The reason why container tracking is so important comes right down to this: There’s tons of uncertainty within the shipping process. First-party companies fill and lock their shipping containers, and pay the shippers to haul it away, with the expectation that it’ll be taken to a port, loaded onto a ship, and successfully delivered to its intended destination. But any time there’s a complex process with many steps, there’s potential for issues to arise.
For example, a ship may make a port call to drop off containers in Djibouti, and a primary party’s container could also be accidentally offloaded. The liner might not notice this error until the ship leaves the port, which could lead on to delays of several months to get the shipping container on another ship and to its intended destination. If the primary party are often notified of the error via a container tracking system, they’ll be ready to plan for the delay. Similarly, liner companies that are transporting many shipping containers on behalf of varied first parties have a vested interest in ensuring that the cargo that ought to get on the ship is on the ship—which are often confirmed by container tracking.
To fully understand the advantages of container tracking systems, you initially need to understand party logistics and therefore the unique container tracking considerations for every party.
LOGISTICS PARTIES
Shipping container tracking would be a breeze if one party was liable for all aspects of shipping. If that were the case, they might simply put a little locating device on all containers and add a local gateway on each ship. The gateway would devour this tracking data and report back to a central IT hub on the ship; from there, the situation data might be transmitted out via GPS to satellite.
But unfortunately, it isn’t that straightforward when it involves container shipping; the method involves four different parties who are liable for very various things within the shipping process.
- First party (1PL): the primary party is that the company that has created goods or merchandise that must be transported from one place to a different via shipping container. (In some cases, the primary party can also be the receiver of the products .) First parties care about container tracking because a delay or disruption in shipping their containers can cause major disruption to their supply chain.
- Second party (2PL): The second party is that the shipper or hauler, like CMA CGM, Maersk, or Hapag-Lloyd. Shippers care primarily about container tracking because they’ve been paid to maneuver something and are liable if they don’t do so successfully.
- Third party (3PL): The third party—known as a “logistic provider”—coordinates the shipment of products on behalf of the primary party by using various second-party shippers.
- Fourth party (4PL): The fourth party is an independent body that helps the primary party organize their supply chain across multiple third-party logistic providers.
For the aim of this text , we’ll talk in-depth about both the primary and second parties (the third and fourth parties aren’t actively involved in container tracking, but they are doing use the info heavily).
FIRST PARTY CONSIDERATIONS
Container tracking would be significantly easier if the primary party actually owned the vessel—or even owned the container. Most vessels and shipping containers are owned by the liner. due to this, there’s a multi-tenancy issue in container tracking: it’d be the primary party’s pallets during a container, but another company—perhaps multiple companies—own the container, the ship, the chassis, and therefore the truck which will play a task in transporting the primary party’s goods.
Therefore, the primary party’s biggest challenge is determining where to feature a tracking device. Faraday’s Law tells us that if you set wire mesh around a transmitter and therefore the size of the mesh holes is smaller than that of the wavelength of the radio wave , the signal won’t be ready to get out. Because shipping containers are large metal containers, they act as a Faraday cage—so a wireless signal isn’t easily ready to pass through the box. Therefore, the sole option available for a primary party who wants to try to to container tracking is to connect a tracking device to the outside of a container (for example, on the container lock).
SECOND PARTY CONSIDERATIONS
The second party—the liner—has a completely different set of container tracking considerations. First, the liner owns the ships and thus has the luxury of being able to install some infrastructure therein—but not all liners own the containers that are loaded onto their ship. If this is often the case, the liner would wish to carefully manage when the tracking device is placed and faraway from the container.
Second, it’s important to think about that the liner might not have an excellent deal of incentive to trace beyond the manifest level unless the cargo is of extremely high value. If the cargo is effective enough to warrant container tracking, liners might consider what’s referred to as exception tracking. this sort of container tracking would allow the liner to supply tracking as a service to first party customers. for instance , the liner could configure a container tracking system to send alerts if anybody of the 200 containers on the manifest hasn’t been loaded onto the ship two hours before its scheduled time of departure .
BENEFITS OF CONTAINER TRACKING
RETURN ON INVESTMENT (ROI)
When determining ROI for the primary party, you’ve got to require into account the value related to ensuring there’s no disruption in your supply and distribution chain. In other words, what’s it worth to your organization to understand that a shipping container has been delayed and won’t reach an intended destination on time. Will having advance knowledge (e.g. before your shipment doesn’t show up at the proper place, at the proper time) allow you to use other methods to satisfy your obligations and keep your supply chain moving? this stuff should be considered before you decide on a container tracking system.
For the second party, the ROI is usually easier to calculate. for instance , if the liner decides to try to to exception tracking, they simply won’t leave a port without ensuring that each one containers are on the ship. If you recognize what proportion it typically costs once you leave behind cargo, you’ll calculate the return on investment you’ll see from exception tracking. Your calculations must also consider the value of lost customer relationships due to the mishandling or loss of cargo during transport.
PREVENT ADDITIONAL OPERATIONAL COSTS
When a primary party experiences problems moving goods and merchandise through the availability chain and eventually to distribution, this will dramatically impact operational costs. While container tracking can’t solve the matter of added expenses thanks to shipping issues, it can prevent additional operational expenses by providing the primary party with a “heads up” regarding a delayed, lost, or compromised shipment.
LOSS PREVENTION & ANTI-THEFT
“We had it on our manifest, so it should get on the ship—but it isn’t.” this is often a press release no first party wants to listen to (and no liner wants to have to pass along). A liner is usually held responsible for lost or stolen containers, so a container tracking system can provide valuable information regarding what may have gone wrong.
There are some ways companies have tried to resolve for the difficulty of container tracking, but inevitably, the answer comes right down to adhering a tracking device to the outside of a shipping container and communicating out its position either through GPS to GSM or satellite, or through a more localized short-range wireless system. We’ll explore both in chapters two and three, below.