As market disruptions and instability hit all-time highs, the pressure put on ocean freight shipping companies reached a breaking point when it came to container tracking and monitoring. As reported by CNBC, ocean containers are also at an all-time shortage. As of March 2021, rates were significantly higher per container than years prior: “Spot rates are up to about $6,000 per container compared with the usual price of $1,200.” And according to Bloomberg, over 3,000 containers have ended up at the bottom of the sea over the past year. In fact, more than 1,000 containers were lost during the first quarter of 2021 alone. The accidents and higher-than-ever rates disrupt supply chains large and small, costing millions for U.S. retailers and manufacturers, including mega-corporations such as Amazon and Tesla. Something must change to enable better ocean shipment management, and at the heart of this issue is the need for better ocean shipment tracking.
Why Ocean Shipment Tracking Is in Such High Demand These Days
There are a host of reasons for the sudden rise in accidents involving ocean cargo shipping lines, as well as the spike in rates. Aside from changes in climate and weather and the subsequent impacts, the most significant factor contributing to this current situation is the stark increase in consumer demand.
With the rise in popularity of e-commerce, fueled by higher-than-ever demand following pandemic-related shutdowns and supply crunches, cargo ships must work twice as hard to keep up with ocean container status. As ocean shipping trends show, this has been difficult as most ocean transportation companies cannot simply add more ships to the routes. That’s paired with ongoing strife relating to limited drayage capacity for inland moves and trouble merely keeping up with demand. So, the solution has been to run routes faster and more often and load each ship with more containers than ever before. The increased movement means that these large containers and massive ships are at an increased risk of issues arising due to poor container tracking processes. But proper ocean shipment tracking in real time could help to reduce problems. And it can help shippers avoid a few difficult conversations with shareholders, such as trying to answer these questions:
- “What is demurrage?”
- “Why are our demurrage fees rising without reason?”
- “Why isn’t our drayage plan working correctly?”
But let’s explore what the whole process looks like to grasp how this could happen.
For example, an overloaded ship will take longer to unload, increasing the risk for per diem detention and demurrage charges. Additionally, shippers and beneficial cargo owners (BCOs) are more likely to experience trouble with finding available drayage carriers and possibly impact future outbound sailings by forcing rolled containers as well. It’s a self-propagating cycle that results in an endless series of adverse effects for everyone. And it’s generating even more interest in real-time ocean shipment tracking.
Failures in Current Ocean Container or Shipment Tracking Methods Cause Missed Opportunities
Shippers miss opportunities to maximize profits and take full advantage of market demands because of disruptions within the transportation supply chain. These issues can lead to significant delays at the port, and shippers often face detention and demurrage fees for failures to account for changes to the estimated time of arrival (ETA) whether or not the reason for those changes is within their control. Carriers or port authorities levy these demurrage fees for containers that sit at the ports after free storage time elapses or for the late return of equipment. Specifically, detention per diem charges are assessed for a late return of equipment (such as an empty container) to the dock, effectively holding up the return of that container to the port of origin.
Many shippers receive these charges for breakdowns in the supply chain that have nothing to do with them and that they have no control over. When looking at issues such as these, it becomes clear that current ocean shipment tracking methods are not working and need drastic improvements to accommodate recent market volatility.
How Enhanced Visibility Allows For Faster and Easier Ocean Shipment Management Across the Board
Enabling advanced visibility within ocean shipment tracking systems and protocols relies on innovative technology and up-to-date data tracking and response protocols. Improving logistics and shipping basics can help streamline the entire process and improve end-to-end visibility. And a few ways to apply technology to increase visibility include:
- Using Application Programming Interfaces (APIs), which allows two or more applications to seamlessly share data in real-time container tracking data, thus improving communication and response times while eliminating the need to update multiple systems and track numerous log-ins.
- Leveraging smart containers that connect to the Internet of Things (IoT) and apply GPS-enabled technology to provide real-time container status updates. This enables shippers to optimize inland drayage moves to reduce risk continuously.
- Using mobile applications that allow shippers and carriers alike to access information, share bills of lading, provide proof of delivery, and sign for deliveries quickly and securely. This further reduces confusion over executed shipments and streamlining the booking process for drayage moves.
- Using artificial intelligence and big data analytics to continuously identify, analyze the potential impact of, and plan accordingly for potential risks throughout ocean transit.
Ultimately, improved visibility and real-time automation allow for faster and easier shipping and tracking across the entire supply chain, especially for ocean cargo and its inevitable impact on over-the-road (OTR) transportation.
Tap the Benefits of Innovative and Technology-Driven Ocean Shipment Tracking Today
Outdated methods of shipment tracking and monitoring have created a perfect storm for ocean freight disruptions and losses. The increased commercial pressure for the ships to arrive on time and carry maximum loads at all times only compounds the problem. Meanwhile, issues arising from equipment shortages, crowded loading terminals, capacity difficulties, lack of effective communications, trouble with scheduled shipping routes, and extended deadlines drive increases across demurrage and per diem detention rates. That can and will impact ocean shipments. The solution to the current ocean freight situation is technology-driven ocean shipment tracking systems. Request an OpenTrack demo to learn more about how your organization can bring order to ocean container tracking today.
