Talking port competitiveness, digitalization and cyber security with Dr. Indra Vonck

Continuing our series of speaker interviews leading up to the upcoming Baltic Ports Conference 2017, Dr. Indra Vonck, Sr. Port Expert at Deloitte Port Services at Deloitte, agreed to share with us his insights regarding port competitiveness, digitalization and cyber security. 

Dr. Indra Vonck
Senior Port Expert, Deloitte Port Services

BPO: What are the main challenges sea ports have to overcome in order to compete on equal footing with other sectors of the transport industry?

Indra Vonck: Within the wider transport and logistics (T&L) sector, companies have begun experimenting with a range of connectivity and data-enabled technologies. In aggregate, these technologies form the Internet of Things (IoT), which represents a convergence between the physical and digital worlds, ultimately using data as a source of value. These IoT technologies are being applied in diverse settings, from last mile transport optimization to warehouse and transport management systems. Seaports are playing catch-up with the large T&L players when it comes to developing insight driven solutions and IoT applications. The current landscape offers some initial attempts at enhancing value propositions through technologies like automation but overall these projects remain isolated.
Ports need to decide on determining which technologies, how to implement them and the way in which they can support the overall digital strategy of the port remains the main challenge. The diverse nature of a port, with a wide variety of companies and ecosystems, operating different kinds of equipment and requiring different types of products and services creates a complicated environment with multiple stakeholders. In addition to heterogeneity of data, a fear of transparency also remains a major issue. Ports are typically comprised of a cluster of competing companies. Thus, they are often very hesitant to share information with a central authority that has the ability to aggregate and distribute the data amongst the stakeholders involved. In addition the interaction with the surrounding environment, both ecological and social, adds an extra layer of complexity and opportunity to the development of a digital port.

BPO: Digitization and the evolution of the port industry go hand in hand – is it possible to support the process of digitization on a regulatory level and if yes, how?

Indra Vonck: While providing novel opportunities, digital innovations are also transforming the whole port business landscape. They open the door for new competitors in key parts of the value chain (e.g. data or web platforms) and can disrupt the traditional power balances in seaports. We already see players like Ali Baba and Amazon investing in certain digital solutions for the seaports and the current leading companies are often not equipped to deal with the fast pace change environment that comes with digital innovation. 
Regulation can both protect the current players and push digitization forward, there are a number of things regulators should focus on in order to improve the digital preparedness of seaports.

• Regulation can help to accelerate the development of common standards and interoperable solutions in the sector. 
• Regulation can increase the attractiveness to investments in the production of digital products both on a regional level (Baltic) or a European level.
• Regulation can accelerate the development of common standards and interoperable solutions to impede fragmentation 
• Regulation is necessary to push the level of digital skills amongst the current working population within seaports
• Regulation must push our cybersecurity standards further in order to protect the maritime- and port cluster against the increasing number of cyber threats.
 
It is important that the major regulators (be it IMO, European Commission, national governments etc.) understand the needs and particularities of the port sector. The complex multi-stakeholder environment requires a tailored approach where organizations like the BPO or ESPO play important roles in being the interpreters between the industry and regulatory environment. 

BPO: Cyber security. How well is the port industry, especially in the Baltic Sea region, prepared for issues related to this increasingly relevant topic? 

Indra Vonck: Increased automation and the decrease of manual intervention in the maritime industry provides fertile ground for security breaches, as we have recently witnessed with the APMT hack. Cybersecurity on ships and in ports now becomes of paramount importance, since the economic impact on the shipping industry and port operations is huge. Companies active in the ports industry, are responsible not just for customer data (which is already extremely valuable), but for physical goods. In addition many of the stored goods can be regarded as strategic stockpiles for the countries and regions increasing the need for a robust security system. Right now port security is limited to the global ISPS code, which focusses mainly on physical threats. Port authority ecosystems must be aware that the digital threat is just as important, certainly if ports continue on their path towards further digitization.
The European Network and Information Security Agency (ENISA) investigated the level preparedness of the maritime industry to cybersecurity risk back in 2011. They found that Maritime cyber security awareness was low to non-existent and that better information exchange and statistics on cyber security can help insurers improve security conditions. The cyber-attacks which occurred in ports, like the drug related attack on the Port of Antwerp and more recently the attack on APMT, showed that little to no progress has been made in the meantime. 
Right now we see no indication that the Baltic region is an exception in the overall level of cybersecurity of the industry. However, it is important that the port sector as a whole reacts against these threats. Since ports are part of a global transport network activities, actions should not be isolated, but driven by cooperation across the entire industry. 

BPO: Thank you for your time!