The US Federal Maritime Commission (FMC) has proposed that the maritime industry could learn something from pizza restaurants on how to prevent supply-chain congestion.
FMC commissioner Carl Bentzel has proposed a shared “track and trace” transport data system to accomplish this goal, much in the same way they let customers know where their pizza deliveries are and when they will arrive.
“The best that could be said of the existing systems of information supporting the ocean-linked supply chain is that they are ad hoc,” he wrote in a 65-page report on the proposed Maritime Transportation Data System (MTDS).
“I like to contrast this with what happens when I order a $10 dollar pizza delivery.”
He said that his local pizza shop gives him an order confirmation and lets him know when his pizza is being cooked, sent out for delivery and is approaching his house.
“And sometimes I even receive a picture confirming delivery,” the commissioner wrote.
Shipping, on the other hand, falls well short of communicating where its cargoes are in the supply chain, causing snarl-ups and delays that could otherwise be prevented, Bentzelsaid.
“The discrepancies between the two visions are remarkable,” he wrote.
“The MTDS will set a standard for information disclosure and keep the delivery mechanism harmonised.”
An open cargo data system that can be shared between the vessels and the terminals will “create an environment of greater accountability for stakeholders moving and receiving cargo”, Bentzel wrote.
“Put plainly, a mandated standard will enable all stakeholders to be on the same page,” he said.
The proposed system emerges out of the FMC’s Maritime Transportation Data Initiative (MTDI), an effort set up to explore transparency in the supply chain.
“The biggest take away from the 18 public meetings held as part of the MTDI and the information gained from the 80 supply chain experts who participated, was that for the supply chain to operate efficiently, there needs to be uniformity on how data is shared and communicated as well as to address rising container volumes and inevitable future supply chain disruptions and cargo surges.”
The supply chain’s inability to handle a tidal wave of consumer goods from China to the US due to pandemic-driven pent-up demand caused container ships to back up by the dozens in overwhelmed ports, the report said.
As a result, shippers faced $5.3bn in detention and demurrage fees, according to an FMC audit.
“This amount is only a fraction of the real economic costs, which encompassed increased freight charges, congestion, and delays,” the report said.
“However, the greatest levels of economic loss were downstream production costs resulting from delays in shipping.”
The MTDI suggested that liner operators that service the US should adopt a uniform system of data sharing and communication, instead of working separately as entities with different business models and cultures.
“All major international carrier lines servicing the United States provide functionally similar services, the culture, business model, and how each communicate information is anything but uniform,” the MTDI said in the report.
“Putting these varying elements into a port or terminal with shrinking capacity creates a recipe for congestion.”
