods to the customer. One of the respondents from terminal operations mentioned that not all the quarantine and customs facilities are available on site. In one of the terminals at Surabaya it was reported that if the imported goods require laboratory testing for customs clearance, it will need an extra day to transport the goods to the laboratory. This does not include the processing time of the laboratory and any traffic jam that might cost more time associated with the transport of goods.

As mentioned previously, The Port of Melbourne, which is supported by a bespoke IT system developed locally, has established a community system which integrates all the stakeholders that are involved in port activity. This frequent communication between all the parties conducting operations at ports creates transparency in operations and provides the customers with frequent updates to the status of the shipment.

An expert that attended the Australian FGD in Melbourne stated that the IT systems are supposed to facilitate the information required by the ports. However, it is really challenging to get a consensus as to what data or information needs to be universally shared. Another expert from a logistics company that attended the same session mentioned that the customs needs to first accept the uniform customs and practice that has been provided by the International Chamber of Commerce. Each of the ports in every country needs to accept the uniform customs regulation and agree as to what is the required data before creating the IT system. Another expert mentioned that right now, Australia is catching up on creating a system where it adopts the single window concept. Similar to Indonesia, the system will have all the regulatory bodies, such as customs and quarantine on one system, making it easier and faster for the customs clearance process. In addition to these sorts of systems, another aspect of Information Technology that is implemented in customs is big data. By using large amounts of processed data, customs can identify which containers to check, instead of checking randomly.


3.3. IT and the Workforce

In adopting Information Technology, the readiness and the mindset of the workforce is equally as important as the system itself. According to the survey responses, there were many respondents who mentioned that the workers must understand technology in order to improve port operations. According to one expert from Indonesia, one of the strategies to improve the workforce capability is to enroll them in certification or training programs related to IT and automation.

As mentioned by one of the participants of the Australian FGD, IT is getting a lot faster and cheaper, but he questions whether these are more deployable. The reason being is that there is also a lack of expertise to facilitate the rapid growth in the Information Technology and automation field over time. In addition, Information Technology experts who designed the IT in ports do not understand the general operations in the ports. Another participant mentioned that this problem could be solved by having a team that consists of IT experts and operational experts.

The same expert mentioned that the success of implementation of IT in ports correlates to the communication and the educative process of the workforce and other stakeholders. While there are many stakeholders who embrace the idea of using Information Technology to make the operations more efficient, there are many who do not understand this. To make it even worse, there are also several parties who make more profit from those inefficiencies. One example is, as mentioned before, that the use of IT should reduce the YOR of the terminal. However, reducing the YOR of the terminal will decrease the income of the terminal, as the owner of the cargo pays the terminal to keep the container inside the ports. Hence, one port respondent from Surabaya mentioned that they would like to keep their YOR in between, not too low to maintain the profit, and also to maintain the performance rating of the port.

Another port expert from Australia mentioned that one of the drivers for increasing Information Technology in Port operations is due to the high labor cost in the operations sector. Technology is expected to replace the workers which would create a drop in the number of employees required. There are concerns if the volume of workers drops and there is a problem, such as the channel dries up, then it will be difficult to handle. The expert went on to say that technology has a fixed level of performance, it always performs at a constant rate. Meanwhile, the ‘man’ labor could provide extra effort at a certain time, if it is deemed necessary to do so. The expert concluded that while technology does reduce the labor cost of the port, it has a fixed performance capacity.

3.4. Ports and Smart City

Although there is no one definition of a Smart City, most agree that it is a system of systems. The smaller sub-systems that manage the city in one sector are combined to become one large system. According to the in-depth interview with a port stakeholder from one of the port operators in Surabaya, the Government of Surabaya has initiated the smart logistics movement. This smart logistics will detect the amount of goods travelling within Surabaya, therefore, it could detect several shortages in the basic groceries, such as sugar, rice, and others.

4. Discussion

The results of the online surveys, Focus Group Discussions, and In-Depth Interviews support our initial hypothesis that Information Technology plays an important role in the operations of the port. This is also shown in several previous studies on IT and ports (Kia et.al., 2000; Lee-Partridge et.al., 2000). However, implementation of IT alone will not instantly increase the port’s performance. There are also several activities and factors that must be considered during the implementation of these IT systems.

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The importance of managing the flow of traffic to and from the ports cannot be underestimated. Efficient management of the distribution of traffic must be undertaken to increase the efficiency of the port. The decisions on managing the distribution of traffic could be assisted by Information Technology. As discussed in the previous section, Indonesian ports have not implemented such Information Technology and currently it is still a work in progress. Australia, on the other hand, has successfully implemented such a system. However, the system does not solely eliminate the problem of uneven distribution of the traffic heading from and to the ports. Congestions still persists, even with the implementation of Vehicle Booking Systems (VBS) and Community Systems.

In order for VBS and Community Systems to increase efficiencies in the Indonesian Ports, attention needs to be paid to the following factors. First, the port operators must communicate with and educate all stakeholders involved as users of the VBS. These stakeholders include the shipping lines, the trucking companies, and the retailers that own the goods. As mentioned in the literature review, communicating and working together on the innovation will increase the performance of the company’s operations (Wang and Wang, 2012). In addition, collaboration could also extract more value from the IT systems (Alsaad et. al., 2018). Therefore, every stakeholder needs to understand what their responsibilities are. In addition, the education process will make sure that all the stakeholder workforce who use this system know how to operate it.

Related to communication, the second factor is to make sure that every stakeholder operates within the same time and hours as the port itself. If clients do not operate during the same hours as the ports, then there will still be an uneven distribution of goods flowing in and out of the ports. This means that even with the help of the IT system, the problem will still persist. Therefore, port operators, as the driver for change, must be able to persuade, negotiate with and influence their partners and other stakeholders (Lai et. al., 2006) in the container supply chain to adjust operating hours to achieve an even distribution of goods flowing in and out of the port. In the case of Surabaya, persuasion could be used to pressure the partnering trucking and transport companies to comply with the hours and slots given by the port operators based on the Vehicle Booking Systems.

While the ports in Australia are more advanced in terms of the Vehicle Booking Systems and the Community System, they have not implemented a single window concept to the customs and quarantines agency. As mentioned previously, Indonesia has implemented the Indonesia National Single Window.

First, when developing the system, the ports must negotiate with customs and other regulatory departments. This will make sure that all information that is required by both the port operators and the government authorities and agencies are well facilitated by the single window system that is being developed. In addition, the system developers should also pay attention to the uniform customs and practices as detailed by the International Chamber of Commerce. This will ensure that the data used is the same.

The second point is that Australian ports should make sure that other activities related to customs also support the added efficiency of the system. As mentioned by Porter (1996), the more intricate and fit the set of activities that an institution has, the more sustainable the competitive advantage is. One such example would be that the Australian customs and regulatory agency opens a full customs and quarantine laboratory in the hinterland of the port. This is to avoid problems that port operators in Indonesia currently face, where it takes time to conduct laboratory testing on imported goods. In addition, another activity, such as implementing a clustering system using big data to cluster the containers for examination would be useful for the Australian ports.

In the implementation of the Vehicle Booking Systems and the single window systems, some attention should also be directed to the stakeholder’s workforce. The effectiveness of the system relies on these workers (Sheu et. al., 2004). The workers must be able to understand how to fully operate the system. This could be done through educating and training the workers to prepare them for the system, as changes in Information Technology in the firm requires a workforce with higher skills (Bresnahan, 2002). When developing and operating the IT system, it is better to have a team which consists of IT experts and operations experts. This is to ensure that the IT experts could consult with


the operations experts when developing or maintaining the system. Also, it would educate the operations experts on IT systems, thus, increasing the capabilities of the operators in the ports.

There is also a need to motivate the workers to work more efficiently. As mentioned in the previous section, IT and automation work at a constant, designed rate. However, the port workforce can work at a fluctuating rate, depending on the situation. In one of the Indonesian ports, one of the officials mentioned that the workers are not motivated, thus, the productivity of the operations are affected. In order to make sure that the workforce work progresses at the same rate as IT developments, there needs to be communication between the port operator and the workforce. The operators should motivate the workforce to embrace the IT and use it to their advantage. The motivation of the workforce could be done through communicating clear goals and rewards. Therefore, communication also plays an important role in the implementation of IT systems in ports.

In addition to the workforce, implementing new IT systems in ports also needs a strong commitment from the port operators and all major stakeholders of the port. This supports the findings of Quaadragas et. al. (2014). These parties must lead the project on implementing the system and also monitor the utilization of the system very closely.

Ports should also consider other trending topics in IT and technologies, such as Internet of Things, smart city, and others. This is to identify disruptive technologies that might be an essential technology in the future (Bower and Christensen, 1995). By adopting the technology very early, it could give the ports a sustainable competitive advantage. The port in Surabaya has made great effort in initiating the integration of new technologies. In the previous section, it was mentioned that the ports are working closely with the Government of Surabaya to integrate the port with the smart city. Therefore, the smart logistics component of the smart city could be achieved, where it could monitor the total cargo containing essential needs, such as food and water, so that deficiencies of such resources can be avoided.

5. Managerial Implications

From the discussion, it is very clear that successful implementation of Information Technology in ports does not solely rely on the technology itself, but also the communication of the technology, both within the company and outside to other stakeholders. Port managers must be able to persuade, influence, support and assist other stakeholders and the partnering firms in the adoption of technology and play by its rules. Therefore, it encourages the adopting firm to imitate the practice, which utilizes the IT, of the managers' firm (Lai et. al., 2006). This principle should also be used when integrating other services to other stakeholders, such as community systems, and so on.

Managers within the company should ensure that the skills of the workforce match with the skills required to operate the technology. Constant upskilling of the workers could be undertaken to maintain the currency of the skills of the workforce associated with the technological innovations. In addition, an operation that understands how to work with IT is also essential to maximize the value of IT. Management must communicate and show their commitment to embrace IT to ensure that the implementation of IT is consistent and does not stop.

Identifying new technologies and quick implementation could also create a competitive advantage for the port. Managers must constantly assess new technologies that might be essential for ports in the future. Presently, the new technology is IoT and smart ports. Smart ports could be an essential system for the ports in the near future.

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6. Conclusion and Future Research

In this paper, we have examined different kinds of Information Technologies that are implemented in ports to improve port operations. Ports could decrease congestion caused by trucks coming into and leaving the ports by controlling their arrival time distribution using a Vehicle Booking System. In addition, this system could also boost the productivity of the port by reducing the shifting of containers within the port, as the container could be scheduled accordingly. However, the implementation of this system must also pay attention to the other parties/ stakeholders throughout the supply chain. The parties must also agree to the allocated time slot given by the system to pick up and drop off their goods.

We have also examined the integration of IT with other sectors, in this case customs and quarantines. Developing a single window IT system that integrates regulatory departments such as customs would be beneficial for the clients and the ports in reducing the administrative work, which would increase efficiencies. However, when integrating this system, other activities should also be considered, such as building a full-service customs facility near the ports to increase efficiency.

The workforce also plays an important role in making sure that the implementation of IT is optimized. The workforce are the ones to use the IT hands on, thus, motivating them to embrace changes provided by the IT is necessary for the optimal use of the IT system. This could be done through educating and training the workers. In addition, effective communication and ongoing training is needed to make sure that the workforce embraces these changes.

Another technology has also been examined in this paper: smart city is the current buzzword that many government agencies in Indonesia discuss. Integrating the port with the smart city is one of the upcoming goals of several ports in Indonesia. By adopting new technologies early, ports could have a sustained competitive advantage compared to other ports.

To summarize, IT plays a crucial role in the operational efficiencies of the ports. However, IT by itself cannot dramatically improve the operations of the ports. Effective communication and management is also needed to ensure that these systems are optimized. In addition, coordination with other stakeholders is also essential for the implementation of such technology.

In the future, it will be interesting to see what it takes for the ‘smart’ port to be well integrated with the whole smart city concept, and how several subsystems, such as smart mobility, integrate with the smart port concept to create a bigger system of the smart city. In addition, the communication, diffusion, and institutional isomorphism when integrating these subsystems also needs to be thoroughly assessed.


7. References

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Minerva Access is the Institutional Repository of The University of Melbourne

Author/s:

Wisesa, H; Hui, K; Wilson, S; Wahyuni, S

Title:

Transforming Maritime Logistics with The Power of Information Technology

Date:

2018-10-22

Citation:

Wisesa, H., Hui, K., Wilson, S. & Wahyuni, S. (2018). Transforming Maritime Logistics with

The Power of Information Technology. Indonesian Strategic Management Society.

Persistent Link:

http://hdl.handle.net/11343/219182

File Description:

Published version

international conference on science, management, and

Documents