How can container yards stay relevant in changing business scenarios?

Factory to Port Delivery scheme has become a phenomenon in all seaports worldwide. While the developing world instills in the initial phase of transforming their ports with Factory to Port delivery scheme, the developed world is already reaping the benefits. Implementation of a factory to port delivery means there is no need for holding the freight at a Container Freight Station (CFS). With this model, the shipment will straight away reach the consignee from the port with a fast track clearance process. Major ports in developing nations are implementing this widely, others are still sticking to While this seems to simplify complex processes, CFS companies do not welcome this step. Yes, as the shipment is not to be held at a CFS, they don’t have a role to play. This has already been visible in the operations across several ports worldwide. Several CFSs are turning into unnotified warehouses. Now, CFSs are transforming their business model to stay relevant in the industry that is facing digitization.

Warehousing, cold storage & handling perishables

Container Freight Stations come with a large space to operate and they are well connected with road transportation as well as in close proximity to ports. The recent trends in several ports across the globe say that most of them are getting empty as most of the container freight operators have vacated. Some still exist in those places handling freight of smaller volumes. This is an opportunity that CFS operators can leverage.

Also, handling perishables is a task that may or may not be achieved with the factory to the port delivery model. This comes as an advantage for CFS to leverage upon. If in case the shipment gets delayed or there are uncertainties in taking the shipment forward they can be held for a while in CFS. Most importantly, when it comes to handling pharmaceutical products that had to be stored in the right temperature CFS will be of more relevance. This is due to sophistication ocean cargo offers in terms of storing critical medicinal products at the right temperature for a prolonged ensuring it doesn’t lose its potency. Over 20 percent of pharmaceutical shipments are sent through ocean cargo nowadays and in the coming years, it is expected to grow multi-fold in the next 10 years.

Inconsistencies involved in Factory to Port delivery model

Well, factory to port delivery even though is a straight forward approach, there are some factors of uncertainties involved in it. Implementing factory to port delivery did save a lot of time, help people battle truck congestions, save costs and a lot of other factors. But let us say, a shipment is delivered at the port. Then the concerned collection agents must be available to transport it from the port to the desired location. If in case there the agent doesn’t show up, there will be a delay in processing other shipments. Hence the problem of truck congestion, lack of inventory management and freight dwell time will eventually increase. Therefore, the factory to port delivery model is yet to shape up as a robust solution to solve issues on a large scale. This comes as an advantage for CFS operators. But to stay relevant for long, these operators must diversify and offer some value addition.

Digitisation

If there is one solution for all the problems that would definitely be- Digitization. Yes, everywhere technology has a large role to play. Either in the form of Artificial Intelligence (AI) or in the form of Advanced Analytics, they offer everything possible to offer simple solutions for complex issues. Blockchain logistics and Cargo Community System are other innovations coming up in this space. Nowadays, we see players in the market who would offer solutions that connect all stakeholders in the industry ranging from freight forwarders to customs brokers. Also, some offer solutions on a Single Window System. Here are some of the examples of digitization making simple solutions cutting out complex procedures:

• Connecting all Stakeholders: The major reason why processes get delayed is all stakeholders in the system are not updated on the freight movement. Once they know where the freight is, they can be prepared to let it move ahead swiftly without any delay from their end. Some service providers offer community-driven platforms wherein all stakeholders can be in one frame and keep monitoring the freight movement.

 

• Improving Visibility: Logistics and Supply Chain is a vast segment. Within this, we have a lot of sub- segments. Hence a freight will go for thorough screening at all levels. This is highly inevitable due to safety and security concerns. Fortunately, with digitization in place cargo movement can be tracked inch by inch. When it comes to air cargo, freight movement cannot be tracked after a point. But a digital platform involving these stakeholders will ensure all are informed on the freight movement.

 

• Reducing Dwell Time: Truck congestion is a major issue across all seaports and airports throughout the world. This is because all trucks are coming at the same time and end up waiting for their turn. After this, they have manual form filling, approvals, payment and all other similar work to do. With a digital platform in place, all trucks can book slots at a particular time, do the remaining operations online and bring the consignment to send it across. Hence the time involved in other activities come down and the movement of freight is quite rapid.

CFS acting as a modern warehouse by offering value-added services will be an asset to all stakeholders and the overall operations. Hence these solutions:

• Uber freight: Using a mobile app to book cabs was the innovation that popped up last decade. In the current one, we have the same concept implied for freight movement. Yes, Uber Freight is already a reality. This can be cost-efficient for freight forwarders as they don’t have to maintain a fleet of trucks for themselves. With this, freight forwarding as a business can grow multi-fold.

 

• Hyperloop: Virgin Hyperloop One system can be used to transport freight and people on-demand, direct from origin to destination. Passengers or cargo are loaded into the hyperloop vehicle, which accelerates gradually via electric propulsion through a low-pressure tube. The vehicle floats above the track using magnetic levitation, traveling at high speed. In the context of the shipping and terminal industry, we could see a future where dedicated freight hyperloop pods are used to distribute containers via a tunnel network. Looking further into the future, this technology could significantly reduce the need for cargo feeders, barges, rail networks, and even container ships. Virgin One Hyperloop together with DP World, one of the largest global terminal operators and a major Kalmar customer, has already introduced DP World Cargospeed – an international brand for hyperloop-enabled cargo systems that aims to deliver freight at the speed of flight and closer to the cost of trucking.

Hence the overall process that consumes humongous time comes down completely. In these solutions, all approvals and processes come under a single frame and are done in a few minutes. Therefore, there is no question of delay. If all CFS owners manage to offer a technological solution that solves the problem that exists in the current factory to port delivery model, they will have a great value addition for shippers and consignees.