Leveraging Big Data to Reduce Shipping Challenges with project44

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In late May, the SCLA Executive Think Tank had the pleasure of talking with leaders from supply chain visibility platform project44. The company—often happy to go by simply “p44”—takes its name from a historic transportation and supply chain solution: Highway 44, which in 1953 became the first major bypass for the famous but by then overburdened Route 66.

[Related content: my C-Suite Commentaries video interview with p44 founder, Jett McCandless. Click here to watch!]

VP of Business Development at project44 John Fitzgerald has been an SCLA member for over ten years, and many other companies whose executives are also members are clients of project44. The major shift through Fitzgerald’s time in this business has been, not surprisingly, in technology, particularly the increase in data available on the otherwise traditional activities of moving goods from place to place.

Project44 amasses a great volume of data to use in myriad ways. In the space of a year, they may track 1.2 billion e-commerce deliveries just in North America, and over 1 billion multimodal shipments—500,000 ocean containers every day.

VP of Supply Chain Insights Josh Brazil joined us to focus on that ocean shipping piece of the picture, and specifically project44’s data on dwell times.

Dwell times paint a vivid picture of worldwide shipping challenges

For the uninitiated, “dwell” generally refers to the time a shipment is stuck somewhere not moving. In ocean shipping, a major issue linked to dwell time is the cost of detention and demurrage. In very simple terms, demurrage involves charges for full containers not being picked up quickly enough after arrival, while detention involves charges for emptied containers sitting around too long after being unloaded.

The issue is sizable: according to VP Brazil, average detention and demurrage fees for an operation shipping 100,000 amounts to about €7 million (more than $7.3 million) annually.

Fortunately, project44’s data on dwell times is available—in basic form for free—via the company’s new platform Port Intel, currently accessible right on the front page of project44’s website. The free tool offers several datasets in a colorful infographic map format covering ports worldwide, with specifics available by clicking on a given port.

What kind of useful insights can all the data create?

VP Brazil gave a few examples. Consider Shanghai during certain periods of pandemic restriction. Simple AIS (automatic identification system using vessel transceivers) information suggested massive congestion.

Deeper data show container vessel congestion was mild—the real problem was on land in China, where lockdowns prevented manufacturers and truckers from getting full containers to the port. It was actually import dwell times that rose because ships could get goods into the port, but trucks were not allowed to come pick them up. Export dwell was low because anything from inside China that managed to get to the port could get right on a ship.

By contrast, in Yantian last June (2021), the port itself was partially closed: export dwell times rose, while import delay was less affected. The data further show that the Yantian situation recovered more quickly than Shanghai when lockdowns ended, and that continued or repeated Chinese lockdowns are causing increased blank sailings and transshipment rollover.

In another example, at the Port of Los Angeles at the end of 2021, there were many vessels and delays. However, dwell data revealed that despite congestion and delay, import dwell times did not go up because full containers simply stayed on vessels at anchor.

The wealth of data shines some light on the quirks and complexities of these situations, for sure.

Meaningful cost reduction is a real possibility

Our project44 speakers noted they have been able to help clients generally achieve a 15-25% reduction in detention and demurrage fees, with some extreme cases seeing up to a 90% reduction.

Using dwell time data in carrier negotiations and long-term planning is new, and project44 itself has data on spot rates but does not track negotiated prices. Of course, project44 has numerous resources beyond Port Intel and the dwell time data, including data on transshipment rollover rates, on-time percentages, TEU capacity, route-specific transit times, a newsletter, a crisis tracker, and freely available market news.

How do you envision you or your organization using this dataset?

Our members asked about price information—what other data would you like to have available? Or what other sources of similar data can you share?

SCLA operates on the principle that sharing information and insights can benefit everyone in the supply chain space, so please reach out to SCLA—or feel free to get in touch with me directly—with your questions, thoughts, and resources.

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Friday, 14 June 2024

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