The rise of e-commerce has led the segment to carve out a sizable share of the global retail market. The increasing penetration of smartphones and access to data services across emerging markets has helped sustain e-commerce growth, introducing an ever-growing consumer base to online retail.
Traditional brick-and-mortar retailers, which have witnessed a slide in revenue, are now experimenting with different sales channels — including dipping into e-commerce for improving their customer reach.
The “Amazon Effect” has revamped traditional logistics workflows, putting end customers at the center of supply chains and forcing stakeholders to expedite operations to guarantee same-day or next-day delivery. With last-mile delivery becoming the new avenue to differentiate services, online retailers look at various means to deliver products, including drones and automated delivery robots.
The advantage retail storefronts have in fulfilling deliveries in the last-mile segment cannot be overlooked. For instance, a local supermarket with an online presence can promise delivery to any customer in the neighborhood within an hour. Amazon, with its logistical prowess, might still struggle with delivering in such short notice as it needs to get the products to its customers from a warehouse, possibly located in the city outskirts.
With the COVID-19 pandemic impacting storefront foot traffic considerably, shopping malls are now moving online to sandwich themselves in the space of same-day last-mile delivery and click-and-collect delivery models.
Citycon, a real estate firm that operates shopping malls across the Nordic countries and Estonia, has built a click-and-collect service that allows consumers to buy products listed across all the shops within a specific mall. To make this happen, Citycon aggregated all shops under a single digital platform, giving the site product variety and volume.
Citycon CEO Scott Ball said the model gives the company a real opportunity to become a “last-mile delivery answer” by leveraging strategically placed real estate to fulfill orders in quick time. But Citycon still has had problems bringing all the retailers operating within its shopping malls into the virtual system, which Ball anticipated would take around a year.
Shopping malls with vacant spaces can repurpose them and rent them out as fulfillment centers for companies like Amazon, giving them steady revenue. Parking spaces within malls can be rented out to park autonomous robots and last-mile electric vehicles, with possibilities of them acting as overnight docking stations.
Retail storefronts within malls can be used to create buying experiences that fuse physical spaces with digital shopping. Amazon introduced a chain of physical stores called Amazon Go, where buyers can get into the store, pick up a few products and walk out of the store without waiting on checkout queues. Amazon uses computer vision to recognize the products picked by consumers and directly charges them on the cards registered with their Amazon accounts.
Ultimately, the retail market is evolving and e-commerce is here to stay. For shopping malls to survive, it is inevitable that they climb the digitalization ladder for new sales and distribution channels. Fusing physical and digital elements of the buying experience will not just help large retailers but also low-margin businesses that struggle with visibility or consumer retention.
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Amsterdam’s Schiphol airport was out front in recent years organizing the cargo community to become highly proficient in handling temperature-sensitive pharmaceutical products. Now the airfreight industry at Europe’s fourth-largest cargo airport is taking steps to make sure it can safely and efficiently transport COVID-19 vaccines once approved.
A task force led by local trade association Air Cargo Netherlands (ACN), Schiphol Cargo and Air France KLM Martinair Cargo, including shippers, drugmakers, forwarders, airlines, ground handlers and trucking companies recently held an initial meeting to discuss handling shipments for four possible vaccine scenarios based on different temperature ranges.
Some vaccines in development will require being frozen to minus 80 degrees Celsius and involve more than one dose, adding to the logistics complexity and anticipated volumes.
The vaccine readiness group will host a roundtable Tuesday on how to map capacity across the air supply chain and develop contingency plans. Dutch Customs and the Dutch Ministry of Health are scheduled to participate in the meeting.
Industry officials and medical groups are concerned that the logistics sector, particularly in airfreight, does not have adequate cold storage facilities and equipment needed to rush huge quantities of temperature-sensitive vaccines under strict protocols around the world to help stop the spread of the deadly coronavirus.
Stepping up to the challenge
Representatives for international airlines and logistics companies say thousands of big freighter jets will be required at a time when air transport capacity is already scarce. Temperature-controlled warehouses, refrigerated containers, dry ice and technology to monitor temperature conditions and alert stakeholders about any deviation are also necessary but not equally available around the world. Industry experts are urging governments, aid organizations, drug manufacturers and logistics companies to collaborate on removing regulatory barriers to efficient transportation and investing in the necessary infrastructure.
Increased security and strict transfer protocols between parties will also need to be part of any vaccine delivery process.
Governments and pharmaceutical companies are planning to use trucks for distribution wherever local manufacturing is available, but air cargo is expected to be used to reach many parts of the world or when expedited delivery is required.
“We have a strong pharma and air cargo community at Schiphol, we know what we are talking about and we will be ready for what is coming,” said Maarten van As, ACN’s managing director, in a news release. “It is not just about the Netherlands, it is about getting the vaccine distributed at speed to the world.”
The coalition said the Dutch Civil Aviation Authority has been very effective in quickly granting permissions for COVID-19 ad hoc flights, something the International Air Transport Association has pleaded with other governments to do.
“We are now focusing on a fast and swift handling process on the tarmac, getting the vaccines as soon as possible to the end customer via the distribution channels rather than storing them at the airport,” said Ferry van der Ent, director of business development for Schiphol Cargo, in the airport update.
Amsterdam plans to coordinate with other air hubs and facilities that meet the World Health Organization’s stringent standards for pharmaceutical distribution, as well as with the nearby ports of Amsterdam and Rotterdam to learn what certified cooling capacity they have to offer, he added.
Under the initiative, the cargo community will continue to work closely with Dutch Customs and other agencies to ensure fast release of goods and priority inspections.
Supply chain partners in Amsterdam say they plan to speed up transfers between logistics and transport partners by using last-minute deliveries, quick pickups and airside delivery or pickup.
“We have a responsibility as an airline to make sure the vaccines get to the right place and we need to consider the whole journey, especially the last mile and especially for places where it can be a challenge to get the last mile right,” said Enrica Calonghi, global head of pharmaceutical logistics at Air France KLM Martinair Cargo.
Air France KLM Martinair cold room
The airline group separately announced it is expanding temperature-controlled capacity at its Schiphol pharmaceutical hub to prepare for the distribution of COVID vaccines. The investment will add 6,760 square feet of cold space able to handle products at temperatures between 2 degrees C and 8 degrees C. Earlier this year, the company built a smaller refrigerated room at the airport.
New refrigerated storage area at Air France KLM Martinair Cargo facility in Amsterdam. (Photo: AFKLMP)
Both cold rooms feature fast-close doors to limit exposure to warm air, a temperature alarm system and central monitoring.
Air France KLM Martinair, which is certified by IATA for exceeding best practices for handling drugs and biological supplies, has made pharmaceutical and health care transport a strategic priority. It recently formed a task force to consult with manufacturers and freight forwarders to define what steps are needed to help ship COVID-19 vaccines. I
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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Over the last decade, technology disruption within the warehousing industry has been telling. The need for expediting supply chains, compounded by the rise of e-commerce, has led warehouses to embrace workflow digitalization and process automation to a significant extent. That aside, there have been technologies that have not yet gained mainstream adoption but have great potential — like virtual reality (VR) and augmented reality (AR).
Though AR and VR are technologies that have been around for a while, their adoption has been hindered by their price points, as the hardware was extremely expensive and the software often had glitches. But after several iterations of technology upgrades over the last decade, they are now a lot more attractive, with quicker return on investments and easy-to-use interfaces.
“Be it designing how the floor is managed in a warehouse or how workers are positioned within a massive refinery, VR and AR can help managers assess and weed out flaws in the designs before they are made functional,” said Brian Lozes, the CEO and founder of Kinemagic. “This helps improve efficiencies as workers can be clearly instructed on their daily operations, and the floor can be arranged in a way to optimize movement and space — all via an interactive 3D layout.”
With e-commerce in the picture, the inventories have shorter stock cycle times, as warehouses are forced to quickly adapt to sudden surges in demand — like with the case of panic buying during the COVID-19 pandemic.
This warrants warehouses to have detailed strategies that help them stay nimble, including optimizing space utilization and layout planning. With AR glasses, warehouse managers can run several trials virtually on proposed designs before finalizing one, saving time and resources.
This idea of simulating real-world operations and predicting outcomes is called digital twinning, in which virtual platforms foster speed and scale, enabling warehouses to visualize operations and spot problems better.
“Digital twins help warehouses to continue optimization efforts without shutting down operations or distracting people from what they do,” said Lozes. “AR provides an immersive model where managers can walk through to visualize models and gain greater insights.”
Apart from creating simulations for warehouse managers, VR and AR can train newly recruited employees virtually, even from the comfort of their homes. This dramatically reduces the time it takes workers to get accustomed to processes, helping them immediately start work when they get on the floor. This is especially true of temporary workers who get recruited during peak demand times, like the annual holiday season.
AR also can be used for order picking, reducing efforts needed to train new employees. In general, employees manually walk through aisles with barcode scanners to scan barcodes for identifying the required items. But with AR-based smart glasses, employees can now locate items via the smart glasses, which scan barcodes to let the workers know which packages to pick.
This would make order picking a hands-free affair, as workers have instructions relayed directly to their glasses, including order number information, bin data and pallet number.
With warehouses recruiting unskilled workers en masse during the peak demand period, technologies like AR and VR can help elevate such employees to work at similar efficiencies to existing workers. Warehouses can now continue functioning without hiccups, maintaining a seamless flow of goods through their inventories and holding up to the promise of expedited shipping.
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Within the trucking industry, legal battles over road accidents are nothing new. However, verdicts in trucking accidents have steadily become more costly, partly due to the legal environment that incentivizes lawsuits. This has led to the nuclear verdicts of today in which a jury awards over $10 million in compensation, crippling many fleets and forcing several to bankruptcy.
In a report, the American Transportation Research Institute (ATRI) observed that while the average size of verdicts was largely below $5 million between 2010 and 2017, the value shot up to over $22 million in 2018 — an increase of 967% percent compared to 2010. The volume of cases has also increased. While 2005-2011 witnessed 79 cases with verdict sizes over $1 million, 2012-2019 saw 265 cases, an increase of 335%.
FreightWaves spoke with Adam Denman, the director of global OEM business at truck safety startup Road-Aware, to understand some of the reasons that lead to truck-related road incidents and the legal battles playing out on road collisions.
Denman pointed out that while driver distraction and fatigue are considered common reasons for truck-related collisions, there are also other lesser-known reasons, including driving at an unsafe speed while turning corners.
“At our fleet trials last year, we realized that neither the safety managers nor the drivers realized how close they were to tipping over in many situations. It is understandable to some extent. Passenger cars provide greater stability when you go around the corner, but you don’t get that in a truck because the tractor is heavy and solidly on the ground. Turning tight corners at an unsafe speed will tip over the trailer in a blink,” said Denman.
For proactively defending themselves against frivolous lawsuits, fleets can invest in technology that helps them monitor not just the in-cab activities like driver behavior but also observe the driving environment. “The lack of exculpatory evidence can be disastrous for fleets, as these verdicts are very often dished out because there isn’t sufficient evidence to precisely know what happened,” said Denman. “So having cameras to monitor 360 degrees will be an excellent defense.”
The lack of pre-fitted safety systems on the trucks is a cause for concern. Denman explained that trucking OEMs in recent years have faced several lawsuits for not fitting safety systems, even though they are not mandated by law. However, such systems would increase the cost of trucks, making them financially unfeasible for many owner-operators and small trucking fleets.
“If you create an analogy for the trucking industry with the aviation market, you can see that the latter will not be allowed to fly aircraft without the appropriate safety equipment. The same is not true of the trucking industry, even though it continues to kill about 5,000 people a year just in the U.S. alone,” said Denman. “I think regulations will eventually force OEMs to fit a lot more standard safety equipment in all their trucks.”
For instance, take the case of trailer rollover accidents in which the trucks are traveling below the posted speed limit on a bend. Based on the truck trailer’s weight and dimensions, the speed at the turn would change dramatically, which is extremely difficult for a driver to deduce without the help of safety systems.
“Drivers are expected to take an educated guess as to what speed is safe. Such assumptions can be dangerous, and safety systems can help avoid such accidents,” said Denman. “There’s an amazingly tight correlation between the profitability of trucking companies and their lack of accidents. For a large fleet, reducing the number of accidents can have a radical effect on its bottom line. Anything done with regard to safety and monitoring can make a huge impact.”
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It was only a few weeks ago that FreightWaves founder and CEO Craig Fuller introduced several new SONAR features as part of the SONAR 7.0 release. One new feature was the “Ocean Shipments Report, which shows U.S. import and export shipment volumes for ocean containers seven days into the future,” Fuller stated on July 21.
FreightWaves CEO Craig Fuller introduced enhancements to SONAR, including Lane Scorecard, Ocean Shipments Report and Reefer Rates (beta), during the 3PL Summit.
On September 16 during the first day of the American Shipper Global Trade Tech Summit, Fuller previewed several new enhancements related to ocean freight, including a new dashboard that showcases numerous data sets in easy-to-see and understand graphics. Most importantly, the data in SONAR’s Ocean Shipments Report app can help companies in all modes “read the future” and know where freight will be coming into the U.S., when and in what volume.
Ports are critical to U.S. economy
As Fuller stated, “U.S. ports are where nearly all transportation modes come together – ships, drayage vehicles, intermodal rail and trucks – moving the imports that are the lifeblood of the American economy.” And now this proprietary data that is unique to SONAR is displayed like never before.
Shippers race to bring cargo into California (Photo: Port of Los Angeles)
In addition to the dashboard, another new feature lets a SONAR subscriber see which companies are the 100 largest consignees by shipment volume – as well as where the imports are coming from and where in the United States those shipments are heading. Fuller and FreightWaves analyst Zach Strickland discussed the Ocean Shipments Reports and what they can do for freight analysis and forecasting across all modes. In the video segment embedded in this article (above), readers can see the entire presentation.
With the new dashboard, it is easy to see why the SONAR Ocean Shipments Report is the best indicator available to gauge how much ocean container volume is being booked for U.S. imports. A SONAR subscriber has the ability to see exactly where ocean container volumes are loading and in what volume. SONAR is the only data platform in the world that has this data set. It is located under the apps in SONAR and provides subscribers new visualizations of maritime container flow and also give them the opportunity to plan for future trucking and/or intermodal activity at various U.S. ports.
FreightWaves’ Craig Fuller and Zach Strickland explain features of the SONAR Ocean Shipment Reports app.
Viewing the Monthly Customs Shipments for example, the latest data shows that in August, more than one-third (33.4%) of all the ocean-borne imports into the U.S. came from just one country – China! Moreover, goods moving from China next week will be up 121% year-over-year – even though companies have worked to move manufacturing and supply chains out of China for the past year.
Prior to the pandemic, most analysts predicted a flat or declining freight market for the remainder of 2020. Fuller saw things differently, and foretold of a good year for freight. No one saw the pandemic coming or its impact on freight, but Fuller was one of the few that predicted a bullish year.
Maersk ships arriving in Los Angeles (Photo: APM Terminals)
Strickland pointed out that the Ocean Shipments Report is a robust “market intelligence product for the global freight market.” He showed how SONAR can show not only import volume (in total and by U.S. port), but which ocean carriers are being used to carry freight – from which countries and in what volume. Strickland also noted that shipments are classified and counted as the total number of bills of lading moving in the next seven days. This is the total number of shipments, and there can be multiple containers per shipment. For that reason, SONAR’s Ocean Shipments Report has another chart showing pure container volumes measured in twenty-foot equivalent units (TEUs). This represents the total number of containers being moved in the lowest common denominator, which is a TEU.
Fuller asked the rhetorical question of why would companies in the U.S. care about high-volume importers (consignees) or about import activity in general? He then explained why this was so important for U.S.-based transportation providers. “If you see this information in SONAR – a week before other providers – then you can get ahead of your competitors by knowing the volume of what will be arriving in the U.S., as well as when and where. And when that freight reaches the U.S., it will need to be moved – perhaps to nearby warehouses, or perhaps to the other side of the country. That is actionable intelligence, which is the essence of SONAR!”
Again, a SONAR subscriber can view U.S. port-level specifics for both U.S. imports and exports. For example, if a subscriber has set a filter to the Port of Los Angeles, then the ocean container volumes that are destined for the Port of Los Angeles are displayed – before they ever leave the countries of origin. Therefore, a SONAR subscriber has a 14- to 30-day heads-up on how much volume can be expected to arrive into the Port of Los Angeles in the next 14 to 30 days (the timing is variable because of the different transit times of the ocean vessels to the Port of Los Angeles).
Of the total TEUs imported in the past 30 days, 17.2K held Amazon merchandise.
How the Ocean Shipments Report adds value to plan for capacity and rates
The Ocean Shipments Report provides leading indicators for the ocean container industry as well as for anyone involved in the domestic U.S. port, intermodal or trucking markets.
As outlined above, a SONAR subscriber can view ocean container volumes seven days into the future on both containerized U.S. imports and exports. The date is based on the date that the volumes are set to leave the country of origin. If a SONAR subscriber is looking at U.S. imports, then those would be leaving from countries such as China, India or Vietnam. Conversely, if a subscriber was looking at exports, then the dates would represent the volumes leaving U.S. ports for export to other countries.
The Ocean Shipments Report also enables a SONAR subscriber involved in moving ocean container shipments to see how volumes are shifting relative to demand this year compared with demand for last year. If volumes this year are above where they were last year, then capacity can be expected to be relatively tight on specific trade lanes, and ocean rates are likely to go up. Conversely, if demand is down on a particular lane compared to last year, then it can be expected that there is an oversupply of capacity, which should put downward pressure on rates.
FreightWaves market expert and analyst Zach Strickland co-hosts the popular FreightWaves podcast “Freightonomics.” Image: FreightWaves
At the American Shipper Global Trade Tech summit Wednesday, Cambridge Capital managing partner Ben Gordon and operating partner Essa Al-Saleh spoke in a fireside chat, discussing trends within the logistics industry and the factors the venture capital firm looks for in a startup before investment.
Al-Saleh moved to Cambridge Capital after a long stint at global logistics firm Agility. While at Agility, Al-Saleh transformed the then-company with a market presence only within Kuwait to a $5 billion company with operations in over 100 countries today. Gordon questioned Al-Saleh on how logistics startups could look to repeat his success at Agility.
“I’d boil it down to three things. One is about finding a great team to work with that has an agile mindset. Two is to focus on what you want to do, how you want to do it and how to go about doing it. The final thing you need to be successful is a bit of luck along the way,” said Al-Saleh.
Al-Saleh explained how the supply chain industry is witnessing explosive growth, even in the wake of the COVID-19 pandemic. Widespread lockdowns and the resulting growth in online retail has led Cambridge Capital to look at investing in the e-commerce-enabled logistics opportunities the “new normal” has generated — like last-mile, automation and fulfillment.
“I think the intersection of technology and logistics is really exciting. It’s the sort of trend that’s been there for a long time. We’ve seen it for over 20 years, but the acceleration in the last six months has been unbelievable,” said Al-Saleh. “Companies in our space, in order for them to remain relevant and sustain themselves over the years, need to drive continuous improvement and innovation.”
Al-Saleh mentioned that for a company to generate Cambridge Capital’s interest, it needs to have passionate and talented founders who have clear perspectives on the market, are openly coachable and are willing to pivot in dire situations.
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Fireside Chat: New technology in logistics
The second factor that Cambridge Capital scrutinizes is the size of the industry problem being solved by a startup and if it is large enough to warrant an investment. “It’s just not possible to become a billion-dollar business if the niche is too tiny,” said Al-Saleh. “The third point is to see if the deal makes sense. We look for situations where the deal makes sense and the founders want us to be their partner.”
For instance, Cambridge Capital was one of the early investors in XPO Logistics. Al-Saleh explained that Brad Jacobs, the founder and CEO of XPO, ticked all the boxes as he was a serial entrepreneur creating a startup in the trucking brokerage niche — a $200 billion market opportunity.
Cambridge Capital is always on the lookout for distinct themes within the market and businesses with huge tailwind growth. Last-mile logistics is an exciting segment, as it has a highly fragmented market and will witness consolidation over the next decade.
“Top 50 companies represent not more than 50% of the total market in last-mile logistics. Compare that to banking and finance, where the top eight control 90% of the market,” said Gordon. “Consolidation remains a winning theme. Cross-border trade and automation of that cross-border will remain a big opportunity.”
A.P. Moller-Maersk’s (OTCMKTS: AMKBY) announcement earlier this week that it will integrate the air cargo and less-than-container-load (LCL) services of its subsidiary Damco into the Maersk brand has some customers checking their options.
Shippers remain unclear how the absorption of Damco into Maersk will impact their overall logistics contracts with the longtime third-party logistics services provider (3PL), as well as what will happen to the customer service staff who were dedicated to their shipping requirements.
Other 3PLs say they are prepared for a possible migration of shippers from Damco.
“The last thing shippers need at present is further uncertainty,” said Thorsten Meincke, a member of DB Schenker’s management board for air and ocean freight, in a statement on Friday.
“We are making an offer to all those who are now looking for long-term security and reliability,” he added.
DB Schenker said it approved a “stability package” for those shippers specifically impacted by Maersk’s announcement, which includes an offer to take over short-term service agreements with up to two-month contract periods that match those agreed by Damco.
The German 3PL also said it “pledges to provide prioritized quotes on short notice” to former Damco customers.
Other large freight forwarders and ocean freight consolidators are also opening their doors to former Damco customers.
“BDP is willing and actively creating strategies to accommodate any customers that will be displaced or incur service disruptions,” Lance Malesh, the Philadelphia-based 3PL’s chief commercial officer, told American Shipper. “We have a well-established transition process that can quickly on-board new clients in a quick time frame and focuses on minimizing any supply chain disruption.”
Since 2018, Damco has increased its focus on the air and ocean LCL logistics business. The 100-year-old 3PL came under the Maersk umbrella in 2005 when the container carrier acquired P&O Nedlloyd.
“During this time, it has become apparent through close customer engagements that the value proposition of Maersk can be greatly enhanced with the expansion of multiple modes of transport,” Maersk said in a statement.
However, since Maersk uses its own container assets, it will no longer pursue the full-container-load “multi-carrier” non-vessel-operating common carrier (NVOCC) service offering once provided by Damco, the company said.
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Europe’s online shoppers continue to desire high-end and specialty American-made products, but the difficult decision of whether to pay for expensive express service or go with cheaper, less definitive shipping through postal services cause many of these sales to fizzle.
That is why third-party logistics services provider Geodis said it has recently launched an e-commerce shipping service that provides a more comfortable price point and transit time between express carrier and postal services.
Geodis MyParcel offers a four-to-six-day, end-to-end transport service between U.S. retailers and European customers. The service’s all-in rate is cheaper than two-to-three-day international express and closer to postal rates, without the 8-to-12-day or longer transits, Ashwani Nath, vice president and global head of e-channel solutions for Geodis, told American Shipper in a phone interview on Wednesday.
Ashwani Nath, vice president and global head of e-channel solutions for Geodis (Photo: Courtesy)
MyParcel allows e-retailers to automatically validate delivery addresses, select customs tariff codes, provide a tax and customs duty calculator, offer an option to reschedule delivery, and track shipments door to door.
Nath said MyParcel can be easily integrated into e-retailers’ online ordering systems through APIs (application programming interfaces). The service appears as a shipping option to the European customer.
Another benefit to MyParcel for small e-retailers is the ability to directly control their transportation pricing and avoid paying commissions to online marketplaces for shipping services.
Geodis started MyParcel to serve e-commerce shipments from the U.S. to Europe. Currently, consumers in 27 European countries can use the shipping option when ordering U.S. goods online.
Geodis, so far, has signed up about a dozen U.S. e-retailers of specialty products, including apparel, herbal medicine, archery supplies, gaming technology, and tattoo ink, and more shippers continue to sign up daily, Nath said.
Currently, MyParcel shipments are funneled through Geodis’s operation at Chicago O’Hare airport and transported on board either Europe-bound passenger flights or the company’s own charter freighters to Amsterdam.
Nath said Geodis arranges expedited ground transport of MyParcel shipments from the e-retailer’s door to O’Hare and does the same between the destination airport to the customer’s door.
Early next year, Geodis will offer the MyParcel service directly from Los Angeles, New York-JFK, and Miami airports to Europe. Nath also said the company is looking to expand service in 2021 to e-retailers in Asia and Europe to serve U.S. e-commerce customers.
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Trucking industries across the world ubiquitously suffer from fragmentation within their markets, which has complicated efforts to ensure end-to-end visibility across logistics operations. In Turkey, one of the largest markets around Europe and the Middle East, the story is no different.
Roughly 95% of all trucks in the Turkish market belong to individual owners. With 92% of all freight moved inland being on the highways, the Turkish market contends with inefficiencies that can be reduced with better visibility into available capacity and volume.
Istanbul-based startup TIRPORT is solving that by building the country’s largest digital freight marketplace. Aside from providing a real-time and location-based digital platform, TIRPORT allows companies to manage, report and track the overall hauling process.
The startup recently introduced TIRPORT SSL, a tool that allows load owners to provide their end customers — the load receivers — to follow the end-to-end transport logistics in real time. Hakan Özçubukçu, co-founder of TIRPORT, explained that this was a game-changer in the Turkish trucking market, which is riddled with information opacity between load owners and receivers.
“Most of the individual drivers are not tracked by any vehicle tracking systems in Turkey, making most of the hauls untraceable,” said Özçubukçu. “Due to this, there is intense telephone traffic around back offices, trying to learn the stage of transportation and inform related parties.”
The conventional process of calling and emailing concerned stakeholders is exhausting and highly manual. The logistics forwarder calls up the driver asking for the load’s whereabouts but cannot be entirely certain of the truth. If routes lie across areas with low signal coverage, getting drivers on the phone might be a hassle. Ideally, with enough information on the load, the forwarder would call up the load owner with the details, who in turn connects with the load receiver on the estimated time of arrival (ETA).
By automating these processes, TIRPORT saves stakeholders capital and human resources. The company also digitalizes documentation that is required for the load haul, helping load owners and receivers to upload documents and verify information at the click of a button.
“Through the SSL link, customers can instantly access the vehicle’s location and see the stage of transportation. The ETA data can be used to make necessary preparations for unloading,” said Emre Capoglu, a business development specialist at TIRPORT. “The waybill and the contents are displayed digitally, thus preventing problems like faulty or incomplete delivery.”
TIRPORT also brought out its own debit card that works alongside its payment system. Özçubukçu explained that the Turkish trucking industry relied heavily on cash transactions, leading to higher operational costs that are also loaded with risk. With such cards, fleets can ensure that the cards only work for drivers matched to specific trucks, easing the process of transactions. For instance, these cards can be used in fuel stations and restaurants, with the back office getting a complete list of the transactions in real time.
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Ocean freight consolidators and forwarders have taken comfort in less-than-container-load (LCL) volumes and services in the U.S. trans-Atlantic trades, despite the ongoing economic headwinds caused by the coronavirus pandemic.
In recent months, more American and European shippers have turned to LCL services as a cheaper alternative to air freight and a way to counter ocean carrier service disruptions involving full-container-load (FCL) transport.
“Owing to the higher FCL and airfreight charges, freight forwarders on trans-Atlantic routes are opting for LCL to meet their cargo delivery commitments,” said Marc Stoffelen, executive director for ocean freight consolidator ECU Worldwide.
“In addition, there are cargo capacity constraints at the moment and this situation is likely to continue,” Stoffelen said. “As a result, LCL volumes will remain stable in the coming months.”
Greg Scott, director of LCL ocean services for C.H. Robinson (Photo: Courtesy)
Ocean freight consolidators serve as carriers to forwarders by co-loading LCL shipments from shippers into single container loads for transport by ocean carriers to overseas destinations.
These service providers were less certain of the trans-Atlantic’s market outcome when in March and April shippers on both sides of the ocean found their international business suddenly constrained by COVID-19 government lockdowns, rapidly rising airfreight transport rates and ocean carriers cutting back on their services.
“LCL volumes certainly took a hit in both directions during the peak COVID-19 shutdown period from mid-March through April,” said Greg Scott, director of LCL ocean services for forwarder C.H. Robinson.
“For imports, we saw increased shipment counts moving but at lower-than-average volumes per house bill of lading,” Scott said. “With a higher dependency for airfreight to move via passenger aircraft on the trans-Atlantic, a shift to LCL made economic sense for those who could handle the transit differences. This was especially true when airfreight rates spiked to over $10 per kilogram.”
Not the strongest, but dependable
Compared to the trans-Pacific, the trans-Atlantic was not the dominant container market, but it has been dependable to ocean consolidators and forwarders over the years.
Prior to the worldwide COVID-19 outbreak, the LCL market in the trans-Atlantic operated in a predictable pattern.
Shipco Transport’s International Cargo Terminals facility at Elizabeth, New Jersey (Photo: Shipco Transport)
“2020 started strong and better than 2019,” said Niels Nielsen, executive vice president for freight consolidator Shipco Transport. “As European countries started to shut down in March going into April, we experienced a drop in demand. That drop lasted a relatively short period of time as we largely saw volume return during May into June.”
At this point, Nielsen said more shippers and their forwarders started switching from full-container loads to LCL services due to smaller customer orders and costly reductions in air cargo capacity.
Robert Sutton, freight consolidator Vanguard Logistics’ regional vice president of sales for the U.S. and Canada, echoed that market reaction in the trans-Atlantic. “Restricted capacity and the rate escalation with airfreight have made room for the middle lane between traditional air and traditional ocean LCL,” he said.
The traditional second-half-year surge in trans-Atlantic volumes occurs in August, followed by a decline in September and October. Freight volumes then surge again in November before declining again in December.
“Europe has always had very steady volumes through the calendar year,” Scott said. “Higher-value products have a more consistent seasonality to them. For example, automotive, chemical and consumer-retail verticals all move in predictable patterns on this trade.
“The difference in 2020 is that we have not seen that peak surge in volumes in July and August that you would normally expect,” he said. “COVID-19 uncertainty has kept those orders and higher inventory levels low, resulting in a lower late-summer surge.”
The eastbound trans-Atlantic trade, however, remains flat and the ocean carriers struggle to secure exports from North America. On the westbound trans-Atlantic leg, however, a rise in exports is underway from the European Union and Middle East to North America, but capacity is constrained by blank sailings placed on ocean carriers’ headhauls.
“From a demand perspective, that remains normal both ways,” said Carmen Gerace, chief transportation officer for forwarder BDP International’s non-vessel-operating common carrier BDP Transport. “With that being said, we have seen a good portion of our client base look to optimize [freight] spend through LCL optimization programs.”
“Rate levels on the trans-Atlantic have been stable and predictable and aren’t fluctuating as much as other trades, allowing shippers to plan their supply chain costs long term between LCL and FCL modes,” said Jens Rehder, Shipco’s vice president of U.S. LCL imports.
Direct and expedited LCL services
Freight consolidators acquire container space from multiple ocean carriers and then retail that capacity to forwarders who manage the logistics of goods shipments on behalf of shippers. These wholesalers pride themselves on providing scheduled, price-competitive LCL services, even in the face of curtailed sailings by ocean carriers and more expensive airfreight.
“Our business was handled without delay throughout COVID,” said Chris Wilson, president of freight consolidator CaroTrans Global. “Our U.S. team did an exceptional job the past six months, and I think it actually provided us an opportunity to improve certain aspects of our business.”
The biggest challenge for consolidators in the trans-Atlantic is navigating blank sailing announcements from ocean carriers.
The trans-Atlantic has much shorter transits between the U.S. East Coast and European ports, compared to the American West Coast ports serving the trans-Pacific market.
Michael Troy II, chief development officer for Troy Container Line (Photo: Courtesy)
“When a [trans-Atlantic] client experiences a seven-day delay due to a blank sailing, it puts a lot of pressure on a supply chain that could be set up for only 12 days on the water,” explained Michael Troy II, chief development officer for consolidator Troy Container Line. “The demand for us has increased due to our clients’ need to find reliable weekly sailings within our mix of carriers.”
Recent actions by the ocean carriers have encouraged consolidators like Troy Container Line to launch additional direct services from various East Coast gateways, such as Chicago, New York and Atlanta, so they are not hindered by the blank sailings. “If one gateway is not offering the transit needed or has a blank sailing, we can still find a solution in other ports,” Troy said.
Some consolidators, such as ECU Worldwide and Shipco, are introducing so-called “expedited” or “express” LCL services to trans-Atlantic shippers and forwarders, a service concept that was launched earlier in the trans-Pacific to counter ocean carrier blank sailings and costly airfreight transport.
Although expedited LCL services are three to four times more expensive per cubic meter of freight than traditional LCL, they offer airfreight shippers that are currently pinched for capacity and seeing higher-than-normal air transport rates due to the coronavirus pandemic a rate that is two-thirds or three-fourths cheaper, if extra days can be allowed in the transit.
“As with the trans-Pacific express offerings, we use carriers with the fastest transit times; we offer late gates at origin CFS [container freight station] and we have dedicated drop-off lanes at the CFS to expedite that process,” said Christine Solorzano, Shipco’s vice president of U.S. LCL exports. “We guarantee top stowage on the vessel to facilitate earlier availability.”
Solorzano believes the trend toward expedited LCL will continue. “They will most likely become a standard, even as we move out of this current situation,” she said.
“This service is essential to those businesses who couldn’t get the capacity or didn’t need to purchase airfreight rates as a result of the passenger travel,” C.H. Robinson’s Scott said. “Cargo from Southern and Central Europe could take advantage of these services via Europe’s extensive LTL [less-than-truckload] network to the main loading ports.”
