The logistics shipping market has undergone a sea change in the last decade. The embrace of globalisation since the beginning of this century has led to a scramble by businesses to leverage cost efficiencies by sourcing raw materials and components from around the world. The reduction in shipping costs and the rise of telecommunication and internet technologies have acted as a catalyst to accelerate this change.
Supply Chains as a strategic component in the age of e-commerce
With the irreversible shift to e-commerce in both B2B and retail sectors, supply chains have graduated from a second rung in the strategic hierarchy of business planning to becoming a backbone around which all strategic decisions by firms are now based. In this age when customers expect hourly updates and real-time tracking of their shipments and before time delivery is the expectation, logistics providers can no longer be content with just guaranteeing timely deliveries.
Firms want to partner with shipping companies who are reliable and can easily integrate with their strategic plans. Late shipment consequences are becoming more severe which can have a ripple effect on the supply chain crippling productivity and enhancing costs.
Manufacturers, wholesalers, retailers, and other shippers now require full visibility into freight status and location. Business owners expect to access a single-point comprehensive information dashboard including arrival and departure time, pick-up and destination locations, in-transit updates with a real-time concrete GPS-enabled system. 100% visibility has become a core service offering and an important metric evaluated by shippers when choosing service providers. Brokers and 3PLs have also embraced freight visibility in a big way.
The current state of the container shipping industry
To keep pace with customer requirements the container shipping industry has begun to employ better messaging, online platforms, and improved visibility of cargo for shippers. However, the container shipping industry is only just entering the electronic revolution where other industries have already done so. For a longtime there had been a belief in the industry that due to the long shipping journeys and multi-week voyages, the shipping container industry may be immune from the move towards real-time logistics tracking.
The industry has now come to the realisation that cargo owners expect technologies from other modes of transportation to spill over into the shipping industry and for shippers to become strategic partners in their business. Although a cargo owner may not want to track a ship travelling at 15 knots in a remote part of the ocean every hour, they expect real-time visibility to plan ahead and ensure timely deliveries. Industry leaders are the first to admit that they have very little real-time freight visibility and how it would give them a competitive edge.
A win-win for both: Cost-efficiencies and service improvement
There has also been a growing realisation in the industry that real-time visibility implementation is required not just to meet an esoteric customer demand without any value proposition for the industry, but it has an inherent potential to realise cost-efficiencies, improve service levels, and to gather new business by optimal deployment of fleet.
Greater visibility can help uncover hidden costs by providing real-time data for analysis. Predictive analysis makes use of all the historical data based on past vessel or ports’ performance, as well as weather, geographical or political factors and provides accurate delivery windows. This boosts productivity across the entire supply chain making both shipping companies and shippers happy. Real-time visibility can also provide data on fleet utilisation, opening new freight hauling opportunities and securing new business.
The next step: Leveraging A.I. and Big Data
Due to the nature of the shipping business where containers may need to sit idle at a terminal to clear customs, legal or other regulatory bottlenecks, such delays were unpredictable and accepted as a part of the business. With the rise of AI and big data, historical data can now be used to develop AI models to predict time spent at ports and container freight stations.
To sum up, information sharing along with shipping visibility are essential to optimise supply chain. This allows the shippers to monitor their cargo in real time and mitigate unwanted events during shipment.This will improve demand forecasting, which lets the user know that when the demand is low or high. This results in faster delivery and less time taken to resolve issues.
Views are personal. The author is CEO & co-founder of NebulARC.