Many manufacturers have been shifting offshore production to Vietnam since the Trump administration tariff wars with China. Most of us realize wages in China have gone up a lot, and China is no longer a cheap place to have items like clothes manufactured.
Here we see that a Covid lockdown is causing problems for supply chains that depend on manufacturing there. The measures taken in the lockdown are interesting for us in America.
Gene Seroka, Executive Director of the Port of LA, is calling on people to cooperate and share data on logistics activities. He wants to see a bold information transformation, for the maritime industry and also for on-shore logistics. He was put in charge of coronavirus-related logistics by the Mayor of Los Angeles, a very big job in addition to his own.
In the video you get to hear him directly.
He makes great claims for the Port of LA logistics information systems. But the port has needed to be dragged kicking and screaming into the digital age. It’s taken much longer to get them to act than it had to. Scholars and also logistics participants such as forwarders, shippers, and NVOOCs (Non-vessel-owning ocean carriers, sort of freight forwarders for ocean cargoes) have been screaming for coordination of systems ever since the 2000’s. It’s just very hard to do without standards. And it takes forever to negotiate standards that don’t place some participants at a disadvantage.
The role of standards could be a lot like their role in the PC market. Used to be, when you bought a PC you had to buy the disk drive, and memory from the same vendor– it had to be compatible. Software also must be compatible with the operating system. Nowadays, these parts are made to standards, and you can go buy any replacement or upgrade memory or disk that are compatible, You can even replace your hard drive with a matching SSD that is transparent to the computer. The adoption of standards allowed computers to become affordable, software to work on all the hardware, and be useful for all. It’s called a network effect. The same is true for logistics software. To connect partners together they need to each conform to standards of data structure (schemas, we call them) and standards of transmission. Nowadays the buzzword for this is APIs, but the concept has had lots of names over the years. My favorite was ‘middleware’.
And the need to share has to be seen by the prospects as more important than preserving the confidentiality of their company data. That is perhaps the largest barrier. So participants have to see tangible economic benefits to sharing, and that is sometimes hard to get direct evidence of. Even the economic network effect is hard to justify economically with hard numbers.
Gene Seroka is a good leader, and for coronavirus, we hope he is able to pull together what’s needed for the job.
Kim Link-Wills, Senior EditorWednesday, September 16, 2020
Here’s a suggestion for a relatively simple way to stop the cheating on crew changes during Covid-19.
Crews are often not allowed to leave ships during the Covid-19 crisis, and are either coerced into signing renewal contracts or simply denied the ability to travel home. How to stop it?
The proposal: get P&I insurers to deny coverage until crew members have been changed. It’s clearly a safety issue to have continuously-serving crew who do not get a mandated break.
It’s simple, and doesn’t require a lot of collaboration between countries, shipowners, and international agencies. And enforcement is quick and easy and dire for the shipowners and cargo owners. No one will ship with a carrier who does not have P&I insurance.
I thin it has real promise, and only needs a few P&I executives to make it happen.
Supply Chain and Logistics 