The Weekly Roar

Are We In the Golden Age of Logistics Technology?

In this week’s Roar, we’re taking a trip to the bleeding edge of logistics technology and investment, yet one more attempt at easing West Coast congestion, a rise in blank sailings, trouble for intra-Asia and Africa shipping, and a ‘stellar year’ for air cargo.

source: wsj.com

source: wsj.com

Talk about (and use of) logistics technology is everywhere these days, and there is plenty more innovation to come. According to a report by Transport Intelligence (Ti) on the top technology trends for 2022, the use of cloud computing could mean the birth of a network that could react, replan, and reschedule without human intervention. Since this technology is rented or licensed, it’ll make it easier for new businesses to enter the market but at the same time provide opportunities for existing supply chain providers. This is nothing but good news for shippers.

Returning to some same old, same old, the ports of Los Angeles and Long Beach are still dealing with congestion. The latest solution is to incentivize carriers with the goal being to increase the number of containers they load over the amount they discharge. This new plan, which is still in development, is referred to as an over-match plan. If approved, it would replace a plan to impose fees on long dwelling containers approved in October ‘21 but so far has not been implemented.

However, according to the COO of the Port of Long Beach, the planned formula is complicated and can’t be applied across the board. Regardless, improvement is necessary, as this continued congestion is having a global impact. Carriers everywhere are struggling with schedule reliability, while shippers are paying higher fees despite late deliveries. In spite of various strategies, such as those mentioned above at the ports of LB and LA, there has been no significant improvement in on-time reliability.

As the East-West trade lanes continues to boom, services on the intra-Asia and Africa routes are paying the price. Combined, the capacity of ships that trade between Asia and Europe or America and Africa decreased by 6.4% in 2021. This shift in global coverage is cause for concern and there is some question about whether regulators should be looking into the issue.

While the doom and gloom continues for marine cargo, new data points to a stellar year for air cargo. And the International Air Transport Association (IATA) feels that it will be more of the same for 2022. When compared to pre-COVID levels (2019), the demand for air cargo increased by nearly 7% in 2021 but by nearly 19% when compared to 2020.

For the rest of the week’s top shipping news, check out the article highlights below.