Shipping Industry Behind on Real-time Location Data

According to research by the Industry Trade Group, there is a yearly average of 1,390 ships that have been lost at sea in the last three years. In 2018 alone, about 46 ships stretched out as far as 1300 feet were lost at sea. Insurer Allianz described this number as being about 55% lower than the 10 year average. Taking these statistics into consideration, one would only naturally want to know “who is paying the big price?”, “what is really the reason for this huge deficit in the shipping industry?”. Given that about 90% of shipping today is sent by the ocean, this is a huge price to pay.

A huge contributing factor to this problem is said to be the lack of real-time location data. This means that at most points during shipping across the sea, there is uncertainty about the actual location of the cargo. It goes as far as saying that most of the contents in the ship are unknown until they are unloaded at their destination. This gap is only but leave shipping prone to crimes like piracy, drug running, terrorism, spoilage of perishable cargo.

Dark and Disconnected
For an industry responsible for moving over $9 trillion worth of goods yearly, this seems like a dumb dilemma. It seems unreal that policy makers and venture capitalists choose to totally ignore the existing communication void. There is not yet a clear reason why this major industry is still slow to incorporate modern tech innovation.

In 2009, FedEX introduced SenseAware shipping containers which tracks the conditions at which cargo is transported at: light exposure, temperature, humidity and other factors. This was a move to ensure that goods are transported well. The containers came with sensors that have the capacity to monitor real-time location and status. This technology however accepted by the Food and Pharmaceutical Industry, has not been adopted by the Ocean Shipping Industry.

The major cited explanation for the hesitation in adopting these tech is the cost of the sensors and tools. Another hindrance is said to be the interoperability of the device. While these excuses may sound quite reasonable, they are not enough. For an industry worth trillions of dollars, cost of installation is not reason enough. This is especially taking into consideration the annual losses due to lack of this communication tech.

The Future of the Shipping Industry
While there is a wide communications gap in the industry and however slow-paced the improvement is, it is happening. Denmark’s Maersk, one of the biggest shipping firms, has taken a step to adopting and equipping its cargo ships with built-in monitoring technology and sensors. This would only set them apart from other shipping firms and increase customers’ confidence in them. If other firms see them profiting from this technological advancement, there is a high chance that they would join in.
So, the idea that the future of the shipping industry would be more data efficient, is not shut down. The uncertainty is about how fast this change would occur. We can only be optimistic.