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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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Asia-Europe rollovers are back

It appears that ocean carriers are again playing fast and loose with delivery dates for cargo.  There’s a telling remark by an NVOCC source: “You might be able to book at that rate, but you have absolutely no idea when you are going to get the boxes shipped.”

Carriers still have not got the message that most shippers want their cargo when it was promised.  There might be a few that can stand a long delay, but the trend in inventory over the last 20 years has been toward rightsizing inventory by factoring in its logistics.  You can’t do that well if there is substantial variation in lead times. The formula for overall variation of inventory— measured by variance (square of standard deviation)— weights variance of lead time by the demand, but variance of demand by the lead time.

Looking at the formula, a mathematical truth deducible simply from the definition of variance and the assumption of independence of demand and lead time distributions, shows that often lead time variation has an outsized effect.

Ocean carriers can’t control the demand, but they can control the lead time. But it seems that they ought to spend more time thinking about how to help keep the customer’s overall variation low, rather than only dealing with what they alone can control.

Time to get on the supply chain thinking boat!  It left the dock years ago!

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 via Asia-Europe carriers leave boxes on quays as they eye better-paid cargo – The Loadstar

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Transpacific trade volumes set for further decline

Transpacific trade won’t recover for at least a couple of years, says an article in the Loadstar.

Most of the tariffs remain in place. And much trade has shifted from China to other Southeast Asia countries, like Vietnam, rather than returning to China.  US container imports from China are off by more than 8% compared with last year.  Vietnam was up 33%, to 1.4m teu; Thailand was up 18%, to 570k teu,  and Malaysia was up 27%, to 335k teu.  But total trade from the region is down.

And US consumers have already overpaid by $38 billion for goods from February of 2018 to September of 2019.  That is the typical story in trade wars; the consumer pays for the war through increased prices for purchases.  It’s a premise of trade economics; when trade is restricted, the consumer must buy at higher prices because they can’t get them from the lower-cost location.

And it’s not clear at all that the trade deal between the US and China will change that trend away from China, and down in general.  Of course, we don’t know what is really in the deal yet, or which things will actually happen.  And we know there’s been little advance on the intellectual property front, and the US has ceded the opportunity to gain support for dumping claims through the WTO.

Not a pretty picture for the Transpac trade.

logo via Transpac volumes set for further decline, despite US-China trade pact – The Loadstar

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