For the past three days our team was busy at JOC in Hamburg, getting the low-down on the latest developments in the ocean freight sector. Of course IMO 2020 was the talk of the show, but there were also insightful discussions on smart containers, Intermodal networks and more.
We’ve pulled the highlights together in a few bite size pieces – enjoy!
Of all the topics discussed at JOC, IMO 2020 was the big one. This new legislation is effective as of 1 January next year and, if you haven’t already, you can expect to see more and more price increases on shipping lines and from forwarders due to increased costs.
However, Xeneta’s market benchmark for the last few years shows no clear link between fuel price and market price of container rates, so don’t accept increased prices without checking the market!
Other bits of best practice from the conference:
If you want to learn more about these functionalities, please reach out to our support team and we’ll help you to get started!
Smart containers are defined as containers that have tracking devices.
One of the benefits of using them are that operators and container owners can check on their utilization and use the data for planning. The key gain is that beneficial cargo owners can also track their shipments in real time, door to door. The data can also be used to spot opportunities and optimize the supply chain.
To give you an idea of how they are used, a majority of 41% smart containers are reefer containers, followed by a 35% share for regional/intermodal containers (especially in North America). The remaining shares are split between dry and tank containers. In total, around 2,5% of all containers are equipped with tracking devices. There are still challenges with regards to the battery life of the trackers, but also the ownership of the data. It looks like data ownership will lie with the party paying for the service and device.
The future for smart containers? It is estimated that by 2023, 7% of all containers will be smart containers, with a big gap between reefer and dry containers. For reefers, it is said that the number will raise to 80% by 2023. An exciting prospect that will likely lead to lots of opportunities for the industry to further optimize processes.
The European Intermodal network faces a number of challenges and not only, as you might think, with regards to quality and punctuality.
Various speakers and discussions at JOC suggested that the speed of change has increased due to various factors. Firstly, climate change, which demands an urgent reduction of CO2 and a rethink of transport modes. This includes a swift push from road to rail. In addition, climate change also directly impacts networks, for example, low water times on rivers will become more common, making barge transport difficult.
Not to forget about the Chinese investments and collaborations in and with Mediterranean ports, which lead to a switch of the intermodal routes from the North-West-Continent to Southern Europe.
On top of this, the infrastructure in place for intermodal transport seems to be stretched to its limits. Finding trained and skilled staff is also something speakers and attendees encounter on a frequent basis. Then on the other hand, there is also a certain skepticism towards using intermodal services on the customer side, as some consider it a ‘broken’ process.
So there are certainly challenges and bottle necks, but will this situation lead to a capacity crash?
The speakers emphasized that certain measurements need to be taken, such as developing much needed infrastructure, but also a better utilization of the existing infrastructure. Additionally, sharing data and best practices among stakeholders will help ease the current strain and develop technical solutions for example for low water barge moves. These initiatives will also go some way towards improving the industry’s image.
The speakers agreed that - should these actions be taken now – there is no need to fear a capacity crash.
For more on the latest insights, how they might affect you and how TenderEasy can help, drop us a line at firstname.lastname@example.org