One of the major incidents that rocked world trade was the blockage of the Suez Canal in March 2021. A gigantic ship stranded on one of the busiest trade routes caused significant economic losses to exporters and created a huge backlog that continued to impact world trade for months to come. Although this incident immediately attracted the attention of the media, many such minor incidents go unreported and result in significant losses to shippers and exporters. These losses can be avoided with the help of real-time tracking and proactive preparation to meet the challenges encountered while shipping cargo.
According to the Maritime Executive, “Four in ten containers (40%) missed their scheduled departure, while some major carriers and ports reported overturn rates above 50%. According to the Global Liner Performance (GLP) report, “the reliability of schedules of global shipping lines fell to 34.9% in January 2021”. Therefore, one of the most urgent needs of logistics management to strengthen the supply chain is to have systems to improve visibility of their cargo movements. Near real-time data on supply chain operations will help reduce risk, improve efficiency, increase customer satisfaction and increase profits. No exporter in the country wants to risk losing their reputation and profits with overseas buyers due to inconsistent delivery of shipments.
The shipping and logistics industry is finally waking up to advanced technologies. Containers transport over 95% of all manufactured goods at some point during their shipping life cycle. While many economies and merchants have evolved, the majority of the ecosystem relies on conventional practices that are inadequate to offer real-time information or exact location, thus contributing to more chaos.
New era technologies usher in smart shipping
“Smart Shipping” is the shipping of the new era, using smart technologies and data analytics to make better shipping decisions. Advances in advanced technologies have resulted in significant developments for the logistics industry. AI and ML are making hyper-automation a reality while immersive technologies such as IoT deliver intelligent container tracking on the go.
The advanced cargo tracker captures multiple data points including shipment departure, arrival time, and ports visited. Simultaneously in the background, the system also compares real-time status updates with the originally scheduled schedule and displays updates on delays accordingly. Data accumulated across multiple data points along the shipping journey provides actionable information for informed decision making. Satellite tracking of shipping carriers’ containers and port congestion data provides real-time ETA information on shipments that helps suppliers and buyers plan not only transshipment routes but also trade schedules . The shipper gets real-time status of the entry / exit gate, container loading / unloading, and vessel departure and arrival. If a disruption is discovered at any time, he can change his logistics planning. In addition, it allows logistics managers to better navigate all of their supply chain activities and share real-time shipment status with all stakeholders directly through the tracking platform, which builds trust and transparency with international buyers. These systems also offer benchmarking of the services offered by various carriers and freight forwarders, which helps identify the best service provider while optimizing costs.
Covid 19 and smart shipping
The first wave of Covid nearly crippled the entire shipping industry, causing disruption in supply chains around the world. The second wave further hampered the slow recovery in global trade and created a severe container shortage, forcing exporters to seek solutions that would provide reliable, real-time data on the condition of containers. This is where the demand for AI-enabled tracking, among other smart shipping mechanisms, sparked the interest of the EXIM community to avoid operational turmoil and effectively plan future expeditions.
Challenges for implementing smart shipping
The shipping industry still operates mostly offline. As digital freight forwarders and some shipping companies try to turn this around with the introduction of next-generation technological solutions, the opportunities for change are still vast. Therefore, an adoption of macro-technology is imperative to help achieve these mainstream services. In addition, the lack of education or technical knowledge to assess the benefits of the technology keeps small exporters out.
Adopting smart shipment planning has the potential to create significant value for the Indian economy. It is indeed the need of the hour for merchants and organizations to invest more in technological infrastructure and adopt intelligent navigation as the new standard.
(The writer is CEO and co-founder of Freightwalla)
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