In today’s digitized age, the requirement of supply chain visibility has become a necessity, and advanced technologies such as IoT-enabled smart containers are providing the market with much-needed innovations..
As shipping websites grapple with real-time tracking issues, the age of the smart containers is upon us providing real-time data whether it is in managing empty containers effectively or combating illicit trade across the globe..
Shipping and Freight Resource caught up with Cédric Rosemont, CEO of Traxens, as part of the Executive Insights series to discuss the issues surrounding transformative technology, the multifaceted impact of IoT devices, and how this technology is transforming supply chain visibility..
SFR : The Internet of Things (IoT) and real-time tracking is on the rise. How do you anticipate these technologies will reshape supply chain transparency and visibility..??
Cargo and vessel tracking has so far been restricted to real-time visibility providers and shipping line websites. Shipping line websites do not have the best reputation in terms of real-time tracking, and this is not helping customers with their requirements.
Even with the best telematics from trucks, the whole visibility can be brought only with the smart container whether it is with or without cargo.
Empty container visibility is of particular importance for shipping lines as there are several empty containers still lying in areas where they are not being used effectively and all lines are looking to get their inventory back to where it is needed most.
And it’s not just about the empty containers, it is also about some trades where illicit goods are moved and the impact it has on the cost of customs clearance.
We work a lot with some shippers who import food products from Latin America, and South America, and they have a lot of cost based on scanners and customs has to scan the containers systematically and this may end up with shippers paying between $400 to $500 fees.
IoT devices and real-time tracking can assist with this visibility quite effectively.
SFR : How do you see the role of digital technology evolving in enhancing supply chain visibility in the next decade?
The announcement by some of the shipping lines that entire dry container fleets will be fitted with IoT devices by the end of 2024 demonstrates the fact that shipping lines have understood that they can leverage this technology for their own operations. This will help customers get the required visibility and also help to continue the advancement of smart containers.
This will help supply chains create real-time visibility, detect delays, and automatically inform affected customers so that they can initiate appropriate countermeasures.
SFR : What percentage of containers have been converted to smart within the fleets of your shareholders, MSC, Maersk, and CMA..??
Currently, these lines are deploying smart containers on demand and not yet as a systematic deployment, and thus far less than 2% of their dry container fleet has been deployed as smart containers.
They are of course trying to reuse the deployed fleet but it has its own challenges in terms of picking the smart container from its stack for a specific customer which could have some cost implications as well.
My personal view is that a systematic deployment would be a good option because then all containers will be smart and can be deployed, tracked, and monitored at all times anywhere to provide the needed visibility.
SFR : Given the increasing concerns about sustainability and ethics, how do you see supply chain visibility playing a role in ensuring responsible sourcing and production?
To be honest, for the smart container, the value proposition in terms of sustainability has not been so obvious and hasn’t been demonstrated but my view is that there is certainly a level of value that a smart container can bring to sustainability.
As an example, with real-time tracking and visibility aided by smart containers shipping lines can better manage the rotation and turnaround time of their containers.
Containers could be routed directly to where it is required such as empty containers going directly to customers instead of the depot and moved again to the customer. Containers can be triangulated between importers and exporters as shipping lines can know exactly where their containers are.
In addition to thinking about this optimization for sustainability, we can also consider that because there are several real-time data points available in terms of the locations of the container, users (shipping lines, truckers, cargo owners) can also identify the usage patterns of the container, the number of miles or kilometers that the containers have already traveled during the trip, how much is the carbon footprint of their goods etc.
There is a requirement in France for example to calculate this carbon footprint and currently, this is being estimated based on eco transit or solutions like that. But that is still only an estimate and the advantage with a smart container is that we can know exactly the number of miles and travel and that could be very useful.
SFR : How do you think augmented reality (AR) and virtual reality (VR) or enhancements like trackers with cameras might be employed in the future to enhance supply chain management and visibility?
To be honest, today we have some prototypes where we try to add some cameras inside of the container to compute the loading factor of the container and to check its optimization.
But when it comes to technology there are some trade-offs that we have to do with our customers as they want to have the lower cost and the lower price for the device and adding the camera, adding the data transmission costs for those pictures coming from the camera is very costly. So today that’s very difficult to say yes, but tomorrow we could have it for sure.
Currently, we already have our superior door opening detection technology which is a key feature of the device and we already think that there could be regulations by customs where they could use these devices as an electronic seal to ensure that there has been no unauthorized door opening.
So right now customers seem more interested in better visibility for the ETA and location of the container than the visibility of cargo theft and security.
SFR : As data becomes more available, how do you see the balance between data privacy and supply chain visibility evolving?
Well, we do view data privacy seriously, but in this case, our view is that the data is the property of the owners of the smart containers. Shipping lines own the containers and buy the IoT devices from us, so the data is technically theirs.
So, when the shipping lines are selling this value-added service of visibility to the customers, they naturally collect the data from the time of empty pick up at the origin till its return to the destination.
It could become necessary for the shipping lines to share such data with some authorities like Customs, Ports, insurance companies etc.
SFR : Are you able to provide some sort of predictive analytics for shippers or shipping lines or even for the likes of insurance companies who can use your data quite effectively..??
We generate a lot of data and we can say to the customer, that at this point the door has been opened a lot of times for your containers, but we are not sure what is the reason.
Today that’s why I want to partner a lot with other platform providers or also other insurance etc because our activity is to generate data and accurate data, but we need to correlate that with the partners that we want to work with, in terms of say, the estimated time of arrival combined with other information such as traffic jams etc.
Today, our job is to provide devices that make containers smart and provide accurate data and if that can enhance immediately the visibility for the cargo owner, that’s good, but if they need to have predictivity based on other information, we think that there are several other visibility providers that would we could collaborate with on behalf of the customer.
SFR : Do you think that insurers could make such container tracking devices mandatory like some countries have for passenger vehicles..??
Yes, we already have some use cases where the customers (shippers) of our customers (shipping lines) finance the value-added services based on a tracking system because their insurance pays for it. We have specific customers shipping coffee where the insurance pays for the tracking system as they want to be able to monitor the temperature inside the container and the humidity to check if everything is OK. These cargo can be impacted by humidity level so they can identify the root cause in the trade exactly where the humidity level could have made an impact.
So that’s already the case. Also for some theft, we have collaboration with insurance and today we have many projects from some of the leading insurance companies around the world because their customers have to transport goods with the required integrity that can be impacted by shock such as optical equipment etc.
SFR : At this stage, where is the most value you are seeing in terms of all the solutions you have – such as door opening, shocks, temperature settings, and route deviations etc, which ones happen the most..??
If we talk about the container, we have to take into account that containers are both reefer and dry containers, with major volumes being dry containers.
On the reefers of course we monitor temperature and/or humidity which are connected directly to the reefer machinery itself. We can have some add-ons from various service providers to monitor the fluctuations of the temperature if any, but with reefers, temperature traceability is the main use case.
We focus 95% on dry containers in which the door opening feature is the most important and expected. In terms of the value proposition of global and accurate visibility and enhancing the data coming from global visibility providers, geo-location will be important.
Currently, for the high-value cargoes that are being shipped, door opening is the most important feature, but it all depends on the trade-offs in costs as I mentioned earlier.
Because to move from generic ETA visibility to accurate geo-location tracked visibility including door opening, costs for customers may increase from €2 to €40 which is a big jump, and of course, customers will need to decide how valuable this will be for them.