Logistics in a Tightly Connected World. Where Do We Go From Here?

By Janet Pucino

My entry into the ocean logistics industry began in 2016 as the CIO of a leading global non-vessel operating common carrier (NVOCC) specializing in less than container load (LCL) shipments. I saw many similarities to the entertainment and bioscience industries where I previously held senior technology positions in the sense that those business sectors relied on supply chains and were also shipping products in various ways to customers. Of course, the products themselves and underlying technology platforms needed to deliver the products were vastly different, but the fundamental business objectives were the same – quality products, satisfied customers, and regulatory compliance.

What really drew me to the global logistics marketplace were the complex networks of shippers, ocean carriers, air freight carriers, freight forwarders, less than container and full container service providers, warehouses, truckers, and railways that all played a role in moving and storing shipments around the globe. All these businesses are specialists in their sector and require expertise in labor regulations, customs regulations, safety, equipment operations, material handling, and port regulations in the more than 800 shipping ports around the world.  In 2019, the World Shipping Council reported that 30% of the top 50 busiest ports were in China. That wasn’t ‘new’ news to the forwarders or the NVOCC’s.  But it would soon foretell to the world, the dire consequences for businesses that depended so heavily on one country for both export volumes of raw materials and goods, as well as import volumes of consumer goods.

Technology innovations
When I entered the industry, the logistics sectors were never really known for leading technology innovation. Historically, the logistics sectors were rather closed to each other, opting to build their own platforms and imposing their own business rules for inter-operability which fragmented data flows across the sectors.  However, I witnessed an accelerated pace of technology adoption over the last 5 years.
Some of my first capital expenditures were directed towards implementing new platforms for data integration, disaster recovery, information security and content management.  As a service provider, my company needed to mirror the pace of industry changes as our customers and partners began shifting their intent to increase transparency across the shipping process through data integration. Accordingly, our primary focus also shifted to leveraging our new integration platform; sharing as much data about the shipments and our services, such as manifests, charges, or booking and shipping status, with as many customers and third parties that were willing to do joint development with our teams.  Making it easy to share data was the main goal - and that alone - kept the project managers, integrators and developers moving forward through the challenging and unique complexities of each integration.

Large freight forwarders also began implementing software services based on block chain to manage invoicing and cash receipts from the dozens of participants handling shipments in the chain, and companies in every sector began sharing their rates and available capacity with data aggregators, those software vendors that offered to aggregate the data so shippers could ‘shop’ for the best deal directly through their preferred operating platforms.  Warehouses began standardizing their operations, capturing electronic dock receipts upon arrival and sending notifications to shippers when goods were on their way to their final destination.  They were also testing dimensioning systems to eliminate the manual work of measuring the size of goods and to improve their co-load optimization in containers.  The Port of Long Beach, among other ports, began automating port terminals - implementing robotic equipment to unload containers – which significantly reduced truck congestion at the port which in turn reduced fuel consumption.

Where do we go from here?
It took a global Covid19 pandemic and global economic crises to illustrate the flaws in the 21st century business models. The lack of diversity in the supply chains devastated production. Solely relying on a single country with 30% of the worlds’ busiest top ports crushed the global economy. According to the Port of LA, March 2020 year over year TEUs (twenty foot equivalent units) decreased by 23.77% for exports and 25.89% for imports.  The estimated value of all 2019 cargo reached $276 billion. If a 20% - 30 % reduction in cargo continues to trend for the remaining months in 2020, it will be another huge loss to the global economy.

Can technology innovation help build a better future for the logistics sector?  The simple answer is yes.  Just as CIO’s design disaster recovery architectures and build in redundancy for their technical footprints, they can help businesses focus on their data flows, strengthen data integrations across systems, and tighten data sharing with business partners to more quickly establish diverse alternatives.   The various sectors in the logistics industry can, and should be, on the forefront of offering diverse solutions to their customers. But business models will have to fundamentally change. Cost will be a factor in making any significant shift to how companies run their supply chains and deliver goods, but as we’ve seen, the world can no longer afford to source and build large scale facilities around a single location, or around a few select tradelanes and ports. 

To learn more about LCL shipping, please check out Vanguard Logistics.

Janet Pucino is an experienced Information Technology (IT) advisor, leadership specialist and author. She has held numerous senior level positions throughout her 30-year technology career and developed a keen focus for optimizing IT investments and leading organizations through change. She holds an MBA from the University of Chicago Booth School of Business and an undergraduate degree from Northern Illinois University. Janet is passionate about leadership development within organizations, particularly for women, and served multiple terms as a member of the Leadership committees for the University of Chicago Booth Advisory Council and Northern Illinois University Foundation Board of Directors.

Janet’s leadership and industry experience includes:
·       CIO, Vanguard Logistics – Global Ocean Logistics company specializing in LCL shipments
·       CIO, Prolacta Bioscience – Bioscience company specializing in nutritional products for neonatal ICUs
·       CEO, Deep Canyon Media – Consulting firm specializing in leadership development and CIO services
·       IT Governance Officer, VP Office of the CIO, VP Worldwide Application Development and Director of Enterprise Architecture and Planning, Warner Bros. Entertainment Inc. – A leading global film, television, and animation entertainment company
·       CTO, Art Center College of Design – Renowned transdisciplinary design college specializing in transportation, product, graphic, and digital design


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