Technology

COMMENTARY

By John McCauley

Don ’ t automate broken container processes , fix them first .

That adage is as relevant now as ever as container shipping is swept up in the broader global AI fever . The fragmentation of shipping processes upstream and downstream is as equally problematic as the often-differing data standards across all actors , albeit with ongoing efforts to improve the data part through , for example , the Digital Container Shipping Association .

That the standard booking process to place and receive confirmation of an order has improved significantly is a testimony to both the simplicity of the process and the advancement of multiple channels of access . I am deliberately not addressing specialist booking processes for out-of-gauge or dangerous goods that require specific , non-tech-enabled processes .

However , the booking process for most participants is a small part of wider processes and it is here that the process breaks down and the holy grail of end-to-end enablement remains elusive . Here is a typical example : Supplier A receives an order in its enterprise resource system ( ERP ) from Customer B . The order has a unique reference set of characters , as does the automated purchase order generated toward the carrier either directly or through a non-vesseloperating common carrier . The order is placed with the carrier and acceptance is confirmed . If the ERP is not connected to the aggregated order process technology ( e . g . CargoWise , Infor Nexus , et al .) then some form of interface mapping is required .

If the data is incomplete or contains errors , then the flow stops , and A cannot confirm the order to B without intervention . If A is not using an aggregated technology and connects to each carrier individually , then the issues multiply . If any of these fail or are unreliable , manual monitoring and / or backup is needed .

That this simple part of the process is broken does not include the major issues relating to reliability . Let ’ s assume the order placed by A is accepted . What percentage likelihood is there that the order will be shipped in full on the vessel nominated and / or on the ETA date scheduled , and therefore with a likelihood of arrival at the next stage in the chain within an acceptable margin of on time to 48 hours ’ delay ?

If you are lucky enough to be a last port load to first port arrival , then the transit time can be met but the other components are less likely to be achieved . If not , the reliability likelihood diminishes . The time for loading and discharging a vessel requires firm and reliable dates to plan at origin the production , storage , loading and domestic transportation , while at the receiving end , depending on the product , use receipt , inventory planning , sale , storage or any other number of dependent processes .

Favoring other modes

But here are the bigger points . For many beneficial cargo owners ( BCOs ), movement of goods by container is a small part of their overall transportation volume . Far greater volume is sent by other modes , particularly road , and often this is the mode of transport directly interfacing with end-customers . So , for many BCOs , container shipping is at best a niche activity requiring specialist knowledge , and as with so much of logistics , only ever matters in a crisis such as a lack of space , rolled cargo , stratospheric price hikes , etc . For those that rely on container shipping for the functioning of their supply chain , such as retail customers , the profile is much higher .

For me , there are the three main reasons why BCOs choose to favor other modes of transport when investing in a transportation management system ( TMS ). Firstly , the sheer volume of road transportation and its customer impact leads to this mode receiving top priority for TMS investment and enhancement . Secondly , the broken processes of container shipping ( with its low likelihood of ever truly improving ) will always play against any container TMS investment . Finally , people understand road , rail and air , but ocean shipping less so . So when we say that road transport “ on time in full ” is 95 % and container shipping globally is about 60 %, eyes glaze over as the logistics expert tries to summarize the difference .

The typical investment criteria , aside from financial , will be “ Does it help my customers , reliably and consistently ?” and “ Will it lead to efficiency in the end-to-end process ?” Regrettably , the answer to both of these is “ not enough .”

email : john-mccauley1 @ outlook . com

Don ’ t automate broken container processes , fix them first .

www . joc . com September 23 , 2024 | Journal of Commerce 27