Smart containers and the data-driven supply chain
Smart containers hold promise for revolutionising supply chains. However, generating and collecting smart container data is not enough to make supply chains ‘smart’, write Hanane Becha, Todd Frazier, Jaco Voorspuij and Michael Schröder.
Stakeholders already manage huge amounts of data and struggle with multiple technologies that take time away from their core businesses. A smart container solution must deliver data that matters, in a standard format for easy integration into different systems. It must enable unambiguous data interpretation and empower involved stakeholders with actionable information.
When trip plans, cargo information, and other information is shared with service providers, smart containers may be configured to differentiate ‘business-as-usual’ events and exceptions, and create alerts when certain measures exceed the configured thresholds, allowing stakeholders to be informed to take action. For example, if a container is sealed prior to shipping, the smart container solution can notify the appropriate stakeholder of the place and time of an unauthorized door opening.
Moreover, smart container data enables the creation of value-added services such as Estimated Time of Arrival (ETA) calculation, optimisation of container flow and fleet management, CO2 emission calculations for the journey, as well as predictive maintenance.
Smart containers are traditional marine containers – reefers, dry or tank containers – with added electronics enabling them to sense, interact, and communicate.
The added electronics enable tracking and monitoring of a container trip and the conditions under which the cargo has been transported. The smart container solution can be designed to share near real-time physical data regarding location, door opening and closing events, shocks and vibrations, temperature, and any other relevant physical parameters.
Smart container data providing near real-time door-to-door trip visibility is one of the foundations for end-to-end supply chain visibility.
The smart container solution is based on various technical pillars:
- An active smart device (able to send data using its own power) affixed to the container
- A cloud-based platform collecting the data, processing it and sharing it
- A catalogue of APIs for easy integration into different platforms
- Various communication protocols.
Smart containers support enhanced decision-making by stakeholders by providing a common base to achieve near real-time shared visibility across the entire door-to-door trip execution. Shared visibility is key to enhance the stakeholders’ collaboration and coordination as well as to delineate the responsibilities of each actor of the supply chain.
Analysing enhanced visibility aggregated over time enables actors to improve their processes, resulting in the reduction of transport lead time and costs. Smart containers may be combined with other innovations such as blockchain, Big Data or data pipelines to provide even greater benefits.
Standards-based smart container solutions can benefit a range of stakeholders, such as:
- Transport Operators (with container fleets) – facilitate efficient container fleet management and enable operators to offer a value-added service while ensuring better service quality. Having reliable information to act on and enhance processes mitigates risks and results in mastering operational costs.
- Container owners – improve fleet management efficiency by remotely accessing their container inventory as well as generating periodic (e.g. monthly) or on-demand reviews to reconcile container inventory with depot operators.
- Logistics Service Providers (e.g. handling operators, international freight forwarders, brokers) – obtain timelier and more accurate information on the status of consignments, hazards or unanticipated events, allowing better risk mitigation.
- Consignors and Consignees – optimise supply chains and monitor the quality of the products, enabling better inventory management. Smart Container data may decrease cargo loss or deterioration, and reduce associated costs.
- Vessel crew – enhance operations on board vessels by enabling the crew to remotely monitor the count of full and empty containers, and to determine temperature and status of reefers, saving cargo that otherwise would be discovered when delivered as damaged and unsalvageable.
- Depot operators – enable efficient daily or on-demand remote determination of the container inventory.
- Inland and sea terminal operators – enable terminal operators to verify the exact location of each container in their yard in real time, advise of mishandling or equipment failures, and assist in locating dangerous goods to enhance safety.
- Cross-border Regulatory Authorities – collect data about the physical trip of the container prior to its arrival to improve efficiency and security, potentially creating a ‘fast lane’ for clearance of standards-based smart containers.
- Port Authorities – infrastructure planning based on long term analyses of smart container data. Real-time smart container data can also be used for reporting to governmental authorities on port usage and to reduce the congestion on the roads.
- Banks and Insurance institutions – support more informed risk analyses, mitigation of adverse events and claims settlements, based on actual data. Post-evaluating completed journeys could allow lower rates to finance supply chains.
The United Nations Economic Commission for Europe (UNECE) Trade Facilitation White Paper on Real-time Smart Container data for supply chain excellence provides a detailed look into the various benefits of using smart containers as well as the various potential use cases for this technology.
The importance of standards
Clear, unambiguous message exchange standards are necessary to reap the benefits of the smart containers. Data sharing is particularly important in the logistics supply chain due to the large numbers of diverse players, and because container movements are global.
Standards-based data models and standard APIs will help stakeholders accelerate the integration of digital services from various sources. Standards-based data exchange enables open communications channels between supply chain stakeholders, increasing and simplifying their collaboration. In addition, it reduces and shares associated data exchange costs, which in turn improves efficiency.
The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) Smart Container Business Requirements Specifications (BRS) is the first formal standard that details smart container data elements. The smart container standardisation effort is one of many standardisation initiatives supporting global trade.
Digitalisation fosters an environment of transparency to support competitiveness on equal terms and enables companies to focus on containing and cutting down logistics and supply chain management costs. Furthermore, standards-based Smart Container solutions offer greater flexibility in dealing with supply chain disruptions (such as we are seeing today) and improved resilience.
Given these are common goals for all involved actors—be it carriers, shippers, forwarders, governmental bodies or IT and service providers—a collaborative approach should become the norm for enhanced supply chain visibility, resilience, and analytics.
Thanks to standards-based smart container solutions, the computer representation of the supply chain will become synchronised with the physical world. Supply chains will become more transparent, reliable, agile, secure, resilient, connected and sustainable.
Smart container solutions provide one of the missing pieces in the puzzle, but only if different actors along the transport chain establish capabilities to integrate smart container services into their business operations, as well as sharing the data gathered from the smart container with others along the transport chain.
Note – The opinions expressed herein are the authors’ own and do not necessarily represent those of their employers, or the organisations in which they are active.
Editor’s note: This article is an abridged version of a longer paper by the authors, which includes further details on the use cases mentioned above, as well as a full list of references. The full paper can be downloaded here.