Ports not prepared for IMO single window mandate

Almost a third of global ports are not going to be ready for the International Maritime Organization (IMO)’s Maritime Single Window (MSW) mandate, which becomes compulsory worldwide from the beginning of January 2024.

A recent survey of 200 ports by Kale Logistics Solutions revealed that 30 percent are not prepared to make the transition. This study examines the technological initiatives taken by ports and their willingness to digitize.

IMO has pitched for time-bound action plans and adopting an MSW system as part of the digitization drive. IMO’s Convention on Facilitation of International Maritime Trade has made electronic data exchange mandatory since 2019. Yet only 30 percent of the ports globally adhered to the mandate.

Most recently, a new amendment was made in May 2022 due to the FAL 46 meeting. This mandated the compulsory deployment of an MSW with effect from January 1, 2024 at all ports with the agenda of digitally exchanging information required on arrival, stay and departure of ships on or before the arrival at the destination port.

Kale highlighted the urgency for the industry to speed up its digital transformation as it unveiled the survey results, which also cited high implementation costs, long timelines, and varying levels of digital readiness as leading factors hindering regulatory compliance.

The study involved ports located throughout the Asia Pacific, Middle East, Europe, Africa, North America, and South America, and emphasized that Port Community Systems embedded with an MSW are integral to achieving the true potential of a port.

According to regulatory bodies, paperless operations in cross-border trade could potentially reduce export border compliance time from 44 percent to 24 percent and export cost from 31 percent to 17 percent. It is believed that US$115 per sea container is incurred due to manual customs process. With a dynamic platform like MSW, the cost could be potentially eliminated.

Globally, where similar systems are deployed, the port realized the above mentioned benefits along with a 10 to 15 percent improvement in operational efficiency on a monthly basis, followed by potential cost savings of US$2 to 12 million across imports, exports and trans-shipment processes.

“The purpose of this study was to identify the tangible benefits the maritime industry can achieve with technology intervention, and the results showed potential savings of up to US$50 billion annually by using MSW platforms,” said Vineet Malhotra, Co-Founder and Director, Kale Logistics Solutions.

“However, these benefits are subject to 100 percent adoption of the MSW, and our report reveals that ports are encountering a number of barriers that hinder this digitization. The MSW concept has the potential to revolutionize the international shipping industry.”

MSW platforms bring major sustainability benefits by digitizing documentation, streamlining processes, and improving information exchange, resulting in reduced paper usage and more efficient vessel management, ultimately lowering emissions and environmental impact.

On average 12 agencies collaborate on one ship-shore operation, and the MSW simplifies documentary procedures between all actors involved and ensures information only needs to be inputted once.

“The importance of this study will sow the seed for a digital revolution in the maritime industry worldwide, demonstrating how digitization can not only bring order to the ongoing chaotic operations in the industry but also achieve significant sustainability goals in the long run,” added Malhotra.