Turning the invisible network into the visible supply chain

Knowing where something is, and in what state it is in, is a fundamental part of being able to plan any operation. From automotive manufacture to supermarkets selling foreign-grown fruit, many sectors need to be able to know where their goods are at any one time.

Yet for many years a combination of legacy IT and the nature of global transportation, in which an average of 28 parties can be involved in the shipment of a single container, meant that the best any business could expect would be an assurance that its containers were on their way. Quite often, the only in-transit update would be when something was not going to plan: a container not loaded onto a ship, a vessel not calling at a scheduled port, or a delay on the land part of the journey. The BBC once called shipping "the invisible network that runs the world"; customers could be forgiven for thinking that level of visibility extended to those using the network.

The implications are significant: supermarkets expecting perishable goods might have to write off whole containers if they did not arrive on time; automotive manufacturers could find their production disrupted due to a lack of parts; retailers might run low on stock relevant only to specific points in the calendar.

From waiting and hoping to monitoring and improving

However, thanks to customer demand and improved technology, this is changing. Some of the industry's largest players have announced plans to provide tracking services in the last couple of years. Most recently, container shipping giant MSC announced it would be deploying 50,000 smart containers, while the Port of Rotterdam, Europe's largest port, is partnering with Samsung on a pilot.

The current focus on tracking was summed up by Diego Aponte, CEO and President of MSC, in The Loadstar: "MSC believes the real-time tracking of containers is the future of the shipping industry. While shipping lines should, of course, compete on service, we will achieve better results for our customers by working in a more harmonized way on technology and innovation."

Elsewhere, the Danish operator Maersk Line has been using what it calls Remote Container Management for its refrigerated reefer containers for over a year. Vincent Clerc, Maersk's Chief Commercial Officer said, "The old days of waiting, hoping and reacting are over. Our customers can now monitor and make decisions about their supply chains as their cargo moves, as well as use the data to study and improve their entire supply chains."

One goal, multiple ways to achieve it

What is interesting about the focus on tracking containers is the different ways the participants are going about it. For MSC and Maersk, that has meant Internet of Things (IoT), while the Port of Rotterdam is deploying Blockchain for its program.

MSC is using a tracking device attached to a container, which connects to a mesh radio network to control performance and power consumption, and a cloud platform to collect, process and share the data from the device. The device generates GPS, temperature, vibration and movement data and sends it to a cloud platform for customers to access.

Maersk Line uses a GPS, modem and SIM card attached to each container, with data then shared with support teams and customers via satellite transmitters on its vessels. It accurately monitors container temperature – vital to ensure perishable goods arrive at their destination in the right condition – as well as location. In the first six months of 2017, the technology captured more than 4,500 incorrect temperature settings on reefers. In 200 instances, the inaccuracy was such that had it not been captured and the changes made, the cargo—worth several million dollars—would have been lost.

Not only is it saving on potential customer compensation, but there is significant opportunity to cut operational costs as well. Maersk Line used to spend $200 million each year on physically inspecting containers. With IoT sensors providing similar data, that figure could be significantly reduced.

Both these approaches are designed to work whether on a truck, a quayside or in the depths of a vessel, using the relevant communication infrastructure to share data as the container moves from land to sea and back again.

The demand for IoT in shipping is underlined by the Orange Business agreement with Cargotec, a leading provider of cargo and load handling solutions, with worldwide IoT connectivity. The deal enables new digital services and delivers a much higher degree of operational efficiency, both internally and further down the value chain at the customer level.

The Port of Rotterdam is working with ABN AMRO, Samsung and start-up Blocklab to connect two separate Blockchains to allow all parties involved in the shipment of a container to access data on the shipment. In this way, hauler or rail freight provider, port operators, customs houses and carrier will upload data on the container's progress as it completes each stage of its journey.

It is the latest example of the increasing interest in Blockchain, with several initiatives from both industry leaders and start-ups using the technology. The appetite is such that the Blockchain in Transport Alliance (BiTA) has been established to provide Blockchain standards to the freight industry. Its members come from both logistics and technology, including Orange.

A real-time future

Maturing technologies are making what was once thought impossible achievable. Whether Blockchain or IoT, shipping industry players are committing to providing customers with greater levels of insight and data, in real time, to improve their own business operations. As these new innovations become the norm, the days of "hoping, waiting and reacting" should be consigned to the past, and up-to-the minute information the reality.

The logistics industry has the opportunity to provide its customers with more accurate data and information on their supply chains. Yet there is still significant work to do before this becomes the standard. Discover what you need to do in this digital supply chain whitepaper from PwC and read this blog on the technologies transforming shipping.

Josh Turner
Josh Turner

I am a technology writer with a decade of experience in business, technology and logistics. From starting off my career writing questions for a TV quiz show, I’m now spending my time looking at how the world of business is going digital and transforming a variety of sectors and industries.