Partnerships between cargo visibility providers are a sign that no single platform has all the necessary data. Photo credit: Shutterstock.com.
This story appears in the print edition of the Jan. 4, 2021, Journal of Commerce Annual Review and Outlook.
Technology experts are pointing to a need for shippers and logistics services providers (LSPs) to home in on data quality over functionality when it comes to incorporating cargo visibility tools into the management of their shipments.
Gone is the era when sales teams at standalone cargo visibility providers and third-party logistics providers (3PLs) had to justify investment in visibility to prospective buyers. Instead, the terms of engagement tend to center around the predictive nature of the visibility, how that data can aid logistics teams and adjacent functions such as finance and customer service, and the quality of the data.
“Seventy-five percent data reliability is not good enough,” Kevin Valsi, CEO of Los Angeles-based visibility startup OpenTrack, told JOC.com in mid-2020. “Software automation can solve track-and-trace, and it’s a shared problem across the industry, whether you’re a cargo owner, a third-party logistics provider, or a drayage operator.”
OpenTrack has built a US import container tracking automation platform that, unlike traditional visibility tools, is not solely reliant on data feeds from specific parties such as container lines and terminals and is meant to work in the background, not interrupting a shipper’s or LSP’s use of a booking or transportation management system (TMS).
According to logistics software providers, this approach is emblematic of a few trends that are shaping the visibility market going into 2021: reliance on discrete software for individual modes or geographies; use of systems that don’t interfere with existing systems; and migration to machine learning or automation-based tools that don’t depend on humans to manually track milestones.
Collection constraints
While broad supply chain management software providers such as E2open or Infor Nexus and global TMS providers such as Haven or BuyCo endeavor to provide visibility across modes, the reality is that standalone providers generally continue to specialize in one mode.
To wit, Ocean Insights partnered with FourKites in 2019 as sales channel partners because Ocean Insights is a specialist in container tracking and FourKites specializes in surface transportation tracking. In fall 2020, Terminal 49, a container visibility platform, developed an application programming interface (API) that it is selling to 3PLs and to other software providers.
That, in and of itself, is a sign that no single platform has every piece of data it needs under its own umbrella.
“You cannot wait for your clients to become mature on this,” Marc Dumortier, digital solutions manager for the Paris-based forwarder Clasquin, told JOC.com. The implication is that 3PLs need to be the collector and conduit of freight visibility to shippers.
“Either our clients want to get perfect tracking or not, but more and more on [requests for proposal], you get these requests, and you have to be ready,” Dumortier said. “We don’t want to just be opportunistic. It’s important for us to think not only about what we are doing today, but what we can propose to the clients.”
Valsi said it may well be that the market expects 3PLs to be the clearinghouse for all the various components of an end-to-end visibility picture, as well as the provider of quality control for that data.
“Forwarders can better invest [in visibility solutions] because of the aggregation of volume, in ways that importers can’t,” he said.
Another example of this is the New York-based non-vessel-operating common carrier (NVO) OL USA using software from Blume Global to provide multimodal visibility.
“Depending on how large the customer is, we’re building an interface with our system and theirs,” OL president Alan Baer told JOC.com. “When you look at someone bringing in 400 TEU a year, that responsibility falls to us a lot.”
The Blume software is designed to not only track freight, but proactively identify alternate transport options if there is a disruption. Blume has been seeking to move beyond being seen as a pure visibility provider and instead as one that powers more execution-oriented decisions.
The data question gets more interesting when you factor in the range of asset-tracking, sensor-based providers such as Traxens, Arviem, and Globe Tracker. Theoretically, data from those providers is unassailable, but while the cost of those devices is quickly falling, they haven’t yet gained widespread traction. Sky-high freight rates in 2020 were hardly helpful in convincing shippers to invest in yet more expensive ways to track dismal ocean carrier on-time performance.
But it all comes back to the underlying data. Shippers need visibility data in the first place because of disruptions that skew published transit times relative to reality.
“Because [estimated times of arrival] from our supplier are often inaccurate due to multiple reasons, from sailing delay to customs hold to congestion at the railyard, our customer service team often ends up giving customers wrong information about product availability,” Yuske Abe, director of distribution for Yokohama Tire (Canada) told JOC.com in September when describing the benefits of using Terminal 49, which aggregates and cleanses data from container lines and terminals. “There was no system in place to keep track of container release dates.”
Contact Eric Johnson at [email protected] and follow him on Twitter: @LogTechEric.
