Carriers should offer IT solutions

Carriers should offer IT solutions

LONG BEACH, Calif. -- Ocean carriers have invested millions of dollars to develop information technology for their own operations, and now they want to sell some of that technology to their customers.

Shippers are in fact turning to transportation providers for assistance in managing their supply chains. However, shippers are selective as to the technology they are willing to pay for and the services they expect carriers to provide as part of the transportation package.

"If your core processes are IT driven, you are ready to externalize these solutions to meet your customers' supply chain needs," Ravi Ramakrishnan, vice president of applications developments at APL Logistics, told the Eye for Transport North American Technology forum Wednesday.

Shippers expect carriers to provide basic services such as booking and track-and-trace. But carriers will charge for information technology that goes beyond basic services, and shippers are increasingly receptive to the idea of paying for those services, said Duncan Wright, manager of strategic sales and development at Horizon Services Group. One example: value-added services that optimize cargo routing and reduce total transit times from origin to destination.

Sun Microsystems handles 150,000 transactions a year, and its logistics department does not have the resources to keep track of all of those shipments, said Sergio Retamal, supply base development manager. Carrier-owned logistics companies do have the resources, and since their customer base is so large, they should be able to offer technology services at a lower cost than individual shippers could develop on their own, Retamal said.

The key for carriers is to offer their customers the level of service they need. Most shippers do not want to know the location of their shipments every step of the way on a 15-to-20-day ocean voyage. Rather, they want to be notified about key events in the shipment process, such as when their containers reach the U.S., when they clear Customs and whether a shipment will be delayed. "My job is to look for exceptions," Retamal said. "Your job is to have real-time visibility so you can manage your business," he told the carrier representatives.

That's one reason why radio frequency identification devices will be a hard sell among shippers of ocean freight . "If the shipment spends 20 days on the water, do you really care where it is at any given time?" Retamal asked.