Globalization in trade and logistics is not a new trend in the market. However, a successful company is one that combines visibility in its supply chain, market data, and intelligence.
So how do shippers, carriers, and 3PLs attain the necessary visibility in their supply chain? Surprise, much of it comes down to the technology they choose to embrace. Strong technology makes for a stronger business by reducing operating costs, improving efficiency, and gains to customer service.
Organizations Demand Purpose-Built Applications for supply Chain Visibility Technology
While technology is important to boosting visibility and improving supply chains, choosing the right technology is most important. According to a study by the Business Continuity Institute, over 78% of organizations have poor or inadequate visibility of their supply chains, due largely to having the wrong systems in place. A number of companies have invested in Enterprise Resource Planning (ERP) and Transportation Management Systems (TMS). For many of these companies, there is a belief that value building begins and ends with these systems.
While these systems do have their uses, they are limited in scope, lacking an automated network as well as current market trends and global market data. When it comes time to evaluate supply chain efficiency, these systems are simply inadequate, lacking the necessary insight into the markets they are operating in and thus not fully improving supply chains. Instead, businesses should be looking for systems that provide real-time market data, allowing them to make informed decisions based on relevant data. As it stands, most companies evaluate their supply chain internally, using data that might have little to no relevance to the current market standing.
Greater Focus on Logistics Efficiency and Accuracy
Simply put, visibility isn’t just about tracking orders, but rather being able to understand how your supply chain is operating and performing at a moment's notice versus the market and your peers. Because of this, accuracy and efficiency are a must for supply chains, and visibility is crucial. Given the constant state of flux that the global market finds itself in, having that real-time insight can prove invaluable when it comes to supply chain flexibility and adjusting to the ever changing market.
Imagine if your company was better able to anticipate a shift or change in the market. Rather than having to react to a change, which can cause a drop in both efficiency and profit, you could make adjustments before the change. Not only would your supply chain become stronger, but also your company as a whole. This is why visibility and relevant data are a must and the main reason why logistics companies are making the move to more technology-driven systems.
We’ve highlighted how supply chains and logistics technology have impacted the way a business operates. As noted previously, strong technology makes for a stronger business by reducing operating costs, improving efficiency and customer service. While this is crucial for all businesses, it’s ever so important for oceanic freight companies, who combined, were estimated to lose upwards of $10 billion in 2016 according to SeaIntelligence Consulting. Improving supply chains is critical and the use of technology is leading the way towards much-needed improvements.
Supply Chain Visibility Technology Trends
There are a lot of buzz words in the industry now with hot technologies set to change not only shipping but the world as we know it. Artificial intelligence, machine learning, blockchain, etc. Let's see how blockchain and the "smart ships" phenomena are set to bring efficiency.
Indeed, ocean carriers are trialing solutions that not only improve supply chain visibility and communications but could also redefine the industry as we know it today. Blockchain is of much interest these days and even though its benefits have yet to be fully tapped, Maersk is diving into the technology with its partner, IBM. Still, in progress, the eventual result will help manage and track shipping containers globally by digitizing the supply chain process from end to end. The product is also designed to help reduce or eliminate fraud and errors and minimize the time products spend in the transit and shipping process.
According to Reuters, Maersk found that a shipment of refrigerated goods from East Africa to Europe can go through nearly 30 people and organizations, including more than 200 different communications among them. By bringing the network of shippers, freight forwarders, ocean carriers, ports, and customs authorities that typically are involved in a shipment onto one platform, the solution is likely to not only improve supply chains but also communications between all involved.
Smart ships are being built with the ability to communicate with other vessels, ports, and partners. The world’s first smart ship was revealed at the Smart Ship Development Forum & Smart Ship Demo “i-Dolphin” in 2016. The ship applies real-time data transmission and collection, large-capacity calculations, digital modeling, and remote control. All of this is designed into the ship to better guarantee navigational safety and improve the operational efficiency of the ship.
In 2015, Hyundai and its partner Accenture announced plans to design a ship that will include a network of sensors and analytics software to improve port logistics and maintenance, as well as reduce running costs. Also in 2015, CMA CGM equipped one of its 18,000-TEU vessels with Traxens technology, which allows containers to communicate with the vessel by using built-in relay antennas.
In addition, through the Traxens technology, containers can remotely be controlled and the temperature of refrigerated containers adjusted. This will allow resource optimization for routine inspections.
Xvela has created a cloud-based vessel stowage and collaboration platform for ocean carriers and terminal operators. In March 2016 it announced a pilot program in which Hamburger Hafen und Logistik AG, PSA International, DP World, Modern Terminals Limited, and the Port of Tanjung Pelepas, along with ocean carriers Maersk Line, MCC Transport, Orient Overseas Container Line, Nippon Yusen Kabushiki Kaisha, and Hapag-Lloyd have all agreed to participate. The purpose of the pilot tests is to provide visibility of stowage planning-related information for both terminal operators and shipping lines, and better connectivity between carriers, terminals, and partner organizations. Terminals will be able to access departure stowage plans as ships leave prior terminals, allowing them to allocate resources and resolve potential issues while carriers will have transparency of terminal operations and the ability to share in real-time with partners.
Related reading: Brexit impact on supply chain
Making the Choice to Improve Supply Chain Visibility Through Technology
When it comes down to it, visibility is the key to building a better business. Ocean freight markets are fickle at the best of times, and unforgiving to those who aren’t prepared.
Xeneta specializes in providing the necessary data that can help your company take the path to success when you buy ocean freight.
Questions you should be asking yourself:
- are my ocean freight rates competitive? Do I need to benchmark?
- how do I know if I and my team are doing a good job in supplier contract negotiations?
- how can I accurately set targets and report to management our strategy and progress in ocean freight purchasing?
Providing real-time short and long-term contracted rates, and relevant market data is only a portion of what Xeneta can offer your company.