Watch: This Is Why Biden’s $2 Trillion Infrastructure Plan Will Fail
In the United States, we have a problem that’s so BIG and obvious that even Elon Musk can’t see it. Our highways are broken, our streets are clogged with traffic,...
By Gavin van Marle (The Loadstar) Declining asset costs and a variety of external factors are driving the container shipping industry into increasing use of container tracking and monitoring devices.
Speaking to The Loadstar on the sidelines of the recent TOC Container Supply Chain conference in Hamburg, Mike Dempsey, vice president of containers and ports at mobile asset tracking technology firm Orbcomm, said the surge of interest in monitoring cargo in the reefer sector would be be followed by interest from dry cargo shippers.
The recent Loadstar LongRead on Maersk’s installation of its remote container management system and devices on its entire fleet of 270,000 reefer containers shows how one carrier responded to technological advances in GSM, satellite tracking and the Internet of Things.
However, Mr Dempsey said there was now increasing interest from other types of shippers who could lease tracking units fixed to dry containers on a per-trip basis, with a current cost of around $40 per trip.
“What we see now is increasing interest in temporary tracking of containers and, at the same time, giving them security as well as monitoring of things like light and humidity.
“There is a nexus of a whole bunch of forces coming together and increasing demand for low-cost, per-trip-basis coverage; rather than having to permanently fix an RCM unit on each container,” he said.
“They can pay per trip, or they can buy some and use them as they want. We are fundamentally almost at the same point as the mobile phone companies where you sign up for a contract and get the phone for free,” he added.
Mr Dempsey described one project Orbcomm is working on in Mexico, on behalf of a “traditional low-margin freight forwarder” involved in the movement of auto parts from the maquiladora plants in Mexico to the US on behalf of vehicle manufacturers such as GM, VW and Caterpillar.
“It has now almost changed its entire business model from being a freight forwarder to being a tracking expert for these clients and giving them green lane access at the border, because they are paying for this technology and it is making more money on a per trip basis out of this than from traditional freight forwarding charges.
At the US-Mexio border, US authorities award those shipments green lane status because the technology is C-TPAT [Customs-Trade Partnership Against Terrorism]-certified.
“The market is going to go two ways – I think the reefer market will be completely covered with these devices because the ROI is so compelling it’s almost a no-brainer.
“The question is how are we going to get from 300,000 to 1.5m reefer boxes, and from 30,000 teu dry containers to 17m teu? A $50 device on a $2,000 container is still pretty expensive when you look at the overall cost – the numbers don’t work for blanket fitting out of the container fleet, but they do work on a per-trip basis and temporary tracking.
Issues with terrorism, migrant flows and increased transhipment due to the formation of larger shipping alliances were all motivating shippers to look for increased condition monitoring of their cargo, he added.
“The alliance model has caused more and more transhipment and so a box can end up in multiple places for longer periods of time. A box that used to go direct from Cape Town to Antwerp, now sits in Algeciras for three days before going on. So the demand to have the data on the condition of the cargo is growing,” he said.
The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary. Check them out at TheLoadstar.co.uk, or find them on Facebook and Twitter.
Join the 67,578 members that receive our newsletter.
Have a news tip? Let us know.