Category Archives: Advanced Computing

US logistics industry needs a unified data stream to boost cargo velocity

This article quotes Carl Bentzel, an FMC commissioner, who says that there is increased concentration of the ocean shipping business, from no carrier having more than 4%, to around 10 carriers, half of whom have 12-20% each.

Many supply chain participants have been calling for standardization of basic data surrounding a shipment, especially concerning its timing and needs as it moves through the system. There are no standards for this kind of data, and any attempt to compile it meets the challenge of disparate and constantly changing independent systems. And often, data for particular shipments is exchanged by emails.

It would be nice if the FMC would step in and develop a standard for data interchange. But different players have different concepts of what data is essential, according to the article. For instance, some partners want to know how long they have storage rights for a particular container, free of detention and demurrage charges. Others want to know whether a chassis is available, and where. Chassis shortages have hampered container moves in the LA/Long Beach area, despite a chassis pool; other ports have pools as well, but containers often ride out delays on a chassis if it’s believed the wait won’t be too long.

A standard would be nice, but often takes years to negotiate. The startup Dray Alliance, mentioned in the article, is trying to set a standard for some of this information with an online and app-based system. But not all the necessary data will be there, not for all the participants in the container-move supply chain. And it’s not clear truckers need one more app.

By Nick Savvides 15/12/2021

US logistics industry needs a unified data stream to boost cargo velocity – The Loadstar

The Big Supply Chain Analytics Failure – Supply Chain Shaman

The Supply Chain Shaman, Lora Cecere, always has something interesting to say and valuable to think about.

Her numbers show that supply-chain related firms are right now simply making incremental improvements on existing systems, and are ignoring the need to go out there and find new ways of gathering and making use of supply chain data.

Systems people for years have known that you have to re-engineer the processes, the ways of doing business, and the software must support that. While it may turn out that the software is already right to support new processes, it’s much more likely that entirely new forms of software are required for the processes to work properly and fluidly.

That means analysts and business process participants together must spend the time needed to truly understand what they need to accomplish, and put in the up-front research and planning to get the system designed well. Few companies are willing to tolerate the time required. But that’s where the true value is realized.

I was just reading an article that tried to set forth a design strategy for a Port Communication System for ports in South Africa. Currently they don’t have them. But the article was at such a high-level that there was no insight into the new procedures and methods that would be needed to really bring these ports into the 21st Century. I’m afraid that much development of supply chain systems is done in that way. We look at existing processes instead of imagining how the processes and the whole scenario could be different. And once we’ve imagined the new world, we can see that the systems have to be different.

So the message to supply chain firms is to put on your imagining cap and plan systems that actually make quantum improvements; done just band-aid the old processes.


The Big Supply Chain Analytics Failure – Supply Chain Shaman

DP World launches ‘end-to-end logistics platform’ to compete with carriers

DP World has not waited to announce their complete booking and shipping system to compete with Maersk’s announcement.

Maersk has Tradelens, a booking systme using blockchain concepts, which is a partnership with IBM, and purports to allow a shipper to book end-to-end delivery of cargo.

The DP World version is called CARGOES. According to the article, DP World claims that while blockchain is not part of their system now, they are looking at including it.

And why would they want to, if the standard database technology works well? It surely would not perform as well, and once they have the permissions set up, registered users can query whatever they set up to allow.

But more important, both of these announcements tend to render ocean freight brokers less relevant for smaller shippers. While there are other services brokers could perform, the one-stop booking and tracing they offered can be obtained elsewhere.

Brokers can still provide customized help with freight services. And they may have a customer relationship that cannot be obtained through an app. And remember, brokers still buy 40% of ocean shipping space, so that competing with brokers may cut off your nose if they shift where they buy their space for resale.

It’s most useful now, with rates at an all-time high for containers, from say Asia to EU or US. The platforms may help the firms keep some of the margin they are able to command right now. They won’t have to discount so much for brokers who book larger volumes Bu tthe ocean shipping firms can’t expect to maintain their blanked sailings and late deliveries as a means of holding prices up. That’s anathema for shippers, who can’t see their cargo tied up in shipping delays of various sorts.

The high prices are going to create big incentives to figure out how to cut them out. We already see large shippers such as Amazon and Walmart and IKEA turning to chartering their own ships. There will be more of that.

These chartered ships are going to create dedicated fleets. And there is no reason they cannot offer some of their unused capacity for sale to some partners. Ocean liner companies may well be creating a secondary carrier set and find themselves serving far more small shippers and fewer of the megashippers, which were their primary source of revenue for years.

That would put them in a long-term starvation system, with megaships to fill and not enough large shippers to fill them. There would be massive retrenchment and only a few carriers would survive. That could be the future 10 years from now, after the supply chain disruption blip of the Covid period.

It’s good to remember that apps by themselves can’t create huge value; it’s the actual services and products they provide that are the real source of value. The shipping itself has to be conducted in a way that’s worth it for the customer.

By Charlie Bartlett, European Correspondent 21/10/2021

DP World launches ‘end-to-end logistics platform’ to compete with carriers – The Loadstar