TradeTech Delivers The Accountability Supply Chain Participants Demand

I am CEO of Nexxiot, an innovative TradeTech company driving responsible logistics technology.

When it comes to trade and cargo transparency, some say everything is working fine, so why change? Others believe in the power of digital transformation to create new value. With increased supply chain scrutiny, the global megatrend is siding with innovators. The choice is to wait to see what happens or invest in technology to protect the flow of cargo across the world.

There are many active stakeholders in the global value network of international supply chains. With carriers, shippers, cargo owners, ports, terminals, customs, 3-5PLs, freight forwarders and finance partners involved, how do we manage the flow of information and ensure comprehensive accountability on the topics that matter most?

Dangerous Cargo

Container vessels move between continents making multiple stops. The complexity is too great, and resources are too limited, to check every load. Yet dangerous cargo and lack of oversight can result in disaster. When shipping oxidizers like fertilizers, corrosive chemicals, acids and flammable petrochemicals, if something goes wrong, the consequences are dire. Foodstuffs like flour, coffee or cocoa are highly sensitive to extremes in temperature and humidity, creating risk around quality. As demand for electric vehicles rises, more lithium batteries are shipped around the world, which can cause dangerous fires.

Some cargo is sensitive to environmental conditions, while other goods are intrinsically risky. The illegal wildlife trade makes an estimated $7 to $23 billion every year, much of it transported in shipping containers that evade inspection. There have been 16 serious container ship fires in the past five years, some resulting in significant environmental disasters as well as loss of life. The X-Press Pearl burned and later sank off the coast of Sri Lanka, resulting in 1,680 tons of plastic pellets being released into the ocean. According to a A report, it’s the largest plastic spill in history. The fire resulted from leaking chemicals caused by opaque processes and a lack of accountability at multiple stages. What can be done to resolve this?

The type and conditions of the cargo itself are not where the risks end. Shippers make declarations of cargo in the booking process, but the process requires a great deal of trust. Ocean carriers use this documentation to make stowage plans and pricing adjustments, as well as decisions on weight control, metacentric height (GM), vessel stability, hazardous goods management, “vanning” surveys, customs declarations, preshipment inspections and crew safety. But cargo is often misdeclared by the shipper. Whether it’s to reduce costs related to risky contents, reduce shipping time or just through errors, the implications are considerable. With millions of trips per year, it seems like a lottery to guarantee transport without incident. This situation prevents the supply chain from being truly safe, reliable, efficient, predictive, clean and secure.

Digital Solutions Create Transparency

When things go wrong, symptoms are confused with cause. The Suez Canal was blocked by a “desert wind” rather than the intrinsic risk of a narrow channel with huge volumes of trade passing through. When vessels are stalled off the port of Los Angeles, it’s attributed to “a frantic holiday season” rather than lack of access to data. Luxury goods are imitated by fraudulent actors, undermining brand integrity. Pharmaceutical products can be damaged or rendered unusable when conditions are not controlled or monitored en route. What type of technology can solve all these issues?

Better data is required at each step of the process, as consumers demand to know where raw materials come from, regulations on safety, provenance and sustainability increase and shippers attempt to get financing for transport and insurance to cover risks. Each stakeholder requires part of the information to do their job, so an elegant, integrated solution is best. Tradetech is accelerating the deployment of digital solutions, providing tools used by multiple participants in the supply chain. Quality self-powered sensors collect data; zero-maintenance gateways transport data to the cloud; a powerful cloud platform interprets data and provides vital insights. Cargo is physical and sensors record physical parameters but by digitizing processes the entire journey is vastly improved.

I estimate that by 2025, 95% of cargo assets will be equipped with sensors. With these tools, interventions are made earlier and risk assessments support decisions on where to focus resources. Modalities are aligned to select the most sustainable route and investigations become less protracted. Each partner can be held accountable for the quality of the job they do.

Building A Culture Of Accountability

Visibility and accountability are not always popular at first, but those who value quality are pleased to have their high standards noticed. Those who act in bad faith will be exposed. While there is some resistance to change, the technology is in place to make improvements that will create value for all.

The shipping industry must take a moment to consider what kind of culture it wants to promote. Will it be characterized by constant improvement, where safety records get better year by year and spills and damage inflicted on coastlines are eliminated? Will it be one where consumers feel confident in the products they select, and where insurance claims are easily processed and rapidly executed? The eyes of the world are on global supply chains like never before. With the benefits of data-driven transparency stacking up, should we defer decisions any longer, or is now the time to act?

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