Tag Archives: maritime

Port of LA leader calls for industrywide digital transformation

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

Port of LA leader calls for industrywide digital transformation (with video) – FreightWaves
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IMO 2020 makes box lines speed up?

Mike King wrote a piece about the risk that the IMO2020 fuel regulations will induce ocean carriers to speed up, thus burning more fuel and causing more emissions.

Most carriers are equipping ships with scrubbers, which will let them continue to burn high sulfur (3.5%) fuel, rather than shift to the lower 0.5% fuel grade.  The scrubbers take out the sulfur and other unwanted chemicals, either discharging them into the sea (open-loop systems) or retaining them for disposal in port (closed loop systems).  Some ports and countries have banned the use of open-loop scrubbers near their shores.  China and Singapore are two.

Exceptions to the rules are in certain zones called Emissions Control Areas (ECAs), where the maximum sulfur content is 0.1%, very low.  ECAs are set up by countries or trading unions like the EU with a mileage limit near their shores.  While steaming in those zones, the ultra low sulfur fuel must be used.

I recently refereed a study [1] that indicated that the ECAs actually induced carriers to avoid them for longer, burning the high-sulfur fuel longer, and also in some cases going faster.  It’s an economic decision problem with fairly straightforward calculations to optimize the route taken, based on the price differential of the grades of fuel and the exact time on each part of the route. Lower emissions and lower cost come about in opposition.  The calculations are especially relevant for short sea shipping routes, such as along the East Asian and Chinese coastline.  Ships can go offshore far enough and, using their scrubbers, burn the highest sulfur fuel which might be a lot cheaper, then dart directly in when they get near the port, into the ECA region.

On long sea routes a lot of time can be spent steaming with the 0.5% fuel, and speeding up might be a way of reducing the time and improving customer service by shortening the voyage.  Delays in ocean shipping happen very frequently and are a source of much discontent among shippers; they also produce a lot of lost business for carriers.

The interesting part of the article to me is the clear indication that speeding up using a scrubber could be a viable strategy for improving service. We might then get greater CO2 emissions than we did with slower steaming.

Sustainability is always tightly coupled with economics.  We have to watch for unintended consequences whenever rules are imposed, and be prepared to adjust them. Hopefully, we’ll keep trying to improve the emissions control measures.

as-twitter-card-default-image3   via Could IMO 2020 prompt box lines to speed up? – FreightWaves

[1] Zhao, Yuzhe; Fan, Yujun; Zhou, JingmiaoKuang, Haibo. Bi-Objective Optimization of Vessel Speed and Route for Sustainable Coastal Shipping under Regulations of Emission Control Areas, Sustainability, under review(2019).

Safety & Shipping Review 2017

 

Maritime losses at sea are always worth reviewing. Allianz, a major insurer, has published this report on 2016 shipping incidents, and trends to be expected in 2017 and beyond. See the pdf below for the full report.

This review focuses on key developments in maritime safety and analyzes shipping losses (of over 100 gross tons) during the 12 months prior to December 31, 2016. It also identifies some of key risk management challenges the industry faces moving forward.

Source: Safety & Shipping Review 2017 – Supply Chain 24/7 Paper

Allianz_AGCS_Safety_Shipping_Review_2017