Influence Of Work Automation On Performance Of Nigerian Ports

Abstract

The study examined the influence of work automation on the performance of Nigeria ports. The study population was the entire sea-ports in Nigeria. In line with the purpose of study, the study adopted the survey/cross sectional approach. The major research instrument used collect data was the questionnaire. Thirty (30) copies of questionnaire were distributed to the respondents from the six major sea-ports in Nigeria. The respondents were department heads and senior port managers. Work automation was used as the independent variable of the study and measures of port performances were productivity and the throughput level of the sea-port. Two hypotheses were developed and tested to determine the extent of the relationship between the study variables. Pearson product moment analysis was used to test the stated hypotheses with the aid of statistical package for the social sciences (SPSS 22.0). The findings of the study revealed that to a very large extent, work automations are often used as key performance indicators (KPI) in Nigeria port. This is true of the system of administration of all port management authority in Nigeria. To a very large extent, the study observed that ports give room for the assessment of work automations. To a very large extent, the respondents were allowed to make variety of inputs on work automations in their various sea-ports. Staff of the ports have the requisite skills to give critical assessment on the issues of work automations. Conclusively, it is evident from the study that there is significant relationship between work automations and productivity in Nigerian ports and there is significant relationship between work automations and cargo throughputs in Nigerian ports. Therefore, port managers should improve on the service quality of their port by recommending improve work automation of the port activities in such a manner that will aid the effective performances of the port operations.

Keywords: Work Automation, Port Performance, Productivity, Cargo Throughputs

Introduction

Businesses in the port operations sector have realised that sustainable competitive advantage increasingly depends on the effective use of existing information and the acquisition of consistent data along the entire supply chain. Digitalisation is seen by many as a panacea or necessary step in order to stay competitive. Some have recognised that “getting smarter” is more important than growing in size. The kind of vertical collaboration that improves co-ordination at the intersection of different transport modes is increasingly seen as the new efficiency frontier in port operations. New information and communication technologies (ICTs) such as sensors, communications or software can play a major role in improving this co-ordination (Kenyon., 2017).

With the possibilities provided by technologies and new data sources, maritime transport stakeholders are seeking new opportunities to extract value-added from more integrated services that cover the entire supply chain. Some of the major players in the shipping industry strive to become integrators of the entire chain, as some carriers seek to take on the role of freight forwarders and further consolidate their position as logistics operators (CMA CGM, 2018). The rationale for vertical integration is obvious as it becomes more and more difficult for shipping companies to generate sustainably competitive margins by reducing maritime costs through bigger vessels (ITF, 2010).

Port authorities around the world increasingly embark on digital strategies that evolve from renters or asset managers to active digital communities. With the need for more efficiency-enhancing coordination in supply chains, port authorities increasingly grow into hubs of physical and information flows among different stakeholders. In the light of growing worldwide competition, ports see the necessity to become more dynamic actors in order to avoid the risk of decreasing significance.

Many efficiency bottlenecks in the Nigerian port are related to coordination issues among different stakeholders. For instance, about 48% of container ships arrive more than 12 hours behind schedule and congestion exacerbates costly waiting time in ports (Levander, 2015). According to the ESCAP-World Bank Trade Cost Database, about 60-80% of trade costs worldwide are non-tariff measures of which transport services represent an important part (WEF/Accenture, 2016). Related inefficiencies, such as trade procedures, business and regulatory practices and constraints, or the insufficient availability and use of information and communication technologies (ICT) contribute to these costs. In terms of paperwork, there may be up to around 200 interactions involving documentation along the supply chain, and the shipper and consignee may deal with as much as 20-30 entities to arrange a shipment (Porter/Lloyd’s List, 2017). Many of these interactions are time­consuming and often still take place via phone, fax or email. In this context, the lack of efficient integration of information communication technology makes it difficult to forecast or make effective operational decisions (Kenyon., 2017).

The most valuable tool for bringing cost-cutting efficiency gains and improvements in the overall performance of the ports is the introduction of work automation in port operations. Work automation is introduced into the ports through information communication and technology applications (Cheon, 2007). As public authorities, some see their natural role as a neutral platform that facilitates coordination among different stakeholders. In the light of the above the study evaluated the influence of work automation on performance of Nigerian ports. The research questions investigated in this study included: i/ How does work automation influence productivity of Nigerian ports? ii. How does work automation affect the throughput level of the Nigerian port? Also, the following hypotheses relating to the purpose and problems of the study have been formulated and investigated in this study: Hol There is no significant relationship between work automations and productivity in Nigerian ports. Ho2: There is no significant relationship between work automations and cargo throughputs in Nigerian ports.

Literature Review

Conceptual Framework

There are several dimensions of modern technology that can help in port operations. This study is interested in conceptualizing, classifying and categorizing work automation as an independent variable as the umbrella for the conceptual framework of the study. This conceptualization has been adopted from the earlier works of WEF/Accenture (2016), Osler (2017), Jahn and Saxe (2017) and Kenyon (2017) and this has been depicted in Figure 1:

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Figure. 1: Conceptual Framework of Influence of work automation on Performance of Nigerian Ports

Work Automations

Work automation can be defined as the use of integrated technology to develop intelligent solutions for efficient control of traffic and trade flows on the port thereby increasing port capacity and port efficiency (Ayantoyinbo, 2015).

Smart ports (or automated ports) according to Cheon, (2007) generally deploy cloud­based software to assist in creating the operational flows that help the port function smoothly. Currently, most of the ports across the world have technology integrated to some extent, if not for complete management (Ballot, 2016). However, there has been a gradual increase in the number of smart ports, thanks to global government initiatives and the exponential growth of maritime trade. The port of Hamburg, Germany is one such smart port that uses cloud-based solutions for managing energy resources, traffic control, infrastructure facilities, and port property for efficient port operation (Bhandari, 2017).

The degree of automation differs from port to port, depending on the capacity of the port, its location, the amount of cargo it handles, and its economic value. With the growth of mega-ports, the scope of work automation has increased to an unprecedented level. Here is an overview of what smart ports cover (Ballot, 2016). The evolution of work automation is seen across different avenues. These include material unloading and cargo handling equipment, digitization of ship records, inventory management, building the necessary infrastructure, assisting ship docking and maintenance, and more.

Generally, there are three principal areas of work automation - the gates, the Ship-to- Shore cranes, and the stacks (Bhandari, 2017). Port gates are a key checkpoint for identifying and recording every entity entering or leaving the port. For ships, it also includes additional security checks, verification, customs, immigration, and quarantine. These are crucial tasks, necessary to protect the integrity of the port and require implementation of stringent security measures ((Etherisc, 2017). As the volume of container traffic through the port increases, these processes consume a lot of extra time, on account of manual limitations. Automating basic processes, such as entry/exit logs, verification, and docking payments can be done with the help of relevant technology. This makes the entire process flow much smoother and well- organized (ESCAP, 2016).

Logistics management with IoT comes into action during the ship to shore delivery of cargo transported by ships. Use of both, manned and unmanned cranes for unloading is currently prevalent. Across the globe, there are only 30 terminals that can be considered fully automated, when it comes to container transportation (Etherisc, 2017).

Automated cranes are used to deliver the containers from the ships to the port by means of unmanned horizontal transportation or unmanned yard cranes. These are later classified by the type of cargo and stacked accordingly in the inventory. These containers handling systems are stable, predictable, and highly efficient. As the cranes are controlled by a computer, the planning and execution process becomes extremely smooth, achieving the required outcomes in the least possible time (Ducruet , & Merk, 2012).

Once the cargo has been offloaded on the port, it is time for the robots to step in. Cargo handlers and stacking cranes are used to stack the containers as per the category specified. The inventory is often managed by the date of departure inland. As the container is to be dispatched for further transportation, robots are once again used to bring them to the designated station and prep them for the road ahead (Etherisc, 2017). Safety is one of the major concerns while designing the robotic equipment used to assist in cargo transportation. Smart design takes into account the level of human­machine interaction involved. In addition, the entire process is analysed to optimize inventory flow and ensure that there is no friction between multiple processes (Geloso, 2014).

Technology has wrought an enormous change in the way ports function today. Automated systems, advanced navigation software, remotely-operated cranes, and huge robotic cargo handlers have enhanced port efficiency. But there is the proverbial other side of the coin as well. As the use of technology increases, the role of human labour suffers in comparison. In addition, potential cyber-attacks by people with malicious intentions are a consistent threat. Work automation is seen as the future, but is it worth the cost? Let us objectively analyse the pros and cons of smart ports to find the answer (Ducruet , & Merk, 2012).

The initial investment cost of automation is extremely high. These costs are not affordable for every port, especially in the under-developed and developing nations. As a result, a compromised version of semi-automated ports having technology as a secondary support for manual labour is brought into practice (Ducruet , & Merk, 2012).

Automation eliminates the human factor involved in the process. This results in the loss of employment of many workers. Labour unions do not react well to automated systems, for obvious reasons. The transition from employed workers to employed supervisors can be difficult and can create problems during the implementation of automation (Bhandari, 2017).

Cyber security is a growing threat for mega-ports with complete or almost-complete automation. Despite having secure information sharing methods, automated systems are susceptible to malware attacks and loss of sensitive data. A breach in security can result in great losses for the port and is hence a problem with work automation (DHL/Cisco, 2015).

Automated systems need to be updated at regular intervals, to keep up with advancements in the software used. Ignoring updates can result in fatal security breaches, which is why all systems need to be upgraded. This implies continuous maintenance costs for ports (Ducruet , & Merk, 2012).

Work automation should be taking into account the needs of shipping companies as well as the companies whose cargo is actually being transported across the seas. Technology has been immensely helpful in improving the order and operational productivity of ports (Heaver, 2015).

Therefore, in the field of ICT, a person who is responsible for ICT facilities is called a system administrator. The System Administrator (SA) is responsible for effective provisioning, installation/configuration, operation, and maintenance of systems hardware and software and related infrastructure. This individual ensures that system hardware, operating systems, software systems, and related procedures adhere to organizational values, enabling staff, volunteers, and Partners (Ballot, 2016).

Investment in ICT facilities including software and hardware has been given consideration to many organizations regarding to their operations. Initial implementation of ICT facilities may involve a lot of money and an organization can incur loss, but in a long run an organization may get a lot of profit. However, the cost of investing ICT may include buying new products, repairing and running cost (Kenyon, 2017). The impact of ICT investment on performance has become a matter of both academics and practitioners like Etherisc (2017).

Performance of Nigerian Ports

Badejo, (1994) is of the opinion that one of the fundamental issues affecting freight operations in Nigeria is lack of coordinated efforts between and within freight modes and operations. Most ports are not linked with dependable road and rail networks. This in turn hampers transport of heavy and extra-ordinary traffic, (Geloso, 2014). Rapu and Ayoade, (1996) stated that one of the most important blocks of sound economic performance is the efficient delivery of goods and materials as quickly and cheaply as possible freight transport plays a key role in the economic development of both developed and developing countries of the world. Freight transport demand is a derived demand which is generated only by inputs to or outputs from agriculture, mining, construction or sea ports industry by purchasing or sales. Thus, the demand for freight is related to economic growth whether it is measured in terms of output expenditure or income.

Over the years the traffic through the Nigerian ports are increasing along with the economic development of the country. It is frequently observed that queues of arriving ships are formed and sometimes ships have to wait for a longer time before berthing. This can be attributed firstly, to the mobility of the existing port facilities to match the ever increasing global trade and secondly, some obnoxious government policies and regulations. This incessant congestion in our ports has resulted in diversion of ships meant for Nigeria ports to other neighbouring country ports. In the reforms and concessioning of 2006, Tin-Can Island Port was concessioned to four different private organizations to manage.

Maduka (2004) defined port congestion as massive un-cleared cargo in the port, resulting in delay of ships in the seaport. According to him, this occurs when ships spend longer time at berth than usual before being worked on or before berth. Onwumere (2008) made mention of port congestion as a situation where in a port; ships on arrival spend more time waiting to berth. In this scenario, more ships will queue at the channels and the outside bar waiting to get space at the terminal for berth age. According to him this waiting time is calculated using the service time of vessels which is one of the ways of measuring port efficiency. His view was that this is a situation whereby cargoes coming into the port are more than the storage facilities can handle.

Port congestion is a global phenomenon not limited to only Nigeria. In 2005 global map of congestion around the world Africa inclusive, the West Coast of Africa including Nigeria was there, the Eastern part of Africa, around Kenya, Southern part of Africa even the West Coast of the United States of America was there several factors attributed to this Zhang et al (2008). Maduka (2004) highlighted the factors responsible for port congestion in Nigeria and suggested ways to control congestion at the ports. According to him, there are advantages and disadvantages in port congestion. He said port congestion brought about realization for better planning, port expansion and development. He cited loss of revenue, unemployment and bad image to the country as its major disadvantages.

Tom (2009) is of the opinion that Nigeria should be warned about reoccurrence of congestion in its port. According to him in spite of the various waivers conceded by the government the dwell time of consignment in the port is gradually jerking up against expected time. He cited the use of manual clearing process as one of the major factors responsible for the reoccurrence of the looming congestion.

Tatcchia et al (2008) has observed that performance operations in most ports of developing nations to be frustratingly slow. However, literatures have substantiated knowledge of logistics as an important ingredient of efficiency. Ogunsiji (2010) is of the opinion that adequate logistics management is the road map involved in the design of efficient and effective configuration of two important flows information and product which often facilitate distribution of a firm's products and services at the right place, right time and right price. Onwumere (2008) is of the opinion that conducive environment is a prerequisite for an efficient logistics system. And any country lacking a good base network of dependable transportation, warehousing communication and other related facilities would hardly be able to configure activity network for sustainable economic survival and development. Most less development countries like Nigeria lacks the expertise needed for crafting environment conducive for the development of good logistics system, have are unable to attract foreign investment a pivotal potential to global business strategy for sustainable competitive advantage.

Ogunsiji (2002) is of the opinion that South African’s increasing competitiveness and her ability to attract more foreign investment relative to her other African neighbours like Nigeria. With the recent increasing globalization of business, of improved logistics and management, ports are assuming strategic dimension in international business. Any country bereft of ideological redefinition of her distribution network and port logistics performance in this dynamic and ever changing global competitive market will ultimately be left lagging behind. The speedy accessibility of any container port relates to the potential for the movement of containerized cargoes to and for the ports via the networks, i.e. cargo, through put is significantly and positively related to its degree of accessibility to other shipping services (Osler, 2017).

Somuyiwa and Adebayo (2011) defined infrastructure as a part of a structure, material or economic base of a society or an organization. Therefore, infrastructure can be seen as the basic structure that fosters the good performance of cities, states or countries essential services. Infrastructure as defined above can be understood as the basic structure directly responsible for the efficient functioning of the transport systems and others that support a country’s economic development. Thus, the fundamental factors to competitiveness are established by economic performance, government, business and infrastructure efficiency. Statistics show that Nigeria pays over $2 billion in freight each year to foreign ship owners either to export oil to import finished goods. He is of the opinion that off shore rigs and support vessels, coastal cabotage trade and import and export trade amounts to well over $20billion. The consensus is that if Nigeria can gain a foothold in its shipping industry. The potentials will be enormous, the potentials include the followings, namely job creation, foreign exchange earnings, wealth creation and indigenous shipping capacity. Egharevba (2011) posited that Nigerian Ports Authority desire to change is borne out of the need to embrace global best practice that is to be the best not only in the sub region but indeed in Africa as a whole. She further stated that the proposed Ports Community System (PCS) in what Nigerian Ports Authority has been yearning for. She added that the organization expects the system to generate data directly from the vessels while also helping to solve truck management and control especially in the area of truck congestion at the port gate after clearance.

Iweala (2011) stated that the Federal Government has mandated all the agencies driving port operations; including the Nigerian Customs Service (NCS) to commence 24 hours service, seven days a week at the nation’s ports. Customs and other port operators that now work from 9 am to 5pm would start working round the clock, so that Nigerian ports could operate like ports in other parts of the world. The obj ective of the above stated efforts is to reduce the time spent on clearing goods from months to 21 days and finally to 48 hours clearing in the long run. To ensure 24 hours clearing of cargoes in the port, the issue of power supply at various terminals must be addressed. Terminal operators have complained that power supply at various facilities is dependent on their own generating set and not electricity which is to be supplied by Nigeria Ports Authority as enshrined in the concession agreement Levander (2011).

The output of a port as a service facility providing the means of exchanging commodities between land and maritime transport can be measured in terms of its throughput; the amount of traffic that passes through it in a given time. Productivity is then throughput divided by the amount of factor or factors of production involved in achieving the output. Generally, any of the inputs associated with a given productive effort can be used in the denominator of the productivity ratio. The three traditional factors of production are land, labour and capital. Element of these three factors of production can be used in measurement of port operational productivity. Port productivity can be evaluated from the stand point of the various factors of production labour, infrastructure and equipment in relation to cargo throughput. Analysis of port productivity is a prerequisite for proper port management both for current operations and for planning the replacement of equipment and for investment in new facilities.

Productivity

Productivity is the quantitative relationship between output and input, productivity is a measure of output to some index of input use. Arithmetically productivity is nothing more than the arithmetic ratio between the amount produced and the amount of any resources used in the course of production. This conception of productivity goes to imply that it can indeed be perceived as the output per unit input or the efficiency with which resources are utilized. Labour which is the most commonly used among the factors of production may be taken as the dock labour input in port operation or the total size of personnel, (unskilled, semiskilled, skilled and managerial staff) engaged in port services. It is more usual to define port labour productivity in terms of actual dock labour engaged in cargo work on the quays. Capital also relates to the stock of equipment, plants and other mechanical handling aids used in port operations on which the enhanced productivity of labour much depends. Port productivity has been discussed and argued by many scholars since the emergence of containerization for more than three decades have evolved a lot of development. The most important objective of a port is to decrease or increase throughput (Ducruet & Merk , 2012). As a result, the turnaround of vessel depends on effective allocation and scheduling of key resources such as quay cranes, berths trucks and yard cranes. Ayatoyinbo, (2015) already foresaw this scenario when he stated that careful planning is necessary for obtaining satisfactory results.

Zhang et al, (2008) argued that most researches conducted on port productivity are based on quantitative measures, as it is easier in assessing port performance. Ports are service oriented; therefore, efficiency is very crucial in determining moves per hour for loading and discharging container from and onto vessel. Some researchers have researched into port performance and productivity; they were able to show the critical aspect of productivity in terminals (Ogunsiji, 2010; Levander, 2015; and Kenyon, 2017).

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