At an event in Dublin this week, a vision of the future was presented for the logistics and supply chain sectors.
These are industries which, despite the constant chatter about optimisation, streamlining and technology, remain bloated and inefficient.
It’s estimated that there are one million free slots on container ships around the world. This is the situation, as GTR reported in its latest cover story, before the world’s biggest container ships come online in 2017.
With the internet of things, big data, digitisation and the use of artificial intelligence, however, some companies are predicting a transformation, with others able to demonstrate how they are already using these practices to make their businesses work better.
The internet of things (IoT) involves the connectivity of devices: using smart technology to heat your home, to boil your kettle or to secure your office.
In the trade finance business, we have seen very recently how the implementation of smart contracts can help reduce transaction times. In the complex world of supply chains, such technology can be much more wide-reaching if it’s used properly, and so the evangelism at the IoT summit in Ireland was understandable, if a little premature.
Lasse Eriksson, vice-president of digitisation at Finnish company Cargotec, said that in the cargo trade, using smart devices to monitor and control vessel fuel consumption, to conduct requisite maintenance and repairs and to manage and co-ordinate the fleet correctly could save US$350,000 per vessel per year. With more than 90,000 ships currently sailing the world, that is a colossal US$32bn industry saving each year.
In the container industry, the savings could amount to US$17bn. Poor stowage plans means ships are not filled to maximum capacity (although with global trade figures nosediving, it’s questionable whether they would be full with even the smartest technology). Poor communication between ocean carriers and port terminals lead to congestion at terminal entrances. 20% of all containers booked simply don’t show up at the port.
Using smart technology to gather and analyse data, many of these issues can be worked through.
“One benefit is you don’t have big surprises coming up, if something is not what it’s supposed to be,” Eriksson explains to GTR. “Currently a lot of the information chain goes through email or Excel. That causes a lot of hassle in the supply chain. At least, with this technology, you’re aware of these matters and you can prepare better for them.”
The IoT is voguish: another buzzword in the zeitgeist-heavy world of fintech (case in point). But it has, in various forms (machine-to-machine, the internet of everything), been around for decades, through the automation and robotification of factories, production lines, and also in the cargo industry.
Cargotec, for instance, has for a decade operated automated shuttle carriers which pick up containers at the quay, before bringing them to the yard where a fully-automated crane lifts them into place. “It will be nice to compare them to Google’s cars,” Eriksson says.
Maersk Line, the world’s largest shipping company, has been working on an IoT solution since 2010: a refrigerated container (or reefer) fleet that as of 2015, is fully networked.
The company’s head of remote container management, Catja Hjorth Rasmussen, explained that through sensor technology, 3 million reefers are now connected with smart technology.