ITM talks to Globe Tracker about the recent partnership with Hapag-Lloyd to produce ‘Hapag-Lloyd LIVE’ smart container tracking solution. To read the full interview and our exclusive features from industry experts, see our latest (July/August) print edition of ITM.
In an initial effort, the company is retrofitting its entire reefer fleet of some 100,000 containers. The program is designed to fit customers’ needs, and Hapag-Lloyd aims to develop commercial products in close collaboration with its customers in order to promote the solution.
The product’s features will be gradually released for use as the entire reefer fleet is being equipped. Moreover, some ‘Hapag- Lloyd LIVE’ features may also be made available upon request to dry container customers, aspiring to enhance supply chain transparency.
The smart reefer solution uses the latest loT technology, and it has been developed by Globe Tracker. T-Mobile Austria (now Magenta) and Ericsson will also be supporting this project by providing global connectivity and IoT infrastructure.
What was it about Globe Tracker’s technology that made Hapag-Lloyd choose you?
In the market there are several vendors which all have technology that communicates to the refrigerated container, and in this specific case they took into account the current technology. But we also have Ericsson as a global logistics partner. They are responsible for what we call ‘the Vice Management’. So, they manage the SIMs and communications as a layer in the backend of our solution and because they are able to support infrastructure to millions of devices it became relatively easy for them to look at a project of 100,000. Hapag-Lloyd could feel comfortable knowing that that part was covered, and I think that was a key piece of it.
Can you tell us a bit about the technology that was chosen by Hapag-Lloyd?
I can only comment on the fact that we use cellular communication as the base technology to communicate the information from refrigerated containers to Hapag-Lloyd. We have a customised user interface directly, which we created for them and we use a backend application called ‘Application Program Interface’, where we can actually also stream data directly into their systems on the backend.
Our technology has been developed in the US. We are in current expansion mode as we have gained a lot of customers in the last eight weeks or so. We have announced agreements with contracts such as Dole, one of the largest fresh food companies in the world, Samskip which is a major short seas shipping line, and our partnership with Hapag-Lloyd. So, we have been successful in finding a recipe in both technology and customisation that suits the lines and we are continuing on that trend and we expect expansion with two or three other shipping lines this year. We should be close to ten by the end of 2019.
came out last year.
Why do you think that real- time GPS tracking software for vessels are so important to the industry?
We have to create a product that is a two- way product. In order to get engagement from the shipping lines you can engage them based on a future of selling data or even sharing data with customers. They need to be able to see that economies have scaled by using technologies, so, improving efficiencies, lowering maintenance and repair costs and things around that nature. So, we put together a very detailed ROI model that details the kind of savings that are possible from the containers. And we demonstrate those savings and features within our trial parameters. Once we are engaged with a line we are able to show them the gains that they can receive and then they can extrapolate that on a larger scale and see whether that is operationally viable for them.
You, as a shipping line, are also able to monitor quite closely the parameters of the products that your customers are shipping around and are able to predictably look at things. You are more aware, and you can intervene with situations and alarms more quickly because the data is always coming in to you. I think that is an integral aspect of our software.
Also, there is a trend continuing with end-to- end services. Hapag-Lloyd has a big driven Vision 2023 that discusses a high quality, customer focused solution, and that’s all Globe Tracker has ever been. We are highly customer focused and are heading towards an end customer visibility program. We have aligned our technology to match the ethos of what the lines are doing and by doing that, they can see a future in our product with them. We are in a sense, their partner as these are long term relationships where you work hand by hand very closely to help develop and customise solutions for the lines.
Do you think customer focused technologies is due to an increase in demand for efficiency in the supply chain from the customer?
Absolutely. There are things that everyone, not just us, are looking at. You certainly see the benefit behind a pallet level sensor in relaying information from inside the cargo area, whereas a lot of these data logging devices are typically forensic in nature, meaning you can only map the trip after the trip is complete. For a shipper they don’t get any notifications in real time. When installing our devices, what they are enabling is infrastructure, so they are outfitting each of their containers with cellular infrastructure which can talk to the sensors and that can give you vital information, while in transit, of all the goods you are carrying. We think that is an expansion into the visibility aspect that is allowing the shipping line to get closer to their end customer to get a tighter bond, which is again, closer to that end strategy.
Yes, cyber security is obviously always a big concern, and something that we take very seriously. We have many mechanisms in place to bring safety and security to our systems, and of course, with that, device communication has also core limitations that actually prevent, or mitigate, the risk of a larger attack. But it is hard to say that anyone can actually prevent cyberattacks, because even the most sophisticated systems in the world have issues.
The question is: ’How damaging can it get?’. We are using high end technologies and communications and encrypted transmissions and so on, but at the end of the day all systems, even the LAN database systems have to be intact as well. Our immediate need here is limiting the two-way communications, so that when you want to control the settings of a refrigerated container remotely, those are the things that you want to be looking at. That control is important.
With a reefer fleet of some 100,00 containers, have you foreseen and prepared for any other risks?
Not all these containers are moving at the same time. A big shipping lines reefer fleet may have four turns a year per unit. If you think about that, it means that there is a significant amount of idle time across the fleet and of course, there are a lot of time spent on ships, where that particular time is the majority of the voyage. The overall exposure on land, where typically a problem may occur, is a lot more of a percentage.
We are at a pace of acceleration now. If you look at data that comes from the segment from the ocean carrier, it has typically not been so prevalent. Yes, they can tell you when it’s on your ship, yes, they know when it’s lifted off the vessel but that can rely on the terminal. With a smart container, you can actually tell all of those things from the device that on the unit. In terms of visibility across the whole supply chain you have a lot more of a real time pulse of what that is. I think that in itself will also bring some interesting efficiencies relative to big data and ETA and even the way people plan their supply chains. If you have congestion at certain ports in certain times of the year you may end up choosing to re-route your cargo to a different port, that may be something that you can notice for a certain time. These kinds of uses of the data become extremely important when you talk about overall supply chain. If you look at the perishables market, it’s already moving to the direction of technologies. You can scan a barcode and get the history of fresh produce. What we suggest with sensors and so on is that we can actually give you temperature compliance in the whole change, from picking. You could get a comprehensive road time visibility report and how fresh the product is and how it was maintained.
Would you say that IoT is steadily becoming a necessity in the supply chain?
If you look at the three technologies appearing on the scene, blockchain, machine learning/AI and IoT, we feel that IoT is a prerequisite to the aforementioned two. IoT can accelerate machine learning and blockchain because you can get sensor data in real time that will allow you to make more effective decisions with both those products. It is more actionable than what they get today, which is based on EDI messaging which is too slow. You may get messages from a port in Europe that comes right away, but you may find that a port in parts of Asia or Latin America may come after a day, a week or even two weeks. This inequity of the data makes it hard for the machines to adapt.
We did. It is Hapag-Lloyd’s solution, called Hapag-Lloyd ‘LIVE’. We do power that solution, so we are the backend of that solution. They were offering live demonstrations at the event, which was successful for them and it got a lot of customer interest.
Do you see any issues surrounding global politics (Brexit or the US/China trade war) impacting the technology industry?
In terms of our technology and deployments, what we see as a trend is, as people start embracing the technology, they see there is a lot more that can be done with it. Trade wars are an unfortunate thing, as most would agree that pre-trade is pretty good for all the parties involved, when you do have that it creates a surge in ebbs and flows.
They create imbalances, such as tariffs congesting ports, because people over order to compensate the fact that they think they may be taxed. Although this brings a short-term surge to that port, it is also overwhelming for the ports and terminals. Ebbs and flows are not always stable. The uncertainty is what causes the ripples. As far as the technology goes, we see it helping no matter what the case is.
Relative to Brexit, the people that have infrastructure within Britain have a lot more to deal with than those who are not within the UK. Rules get changed, and people have to adapt, but one thing I can say about the technology being GPS based is that you absolutely know what thresholds and countries you are crossing, when you are crossing, and how long you’ve been there.
Politics aside, the visibility is still key.