Tuesday, 16 December 2014

Shock of 20G on Container while in Transit

Attached a picture of a container, which was exposed to a shock of 20G while in transport. Thanks to real-time cargo monitoring, the shipper immediately was able to assess the impact on its cargo and make decisions on
- continuing the trip, and/or 
- reorder cargo in a new container
- inspect container
- claims handling
- proactively inform client

The real-time monitoring also allows to precisely identify
- location of incident,
- time,
- custody, and
a historical analysis on how often such incidents happen(ed), where and in whose custody.

All this information allows to mitigate future risk, reduce insurance premium and capital cost.

Thursday, 11 December 2014

The Silk Railway: freight train from China pulls up in Madrid


The longest rail link in the world and the first direct link between China and Spain is up and running after a train from Yiwu in coastal China completed its maiden journey of 8,111 miles to Madrid.
En route it passed through Kazakhstan, Russia, Belarus, Poland, Germany and France before arriving at the Abroñigal freight terminal in Madrid.
The railway has been dubbed the “21st-century Silk Road” by Li Qiang, the governor of Zhejiang province, where Yiwu is located. Its route is longer than the Trans-Siberian railway and the Orient Express.
The first train was met by the mayor of Madrid, Ana Botella, and Spain’s minister of public works, Ana Pastor. It consisted of 30 containers carrying 1,400 tonnes of cargo – mostly toys, stationery and other items for sale over Christmas across Europe.
According to China’s ambassador to Spain, Zhu Banzao, it will return laden with wine, jamón and olive oil in time for the Chinese new year in February.
Yiwu is the world’s largest wholesale hub for small consumer goods and plays host to a vast 4 sq km (1.5 sq mile) market where tens of thousands of traders work daily. The journey was a test run to assess the viability of adding Spain to a route that already links China with Germany five times a week. Those trains link Chongqing, the huge industrial city in south-west China, with Duisburg, and Beijing with Hamburg.
China is Spain’s biggest trading partner after the EU, with bilateral trade worth around £16bn. It is also Spain’s third largest source of imports, after Germany and France. About half of these imports are made up of mobile phones and clothing. The Spanish prime minister, Mariano Rajoy, was in China in September, where he signed deals reported to be worth more than £6.3bn.
A major advantage of the rail route is speed. The train took just three weeks to complete a journey that takes up to six weeks by sea. It is also more environmentally friendly than road transport, which would produce 114 tonnes of CO2 to shift the same volume of goods, compared with the 44 tonnes produced by the train – a 62% reduction.
However, the cargo had to be transferred three times during the journey as a result of incompatible rail gauges. The locomotive also had to be changed every 500 miles.

Wednesday, 19 November 2014

The Carbon Footprint in the Logistics Chain

The news called it a historic agreement, when U.S. President Barack Obama and Chinese President Xi Jinping announced in a historic climate change deal, that both countries would curb their greenhouse gas emissions over the next two decades.
The agreement will give confidence to both companies and investors to support clean energy investment and technological innovation that will ensure the necessary capacity to meet or exceed the stated targets.

The idea and the objective is not new, but the agreement sends a powerful signal to the business community, which is pushing more forcefully for coordinated policies and clear market signals to deal with climate change.

For example: Nike’s environmental goal for logistics and transportation is to achieve a 30% reduction in carbon emissions by 2020. This is a pretty aggressive goal taking into account a growing business.

The US-China agreement may supports Nike’s (and other companies’) strategic decision and hopefully encourages many other companies to follow.

Raw materials and production processes are usually the main drivers for the carbon footprint – but the logistics chain with over 10% is also one of the main contributors.

As the mode of transport (e.g. vessel, train, truck) is not under direct control of the shipper, the shipper is
  • either depending on all its logistics chain partners to consistently provide data, or
  •  monitoring the shipments itself with an independent monitoring solution

in order to track, report and ultimately reduce the logistics emissions.

Real-time cargo monitoring could provide the relevant information, help to select areas of improvement and monitor the improvement year after year.

Improvements in the logistics chain are not only good for the environment. Less emissions usually also translate to less logistics cost, less capital cost, less insurance, etc.

To quote Nike again: Just do it!

Thursday, 23 October 2014

Can Supply Chain Financing benefit from Cargo Monitoring?

If you were a bakery around the next corner, you would be selling your bread or sandwiches just over the counter. You will see and talk to the person just in front of you and you would immediately get the money for your product sold.
You know the buyer, you trust him because you immediately get the money and there is not much risk involved.
If you were an exporter/seller and your buyer is thousands of kilometers away, the situation may look different. Each party tries to reduce its risk.
The buyer might tell you, that he will not pay any invoice before he has not received the product in good quality. And you might tell the buyer, that you will not ship anything, before you have not received the money.
Banks address this dilemma with supply chain/trade-financing, a financial service that has been invented already several hundred years ago.
You, as the seller, don’t want your foreign receivables sitting out there for months doing nothing. It is your working capital and therefore you are looking to fund your receivables.

Besides the traditional company financing through banks, some banks are willing to finance your supply chain. The risk itself is not gone, but for a fee the bank will take over this risk for you. To minimize the risk, the bank will only finance your supply chain based on certain securities. Such securities could be
  • a signed contract between you and the buyer (e.g. 5% financing)
  • a purchase order over a certain amount of your products (e.g. 10% financing)
  • the bill of lading at the moment the product is shipped (e.g. 20% financing)
  • confirmation from the logistics company, that the products have been delivered (e.g. 40% financing)
  • product acceptance confirmation from the buyer (e.g. 25% financing)

Cargo monitoring could increase the value of such securities.
  • Knowing for sure, that cargo has left and knowing exactly where the cargo is and its precise Estimated Time of Arrival (ETA) could increase the financing from e.g. 20% to 30%.
  • Getting real-time information about the arrival of the cargo and a confirmation, that no intrusion has happened and all the cargo is still there, could increase the financing from e.g. 40% to 45%.
  • If in addition the condition of the cargo is monitored and the likelihood of damaged cargo can be decreased, the 40% financing at the time of arrival could even be increased to e.g. 55%.

Thanks to cargo monitoring, the supply chain financing could be further optimized and a direct benefit for the seller in the hundreds could be achieved. 

Wednesday, 24 September 2014

How holy is the Grail of Real-Time in Supply Chain?

A transportation management system (TMS) helps companies move freight from origin to destination efficiently, reliably, and cost effectively. In a TMS survey, ARC found that respondents indicated freight savings of approximately 6 percent with the use of a TMS application.
TMS achieve these savings based on process enforcement, visibility, analytics, and optimization.
Whereas process enforcement and optimization are based on visibility and analytics – any visibility benefits or any analytics functionality is only as good as the data quality and the currentness of data processed.
Capgemini also indicates, that the demand for global visibility is increasing and that shippers want to know where everything is located across the entire supply chain at any given point. Shippers today are still challenged by disparate systems, an obstacle no serious global shipper can afford.
The conclusion is: real-time data is key in order to achieve visibility, analytics, optimization and process enforcement. Real-time is the grail in supply chain.

When does the grail become a holy grail?
  • if 10-15% savings could be achieved instead of the above indicated 6% savings
  • if no additional manpower has to be added
  • if no investment in expensive equipment has to be done
  • if getting-up and running can be achieved quickly
  • if the system does it all instead of people

Three success criteria have to be considered:
  1. the “Indiana Jones” willing to find the holy grail is an adventuresome hero (engaged and experienced)
  2. the holy grail should continuously be used to “drink” from (continuous use of data and new processes)
  3. the holy grail should be “ornamented and decorated” more and more over time (sophistication of software)

Tuesday, 16 September 2014

Nestlé: Improving global supply chain visibility

Nestlé has implemented a cost-effective solution for real-time monitoring of thousands of container movements around the globe each year. The system has significantly increased supply chain visibility bringing a number of operational, strategic and financial benefits.

IGD SupplyChainAnalysis

Friday, 5 September 2014

How to make your supply chain read your mind?

Forget about Siri!
Talking to your iPhone is certainly cool.
But you still have to tell Siri what you want and what Siri has to look for.
Wouldn’t it be great, if your phone would anticipate, what you want to ask and give you the answer before you have even asked for?

The same probably the case with supply chain managers.
It is certainly cool to “talk” to the ERP system and get the system do the planning, the ordering, the invoicing, ….

But like with my iPhone – every day I manually have to turn on the silent mode, when I go to bed, or I have to turn on the airplane mode when entering the airplane, or turn on/off Bluetooth for my headset in the office.
I want these things to happen automatically, so I don’t have to worry about them anymore.

Likewise the supply chain manager: He most likely would also appreciate, if certain actions would happen automatically and he did not have to worry about. So – how to make the supply chain read your mind?
My answer to this question is: Automate actions based on geozones!

Imagine, your container has arrived at the final destination (= geozone) and an authorized person opened the door of the container. At that moment, you know, that your cargo has been delivered to the client and that you can send the invoice. Or even better: your system knows and can automatically start the invoicing process, which allows you to have the cash in 2 weeks earlier. Automate action based on geozone!

Imagine, your container on the feeder vessel has arrived in the transshipment port (= geozone) with a delay. The transatlantic vessel has already left and your shipment plan is invalid.  Based on the current location of the container, a new shipment plan with a new estimated time of arrival can be calculated and automatically fed into the supply chain manager’s ERP system. Automate action based on geozone.

There are many more such examples.
Therefore, forget about Siri.

Talk to us about how to make your supply chain read your mind.

Monday, 18 August 2014

Tilbury Docks: Man dies after 35 found in container

A few weeks ago, we published a sad story in our blog about refugees discovered in Morocco.
Now, another such sad story got published by BBC (see below).

Real-time cargo monitoring could not only safe live but also prevent gangs from their brutal trade with human lives.


BBC News - 16 August 2014

A man has died after 35 people - including children - were found in a shipping container at Tilbury Docks.
The survivors - believed to be from the Indian subcontinent - are said to be recovering "fairly quickly in most cases" at nearby hospitals.
They were discovered after a freighter arrived from Zeebrugge, Belgium at about 06:00 BST and was being unloaded.
Essex Police have launched a homicide investigation and officers are being assisted by their Belgian counterparts.
Supt Trevor Roe said staff at the docks were alerted to the container by "screaming and banging" from inside.
He said about 50 other containers on the freighter, called the Norstream, had been searched and no other people were discovered inside.
Speaking at a press conference, Mr Roe told journalists the survivors were being held under immigration powers and would be taken to an immigration reception centre near Tilbury.
He said they would eventually be interviewed through interpreters.
Belgian police say they believe the lorry which delivered the container in Zeebrugge has been identified through CCTV footage. They do not, however, have information yet about where it originated from.
Mr Roe said the police investigation would look into "the gangs or whoever may be involved in this conspiracy to bring these people in this way over to this country".

It is not known where the container, one of 64 aboard the P&O vessel, originated. Mr Roe also said he did not know where the survivors had been going.