Tag Archives: technology

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DCSA unveils new era of smarter supply chains with track & trace standards

The Digital Container Shipping Association has unveiled its new T&T standard for tracking containers while en route between shipper and consignee.  They are quite detailed and have been planned using some of the latest design thinking techniques, including the definition of personas who might use the system one way or another. They’ve prepared some very nice slide shows to describe at a high level what they are doing.

DCSA was launched by MSC, Maersk, Hapag-Lloyd and ONE last April, with CMA CGM, Yang Ming, Evergreen, HMM and Zim joining a month later. This is a fairly quick turnaround for a first standard delivery.

The catch will be how fast people start sticking to them when building equipment and systems. Doing so can be predicted to help sales, via a network effect– since the standards make systems compatible, there’s less hassle making one system relate to another.  A close review should be done of the standards, to see how many choices individual participants are given to make the information specific to their needs.  Such choices tend to produce systems that lose their compatibility if one of the partners changes, and make specific programming necessary when others try to adapt to the system. It’s the anthesis of cooperation.  And these standards are meant to promote cooperation rather than competition.

An example of the issue can be seen with EDI, in which general record structures are defined, but a lot of latitude is given to provide extra information or different information. The result is that EDI needs to be specially programmed for each pair-wise interaction of companies, a problem that has haunted us for 20 years even though
EDI, in general, was a big step forward.

Let’s hope that we all have learned from the past, and can use the standard to really lubricate information flow in supply chains.

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By via New era of smarter supply chains as DCSA track & trace standards are unveiled – The Loadstar
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Maersk invest in ZigZag Returns

It’s clear that Maersk is making bets as a venture capitalist on young firms with unique value propositions. They have made an investment, via Maersk Growth, in ZigZag, a London-based firm.

I had never heard of ZigZag before.  They offer a SaaS (Software as a service) that allows manufacturers and retailers to manage returns in a one-stop manner.  Their services include hard logistics assets like access to warehouses and sortation centers and access to carriers, as well as just the software.

The story indicates some of what they do.  We all know that returns are a unique type of operation, whose nature differs with the type of industry.  HP has been doing it for many years in the printer division.  But I was interested to find out that there is a lot of interest among clothing manufacturers or retailers.

Apparently people buy clothes, use them for a while, and then return them, even for no refund.  There is also a temptation for retailers to get rid of stale inventory by simply throwing it in a landfill, a sustainability issue.  Easy returns offers an opportunity for a firm that can handle these problems efficiently and in a sustainable manner. (I presume there might be an incentive to cheat; but certainly a specialist could do a better job because it’s their core business).

I doubt that ZigZag will be merged with Maersk.  However, the bet makes sense when you understand that a lot of what Maersk carries is clothing manufactures from the Far East.  If ZigZag can help these clients it could make a difference in the clients’ bottom line, and Maersk would be able to say they helped with the supply chain problems.

Reach ZigZag here: https://www.zigzag.global/

screenshot-Zigzag 2019-11-06

via Maersk invest in ZigZag Returns – Press Release

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ONE won’t install scrubbers

The ONE ocean carrier group has decided to arbitrage the price of Low Sulfur Fuel Oil (LSFO) vs High Sulfur Fuel Oil (HSFO) by not installing scrubbers on their vessels.  That means they will have to use the LSFO everywhere it’s required, mostly in the special ECA emissions control areas set up by a variety of countries.

ONE plans to use fuel price surcharges to offset the difference in price of the fuels.  Many firms are deploying price surcharges December 1.  Surcharges have attracted a lot of unpleasant words from shippers, who will have one more thing to take into account to determine total landed cost.  ONE may need to charge more than some of the firms that are installing scrubbers, such as Maersk, Evergreen, and MSC.   It may be a disadvantage.

But, on the supply side, refiners are starting to produce the LSFO, and bunkers providers are going to inventory it.  It’s possible the price differential may not be as steep as the $200 per ton currently predicted. There certainly will be some fluctuation in the price difference, and not only in global indexes; it may vary for region to region and provider to provider.

There could be an interaction with routes. Certain routes may offer opportunities to buy LSFO at lower prices; if they’re convenient, the cost hit may not be as bad as that predicted for the industry as a whole.  Perhaps ONE knows something we don’t about their routes and bunker providers.

Apparently the scrubber producers and installers are backlogged at present, so it’s not possible to get one installed promptly.  Over time this demand will fall, and maybe one can install a scrubber cheaper later on, an example of the learning curve phenomenon.

But rather than tag ONE management with ‘too slow too late’ decision making, we need to see how the whole picture plays out.  There are lots of moving parts in the problem of how to meet IMO2020’s 0.5% sulfur requirement.

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via Decision not to install scrubbers could prove expensive for ONE – The Loadstar