Living with paradoxes

Many port-cities around the world have presented ambitious port expansion plans to bridge the infrastructure gap as a way to gear up their economies. At the same time, many ports are troubled by heavy congestion, labour disputes, scarcity of land, negative public opinion, environmental degradation and a fight for talent.

Existing models of problem solving and solution design start from a bargaining position: what’s in it for me; is there a sound business case? However, there are numerous examples in port management practices that shows this mind-set does not work. Labour negotiations end up in lengthy strikes, causing economic loss to society, damaging employment development and poisoning relationships between stakeholders. These business practices hinder knowledge exchange, prohibit experience sharing and block innovation processes. So, how can port-cities create both value for business and society through the path of partnerships?

In science as well as in society, there is a growing interest in paradoxes as a means to characterise societal problems. Paradoxes appear when two seemingly contradictory or exclusive factors appear to be true at the same time. Leonardo Da Vinci gave the concept of paradox thinking a face with his Mona Lisa painting. In her smile people see mystery, ambiguity, and opposites. For hundreds of years, the painting made people curious to the unknown and caused imagination and idea generation to flow.

The anonymous poetic essay ‘Paradoxes of our age’ which circulates on the internet captures the challenges for humanity in the 21st century. In modern business, facing these challenges often leads to conflicts of interests, lobbying circuits at governments, win-lose situations, preference for costs instead of value, and a pursuit to fulfil business goals instead of societal goals.

 

Negotiating power

In a mature port cluster, conflicting interests are usually accommodated by a settlement of differences, which is the outcome of a negotiation process. This approach suggests that the quality of cluster performance is a product of a zero-sum game – the gain for one goes at the expense of the other – or even a negative-sum game, when parties cannot come to agreement at all. To illustrate this, the recent port strikes at US west coast ports hurt the economy, business, port workers and society.

The question is whether bargaining will ever be effective for solving the highly complex challenges of today. It is certainly not the most constructive method. The value of paradox thinking lies in the acknowledgement that problems are surrounded with ambiguity. Such a mind-set can trigger creativity, out-of-the box thinking, organisational learning and co-operation which can resolve complicated issues. What paradoxes are we facing in the port landscape?

One of the most crucial ones is the paradox of growth and accessibility. Attracting more cargo is a way to strengthen competitiveness. However, the more cargo is generated, the more congested ports become, which hampers further growth. The paradox is to find smarter and more versatile ways to deal with traffic growth.

Ports that are investing not just in infrastructure but also in connectivity with hinterland ports are finding a way out of this paradox. When Rotterdam put forward its plan to expand the port with the second Maasvlakte project, the Dutch government committed the port to fulfil a double objective: port growth while meeting sustainability targets. Partially to meet those objectives, Rotterdam created the InlandLinks community as an emerging platform for innovations in the intermodal container logistics chain.

In Hamburg, Hamburg Port Authority, Deutsche Telekom and SAP announced in May that they would bring growth to the port through smart port solutions, instead of expanding the port. The joint logistics IT solution is designed to link up port users, taking the integration of mobile applications to the next level. One of the pilot projects is the integration of trucking companies into a ‘cloud’, enabling fleet planners to communicate with their drivers continuously and in real-time.

 

Automation nation

Meanwhile, the level of automation and autonomous processes throughout the supply chain creates tensions among employers and workers’ unions. Automation eliminates human errors, so say the employers. Just like port community systems eliminated the number of typing errors in transport systems, automation on container terminals is making processes on the yards and quaysides more safe and stable by eliminating human intervention. At the same time, these companies received their license to grow by promoting themselves as engines for employment. Can we find convincing arguments that automation indeed leads to new jobs?

There is no doubt particular hands-on port jobs will be lost. However other jobs will be created, especially in IT. With the abundance of companies, trade flows and cargo, ports are ideal playgrounds for programmers who love to ‘code’, link datasets and feed them into geographical charts or to mobile displays.

At the annual World Port Days, Port of Rotterdam recently brought together a hundred ‘techies’, hackers, concept designers and port experts at their third consecutive World Port Hackathon. These events are breeding grounds of new ideas, innovative solutions, start-ups and new jobs. It’s a veritable ‘Silicon Harbour’ in the making. Follow-up is given via incubator centres where promising concepts are shaped into business wise propositions that might disrupt existing markets.

 

Sustainability counts

On the sustainability front, generally speaking, when ports expand, nature is lost. This is the case in traditional dredging and construction works, but the Maasvlakte 2 project proves it is possible to both grow the port while meeting sustainability objectives at the same time. Additionally, the Building with Nature concept by Ronald Waterman (2008) is an excellent example how integral coastal policies in densely populated coastal areas can be deployed effectively to balance the little space available for living, working, transport and recreation, with the need to preserve or even enlarge natural coastal zones and deltaic habitats.

A good example is the Building with Nature Indonesia project to prevent eroding delta coastlines in Indonesia. The project is part of the Dutch EcoShape programme and aims to halt the process of large scale environmental degradation and disturbance of sediment balance that resulted from aquaculture and infrastructure development. The application of engineering measures such as permeable wooden dams alongside rehabilitation of mangroves, as well as sustainable land-use regimes will help revitalise the fishery grounds, aquaculture as well as the agriculture.

Among the general public, ports are often associated with heavy industries, busy traffic and equipment that goes way beyond human scale. Not exactly an area that you would wish to spend your family time. Because of these economies of scale, ports have physically moved away from the city and consequentially out of the people’s heart. From an economical perspective this doesn’t seem to be a big deal. Why should people be concerned about a highly industrialised environment? Well, for ports to grow, they’re competing with other economic activities in spatial planning, such as space for housing, real estate development for offices, and recreational activities. If not balanced well, spatial planning becomes an arena for project developers whose sole intention is to maximise profit, instead of creating value for the entire area. This is another paradox.

Although they are vast industrial areas full of factories, warehouses, ships and heavy equipment, ports can form an attractive environment for cycling or for spending time at the water or waterfront areas. In August, the port of Amsterdam was home to Sail 2015, world’s largest free sailing event which is organised every five years. The world’s most impressive tall ships line up in front of 2.3 million spectators ashore and afloat in a five-day sailing celebration. The event connects past to present, city to sea, pleasure to profit and people to port. The shared value created by hundreds of organisations and thousands of volunteers is invaluable.

 

Data mine

The amount of data which goes with the organisation of trade flows is huge. Many ports have implemented port community systems, and have eliminated double data entry and human errors by aligning the information exchange through a single hub. The next level for port community systems is to make use of the abundance of data for collaborative process planning to eliminate waiting time in between parties within a port’s nautical chain. From a technology point of view, all data is available to enable collaborative planning – if all parties are willing to share data.

But companies keep data for themselves making the planning of subsequent processes in the chain more difficult and execution very erratic. This leads to delays, additional waiting time, missing out on sailing schedules and higher inventories. In Rotterdam, the NextLogic project takes an alternative approach. Funded by the Port of Rotterdam and Rijkswaterstaat (Dutch Ministry of Infrastructure and the Environment), Nextlogic aims to improve the entire inland container chain by barge. By improving how existing or new information is shared and by combining it, parties in the chain receive information upfront, which allows them to plan their activities in a timelier manner and with better insights into the status of containers, calls, trips and handling by other chain parties.

The ambition is to exchange real-time information via Application Programming Interfaces (APIs) which provides the flexibility and convenience

of data sharing and systems synchronisation, and facilitates the alignment of planning processes. The level of trust between the various parties to share real-time data is crucial, as is the willingness to learn from this collaborative project as well as reliability in each other’s decision-making processes.

In a society where it is increasingly challenging to manage and stay in business, agility is a prerequisite. Technological innovations and market dynamics are leading to a demand for different skillsets. Fixed contracts are perceived as a burden as it fixes businesses to employees who may not be able or are even resistant to change. A common strategy is to outsource competencies and hire a temporary workforce, instead of investing in people. Investing in education is perceived to be a public responsibility, talent development is up to the individual and life-long learning is definitely not the responsibility of employer.

From this short-sighted, human-capital avoiding mind-set the image of an unattractive company emerges, in which the young and bright professionals cannot see a career. No wonder companies find it difficult to find motivated people to fill their vacancies. Singapore takes a different approach, knowing that the maritime industry contributes about 7% to Singapore’s GDP. In tripartite partnerships, government, maritime companies and organisations, and labour unions provide scholarships annually to some 50 students, worth almost between $1.5m and $1.9m. These scholarships are provided for education – at home and abroad in areas such as nautical studies, marine engineering, mechanical engineering (offshore, oil and gas), naval architecture, maritime economics, business administration, logistics and maritime law. Participating companies and organisations are at the forefront of talent scouting and collectively create a favourable career path for high potentials.

 

Drawing conclusions

What does this paradox thinking tell us? Back to some theory. According to Van Tulder (2014), thinking in paradoxes implies a search for many reconciliations of the head (rational, efficiency driven), heart (intentions, passions) and hands (pragmatic) in continuous feedback loops.

To effectively understand paradoxes, a participative, integrative, creative and holistic thinking is required. This is done by applying a learning approach whereby multiple people and multiple viewpoints are shared and applied to new solution paths. The examples above should not be considered as ultimate solutions, but as steps closer to the light. This starts from the acknowledgement of paradoxes and an awareness that a learning perspective can help overcome individual intentions and positions.

On the basis of trust, people can be willing to share their backgrounds, deeper values and knowledge. Turning knowledge into innovations, means dealing with these paradoxes in a way that firstly brings people around the table, and secondly builds trustworthy relationships via co-creation events and programmes where so-called tacit knowledge can flow seamlessly in an open space or online platform.

The collaborative paradigm can also trigger renewal for process innovations, through how people are assigned to participate in these learning cells and platforms. Students, education staff, researchers, freelancers and trainees form an important group of knowledge ‘migrants’ because of their job mobility, open minds and eagerness to develop new knowledge. Ideally, these knowledge assets should be put together and managed by leader firms on innovation programs, so that funding and business drive is brought into the equation as well. Then, faced with paradoxes, port partners will learn from to see creative tension rather than conflict.

Source: Port Strategy 

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