In Combined Transport, loading units run through a complex supply chain. Because of multiple legs in the journey for example first and last mile operations with trucks; loading, and unloading of containers in terminals; long haul runs on trains or ships. At first glance, this is a perfect digitalization use case, but in reality, the adoption of asset tracking devices for loading units (containers, swap bodies, trailers) in intermodal transport is very low. What are the reasons and how can they be overcome?
During visits of some of the biggest hinterland terminals in Europe, it became apparent that there are no tracking devices installed on most of the loading units. As a result, if there are no tracking devices, companies do not generate real-time data and are unable to benefit from advanced analytics. If the goal is a smart supply chain, then seven essential building blocks need to be conceptualized and implemented to create successful, scalable and secure connected products. Sensors represent an important aspect of building block two.
A study published by KPMG in February 2016 presents that only 2% of logistics companies are running smart supply chains today. One main reason is the low operating margins in combined transport, caused by the complexity of the operations and fierce price competition with road freight. Meaning that combined transport operators struggle to generate profits and thus are hesitant to invest in digitalization initiatives. Secondly, many freight forwarders already track their shipments and have a legacy IT system in place, which is often not very well integrated with other involved actors along the supply chain. Due to a variety of stakeholders that are responsible for the planning and operation of the transport, it is not obvious which company should bear the cost of additional sensors and software integration. However, the seamless tracking and monitoring of the particular loading unit is an essential building block to introduce the internet of things to the railways and benefit from big data analysis to manage and optimize the entire intermodal supply chain.
Another point is that ISO containers, which are the standard loading unit for global trade especially for ocean freight, are simply very cheap and thus account for 95% of hinterland transports. A 20-foot container is priced at $ 1,300 and encircles the globe four times a year. It’s quite common to lease a container per day from a container rental company. These leasing companies supply millions of containers and store them in depots all over the world. In this context, the rental fee for a single container starts at 1 US dollar per day. Therefore, sensors are required to be extremely cheap and need to be able to circle on global trade routes while not being recharged with energy. Sensors would also need to be installed by the manufacturer or leasing company before the container starts traveling the world or as an alternative, during regular overhauls.
Today, literally hundreds of asset tracking solutions exist on the market for road transport, but most do not fulfill the above specifications and are therefore not ideal for global intermodal supply chains. To read an evaluation of the pros and cons of multiple tracking solutions, visit this article Sharing telematic data to improve the intermodal freight.
One significant disadvantage of autarkic GSM based trackers is the short life span and high overall cost for unit operation, mainly caused by the battery and required provider-based long distance connectivity and localization. The mobile connectivity like 2G/3G/4G requires an expensive (€ 50) and energy demanding modem. In addition to that, each device needs to connect via a telecom provider causing annual operational costs of € 200 per SIM card.
Another approach is RFID tags. eSEALs are used for freight security and container identification and come at a unit cost of € 2. However, the total cost for such a system is unevenly distributed between terminal operator and freight forwarders. As terminals need to bear a substantial invest for supporting RFID infrastructure (scanning bridges, readers, etc.), they incur significant investment but are not the primary beneficiaries of the solution. That is why terminals rarely invest in RFID technology.
A promising new technology called beacons is, however, emerging with a unit cost of € 5 to 20 per sensor. Originally this technology was developed for indoor navigation to calculate the position of the mobile device via triangulation. In the context of logistics, the triangulation is used the other way around. Imagine a scenario, where every beacon sends their unique identifier (UUID) with a distance up to 100 meters and is configured with a unique loading unit code (e.g. BIC and ILU). The Beacon doesn’t have an own GPS module or long distance communication like 4G. Instead, the devices would connect to nearby routers/smartphone/tablets to use their GPS signal and internet access. The benefits are obvious, as the Beacons carry low unit costs and leverage existing infrastructure, initial investments and operational costs are kept to a minimum.
Furthermore, the low-energy Bluetooth 4.0 standard has a significantly enhanced battery lifetime and consumes 80% less energy compared to previous generations. Hence, a battery lifespan of multiple years in realistic for operations. If required by container overhaul cycle, the battery life can be further enhanced using an energy harvesting technology like a 3x3cm solar panel or a device leveraging the Piezo effect, to recharge battery packs like Revibe Energy.
The deployment of beacon technology in transportation is not a world novelty. Let’s look at the exciting solution of TrackBlue. Track blue’s devices connect with the ATADEX OverPass software to emulate the electronic bill of lading. The solution integrates an XYZ-Accelerator sensor for better energy management and shock/damage detection. Also, the customization of the beacons with additional sensors (temperature, humidity, light) can be relevant for freight forwarders, who have to comply with certain regulations in the supply chain.
The next development in the Bluetooth and beacon market is highly promising. Bluetooth’s next trick is the ability to build meshed networks to broadcast the signal from one sensor to the next. In this case, the Internet gateway device doesn’t need a direct connection to all loading units, but the signal is forwarded from one device to another. Therefore, meshed networks could work very well on ships, trains or within terminals.
Another enabler for logistic and supply chain optimisation could be Googles Nearby notification feature. Nearby Notifications is allowing to send the location of an asset via a mobile device in a native way (part of the Android OS). Google offers developers an open cloud-based platform and SDK Eddystone for Android and iOS.
However, for the beacon technology to take off, some challenges still need to be addressed. For example, the signal reflection in metallurgical environments is still a topic that needs further testing. Bluetooth operates at frequencies between 2,402 and 2,480 MHz, or 2,400 and 2,483.5 MHz. In this case, the signals will be reflected off the container’s surface. Especially the spacing in container stacks could result in the imprecision of signals. Meaning the signals wouldn’t be able to leave the container stack, and therefore the error rate through the signal reflection would be quite high.
To solve this issue, a hybrid approach with a narrow band could be introduced like for example the Long Range Wide Area Network (LoraWAN). Lora operates in a bandwidth of 868 MHz and 915 MHz(US) and can reach the receiver devices inside a container stack. The single microcontroller board LoPy is a very interesting application for a hybrid communication strategy (BLE, Lora, WiFi).
Whether you can stomach the cost of implementation or not, the simple truth is, at some point, you may not have a choice.
With growing competition, you can’t hope to stay afloat through competitive pricing alone – you need a more persuasive differentiator that’ll give you an edge over the competition.
The efficiency + predictability that real-time tracking bring to operations will not only help you deliver better service to your clients, it’ll allow you to handle exceptions and disruptions better.
While clients may remember the 6 months of solid hassle-free service you gave them, they WILL remember that one time you dropped the ball.