Tag Archives: transportation

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Drought forces Panama Canal draught restrictions and pushes up rates

 has a good interview in The Loadstar with Jon Slangerup of AGL (American Global Logistics, a forwarder), who is the former head of the Port of Long Beach.  the recent drought has forced the Panama Canal to raise rates, and spot rates to the US East Coast have increased 14% or more.  This may put a dent in the so-called East Coast routing of containers from the Far East.

But Mr. Slangerup made another comment very interesting to a long time observer of the debate about whether the improvements to the Panama Canal would actually win traffic from the West Coast ports such as Long Beach, Los Angeles, and Oakland (let alone Seattle).

He noted that one could view the recent increases of Panama canal traffic as simply a recovery to normal after a long time in which the canal was operating in a reduced fashion because of the construction.  (The canal opened the expansion on 26 June 2016.)  He doesn’t think that the improvements have significantly altered proportions of traffic in the long run.

He also pointed out that many if not most freight buyers are concerned primarily about price.  Unless the Panama Canal can couple reduced tariffs with expanded capacity, shippers may not choose those routes in preference to the West Coast passage, which is also improving even for transit to Europe.  There has been a lot of progress in eliminating delays on the West Coast routes as well.  Slangerup noted that dock-to-rail loadings at the West Coast ports has increased from 23% to 30% and is being driven upward toward a goal of 50%. And there have been gains at the Chicago transfer points due to implementations by several railroads of PSR (precision scheduled railroading). For example, see this article by Julie Shneider in Progressive Railroading.

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Posted on May 14, 2019 by in Logistics, Ports, Rail, Shipping, Supply Chains

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The Dawn of the Deep Tech Ecosystem

This Boston Consulting Group report by  Massimo Portincaso, Arnaud de la Tour, and Philippe Soussan,  discusses seven categories of so-called deep-tech areas of research that are likely to yield new disruptions for businesses of all types.   They believe that deep-tech industries are no longer dominated by larger companies doing incremental research, but ratherby small, nimble enterpreneurial firms finding and developing solutions for novel use cases.

They claim we are moving into a phase in which truly new types of infrastructure for business uses is emerging.  And the development of these new uses requires a whole ecosystem–  a band of cooperating players, including technicians, investors large and small, and firms who have use cases–  rather than simply a firm, some financing, and a product.   This differs from the ‘maker’ approach to innovation, which believes we can just set people working with some simple tools, and they will come up with the products the world needs.

I support this ecosystem approach, not the more limited one. As an example I call your attention to NYMIC, the New York Maritime Innovation Center, started by my colleague Dr Chris Clott of SUNY Maritime.  It fits exactly into the role of helping create a good ecosystem for innovation in the maritime field, one which greatly needs stimulants to produce service improvements.  Its motto is “Convene, Connect, Catalyze”, which exactly expresses what BCG’s discussion here is saying.

BCG has a full report entitled The Dawn of the Deep Tech Ecosystem.  Much can be learned by studying how it is evolving in the different deep tech areas they believe are a part of it. Link to PDF.

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via The Dawn of the Deep Tech Ecosystem

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Posted on May 10, 2019 by in Advanced Computing, entrepreneurship, Investing, Logistics, Ports, Shipping, Strategy, Supply Chains

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Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

  has summarized Gartner’s survey in this article, which seems to indicate more clearly that blockchain is a solution chasing problems.  The basic problems are “technology immaturity”, “lack of standards”, ‘too ambitious scope”, and a misunderstanding of the use cases.    I think Gartner has made a fair assessment of the situation, if perhaps even a bit too enthusiastic!  So much hype over blockchain, and so much development investment, forces companies to take a look at a technology that basically duplicates what many systems already do.  In short, the use case doesn’t hold up.
We need trust between partners in our supply chains.  Supply chains are all about cooperation, and current systems have nearly the same capacity for verification that blockchain based systems do. What current systems lack is an easy way to provide access for partners, and to control it.  So the trustless paradigm is not immediately relevant.  It might be in some of the commodity tracking uses Gartner details, though how it would prevent blatant fraud is not clear.
Gartner is also right about the impending balkanization of blockchain systems.  Each one is its own chain, but logistics partnerships are shifting constantly.  What’s needed is connections between blockchains so data can be translated between them readily.  Gartner refers to them as APIs;  in the old days, we called them middleware.  It would be great, as one survey participant indicated, to have a replacement for a peer-to-peer system (EDI) which allows many to many communication without the hassle, but that is not what blockchain proponents are suggesting.
Finally, the lack of standards is a major problem for supply chains.  Supply chains are about cooperation, and cooperation requires agreement on standards.  My partner Chris Clott and I have written about the need in the maritime supply chain world, and there’s more coming.  In fact, several groups have started up intending to create standards.  (See the BCG article below.)   Experience shows that standards take a while (read l..oo…oo..ng time) to become accepted.  And there’s substantial evidence that standard setting in a top-down fashion is more likely to fail and less likely to get a good ecosystem of cooperating providers than evolution from the bottom up based on specific solutions to particular use cases.  (See article by Hanseth etal below).
From this viewpoint, it’s actually good that there has not been too much success yet, and that there are still lots of entrepreneurial attempts at creating useful solutions to specific logistics and supply chain problems.  Whether these can use blockchain or some other database technology is uncertain, but the effort is going to yield some progress, though over a longer time frame than we expect.  I’m thinking more in the time frame of ERP’s rise as a must-have system, maybe 20 years.

screenshot-www.supplychaindive.com 2018-01-29 09-45-53-153 via Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

Here’s a link to the actual Gartner report PDF .

Here’s a link to the BCG report PDF.

Here’s a link to the Hanseth etal paper, about standardization projects in Norwegian health care.

 

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Posted on May 9, 2019 by in Advanced Computing, Logistics, Supply Chains

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