Category Archives: Uncategorized

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Moody’s: Port Automation May Not Always Deliver Results

I found this article via Gavin van Marle of Loadstar. It’s not a surprise that automation may not deliver the results its backers were touting.  So much depends on the external systems, such as the computer planning, the labor system, the users’ habits and preferences, and the timing and size of the workload presented.  If they’re not all considered and planned together, results will not be as good as they could be.

The labor arguments we see nowadays surrounding automation at ports are another fascinating aspect.  There hasn’t been any national conversation here in the US around the relation between automation and jobs.  The present political environment here in the US works against it.  This is probably true elsewhere as well.

Some jobs probably ought to be taken over by machines. Some probably shouldn’t. And what do we do for the displaced workers, or for workers who want to participate in the automation boom, but don’t have the skills yet?  there needs to be a broad conversation around automation and workers.

That’s how I read the Pier 400 controversy at the Port of Los Angeles. The recent turndown of the project by the commission asks for an extended conversation between unions and the port about just this man-machine question and how it should affect the workplaces.  It’s a good conversation to have. Intransigent positions aren’t going to help at all.

screenshot-Maritime Executive 2019-05-21  via Moody’s: Port Automation May Not Always Deliver Results

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New paper published on Standards and carrier differentiation

My colleagues Chris Clott, Rob Cannizzaro and I just published a paper in the Journal of Shipping and Trade.  In it we propose a new standard called ServiceTerms for classifying container cargo on six ACTION dimensions which are relevant to downstream supply chain service and performance (and to some extent upstream actions).  The six dimensions are

  • Accessorial
  • Customer Service
  • Transport
  • Inventory
  • Orders and paperwork
  • None of the above.

ServiceTerms would function something like INCOTERMS in supply chain contracts. They would provide a standard which every participant in the supply chain– ocean, rail and truck carriers, port terminals, warehousing, drayage, distribution, and so on– would know about in advance and determine how they were going to handle the goods to meet the standard.   The standard includes a specification of limits on the time spent in each step of the journey, based on the total length in time committed to.  These time standards would allow each of the actors to plan their operations to meet their time requirement.  Aiming  for the standard would coordinate the supply chain actors with only limited need for them to work together except on the handoffs. (And these are typically between just two adjacent players in the network.)  The actors in the chain would be enabled to innovate their own individual  techniques to meet their goals.

Like INCOTERMS there would be no specific penalties for failure.  However, there would be measurement and reporting of performance (time in service) at each stage of the end-to-end delivery.  Individual contracts could provide penalties, negotiated by the participants;  everyone involved could keep track of whether a participant was doing his or her bit to meet the standard; or whether some were agreeing to a standard with less than total commitment to making it happen for individual cargoes.

Alliances have been touted as supply chain improvements because they coordinate a few ocean carriers on legs of a journey. But supply chain thinking tells us what matters is the overall source to destination performance, and that requires more involvement, particularly from downstream players such as rail, barge, truck, warehouse, and “last mile”.  To improve their abysmal service performance, alliances have to find ways of coordinating the entire delivery process.  A standard for the process that shippers, handlers,  and carriers can agree and coordinate on is a central element.

We see alliances as entities capable of incubating the ServiceTerms standards, much as the International Chamber of Commerce does for INCOTERMS.   ServiceTerms could then be included in a standard contract for delivery. The specifics of the ServiceTerms  standard should be negotiated during the incubation process; and the process should allow for individual variations by contract, much as INCOTERMS do.

If the majority of cargo went according to the standard, all the supply chain players would work together to make sure the overall term was met.  That should improve everyone’s focus on the goal of making customer service a standard rather than an exception in the container business.

 

 

   via Standard setting and carrier differentiation at seaports | SpringerLink

Cite this article as:

Clott, C.B., Hartman, B.C. & Cannizzaro, R. J. shipp. trd. (2018) 3: 9. https://doi.org/10.1186/s41072-018-0035-0

A pdf of the article is available here.

Which Carriers Should You Use?

Here’s a nice study from MIT students on choosing a portfolio of trucking companies to carry your goods.  I’m not sure it reveals much revolutionary, but the analytic methods are solid and confirm some basic intuition about the situation.  

http://supplychainmit.com/2017/07/20/which-carriers-should-you-use/