Category Archives: Ports

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Liner customers “bewildered” by new low-sulfur fuel charges – FreightWaves

Ocean carriers are confusing their customers again.  This time, it’s the low-sulphur fuel charges which are being put in place before the requirement to use it is mandated.   Each carrier has different charges, with different bases.  The result is confusion about the impact.  Some charges are being billed as “sustainability” charges. That means different things to different customers.  Most of them translate to “higher cost”.  Carriers are using various international indices to measure the changes in contracts, which may or may not relate to the actual extra cost.  And some ships are being fit to use LNG rather than the low-sulfur marine fuel, which is a whole different calculation.

Here’s an example from the article of a typical letter.

Evergreen Lo-sulfur fuel memo

The article finally gets to the bottom line.  Customers are worried that the new charges will be used by the carriers as profit centers rather than just recovering their costs.  the rate rises might go into carriers’ pockets rather than fund sustainability or simple costs.  It’s a reasonable worry, given that fuel surcharges have been used that way in the past by the carriers. Everyone knows the carriers are operating at very thin margins, particularly in the container trade.

It seems like more public relations needs to be done by carriers.  They also need to pay attention to the cost allocation part.  How can they reassure shippers that they won’t be overcharging them?  Cost allocation issues surround many business decisions, and need to be thought through.

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via Liner customers “bewildered” by new low-sulfur fuel charges – FreightWaves

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Posted on October 2, 2019 by in Logistics, Ports, Shipping, Supply Chains, Sustainability

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Online port community system ‘game-changer’ for India’s shipping industry

, has written an interesting piece about a new port communication and collaboration system that is revolutionizing how Indian p[orts operate. It’s called PC51x, and it connects port users via secure messaging to exchange paperwork, financial info, and other messages.  In trials, it reduced cost and time for interaction drastically.

And it did NOT involve blockchain. In fact, it uses only technology developed years ago and tested severely by those years of practice.  It seems that for the user it operates like one of those doctor portals we have all become accustomed to in the US; annoying, but much faster and less annoying than waiting for her to call back (!@?^%$#!).  And capable of much faster integration if those communicating have a desire to make it better and faster.

They have announced a portal type interface.  This type of function is like what we used to call ‘middleware’, connecting systems with different data specifications and requirements, and letting them work out how to use the data.  It makes a lot of sense to me.

I think any port could copy this with a little hard nose bargaining with those it collaborates with.   Getting truckers on board might be more difficult without a good look at the systems they use every day.   But for many others it makes sense.

But should the port be the driver?  I think there is potential for 3PLs to usurp the role for their cargoes.  Then we’d have to link in their systems. Hard, but not impractical, and easier than forcing all their shippers to use the port’s message portal.  Everyone would benefit.  And more players such as banks and customs could participate as well.  Better that this should be driven by a lot of smaller players (if ports can be thought of as smaller) than by a national or global standards initiative, especially one from a single source.  Let it evolve, I say.

logo  via Online port community system a ‘game-changer’ for India’s shipping industry – The Loadstar

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Posted on May 30, 2019 by in Advanced Computing, Leadership, Logistics, Ports, Shipping, Strategy, Supply Chains

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Sensors, ‘grey boxes’ and opportunities

 of the Loadstar has a short article about a vision DPWorld has for integrating data and logistics.  He describes some innovative activities. In Yiwu, China DPWorld has an agreement for a project that allows customers to clear cargo through customs before it leaves for Jebel Ali. The DP World representative also pointed out that in the future, each item in a box may carry a sensor.  Box handling equipment could make use of the sensor data (eg, promised delivery dates) to route boxes by a faster or slower route.

It isn’t clear to me how the second method will work out–  I’m reminded of the old Fedex cartoon where the delivery man is swimming ashore to a client on a desert island with a wrapped package, but the stranded client says “But my birthday is tomorrow!”. Rerouting a collection of cargo on the basis of, say, average due date,  is fraught with problems. Are the partners in each supply chain ready for early delivery, or do they want it, or will they actually pay to have it delayed?     I used to have a copy of this cartoon which I showed to my logistics and operations classes, but it’s gotten lost over the years.

There’s no question that improving customs clearance and in fact throughput at any stage will benefit from accurate and easy data interchange.  But for that, you need some standardization, and for it to transform the industry the standards need to be common for the whole industry.  I’m reminded of the effort it took to translate US freight codes to the Harmonized codes used in international traffic.

Standards need to be set, and where they deal with complementary processes they need to be set broadly so that everyone can participate.  That requires some joint standard setting.  It happened for INCOterms, it happened for disk drive interface standards, it happened (more or less) for EDI;  but it takes a village.  One or two firms can’t do it.

logo  via Sensors, ‘grey boxes’ and opportunities in an age where ‘data is the new container’ – The Loadstar

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Posted on May 23, 2019 by in Logistics, Ports, Supply Chains

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