Insight: How Connected Containers Can Create Smarter Supply Chains
Over the last 50 years the volume of cargo transported in container boxes has risen exponentially with container shipping emerging as the backbone of the global higher-value goods trade. Today, the global container fleet across the world has reached well over 50 million twenty-foot equivalents (TEUs).
Keeping an accurate track of such a vast number of boxes moving across the world - in other words visibility - is one of the primary challenges of today's supply chain.
Further, the experience of shippers and carriers through two chaotic years of the recent pandemic has brought this challenge more sharply into focus.
In this article we look at how connected containers can benefit supply chains by creating greater visibility, reliability and resilience.
The technology to achieve complete visibility on containers in transit has matured enough to become commercially viable and many shipping lines and freight forwarders are rapidly implementing digital connectivity systems for their containers.
What is a smart container?
A smart container is a regular container outfitted with a geospatial tracking device along with a number of sensors that are connected to the internet using technologies like IoT so their data can be transmitted to shippers and carriers located anywhere in the world in real time.
This way the container itself can provide a variety of critical real time data such as:
Current location including geo-fenced areas
A real time estimate on time of arrival
Door opens and closes
These are a just some of the vital stats that they provide to cargo owners and carriers as more sophisticated sensors can provide even more information for specialised container cargos.
What's more, these technologies are getting cheaper with each passing year accompanied by improvements in longevity and maintenance.
Advantages of smart containers
Smart containers have various advantages over their traditional, not-so-smart counterparts as they provide accurate, real-time data while being moved from place to place.
Automated and error-free data capture
Typically, in-transit containers on board a ship are checked from time to time by data loggers who have to visit the container and physically monitor temperature, door security and physical damage, among other things.
Smart containers completely automate this process and eliminate the scope for human error in the data capturing process while freeing up human resources for other jobs.
Various stakeholders like cargo owners and carriers can now view all this accurate data in real time on their computer and mobile screens from remote locations anywhere in the world.
Identification and location tracking
With the real time data they provide smart containers can be remotely identified and located providing precise coordinates of the box.
Cargo owners monitoring this data can then take quicker action if they find the container is not moving as required or has landed up in a location where it shouldn't be.
Monitoring quality of the container and cargo
Containers are moved using cranes and straddle carriers. Any damage to the container that occurs during this movement, or even while stowed on board a ship, can be instantly transmitted to the concerned parties for instant remedial action.
Attached sensors can also continously monitor the actual cargo inside and send alerts about any undesired changes. This way appropriate action can be immediately taken by the carrier to prevent any further damage to the cargo.
All these above features of the smart container provide one crucial advantage to stake holders in the supply chain that has been missing thus far: Accurate real time visibility of cargo which puts an end to blind spots and speculative calculations.
Smart containers are the result of rapid progess made in a range of digital and satellite technologies that have moved from the conceptual stage a couple of decades ago, to actual implementation in a variety of use cases today.
IoT or the Internet of Things technology is a collective network of connected devices that facilitates communication between individual devices and the digital cloud, as well as between the devices themselves.
The data captured by the container's sensors is transmitted along this network to concerned parties who can respond accordingly. For example if the temperature of container is not at the level its supposed to be, cargo owners can detect this and send instructions via the network to the container's thermostat to adjust the temperature accordingly.
Even today, there are already billions of IoT connected devices generating trillions of bytes of data every day. Capturing this data, analysing it and identifying trends or providing solutions to a given problem requires extremely sophisticatd data analysis algorithms that crunch this 'big data.'
These algorithms can then come up with immediate solutions for a given problem or provide valuable suggestions for future planning of the supply chain.
This is a distributed digital ledger system that allows secure transmission of validated data across different networks.
Blockchain technology provides a convenient, reliable means of recording and securely enabling change in stewardship or ownership of the container at ports or international borders.
Any data is only as good as how efficiently it is distributed and used. This requires the setting up of common global standards which will allow for seamless, meaningful data sharing and analyses.
The ISO standardisation of physical shipping containers in 1968 added real value over the next decade by reducing the cost of transportation of containers and creating greater flexibility and opportunities in the supply chain.
In the digital era the industry has to come up with a standardised digital formats for messaging and signalling that is a common code for all devices across the world.
Just as the standard container dimensions and capacities have created a framework that is recognised globally, data generated by smart containers, with the right permissions, should have the capability of being read and understood by any standard digital device like a laptop or a mobile phone.
Only then will the the deployment of smart containers containers in the supply chain realise the promise of their true value addition.
Collapsible smart containers
The US company GenFlat has come up with a novel way to save space at ports with their own version of a smart container: the collapsible kind.
GenFlat are providing a revolutionary container solution with its foldable container solution that has the power to revolutionise port operations by freeing up much-needed space taken up by empties.
This provides huge savings on costs and space, while simultaneously massively optimising operations.
When fitted with geospatial and sensor devices, these 'smart empties' can transmit their location and status to their owners giving them instant access to information on empty containers that can be reallocated to newer locations as and when required.
Smart containers in industry
In recent times liners have been flush with cash and many of them are investing parts of this to improve operational efficiencies by deploying smart containers in their fleets.
This value add not only increases cargo security but also provides end-to-end tranparency for carriers, freight forwarders and cargo owners.
Meanwhile, Hapag-Lloyd took its first steps in 2022 undertaking a major project to equip its entire dry container fleet with real-time tracking devices with the aim to install 1.6 million of them across its container by the end of this year.
Other players like ONE have also launched partnerships earlier this year with the likes of Sony to digitize its container fleet.
Smart Containers will take container shipping beyond just being paperless. Using IoT, quick decision making based on accurate data will open up a whole new world of digital possibilities for the container shipping industry.
The end-to-end visibility created by smart containers will help all stakeholders not only react better to present circumstances but also take away learnings from the analyses of big data that will help all supply chain players plan better for the future.
Further, information sharing will build resilience, reliability and trust across the supply chain while seeing dramatic increases in efficiency, safety, cost reduction and customer satisfaction.