During the six days in March when the massive Ever Given container ship lay stuck in the Suez Canal, the entire world felt the impact as an estimated 60,000-plus cargo containers, stuffed with a plethora of goods bound for every corner of the globe, piled up on either end of the canal. As reported in the Wall Street Journal, my company’s data showed retail goods delayed 11% compared to the previous week. Consumer packaged goods and manufacturing shipments were similarly delayed.
Worse, even with the logjam long since cleared, the ripple effects of the Suez disruption continue and likely will for months, hampering everything from drug production and housing construction to the availability of any number of consumer goods.
It was the latest “unprecedented disruption” in a year of unprecedented supply chain disruptions — which should hammer home to ocean shippers everywhere that putting new systems and processes in place to manage supply chain volatility is now essential.
So what needs to change to equip international ocean shippers, and their vast partner networks, for the modern era? I’d propose several things.
International ocean shipping is, by its very nature, the most complex and opaque mode of freight transportation. And the industry’s reliance on archaic manual processes isn’t helping matters. In a recent survey of 160 senior ocean supply chain leaders, more than half admitted that they did not use any software for freight management — not for managing quotes, not for managing bookings and not even for managing the byzantine and onerous documentation requirements of ocean shipping.
In light of the last year of near-constant supply chain disruptions, this is no longer feasible. Digital transformation has to be ocean freight shipping’s top priority.
I’ve written previously about the distinct advantages of cloud-based multi-tenant solutions for ocean freight logistics.
Today, the vast majority of ports and terminals use outdated, on-premises software that locks data inside silos. Cloud-based solutions enable real-time access to data — and the upstream and downstream communications between supply chain partners that are critical to mitigating the impact of disruptions. In the case of the Ever Given, real-time cloud-based systems could have alerted stakeholders with revised ETAs and facilitated the rerouting of shipments to alternate ports.
Today, the various ocean liners publish their sailing schedules three to six months in advance. One disruption can throw them all into disarray. It’s time for ocean liners to collaborate on more flexible, adaptive scheduling, publishing on a weekly or even daily basis, with the ability to push out real-time updates in response to events on the high seas.
The huge number of parties involved in ocean shipping, combined with the large number of ports and country-specific regulations, all add up to a documentation hairball for shippers. A shipper that hasn’t completed the right set of documents for any given port can look forward to escalating government fines and detention/demurrage fees — sometimes in the millions of dollars — while containers sit anchored in place.
International ocean shipping calls for more standardized documentation. We can start with more standardization across U.S. ports, underpinned by cloud-based systems that provide trading partners with secure access to critical documents and automated templates that can streamline the creation and modification of purchase orders, courier instructions, bills of lading and other critical documents.
For a global supply chain buffeted for more than a year by “unprecedented” disruptions, the list of lessons learned is growing long indeed. But if there’s an overarching lesson to be had, it seems to me to be this: Uncertainties happen. And they seem to be happening with greater frequency.
The bottom line? We can’t prevent disruptions. But there is a great deal we can do to mitigate their impact. It’s time for international ocean freight shipping to put its full weight behind modernization, automation and collaboration. That way, when the next crisis arises, we can act swiftly and intelligently in order to keep goods moving through our international waterways.