Across the US, importers and exporters are at the mercy of terminal and port efficiency. Shippers must rely on parties that are faced with geographical constraints, altering how much freight can be moved through their boundaries. A 2019 Survey found that 81% of supply chain professionals identify the terminals as the chokepoint that creates the most friction in logistics. This is perhaps fueled by the perception that terminals can be compensated for inefficiency (demurrage). But make no mistake, there are massive opportunities for improvement in port efficiency, but success will only be achieved if constituents from across the supply chain work together to solve a wide range of issues. Three major opportunities to improve port efficiency are—
Increasing Transparency Through APIs
Data sharing has never been a component of traditional terminal and port operations. For far too long, the ports have been stuck using archaic technology and haven’t been able to offer data in effective ways. BCOs could benefit greatly layering in track and trace technology, but the dominant solution, electronic data interchange (EDI), leaves something to be desired. There are more than 2,000 variations of EDI to choose from. Forward-thinking terminals that wish to meet the needs of their shippers have a nearly impossible moving target to hit, a literal 1 in 2,000 chance of getting it right.
Enter APIs, a more modern programming language that enables disparate programs to more easily share information. APIs, which largely gained mass adoption around Salesforce, can even solve the EDI issue, connecting various EDI languages and enabling real-time data transactions.
Solving the Chassis Catastrophe
Many of the steamship lines offer shippers access to free port chassis for a day when a ship arrives. The challenge, however, is that these chassis are often late in returning to the ports, meaning there are not enough to go around. The result is a tremendous drain on the entire supply chain. Containers are left to accrue demurrage fees, often in the thousands of dollars per container, while carriers are essentially required to utilize a set of chassis that aren’t always readily available, dramatically limiting their earning potential and productivity.
Adding complexity is the fact that not every chassis is made equally; some companies offer GPS or LTE connectivity, allowing shippers and carriers alike to easily learn the location and condition of a chassis. AIM Chassis is on the cutting edge of chassis management. As with APIs, these companies are demonstrating a larger appetite for data sharing to alleviate many of these issues. However in many cases, the terminals are very limited with regards to how much impact they can have; chassis agreements and ownership are not within their overall sphere of influence.
Scaling through Scalable Solutions
Nearly every US port has geographical constraints; there is simply no room to expand beyond their current boundaries because the land around them is already owned and in use. This means ports must re-imagine the traditional means of scaling. Automation, which is incredibly expensive, is one approach to increasing throughput. Another, however, is to find space that’s not exactly at the port but is close enough that containers can be easily moved, transloaded, and returned rapidly. Companies like SecureSpace are offering AirBNB-like capabilities and access to yards.
Another less costly approach is to expand hours of operation to keep up with drayage demand. Ports on the west coast have utilized fees from drivers to enable extra staffing to remain open for more hours and increase throughputs.
The NEXT Advantage
NEXT Trucking has taken a 360º approach to solving congestion at the ports. On the technology side, NEXT has built a solution that connects more than 2,500 various EDI solutions through API, removing one of the major hurdles terminals face in creating transparency and enabling shippers to further leverage their EDI investments. Chassis management issues have been alleviated through the use of AI; chassis management is nothing more than a complex mathematical equation that NEXT has cracked through a new program called Chassis Management, which is being trickled out this month and into the new year.
NEXT has also pioneered an approach that merges technology and real estate, setting up yards just miles away from the ports of Los Angeles and Long Beach. In partnership with the terminals, NEXT utilizes peel piles to move containers through the ports more rapidly.
The results have been tremendous:
- Our customers see a 167% increase in containers pulled per truck
- We’re decreasing environmental impact by limiting the amount of time trucks idle while waiting to get in and out of the ports
- We’re cutting demurrage fees out of the picture