Case Study

EuropeanCommission

www.bestlog.org

IT Integration System in Port of Valencia

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If transport continues to grow at the same rate as the economy,this will become both an economic and an environmental problem.lncreasingly congested roads are as much a disadvantage to European business as they are to society at large. The bestlog project, initiated by the European Commission, will establish an exchangeplatform for the improvement of supply chain management practice across Europe.

THE PLATFORM

To improve logistics practice and logistics education•To raise the overall standards of practice across Europe•To set high standards for logistics education and practice•To create economic growth and job opportunities as a result•Achieve a better match between EC policy and business decisions•

OBJECTIVES

European platform for sharing logistics best practice•Online directory of logistics best practice case studies•Online directory of European logistics education opportunities•Benchmarking on line for European companies•European conferences to share logistics best practice•Web forum, award directory, media directory, and more•lndustry workshops•

SOLUTIONS & ACTIVITIES

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COMPANY FACTS

PROBLEM DESCRIPTION

IT Integration System in Port of Valencia

Relationships between the different agents in the harbor are sometimes complicated. The players involved in the process are in most cases ship and cargo agents and operators (forwarding agents, shipping agents, carriers, etc). There is a general lack of standardization in the area of reports, IT systems and the procedures these agents use. Furthermore, processesareinefficientandsometimesmanual,thevisibilityalong the supply chain is heavily reduced and there is no integrationwithback-officesystems.

Ontheotherhand,theconstantgrowthofcontainertrafficat the port of Valencia has resulted in a parallel increase in the volume of container-related services and in particular land transport.

This changing situation overtaxed the previous procedures and practices and revealed how inadequate they were. This led to the realization that these practices should be replaced by other methods in which technological solutions play a key role in identifying potential areas for improvement. These new methods should cater to the necessities and solve problems such as:

Management of complexity•Fierce competition between leading sea ports due to •the high number of companies using maritime transport routes.Ability to handle the maximum volume of containerized •cargos.Highly fragmented industry with a large number of •agents.Compliance with international security and safety •requirements.Need for accurate information for planning and •operations.

There is a general lack of standardization with regard to the systems used by agents. Furthermore, the volume of containertraffichasgrownconsiderably,and this has resulted in an increase in the volume of logistics services and port operations. In order to speed up processes and operations, the port of Valencia decided to create a new IT system to coordinate all agents operating within the port. valenciaportpcs.net is a web service platform which was created to coordinate all the agents involved in maritime logistics processes. This IT platform integrates the following:1. The EDI services provided by the Port Authority.2. The services offered by the SIC (information and communication system). 3. The maritime services provided by carriers.In short, it offers a range of options that are available to all agents involved in port logistics.

Company name: Port Authority of ValenciaLocation: Valencia; SpainIndustry/sector: Port Authorities Company size: LargeEmployees: 402 (2008)Turnover: 112 million € (2008) Services/products offered: The Port Authority of Valencia (PAV), which trades under the name of Valenciaport, is the public body responsible for managing the three state-owned ports located along 80km of the eastern Mediterranean coast of Spain: Valencia, Sagunto and Gandía.

CASE STUDY

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valenciaportpcs.net is the result of a wide-ranging process aimed at improving the productivity of the port community using IT. The IT web platform developed to cater to the needs of the port of Valencia is a further development and improvement of the SIC (Community Information System) and EDI-based applications for the exchange of information between the agents of the port community and the Port Authority of Valencia.

valenciaportpcs.net aims to establish itself as the main tool supporting the operations between said agents by:

Modernizing logistics management: employing •standardized information exchanges to facilitate business and administrative procedures and operations relating to cargo movements at Valencia ports. Optimizing seaport-land integration: by developing •the existing integration between the port community and land transport services on both the “land” side (with haulage operators) and on the “sea” side through integration with the world’s leading carriers via INTTRA and GT Nexus. This means that users are able to view the entire transport chain on the website.

THE SOLUTION

FREIGHT FORWARDER

EXPORTER

IMPORTER CUSTOMS AGENCY

CUSTOMS

TRUCK COMPANY

DEPOTCONTAINER

TERMINAL

SHIPPING AGENCY

CARRIER

PORT AUTHORITY

OTHER AUTHORITIES

miércoles 25 de marzo de 2009

It was necessary to meet the requirements of agents and users.Usersneedsimplifiedbusinessprocesseswhichdonotforce them to make changes to the systems they use and do not change the nature of their relationships with their partners.

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Interconnecting associated ports: making integration •options with other associated ports more accessible, thereby facilitating operations and the exchange of information between port communities.

The fact that valenciaportpcs.net covers business and transactions for sea, port and land operations constitute yet another step forward in the evolution of port information systems. The new IT system integrates all the agents involved in the logistics operations that take place in the port and solves the coordination problems they have in the area of loading and unloading of shipments. The tool provides information relating to logistics processes like:

Sea:sendingandconfirmationofdocumentaryprocedures•relating to transactions, confirmation of booking andshipping instructions.

Port: the electronic processes involved in port of call •requests, dangerous goods declarations, pre-loading cargo manifests and summary declarations. Land: processing of haulage orders, cargo acceptance •and delivery orders as well as rail loading orders.

CHALLENGES

Challenge 1: Integration of all the agents operating at the port.

Challenge 2: The necessity to create a new application to integrate the IT systems used by the agents with the new web service in order to transfer and include the information provided by these agents.

Challenge 3: The lengthy deployment and acceptance process does not begin until the software has been implemented, which means it takes a long time for the port community to recognize the value of the new system.

Challenge 4: The port of Valencia is a public body; this means that, in order to implement this project, the PAV had to tackle administrative, legal and procedural issues that resulted in added complexity in the software development process.

CASE STUDY

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Lesson 1: Integration of all the agents operating at the •portimprovesproductivityandhelpstoboostefficiency.Lesson 2: Error-free processes help to reduce costs.•Lesson 3: Integrating different systems and making •sure they run smoothly can ensure that information is provided faster and more reliablly.

LESSONS LEARNED AND SUCCESS FACTORS

In addition to administrative services, valenciaportpcs.net also offers features of a more operational nature. These operational and logistics services include:

Integral track and trace: this service enables platform •users to obtain track and trace information about their shipments such as the current status of their cargo, transshipments carried out or documents processed. It also allows them to integrate this information in their systems to make it available to their customers. In addition to being accessible from the client application and via electronic messages, this service is available in the private section of the valenciaportpcs.net web page, enabling users to obtain information about their shipments anywhere and at any time.Quality control: this service provides information from •the different agents involved in transportation about compliance with the guarantees offered by the Port of Valencia Seal of Quality Guarantee and also the quality management provided by users of the platform themselves. A series of activity reports has also been designed to provide graphs of the volume of use of each service and the number of transactions carried out via valenciaportpcs.net

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CHALLENGES

Transferables Limitations

Country Company SizeSector

++: very high, +: high, o: neutral, -: low, --: very low

TRANSFERABILITY

This technique can be used in any industry because consists of integrating and communicating all the agents involved in the supply chain. They only need a common way of communication (for example EDI). In general this way of working can be used in any kind of geography but is very relevant in ports because of the distance between the different agents. There is no problem in using this technique for little companies but sometimes it can be too expensive.

Therearenolimitationsintermsofefficiencyandintegration of the companies. The problems begin when a small company wants to use this kind of technology. As mentioned before, companies need to invest a lot of money in order to achieve this level of technology and they are sometimes unable to do so.

+ ++ 0

T H E B E N E F I T S

Theport isnowmoreefficientandflexible, customer servicehas improved, and•agents can handle more TEUs. Port services have improved and information is provided faster and with greater reliability.Productivity has improved due to standardization of all the agents; moreover, truck •drivers and the remaining the agents have also increase their productivity because information is more precise and waiting times and errors have been reduced.This improves processes and reduces the amount of paperwork. In addition, the •availability of more precise data reduces excessive costs. Optimization of processes also has a positive impact on costs.

Economic

As information is more reliable, waiting times and the number of the trucks have •been reduced or optimized, and exhaust emissions are also lower.Whenever a port increases the scope of its operations and the number of containers •moved, it is generally necessary to build more docks and buildings. This need has been reduced thanks to optimized utilization of the existing dock facilities.

Environmental

Reducing waiting time at terminals and less congestion of ships at the port etc. •decreases hazardous emissions.Noise is reduced due to the lower number of trucks at the port and reduced •congestion.

Social

SUST

AIN

ABIL

ITY

Easy access to all integrated logistics information (sea, port and land), improved performance of operations (which improves quality and customer service), efficienttransactions, one-stop access and communication with carriers are the key features of the modern design of port of Valencia. The system is easier to use thanks to two methods of integration: electronic messaging integrated in user applications and an exclusive customer application.

CASE STUDY

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Contact

PROJECT SECRETARIATBerlin Institute of Technology

H90 - bestLogStrasse des 17. Juni 135 10623 Berlin - Germany

Phone: +49-30 - 314 299 80Fax: +49-30 - 314 787 94

E-Mail: info@bestlog.orgWeb: www.bestlog.org

EuropeanCommission

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This document, including but not limited to text and photographs, is protected under copyright. The copyright owners admit the use for informatory and training purposes. Any commercial use of the document or parts thereof is prohibited.

Guerola Pérez, Sonia. ITENE Packaging, Transport and Logistics Research Center (2009): BestLog Good Practice Cases. IT Integration System in Port of Valencia. Published by BestLog Project. www.bestlog.org.

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