HAMBURG — Forecasts for an uptick in the use of sensor-enabled ocean containers by shipping lines over the next few years varies widely depending on views of how integral the resultant technology will be to managers of containerized supply chains.
A discussion on the benefits of adopting smart container technology at the JOC Container Trade Europe conference this week yielded a wide range of projections for what percentage of the global dry container fleet might actually be equipped with such devices in the near future.
Martin Dixon, director and head of research products with maritime consultancy Drewry, referred to a recent report he conducted on the subject in suggesting as little as 1.25 percent of the world’s dry boxes might be outfitted as smart containers by 2023.
But Kathryn Delecluse, smart container commercial project leader with Mediterranean Shipping Co., said her company is aiming to equip 30 percent of its dry containers with sensor technology by about 2025. The company currently has committed to 50,000 smart containers by 2020, using devices manufactured by Marseille-based technology provider Traxens.
Traxens provides the hardware to equip boxes with location and condition monitoring and offers training to shipping lines wanting to offer a smart container service to their customers. The company also provides an associated analytics platform to help customers compile and analyze the data generated by the devices.
Thomas Nouvian, deputy director of Traxens’s maritime business unit, said he believes as much as 10 percent of the global container fleet will be outfitted as smart containers by 2023, whether using Traxens devices or those of its competitors.
“Some carriers, like MSC, will be very active, some less so, and some won’t have installed smart containers at all,” he said.
Dixon noted during a session at the conference that sensor technology has already permeated the global reefer container fleet due to two factors: a broader need by shippers to monitor the condition of temperature-controlled cargo and the reality that the power source used to refrigerate such cargo can also be used to power devices to track its location and condition.
Cost-effective smart containers needed
No such infrastructure exists for the movement of dry containers, which means smart container makers must get creative in building models that are cost-effective for shipping lines to invest in, and shippers to use.
Those considerations include battery life, ease of installation, reusability of the device, and the ability for data generated by the sensor to be relayed via a satellite-based or internet-based network. The Traxens device is designed to be reused for years and conveys data while at sea via a connection to the ship’s communications systems.
Buyco, a Marseille-based shipment management software provider that also makes one-time-use trackable container seals, is aiming for a segment of the market that needs basic information about the location of the container.
“It depends on how smart your container needs to be,” said Buyco CEO Carl Lauron. “Traxens is like Einstein, but some BCOs [beneficial cargo owners] don’t need to have that level of cleverness. This will cost a few euros per TEU and that’s enough for [shippers]. You can track a big missing point. In the future, we’ll have segmentation of solutions in this space. Cheap solutions, and very smart containers.”
Delecluse, for instance, works with shippers to identify opportunities to use the Traxens devices to eliminate costs. The thinking has been that smart containers only work economically for shippers of high-value goods or ones with vulnerable supply chains. But Delecluse said there are shippers that don’t fit that profile but deal with supply chain costs that could be rectified by knowing where their containers are to a more precise degree.
She described a metal scrap shipper that had large exposure to detention and demurrage costs. So even though the shipper’s margins were tight, it had a cost that could be solved in part by better visibility.
“That would have been the last shipper I thought would have been interested in the Traxens device,” Delecluse said. “We look at what are the BCO’s biggest needs. There will be different types of smart containers. What’s extremely important is to build standardization and have devices that can communicate among themselves.”
Nouvian, meanwhile, said any projection of smart container proliferation in the dry container fleet must recognize that there are trends impacting supply chains that were not there in the past.
“You can’t look at historical trends to forecast where this is going,” he said. “We’re just at the start about the value that sensors can deliver in the dry market, the benefits versus the cost. The cost of the tech inevitably will go down, massively. Twice, thrice, four times below what it is now. Most of the stakeholders of the ecosystem don’t understand the full benefits to the smart container in their ecosystem. And that’s because most BCOs don’t know how to use data to benefit their supply chain. The value perceived is going to be much more understood. A real trend will happen, and the forecast will have to be revised.”