Supply Chains- More Blockages, and Bad Data

Container shipping has been in the news lately- I would say that confusion is reigning supreme, with numerous sources quoting various cargo flow metrics and prices for the movement of boxes on major trades. At this point, I am getting multiple emails per day about online platforms for keeping track of, and optimizing (still need clear to me what the precise definition is) cargo flows. Maybe there is a better way. Changes are certainly in the air; I would highly recommend a Seatrade Maritime podcast where a top executive from one of the liner majors (who heads up something called the Digital Container Shipping Association, or “DCSA”- which I must confess was a new one for me). One of his points was the Covid outbreaks accelerated digital trends that had already started. As always when the subject is data, I remind myself (and, most importantly, the readers), that data architects and boffins need to be thinking about standardization. Yes, the carriers could possibly get on the same page (or whatever the blockchains guys call it), but then- what about the cargo side? And where does ESG fit in exactly- with the big name brands being scrutinized (and trying to adjust the freight payments to consider degrees of green-ness).

Standardizing trade, though digital means, is happening now. Those who get it right will reap huge rewards. My friends at McKinsey, who I quote sometimes, have said: “…differentiation may require looking beyond the boundaries of the organization to digitally enabled ecosystems with interconnected services that fulfill a variety of users’ cross-sectoral needs in one integrated experience.”

Wow- a digital ecosystem- now we are talking! But, these marvelous inspirational quotes do not always hold water. Indeed, they fly in the face of actual business practices. We have quotes from various industry experts who point out that a “digital twin” is not a substitute for real movements of cargo. This past week, the cargo community got very lucky when a serious port blockage at Savannah, Georgia (USA) was avoided. A large container vessel had gone aground in the channel leading to the port (now attracting attention as containerized cargo has been diverted from the U.S. West Coast). According to reports that I was skimming, the vessel was refloated in a matter of hours (not days- as in the “Never Ever” in the Suez Canal, or weeks as in the case of the “Never again, please”, which got stuck outside Baltimore USA)- fortunately not blocking the channel.

The point is that the supply chain (the real one- not the digital one), and this includes the ships at harbors and terminals, is over-crowded. The good news, if you can call it that, is that the “recession” which appears to be on the horizon, is reducing demand and therefore easing pressure on cargo flows. But even here, the  “experts” don’t agree on what data to  look at- and, what it’s saying. Last week, the research arm of one of the top maritime and logistics stock franchises, issued a stark criticism of one of the top logistics information platforms- whose data analytics were indicating a sharp drop in cargo movements (and a big drop, therefore, in the fortunes of logistics “names” under coverage).

Maybe, as we get standardized data around the trade flows, the quality of information- which is, after all, the grist for economic forecasting, may just improve.