The fourth wave of Port Community Systems

Port Community Systems (PCS) are facing their fourth revolution. They have evolved from basic local communication systems to sophisticated digital platforms that enable real-time information sharing, logistics integration and increased supply chain visibility. Their evolution responds to the needs of a sector in continuous technological, commercial and geopolitical evolution. And now comes the fourth generation: let's see what it brings.

Posted on 03.15.2024
The fourth wave of PCS, driven by rapid technological progress, increasing industry demands and stricter regulatory obligations, will transform port and marine logistics (FP).

40 years ago it all began

Port Community Systems (PCS) burst onto the port-logistics scene four decades ago. Specifically, the first PCSs date back to the early 1980s and were implemented in Hamburg (Dakosy, 1982), Le Havre (SOGET, 1983) and Felixstowe (MCP, 1984).

They were born with the objective of facilitating a fluid exchange of information, coordination and collaborationamong the members of a port community. And, by streamlining communication and automating data exchange, PCS also drive efficiency, transparency and security in the complex ecosystem of global trade. But times have changed, and logistics and its technological, commercial and geopolitical context have evolved and also increased in complexity.

This is reflected in the publication Port Community Systems. Lessons from global experience, a joint publication of World Bank and  IAPH and the International Association of Ports and Harbors, IAPH. The study not only reviews the lessons learned over the past forty years, but also looks to the future, to the current fourth generation of PCS and their relationship with the current scenario of international trade and supply chain management.

"Since 2010, there has been a big change. We are shifting from a voluntary approach, that of port community PCSs, to a model based on a national and regulated operator. Current implementations are now driven by the regulatory framework; by a presidential decree as in the case of Peru or by a customs regulation, as in Mauritius. This way forward is the most relevant and, at the same time, the most important challenge of this new generation", summarizes for PierNext Pascal Ollivier, co-editor of the publication, president of Maritime Street, and chairman of the IAPH Data Collaboration Committee .

PCS also drives efficiency, transparency and security in the complex global trade ecosystem (FP/PierNext).

The previous stages of Port Community Systems (PCS)

The three stages that precede the current one and show the evolution of the PCS are characterized by sharing a common implementation period, as well as geo-economic and socio-technical adjustments. Each phase benefits from a particular set of legal instruments, regulatory requirements and technological advances.

1) The first wave was between 1982 and 2000.

At that stage, PCSs emerged to improve communication and information exchange between members of port communities. Based on electronic data interchange (EDI) and specifically on the EDIFACT standard, developed under the auspices of the United Nations and adopted by the International Organization for Standardization (ISO), these PCS were born out of the need for public administrations, basically customs and port authorities, to handle a much larger volume of data as a result of containerization and globalization.

Thus the first exchanges of information take place in a B2A (business to administration) environment and are linked to documentary transactions such as those related to ships' cargo manifests, customs declarations, berthing requests.At this stage, companies adopted paperless procedures and the digitization of customs declarations also stands out. The European common market contributed to the configuration of this scenario, as its economy was highly dependent on international trade, with competitive and high-performance ports of entry that had to allocate large investments to port mechanization, multimodality and digitization.

2) The second wave materialized in the decade between 2001 and 2011.

This stage built on the momentum of data standardization promoted by the United Nations Centre for Electronic Commerce and Trade Facilitation (UN/CEFACT) and ISO.

The International Maritime Organization (IMO) developed its compendium on facilitation and e-commerce, defining data standards for the transmission of electronic reports between ship operators and shore-based regulatory authorities, and the World Customs Organization (WCO) developed the data model that outlines the basic requirements for cross-border customs and regulatory data.

This facilitated the development of the UN/EDIFACT electronic data interchange standard, which has been universally adopted by the industry.

3) The third wave, between 2012 and 2017.

It had significant legal and technological dimensions, mainly in the global south (developing and emerging countries). The rise of Web 2.0 technologies contributed to the evolution of ICT architecture towards more open, flexible and user-centric systems.

Technological developments, such as n-tier architectures, distributed web applications and service-oriented architectures (SOA), also drove these advances, and B2B (business-to-business) relationships between private agents in the port-logistics community are beginning to be added to the B2A model.

This third wave saw the introduction of PCS in Africa and the Americas.

Next-generation PCSs envision a future characterized by continuous evolution and innovative breakthroughs for data interchange (FP/PierNext).

Features of the fourth wave of PCS

Next-generation Port Community Systems envision a future characterized by continuous evolution and innovative breakthroughs in data exchange. Driven by rapid technological progress, increasing industry demands and stricter regulatory obligations, they will continue to transform the port and maritime logistics landscape.

  • PCS will be based on the provision of multimodal services, evolving from an entirely maritime environment to contemplate all modes of transport involved in port activity.
  • Their solutions will be offered in the cloud and are being linked to external digital logistics platforms.
  • Regulation include since 2024 measures under the IMO FAL convention on Maritime Single Window, privacy legislation and adoption of Legal Entity Identifiers in the maritime industry. It's mandatory for all IMO member states.
  • To cope with disruptive events, PCSs can play a crucial role:
    • Collaborating with affected ports to redirect their resources.
    • Providing real-time information to stakeholders, especially freight forwarders and shipping lines, to improve the predictability of the operations.
    • Providing information to shippers and beneficial cargo owners to increase visibility and predictability.
  • This wave will incorporate Industry 4.0 technologies in the maritime industry to improve efficiency and automate logistics management. Artificial intelligence techniques, big data, Internet of Things (IoT) and technologies such as autonomous vehicles, sensors, augmented reality and digital twins are being applied.
  • In addition, predictive analytics and prescriptive analytics are paving the way for improved data-driven decision making, proactive risk management and optimized resource allocation.

How can PCSs have the ability to measure carbon footprint and meet the Sustainable Development Goals? IPCSA, the International PCS Association, answers, is working on it (FP).

Challenges facing the PCS

The emergence of this fourth wave of PCS is motivated by a number of challenges that Pascal Ollivier explains below.

a) Cargo owners demand improvements.

"Cargo owners are the main stakeholders in jumping on the PCS bandwagon. They want to know where their cargo is and what its status is right now and to know it anywhere in the world. They want visibility and predictability," the expert notes.

To meet their demands, the IAPH has set up the Supply chain resilience task force, which includes terminal operators, shipping companies, PCS operators and port authorities, among others.

b) From a local to a national platform

The other important dimension of the leap from a local to a national solution has been the contribution of PCS to trade facilitation, through digitization and IT systems. These include facilitating faster and more efficient exchanges of import and export documentation in corridors, logistics zones and other national infrastructures.

"Going for a national rather than a local platform is a major trend that is also seen in other countries such as Jamaica, the Democratic Republic of Congo and Togo, although they are not without challenges given the greater number of players involved," he notes.

c) Decarbonization

How can PCSs have the ability to measure the carbon footprint and meet the Sustainable Development Goals, Ollivier asks.

IPCSA, the International PCS Association, he replies, is working on it.PCSs already provide granular data on operational aspects of a port and processing that data can facilitate the forecasting of actual ship arrival dates and times and the availability of terminals for unloading cargo, with consequent fuel savings as long as both events are coordinated.

New technologies, such as AI , 5G, IoT, Big Data, and advanced web services such as JSON API, have endowed PCS with additional capabilities to meet the challenge of onshore and offshore energy optimization. AI and Big Data, for example, are used to develop indicators to forecast actual vessel arrival and cargo delivery dates or times.

d) Cybersecurity

Three years ago, the European Cybersecurity Agency, cited PCSs as one of the top four risks facing port authorities in terms of cyber-attacks, given the sensitive nature of the data being managed.

"In Europe, we have the legal framework of the NIS 2 Directive that identifies all critical infrastructure, including PCS.But in the global south, the same is not true. Malaysia, which is among the top five shipping countries in the world, does not have a cybersecurity law," he warns.

Any aspect related to PCS has to be cybersecure, not only from the technical design point of view, but of its entire environment, including people.

e) Technology and the cloud

"Although we have been saying for two decades that PCSs are not purely a technology project, there is an important change in this regard, which is the cloud, and that depends on connectivity, although not all countries have the same level of maturity," he notes.

As for the technologies he predicts will impact PCS, Ollivier points to Artificial Intelligence, which, among other benefits, will help optimize processes and achieve a more efficient supply chain. "It would be great to implement AI, as there are millions of transactions and data, but legal protection is necessary," he continues.

f) The digital divide between the global north and south

Of the 175 countries that are part of the International Maritime Organization, 125 countries still do not have PCS. "This is the ultimate goal of this report, to address this gap. We cannot wait until 2050 for this to happen. We need the legal framework, but also prescribers who, in the case of some countries, do not belong to the port community but to the national government," he explains.

Cooperation is also needed between two authorities, port and customs because without customs there is no PCS, as it is the body that has authority over the cargo. "They must embark on this journey from day one, but in the global south this dialogue does not exist," he notes.

Ollivier insists that bridging this gap is urgent for global trade, and gives the example of Namibia, where cargo is not released until 19 days after arrival at the port, when in Barcelona or Rotterdam that same process takes three minutes.

This has a major impact on international maritime trade.

The fourth wave of SQPs has encountered "old" acquaintances, such as geopolitical tensions, protectionism and will have to bet on innovation (FP).

The new dimension of the fourth generation of PCSs

How does this fourth generation differ from the previous ones? Ollivier talks about different dimensions, since at the beginning, the objective of the PCS was to change the business model to improve processes, eliminate paper and bet on digitalization at the local level.

The report points out that the recent protectionism of some countries has led to a partial reversal of globalization. International trade has been affected by various trade policy discontinuities (US-China tensions and Brexit) and disruptive events, coupled with a realignment of trade associations thathave introduced volatility into world trade.

To navigate these uncertainties, ports must remain agile, adaptable and resilient to the changing mix of cargo patterns and demand.

Finally, Ollivier mentions the word innovation, or the need to create innovative ecosystems with the collaboration of start-ups that cross, once again, the local border to become global and close the current gaps that limit the capacity of global logistics.