Containerised supply chains crippled by lack of data sharing
TERMINAL operators, shipping lines, railroads, truckers, and beneficial cargo owners have made great strides in digitising their internal operations, but their reluctance to share data on shipments with each other is crippling supply chain efficiency.
With big ships generating as many as 12,000 container moves in a single port call, the inability and reluctance of supply-chain partners to share advance information on cargo shipments has already created significant congestion problems at global ports, IHS Media reported.
"Everyone has their silo of data, and does really well within their own silo," Cliff Katab, president of Performance Team, told a supply chain digital transformation conference recently at the University of Southern California.
Connecting the overseas factory, shipping line, terminal operator, trucker, railroad, and distribution facility in the United States with advance information on shipments is the goal of digital transformation, but the trade is not there yet, Mr Katab added.
The good news for supply chain logisticians is that all the information that is required to improve cargo flow and network optimisation is available.
"The data is there, but there are disconnects in the system," said former APL executive Ron Widdows. Breaking down those hurdles requires investment in creating a common platform, which is difficult to achieve in what has become a commoditised business, and building trust among all the supply-chain partners so they are willing to share information with others, he said.
A major challenge for the port, shipping, and marine terminal industries, all of which are operating on slim margins or may be losing money, is to make digitised port community systems affordable, said managing director of commercial operations at the Port of Long Beach, Noel Hacegaba.
The port platforms must be secure, so all the transportation sectors feel confident sharing data through them, and they must be able to communicate with the legacy systems of the supply-chain partners, he said.
Ocean carriers, in collaboration with private vendors, are also working on web-based systems to develop what Henrik Jensen of the new venture team at Maersk Line termed a shipping information pipeline. "It is the Internet for logistics," he said.
Highlighting the need to bring visibility to shipment data for all the participants in the supply chain, Mr Jensen said the cost of handling and processing the information on a container is roughly the same as the transportation cost of moving the container.
Even though port authorities themselves do not transport containers, they are experiencing great public pressure to mitigate the community impact that occurs from inefficiencies in the supply chain, ranging from port congestion to delays that beneficial cargo owners (BCOs) experience in taking delivery of their shipments, said Gene Seroka, executive director of the Port of Los Angeles.
When a prominent BCO calls the mayor of Los Angeles because its shipments are being held up at the port, "it becomes a matter of public policy," he said.