Benefits of Technology Adoption for Enhanced Integration of Port–Hinterland Operations

Abstract

Because container shipping is the most important means of transportation for international trade, the integration of port–hinterland operations is critical to improve the performance of global supply chains. Information and communication technology (ICT) can assist port stakeholders in addressing bottlenecks and streamlining processes at the port–hinterland interface. However, ICT adoption is often hindered by uncertainties concerning expected gains. This paper shows that the adoption of well-established technologies for supply chain management—namely barcode and global positioning systems technology—can bring significant performance gains for the port–hinterland interface, as evidenced by increased container cycle time, utilization rates, and total throughput. In addition, results show the presence of diminishing returns when implementing multiple readers in the system. System dynamics and a unique database containing real data from the Hutchinson Terminal at the Port of Veracruz, Mexico—selected because it is one of the most important ports in the Americas—are used to show the benefits that both local (nodes) and global (supply chain) levels can obtain from ICT adoption. The results of this research will help to reduce uncertainty and incentivize ICT adoption by port stakeholders, particularly in developing countries where research is lagging. The model proposed here can be applied to any port to analyze the impact of ICT adoption and provide support for the decision making of port stakeholders.