At an event in Dublin this week, a vision of the future was presented for the logistics and supply chain sectors.
These are industries which, despite the constant chatter about optimisation, streamlining and technology, remain bloated and inefficient.
It’s estimated that there are one million free slots on container ships around the world. This is the situation, as GTR reported in its latest cover story, before the world’s biggest container ships come online in 2017.
With the internet of things, big data, digitisation and the use of artificial intelligence, however, some companies are predicting a transformation, with others able to demonstrate how they are already using these practices to make their businesses work better.
The internet of things (IoT) involves the connectivity of devices: using smart technology to heat your home, to boil your kettle or to secure your office.
In the trade finance business, we have seen very recently how the implementation of smart contracts can help reduce transaction times. In the complex world of supply chains, such technology can be much more wide-reaching if it’s used properly, and so the evangelism at the IoT summit in Ireland was understandable, if a little premature.
Lasse Eriksson, vice-president of digitisation at Finnish company Cargotec, said that in the cargo trade, using smart devices to monitor and control vessel fuel consumption, to conduct requisite maintenance and repairs and to manage and co-ordinate the fleet correctly could save US$350,000 per vessel per year. With more than 90,000 ships currently sailing the world, that is a colossal US$32bn industry saving each year.
In the container industry, the savings could amount to US$17bn. Poor stowage plans means ships are not filled to maximum capacity (although with global trade figures nosediving, it’s questionable whether they would be full with even the smartest technology). Poor communication between ocean carriers and port terminals lead to congestion at terminal entrances. 20% of all containers booked simply don’t show up at the port.
Using smart technology to gather and analyse data, many of these issues can be worked through.
“One benefit is you don’t have big surprises coming up, if something is not what it’s supposed to be,” Eriksson explains to GTR. “Currently a lot of the information chain goes through email or Excel. That causes a lot of hassle in the supply chain. At least, with this technology, you’re aware of these matters and you can prepare better for them.”
Just another buzzword?
The IoT is voguish: another buzzword in the zeitgeist-heavy world of fintech (case in point). But it has, in various forms (machine-to-machine, the internet of everything), been around for decades, through the automation and robotification of factories, production lines, and also in the cargo industry.
Cargotec, for instance, has for a decade operated automated shuttle carriers which pick up containers at the quay, before bringing them to the yard where a fully-automated crane lifts them into place. “It will be nice to compare them to Google’s cars,” Eriksson says.
Maersk Line, the world’s largest shipping company, has been working on an IoT solution since 2010: a refrigerated container (or reefer) fleet that as of 2015, is fully networked.
The company’s head of remote container management, Catja Hjorth Rasmussen, explained that through sensor technology, 3 million reefers are now connected with smart technology. From a centralised location, Maersk can now see if there is something wrong with the goods, which precise container it is in and what tools you have to bring to fix it.
Rather than manual troubleshooting, the technology allows them to pinpoint any problems, saving huge amounts of time and money on random inspections and serendipitous maintenance.
Another company, Evertracker, is looking beyond the IoT, combining it with artificial intelligence in order to make its clients’ supply chains more transparent. Managing director Marc Schmitt got the idea while working as a graphic designer and creating annual statements.
If the data was late, the writer was left waiting. If the text was late, the designer was waiting, then the printer, then the delivery driver, and so on. These same problems are found along supply chains the world over, particularly those dependent on regular, reliable deliveries.
Thus, Schmitt works extensively with newspaper companies, laboratories and postal services. Their technology uses GPS to track a truck, a shipment or any sort of device at every stage of the delivery cycle. The data is fed back to an IoT platform, after which Evertracker analyses it, combines it with historical data and extraneous factors (weather, traffic) and predicts what will happen the next day, and the day after.
“To digitise your supply chain you need every piece of information,” Schmitt tells GTR. “We’re not just getting data and giving it to clients: even if they can manage hundreds of devices smartly, this will not give clients any answers, just data. That’s why a lot of people are afraid of GPS – they don’t know what to do with the data.”
He adds: “We can understand your process, we can build algorithms that help you make decisions, because we will understand why things happens. Then you can automate it [the supply chain]. This automation is one of the key factors in the future.”
Again, automation is not a new idea: recently deceased futurist Alvin Toffler was predicting a post-human workforce as far back as 1970. What is new is the amount of data we now have, and the potential access key. Smartphones and their apps provide constant data feeds, while GPS and tracking devices deliver reams of digital information: you just need to know how to separate the wheat from the chaff.
But let’s not pretend that automation is the solution to industry’s or society’s ills. The election of Donald Trump in the United States this month shows what can happen when industry becomes hollowed out and employment decimated.
Ireland, which hosted the event, has for some years been considered a hub for technology, with its favourable tax rate acting as a beacon for Silicon Valley’s largest companies. But it has also experienced a colossal brain drain, where some of the brightest minds have left the country, as traditional industries died and new ones fail to replace the jobs they take to the grave with them.
One speaker casually dismissed the social implications of the IoT and robotics. “Where are all the farmers now? They have all got new jobs,” he said, conveniently (or ignorantly) ignoring his surroundings.
So while the technology, supply chain and manufacturing industries should well be excited about the possibilities of IoT and its connected technologies, there is a responsibility to discuss the wider issues: what happens to the 20,000 German truck drivers whose jobs are taken by 100 machines?
This is a responsibility that many in Dublin, sadly, chose to ignore.