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Why do businesses need dry container IoT?

1. Increasing customer and shipper demand for visibility

Businesses expect reliable service, timely deliveries and competitive pricing from logistics service providers. However, requirements continue to evolve in step with customers’ desire to optimize their supply chains and increase resilience.

Previously a niche requirement in the dry sector, on-demand access to reliable, accurate, location and condition monitoring of goods is becoming a mainstream expectation. According to a report published in 2022 by Ti, in partnership with project 44, ‘57.4% of shippers require carriers to provide real-time visibility before they can earn shippers’ business’. However, only 20.2% of shippers said they operate a fully transparent supply network or one with real-time visibility across all modes and regions. The remainder have partial visibility on their shipments.’

This creates a significant opportunity for container shipping lines to seize the commercial initiative, offer value-added services and corner market share.

The intermodal supply chain

While consumers picture containers stacked high on vast ocean-going vessels, businesses understand that the supply chain involves more than just moving boxes between ports. In reality, containers may have been transported via rail, road and inland waterway and handled by multiple stakeholders before they reach the international port of departure, and the same after the port of arrival. Coordination throughout the chain is, therefore, vital to ensure efficient flow from stuffing to stripping.

While transportation modes may generate different telematics data, the ability to collate and present it in a single window enables fleet optimization and the mitigation of supply chain disruption. The commercial and operational benefits associated with tracking asset location and status are hard to ignore. Ti reported that over the next five years, 38.3% of shippers seek to achieve visibility across all transport modes and regions to migrate towards data-driven decision-making.

Fortunately, the technology now exists to meet the demand. Combining versatile IoT devices, sensors, applications and multiple global connectivity options, the latest dry container IoT solutions allow stakeholders to maintain situational awareness; protect non-perishable but temperature-sensitive cargo; streamline handovers and delivery; improve customer service; reduce operational costs and more.

2. Actionable information to optimize planning and forecasting

Supply chain logistics are complex, and COVID-19 emphasized the need for robust contingency plans to absorb resource shortages, supplier defaults and delivery failures. It also demonstrated that many companies were over-reliant on single main partners and maintained insufficient stock to ride out supply shortfalls. To improve resilience, some businesses have sought to diversify their supply chain partnerships, but this further complicates logistics, as goods are shipped by disparate suppliers, and potentially from various ports of departure.

A scarcity of actionable information, for example, where a container is and when it will arrive, makes logistics exponentially more challenging. It increases the risk of incurring demurrage, detention or per diem fees for the carrier and the likelihood that retailers will not be able to replenish inventories.

Some tracking solutions already provide identification, location and proof of status data, such as arrival at destination alerts and actual executed transit time, but fast-evolving IoT technology can now provide more expansive data for better monitoring of service and equipment performance to assist operations planning.

The additional information may include:

• Automated exception alerts, such as unauthorized door openings
• Ambient temperature monitoring to alert of thresholds exceeded
• Alerts which detect if, where and when the cargo has experienced any shock impact
• Monitoring cargo damage during transit through integrated sensors

Big data integration

Fusing the data harvested from IoT devices with big data increases the value proposition even further. Dry container IoT solutions transmit a large amount of data which, when fed into digital platforms and integrated with enterprise systems, can be analyzed and interpreted to provide performance evaluations.

Such data is not only useful for on-demand visibility during a single container journey. In the context of multiple trips over an extended period, access to historical data simplifies analyzing operational patterns and remedying inefficient practices. For example, with historical data, it is possible to identify negative trends in a particular supply chain or transport route, average turnaround times or damage rates of different ports, yards and routes or haulage companies with a higher-than-average incidence of tampering, intrusion and theft. Contracts, partnerships and schedules can then be evaluated, and inefficiencies engineered out.

IoT data can also offer deeper insights into the flow of containers to inform port optimization strategies. At the operational level, automating existing container reconciliation processes beyond the data collected by fixed OCR readers would be far more efficient. The existing model of gathering location and condition data manually is slow, labor-intensive, costly, prone to error, and vulnerable to fraud.

Using data integration, dry container IoT solutions will contribute to creating transparent supply chains and improve global standards as companies compete to achieve supply chain excellence. Some container shipping lines are already feeding telematics data into artificial intelligence, machine learning and predictive analytics engines to make their supply chains and asset operations smarter. For instance, they offer predictive ETAs to deliver a better customer experience and enable mitigation of delays, disruptions or spoilage.

Supply chain logistics are complex, and COVID-19 emphasized the need for robust contingency plans to absorb resource shortages, supplier defaults and delivery failures.

3. Improved asset utilization for efficiency

Increasing efficiency has been a perennial challenge for container shipping lines, and the pandemic brought the issue into stark relief. Port delays and abrupt changes in consumer demands complicated planning and forecasting. A lack of slots and higher freight rates meant it was difficult and expensive to stock containers at key locations or move them to service demand. As a result, assets were often out of place or shipped empty. Container shipping lines incurred additional unbudgeted operational costs as resources had to be deployed to trace discrepancies between where a consignment should have been and where it was. Costs were also sometimes magnified when incidents resulted in customer complaints.

Efficiency gains can be achieved through storage, repositioning empty containers where they’re needed, avoiding blank sailings, reducing empty containers on deck, reducing container losses and improving vessel turnaround times. But the key enabler of efficient movement is knowing the exact location of the assets. Ship operators now recognize they require situational awareness to optimize the use and forecasting of their container inventory.

Reducing the risk of over- or under-ordering and stockouts can also be the difference between success and failure for many businesses, and certainty of cargo location is vital for effective stock-level management.

Every facet of the supply chain requires a more sustainable and transparent container transport industry, with traceability, visibility, lower costs and more efficient use of capacity. Dry container IoT solutions will help achieve these objectives. Uninterrupted end-to-end visibility of all container movements, reliable forecasts and integrated flow management lay the foundation for flexible and agile global supply chains.

4. The need for improved data sharing

Despite its pivotal role in trade and logistics, the container shipping market has faced turbulent times in recent years due to low profitability rates (with the notable exception of the first two years of the pandemic) and increased competition. Attempts to course-correct have been hampered by the tendency in the past to stove- pipe data at the individual stakeholder level.

Stakeholders want the ability to integrate services from multiple software providers. They also recognize the potential benefits of combining IoT data with other innovations, such as blockchain, which could be used to share sensitive information, like customs clearance documentation, and data pipelines to provide even more utility.

Today, the container sector is increasingly aware that more open and flexible data architecture is the way of the future.

Sharing IoT data in a standardized, user-friendly format will allow stakeholders to realize its true value. For example, sharing container shipping lines’ data with shippers will help them to find capacity faster and reduce customer costs while informing the development of more efficient and sustainable transport schedules.

Strategic alliances between container shipping lines and vessel-sharing agreements have made market differentiation increasingly difficult. Creating value is, therefore, becoming vital to maintaining a competitive advantage. IoT tracks inventory, boosts efficiency and improves customer service, but sharing the data itself can also be leveraged for commercial gain. For ship operators, it creates new value-added service opportunities and potential revenue streams, such as offering subscription-based services to users of dry container IoT solution data with different prices for different levels of data access.

5. Increasing requirements for ESG data

Shipping is increasingly focused on ESG factors and decarbonization, with parties such as regulators, financiers and cargo owners considering sustainability credentials and performance as part of their due diligence.

Container shipping lines must innovate and adapt to environmental concerns, both for their own operations and to meet customer requirements. Ship operators and their customers are increasingly moving towards reporting CO2 emissions for transporting loads from the point of manufacturing to the end customer. IoT data can service this demand and be used to calculate total emissions, down to the container level, per leg of the supply chain.

The preparation of the Digital Container Shipping Association (DCSA) standards for just-in-time port calls, allied to better visibility of dry containers, will lead to better vessel planning, increased time at sea rather than in port and optimized transit times, resulting in fuel savings and a reduced carbon footprint. This will ultimately contribute to greener container shipping.

6. The need to improve occupational safety

Shipping and shore-based businesses must consider the health, safety and welfare of their employees. Although businesses cannot eradicate operational risks in container shipping’s dynamic environment, they can mitigate them through innovation.

A case in point is the monitoring of containers for exceptional events on board a vessel. The shipping line has an obligation to care for the container and its cargo while on board, with the responsibility falling to the crew to ensure safe carriage. This can lead to work overload, miscalculation, human error, and avoidable accidents. Containers fitted with IoT devices can simultaneously enhance workplace safety and improve operational efficiency by automating processes and enabling performance parameters to be monitored remotely.

Harnessing IoT data would also eliminate the manual reconciliation of containers, reducing the need to undertake an onerous task that is inherently dangerous in busy port settings.

Dry container IoT solutions themselves must not endanger crew and port worker safety, the vessel or the port infrastructure where it is stacked. It is imperative that devices are intrinsically safe and ATEX explosion-proof certified, which will also help comply with future potential device standards for explosion prevention.

7. Minimizing tampering, intrusion, cargo damage and theft

An estimated 70-80% of cargo theft occurs during land transit from consignor to consignee; however, the entire container supply chain is vulnerable to acts of tampering, intrusion and theft. Physical security measures, such as ISO-certified tamper-proof seals, can be defeated given sufficient time and determination or circumvented altogether.

Shippers must also mitigate risks posed by human trafficking, smuggling and stowaways in order to minimize reputational damage and fines and contribute to countering the societal challenges of criminality and exploitation.

Although IoT solutions cannot, in themselves, prevent tampering, intrusion and theft, their detection and notification capabilities can provide reassurance of cargo integrity throughout the value chain. They can transmit an alarm in the event of container doors being opened anywhere along the supply chain or of changes in ambient temperature or shock. Such information can potentially reduce the impact of criminal activity and prevent cargo spoilage. Some telematics solutions can also be reconfigured remotely, allowing reporting to be changed. For example, reporting frequency can be increased during higher-risk sections of the container’s journey from stuffing to stripping.

The ability to track a container’s precise location using GPS positioning allows designated routes to be geo-fenced and unauthorized deviations to be reported. Dry container IoT solutions can also send an alarm when a transit takes longer than expected and report potential unscheduled stops along an authorized route. And, of course, traceability can help recover stolen assets and allow shippers, BCOs and others to use historical data to identify routes with more security incidents, empowering them to make better routing or vendor decisions.

Finally, for post-incident investigations, IoT data provides valuable time and location evidence that can otherwise be extremely difficult to provide. It also simplifies the insurance claim process for BCOs and increases the likelihood of claim settlement. Insurers are recognizing the value of telematics data and, in the future, may reduce insurance premiums for fleets with IoT devices.

What makes a dry container solution attractive today?

There are three key features that every shipping line should consider in their dry container solution; all of which are present in ORBCOMM’s offering.

1. Data interoperability

Recognizing the benefits of digitalization, nine of the world’s top ten container shipping lines established the DCSA to harmonize digital standards. Since its inception, DCSA has collaborated with the Container Owners Association (COA) to develop standard APIs for container IoT data communication. Utilizing these standards enables container shipping lines, terminals, logistics companies and others to share data and integrate IoT device feeds from multiple telematics vendors, irrespective of fleet size or composition, and data from transport and warehouse management systems to name a few.

The standards will facilitate efficient container movement along the chain and information exchange between stakeholders.

To ensure interoperability, dry container IoT solutions must therefore be open-architecture. They should also be able to communicate with new IoT technologies as they come to market and be compatible with future industry standards. Dry container IoT solutions should offer flexibility and support multiple use cases with a range of network connectivity options (including satellite), on-vessel wireless communication technologies and wired and wireless sensors.

By utilizing the latest advancements in technology combined with years of container shipping experience, ORBCOMM endeavored to design a ground-breaking solution the industry has been looking for. The entire ORBCOMM dry container solution is interoperable via industry standard APIs to support not only data sharing with stakeholders but also to support a fleet of dry containers outfitted with IoT devices from multiple vendors.

2. Data from different asset types

To prevent data silos, regardless of vendor, shipping lines should not have to worry about using multiple software platforms to see different types of assets on different platforms. ORBCOMM’s software platform provides a single pane of glass view for reefer and dry containers as well as tank containers, gensets, and chassis. A unified view makes it easier for shipping lines to monitor, analyze, plan and optimize the entire asset journey through the supply chain on one platform.

3. Solution affordability

The largest obstacle to wide-scale IoT deployments to date has been the price of the device and the cost of the solution. Dry containers make up a much larger percentage of the container fleet than reefers. The dry asset itself, as well as the cargo it transports, are both less expensive in general. If the cost of a dry solution is in the same price range as reefer is today, dry IoT becomes cost prohibitive.

Rapid advances in IoT technology and lower purchase and installation costs mean tracking, monitoring and control solutions are now available to meet the use case for dry intermodal containers. For the first time, this technology is a viable procurement proposition for all enterprises regardless of their size.

Another significant obstacle for dry IoT is the time and effort to install the device. With so many dry containers to outfit in a given fleet, the installation must be as quick as possible. The ease of installation makes it feasible for mass adoption across existing container inventories.

ORBCOMM’s new dry container solution meets the unique use case for dry marine container IoT and the required price point that did not exist in the market. This low-cost telematics solution can typically be installed in just over a minute. This means installations of devices on a massive scale can occur in a relatively short period and with the lowest possible labor cost.