HomeInsightsSmart containers revolutionize the shipping and logistics industry

Smart containers revolutionize the shipping and logistics industry

Technology is entering into the area of the supply chain

The volume of cargo transported in container boxes has risen from around 102 million metric tons in 1980 to about 1.83 billion metric tons in 2017. About ninety percent of cargo transported by sea is carried in standardized container boxes, whose concept of containerization and intermodal transport have had a tremendous impact on supporting global economic growth by revolutionizing supply chains and logistics. Containerized cargo transport has been playing a leading role as the backbone of international trade development. 

The continuous technological progress has prompted the shipping industry to increasingly move toward its digital transformation over the years and embrace various initiatives to benefit the supply chain stakeholders, enable performance monitoring, and offer improved decision-support tools. For example, tracking devices with interconnected sensors provide international supply chains with smart systems and tools utilizing all the information gathered from them to monitor service performance. 

In the wake of the industrial digitalization strategy, key stakeholders have adopted and implemented such solutions that aim to upgrade conventional freight containers with onboard tracking and monitoring capabilities, security devices, and other multiple sensors, eliminating inefficiencies. Simplification, standardization, and harmonization of processes and procedures on the international level provide them with direct insights into the complexity of international trade logistics. Changes in procedures through technological adoption and smart solutions can boost the supply chain performance, enhancing the level of interconnectivity. 

Given the important role of container shipping in the global world of today, the initiatives that can improve the international supply chain performance have a great potential to facilitate global trade procedures. The monitoring devices installed on containers capture various measurements, such as GPS positioning, temperature, humidity, vibration, radiation, etc., that are transmitted in real-time for further analysis. Besides data obtained from the environment of containers, positioning data can also be obtained from IoT and added to the shipment record using Distributed Ledger Technology such as blockchains.

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Smart containers boost the supply chain performance with underlying technologies

Smart containers are shipping containers that are fitted with permanently installed smart monitoring devices and multiple sensors enabling them to interact and communicate. This means that shipping lines and cargo-related stakeholders can have access to container data coming from the source regardless of whether the container is on a vessel, in a yard, or at any point during the journey. 

Application development paradigms are shifting from a conventional style where applications are developed standalone to an approach where applications and services are developed on a service-oriented architecture, which is a way to make software components reusable via a service interface, utilizing common communication standards in such a way that they can be rapidly incorporated into new applications without having to perform deep integration. Therefore, the adoption of an SOA can accelerate application development and enables new business processes to be implemented quickly from existing services, allowing the implementations to be adapted to meet changing requirements.

SOA services interact using common application programming interfaces (APIs), which should be architected with SOA support, such as JavaScript Object Notation (JSON), REST, or Simple Object Access Protocol (SOAP). As services can be shared and reused through an SOA, service users can query the registries to discover the available published services once the service providers publish descriptions of their services in registries. 

Standardization are the keystones to making shipping containers smart

Considering the delays having a negative economic impact on global economic productivity with the average global schedule reliability of container shipping about 50%, prior notification of delays could cut shippers some slack to prepare for the unexpected event by making alternative plans. Digitalization enables carriers or third parties to be able to provide additional data to shippers and freight forwarders according to ETA. However, the lack of a common language across carriers raises the problem of data quality, meaning that container shipping requires a common approach to technology and common definitions for data and processes so as to make information exchange between parties easier. 

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The lack of interoperability between different IT solutions puts cargo owners at a competitive disadvantage without visibility in container shipping. Achieving end-to-end, real-time visibility into a multi-modal supply chain requires a unified approach to exchange data. Creating transparent, unambiguous message exchange standards is critical to yield the maximum benefits of the smart containers. API is the modern standard for interoperable digital communications, allowing different web-based systems to communicate with each other in real-time. In this regard, smart containers necessitate a shift to API technology. The adoption of API-based digital standards will enable shippers and other stakeholders to receive the real-time data they need to make better decisions along hauling. Without the appropriate standards, the deployment of technologies would be difficult. 

Smart container electronics can be added and retrofitted to all types of existing containers. Various technologies contribute to smart containers to enable information gathered via multiple sensors attached to be utilized wherever and whenever needed. IoT-enabled smart containers can help provide businesses with valuable insights. The sensors of smart containers gather vital information as to the storage condition to alert shipping carriers when situations become unfavorable for stored items. Shipping companies will analyze the data captured by the sensors with an on-site network to generate optimal decisions. A large amount of data is collected during the entire transportation process, from which various important insights can be extracted. 

Blockchain provides the path to secure smart container services

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Blockchains are a rapidly evolving arena of information technology with great potential for delivering significant advances in security, reliability, and cost-efficiency. Blockchain technology, known as a Distributed Ledger Technology, creates original electronic records that cannot be copied or altered with entries being corrected or updated by new entries. Using encryption technologies, blockchain enables participants to trust transaction integrity and share necessary information. Moreover, since its network information and its rules of operation are maintained on the distributed network with a consensus mechanism, no single entity controls all the devices or the information or even dictates the rules. Blockchain, as an underlying technology, lends itself to processes that involve multiple participants, contacts, level of approval, legal contracts, and security requirements. Therefore, after data collected from smart containers is enriched and processed using AI techniques to provide value-added predictive service for supply chain stakeholders, the resulting information can be secured in a blockchain, which gives trustworthiness to all stakeholders.

The various benefits of adopting Smart Container solutions

Smart containers will enable stakeholders to have better visibility, collaboration, and coordination and help to identify bottlenecks, enhancing their processes, and reducing lead time and costs. The smart container data available in real-time also facilitates efficient fleet management and enables operators to secure a value-added service and mitigate risks. In the consignment process, though the stakeholder is the Beneficial Cargo Owner (BCO) that requires more timely information about consignment, the BCO has little information about the consignment during hauling, leading to a passive role. However, smart container information may allow the BCO to take an active role in mitigating risks in a timely fashion. Moreover, smart containers allow better inventory management that can avoid out-of-stock situations. At the same time, door-to-door visibility with smart containers may lead to increased cargo security and better service level. 

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Smart containers may play a role in enhancing the operations onboard ships by allowing the crew to remotely monitor the temperature of the reefers, reducing the toil of the vessel crew. Container owners and leasing companies can also have the benefits of managing their container inventory more efficiently. Smart container solutions may provide the ETA at the terminal, which could help improve intermodal operations at the terminal or port. The terminal operator also has the responsibility to locate hazardous goods art at its terminal in accordance with the rules of the dangerous good of segregation, defined by IMO. Smart container solutions can provide the terminal operating system with reliable data on the physical position of the container, hence ensuring the correctness and completeness of the dangerous goods information. 

UN/CEFACT’s smart container project to develop international multi-modal standards

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The United Nations, through its Centre for Trade Facilitation and Electronic Business (UN/CEFACT), supports activities dedicated to improving the ability of business, trade, and administrative organizations, from developed, developing, and transitional economies, to exchange products and relevant services effectively. The UN/CEFACT has developed the data exchange standards required to promote and simplify the deployment of Smart Container solutions. Its Smart Container Project has delivered formal global Smart Container Business Requirements Specifications Standards and a standard Smart Container Data Model. The project aimed to promote the usage of Smart Containers in multi-modal transport and integrate smart container data into different industry processes of stakeholders during the end-to-end chain. 

UN/CEFACT, in concert with other open standardization organizations, will continue to develop and maintain standards for Smart Containers to ensure they support the business requirements of stakeholders in the future. 

Interoperability and collaboration are fundamental to facilitate the wide adoption of smart container solutions

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All initiatives involving smart containers will be successful when standards allow the whole ecosystem to maximize the benefits of smart container solutions and ensure that sharing standardized smart container data among stakeholders will facilitate massive deployment and wide adoption of smart container solutions. The availability of standardized smart container data offers end-to-end visibility, hence rendering more efficient, safer, and eco-friendly integrated international trade. 

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