THE GLOBAL SUPPLY CHAIN
Is built on a network of industry stakeholders and consumers all relying on one another to deliver.
End-to-end Supply Chain Visibility
The Suez Canal Catastrophe
Ports Gearing Towards Automation and Optimization
END-TO-END SUPPLY CHAIN VISIBILITY
The global supply chain is an extensive network of manufacturers, suppliers, carriers, ports, terminals, and much more. Each entity plays a vital role in feeding a nation’s economy and sustaining the livelihood of occupations. Maintaining a steady flow of goods anticipates minimal supply chain interruption, but of course, within the past year, we have seen everything but tranquility. The global supply chain has repeatedly endured catastrophic events, but operations and business processes have quickly adapted to changing circumstances, realizing the actual value of staying agile.
Consumers now are more likely to pay higher fees to secure fast deliveries, which has become a priority contributing to customer satisfaction. Shipment carriers have encountered many events outside their control, such as the ongoing battle with the global pandemic and the Suez Canal blockage. Fending off the impacts of these events has been challenging as businesses are forced to the edge to pivot to meet stark and changing demands continually. As a result, end-to-end supply chain visibility is a significant constituent to achieving a healthy interrelation across the maritime and container industry.
How can we achieve interoperability for an end-to-end supply chain? A reliable flow of goods from end-to-end of the supply chain requires standards and knowledge sharing. Despite industries rich with technological influence, there are still ports and terminals operating manually without any form of technology. For instance, some still opt for a paper bill of lading while some terminal staff still administer work instructions verbally. Without reinforcing standards or the use of critical software tools, not only is the entire process of receiving goods is cumbersome but achieving optimal levels of efficiency become far-reaching.
Industry experts and stakeholders of the maritime and container handling industry have gathered over the past year to form a committee that works together to define industry standards and facilitate the transition into the digitalization age. Organizations like Terminal Industry Committee 4.0 (TIC 4.0) have already taken significant strides towards increased supply chain visibility by defining a common agreed language. The progression in establishing definitions for real objects, grammar, and semantics steer towards a well-established common vocabulary. As a result, it resolves misunderstanding, which typically happens when communicating between different departments and entities since the message can often become misconstrued when applying their judgment.
As more industry stakeholders practice outlined standards, innovation projects become easier to integrate. Improved agility in projects owe these standards as they typically reinvent with each project and service or product supplier, creating a cluster of confusion. Conflicting understandings and definitions of the same concepts deviate from end-to-end supply chain visibility. Therefore, encouraged participation in using a commonly defined language will most definitely facilitate communication across all channels of the supply chain and ultimately achieve interoperability.
THE SUEZ CANAL CATASTROPHE
The whole ordeal with the Suez Canal blockage riveted the world’s attention while the entire network of vessel carriers and port operators were left perplexed, realizing this incident’s grave impacts. The global supply chain is mainly interconnected, relying on one another to collect or deliver goods from the manufacturing until it is within the customer’s hands. Any interruption, as a result, will relay into other areas of ports and logistics, threatening the flow of container movement, and hence, endanger the economy. Therefore, the blockage is an event that no seafarer or port operator would ever want to encounter.
The sandstorm’s harsh weather conditions decreased visibility, forcing the Ever Given vessel to become immobile as it wedged into the embankment, blocking the Suez Canal. Catastrophe inevitably struck as the canal serves as the only connection between the Red Sea and the Mediterranean Sea. Significant congestion and shipment delays ensued, prompting a large rescue fleet of eight local tugboats and construction vehicles to dig the vessel free.
A large portion of the maritime trade passes through the Suez as it provides the shortest route from Europe to Asia. It is one of the busiest waterways giving access to as many as 50 vessels a day and accounting for 12 percent of overall maritime trad. Therefore, the canal is vital to sustaining economic flow for nations.
Due to the arduous effort of the tugboats and construction vehicles, the Ever Given was finally set free after six days. However, in retrospect, the blockage prevented trade valued at over $9 billion per day. Congestion ensued consequently, which attribute to the delay in the consignment of goods and insufficient fuel as they queued to pass through the canal. Ports and terminals all braced for the stark container traffic once the Suez cleared.
Global maritime trade relies on this passageway since it saves up to three days of the journey, which amounts to $360,000 on fuel savings. Although this passage route is beneficial for all, vessel sizes are continually becoming larger, outpacing the current infrastructure.
Automation combined with optimization has been the foothold alleviating the frenzy in ports and terminals as they handle a sudden and spike influx of imports. Moving forward, we will likely witness businesses operating under agile frameworks to maintain agility and pivot according to changing conditions.
PORTS GEARING TOWARDS AUTOMATION OPTIMIZATION
A mammoth 369 vessels were trapped in a tailback waiting for the passageway through the Suez Canal as the blockage concluded in six days. The estimated $9 billion loss per day portrays the magnitude of the economic detriment of this whole ordeal. Furthermore, the Ever Given blockage consequences will remain prevalent within the industry for a long time. Ports and terminals will likely bear a significant and abrupt surge in container throughput as they brace for delayed shipments finally reaching their shores. Although the increased traffic in containerized trade conveys a positive outlook on port throughput, it will confront more volatility.
The objective to counteract the spike in container volumes has encouraged port operators to enlarge trucking capacity. The rising flow of trucks can alleviate congestion deriving from the sudden surge in imports discharging at ports and terminals. However, staff on-premises of terminals and TOS users face the challenging task of managing and planning containerized goods at such a large scale since it may omit optimization and even stretch on delays.
We can expect a shift from the common Just-in-Time (JIT) operations to a Just-in-Case (JIC) as stakeholders stock up on inventories to avoid the aftermath of an unprecedented event. Assistive tools that reinforce optimization in correlation with automation will also be widespread within the industry. These tools can drive better outcomes that mitigate the number of errors in planning, especially during these high-stress-inducing circumstances.
Automating processes and optimization modules within a TOS can facilitate planning by generating strategic work instructions and achieve optimal decision-making. Eliminating time-consuming tasks through automation while maximizing the available recourses attributes to the likelihood of achieving optimal performance minimizing disarray. A TOS emanating these features can assist in any operational spectrum that ranges from vessel berthing to managing containers within the yard. Optimization is not limited to the sole objective of achieving productivity. Instead, it is also responsible for forecasting the emergence of any potential problem areas, depleting costs, and balancing various resources to yield transparency in all decisions.
A TOS with refined terminal optimization should exhibit the following capabilities and benefits:
- Forecasting problems – warrant an early detection of upcoming issues that can constrain daily terminal operations.
- Risk management – instigate proactive measures in responding to any potential risks or challenges.
- Reduce costs – TOS users can leverage forecasting problems earlier to avoid investing financial resources in amending issues.
- Improve process efficiency – avoids vessel waiting times and resource bottlenecks.
- Improve operational efficiency – heed greater control and visibility because of optimized resources and forecasting abilities.
- Faster Decision-Making – the timeframe for planning and exercising decisions should be significantly reduced and not at the expense of any set requirements to reflect a capable TOS.
- Accurate information – TOS should have AI integrated into the system and automated data to provide accurate information which inhibits errors from ensuing, granting heightened visibility over operations.