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Sunday, September 24, 2017

Octopi: A Fresh Take on Terminal Operating Software

By Joseph Keefe

There’s a new kid in town. The Octopi Terminal Operating System targets small to medium sized container terminals. In this case, size does matter, but bigger isn’t necessarily better.

 
In the global supply chain, billions of dollars are at stake and virtually 98% of all consumer goods for the world’s population travels via ocean transport. The recent collapse of one of the world’s largest ocean carriers brought that reality into sharp focus. In that case, ‘bigger’ didn’t translate into ‘better.’ Hence, when it comes to the tracking and documentation of this cargo, there is every reason to make sure that who you trust that task to is not only competent, but also has the wherewithal to be there when times get tough.
 
In a world where value is often (incorrectly) measured in terms of how many boxes you can cram onto a post-Panamax containership, terminal operators are searching for the right IT solution to provide that all-important competitive edge. Answering the call is a Miami-based software company that provides Terminal Operating Software (TOS). Their first product, Octopi, is a new take on TOS systems. The management team of Luc Castera and Guille Carlos claim that terminal operators can use Octopi to efficiently track the movement of shipping containers, communicate their location with shipping lines in real-time, and maintain an accurate history of cargo movements.
 
Octopi went live with its first customer in October 2015. For their part, Castera and Carlos – until now, a relatively unknown quantity on the waterfront – have more than 20 years of combined experience developing software. In a previous life, Castera was CTO of Intellum and Carlos was the first tech hire of FiveStreet, which was acquired by move.com in 2013. That was then, this is now.
 
Wet Feet
Octopi isn’t a name that today rolls right off your tongue. By May of 2016, however, the company had signed a contract with Caribbean Port Services (CPS), which manages all the terminals at the port of Port-Au-Prince, Haiti. With that contract, about 85 percent of all containerized cargo going to Haiti now goes through Octopi. Before that, in April, Octopi (then called Cetus Labs) was also the winner of the 2016 early-stage Startup Showcase competition at eMerge Americas.
 
In June of this year, Octopi completed its billing module, which allows the software product to interface with accounting software such as Quickbooks Online or Microsoft Dynamics GP. According to Octopi co-founder Luc Castera, this is just the beginning.
 
Castera told MLP in November, “We saw an opportunity in this market and built this application for terminal operators. Our first customer came in October 2015 in Port Au Prince, Haiti, with a terminal operator named IMT. They do about 65,000 TEU’s and it was quite a success story. We improved their productivity by about 50 percent. It was such a success that the other two operators at the port – there are three – decided to use Octopi.”
 
Castera says their early success hinged on just three things. “Number one, the existing vendors tend to target the bigger terminal operators, and some smaller or medium terminal operators felt that the existing solutions weren’t a good fit. It also had to do with pricing and the amount of effort involved with implementing the system. And, they wanted to be live; quicker and faster. And, they needed some specific features, for example, that would be very difficult for a small operation to get from bigger software companies. We were not only able to do that, but also fit their business model, as well.”
 
Thinking Local
Not only was Octopi’s first client a small Caribbean-based box terminal, it also had some unique operating requirements. It turns out that when a container is unloaded at the port, it needs to be put on a truck which transits a back road to go to one of three terminals. It was all about tracking that box at each point until it gets “gated in” at the back terminal. And, in this case, once the other two terminals saw better productivity when using the Octopi system, they wanted to switch, as well.
 
From Haiti, Jean Philippe Baussan, Vice President of Caribbean Port Service (CPS), weighed in on his experiences with Octopi. He told MLP, “Octopi was the perfect fit for our terminal size. The other well known and established providers did not seem to be interested in our business. The implementation time was too long and customization to take into account some particulars of our market were very costly.” 
 
Baussan touted the cloud-based nature of the Octopi system. “There was no need to install and maintain costly servers in Haiti. This is being managed by the Octopi team and allows us to concentrate on our core business.” Once installed, Octopi moved his terminal from a ‘Pen and Paper’ operation to a paperless one, improved data accuracy and transparency with EDI, provided remote live dashboards and created a user-friendly truck appointment module. As a result, he said, truck turnaround time inside the yard improved. 
 
That cloud based solution helps in other ways, as well. When hurricane Matthew blew through Haiti in October, Octopi never missed a beat on the tiny island. “That showed the power of the cloud. The IT team in Port Au Prince went to bed and had a good, sound sleep because they didn’t have to worry about their servers,” said Castera, adding, “Actually, at 7 AM of the next day after of hurricane, we started seeing movement at the terminal. We had 100 percent up time – the system never went down.” 
 
Separately, says Castera, the security of the cloud manifests itself in other important ways, as well. The all-important topic of cyber security begins, insists Octopi’s founders, with physical security. Castera told MLP, “Physical security involves our cloud based servers being located in what we call bunkers. You have to go through a lot of security check points just to get in. So, physical access to these servers is extremely difficult. And, this involves back-up generators and other safeguards built into that bunker.” The alternative, he says, is to have a server located at the port. “We have seen more than one terminal where these servers were not considered high security locations. I could have walked right in, stuck a USB stick into the server and gained access.”
 
Pricing
In a market so opaque that it is difficult to find comparative pricing information, what a terminal might pay for a TOS solution can vary greatly from project to project. Castera has a different plan. “From our side, we’re trying to keep the pricing simple. We have a onetime upfront cost which pays for implementation, time spent understanding your operation and requirements and a short training window to bring workers up to speed. “When I say training,” adds Castera quickly, “it takes just 30 minutes to one hour to train one employee. After that we simply charge a license fee that covers all hosting and maintenance. That’s a yearly fee, based on the size of your port.”
 
Beyond their unique pricing model, Octopi also allows customers to have as many users as they want. This includes allowing the terminals to give access to different traders in the supply chain. Castera explains the practice, saying, “The beauty of that is that you can access it from anywhere – you don’t have to be physically located at the port itself. The shipping line in Egypt, for example, could be given access so that they have more data transparency. And, we are finding that consignees get tons of value from those privileges. But, we don’t charge for that extra seat. We’ve talked to terminals who, given that option, would charge others for that access, but no, we don’t intend to do that. It is possible that our customers could make money using Octopi, charging other stakeholders for access. That’s a client decision, though.”
 
There’s a New Kid in Town
Octopi is built with three guiding principles – first, TOS data should be presented in a way that makes sense and allows customers – operations and c-suite personnel alike – to make data-driven decisions. Secondly, Octopi is designed to be user-friendly. Finally, a lot of the smaller to medium sized container terminals don’t have, and further do not want to spend a lot of money putting together a big IT team – something they might need to support some of the existing TOS solutions. That’s why Octopi was built exclusively as a cloud-based solution.
 
Octopi’s target market includes any small to medium sized terminal moving 2,000 to 300,000 TEU’s annually. Castera explains, “That’s our market. We’re definitely looking at the U.S. markets, because some of these huge ports actually have multiple terminals and operators. Some can have as many as 5 to 10 terminals each.”
 
The Miami-based firm will concentrate at first on the Americas – the Caribbean, Jamaica, and Latin America. Castera says that it is simply a matter of finding the smaller players in these markets and talking to them. As container-on-barge operations become more common in the heartland, on the Mississippi River, in particular, Octopi hopes to gain access into those markets, as well. Castera says simply, “These are all players right now who are having trouble finding a solution in the market.”
 
Today’s smaller niche ports and terminals have to dig even harder to find competitive advantages when competing with deep-pocketed megaports intent on dredging to 50 feet and wooing new cargoes. As that effort progresses, there’s a kid in town to help. 
 
 
(As published in the Q4 2016 edition of Maritime Logistics Professional)