The need for timely accurate data to increase efficiency within the supply chain was a recurring theme in stakeholder comments during the February meetings of the Federal Maritime Commission’s (FMC) Maritime Data Initiative.
Continuing through April, the weekly meetings have examined global supply chain issues from the perspectives of different groups of stakeholders.
The goal of the FMC initiative is to establish data standards and best practices for data access and transmission, which is essential not only for reliable and stable ocean transportation systems, but for the global supply chain.
Comments from the February data initiative meetings are summarized below.
Stakeholders from the railroad industry discussed on February 1 how they often don’t receive much advance notice when freight is arriving and that they would benefit greatly from getting visibility on that data further in advance.
Accurate forecasting and visibility is crucial to providing the highest quality of service possible.
This data is especially important as the railroads try to understand and identify the changes in demand, so the railroads are able to get ahead of changes in traffic patterns.
There currently is a lot of focus in the rail industry on taking better advantage of the railroad intermodal on dock rail to help improve congestion. A network of both coastal and inland ports fed by the intermodal services is starting to evolve. As 24/7 operations, the railroads are the most logical resource to utilize in managing cargo to help alleviate congestion.
Partnering with Government
The February 8 meeting featured “federal partners” with representatives from the U.S. departments of Transportation, Commerce and Agriculture, as well as Customs and Border Patrol.
It was first noted that exports of cargo out of the United States are handled largely as a manual paper process and there is a pressing need to automate it to electronic manifests so it would align on the import side with the electronic import manifests.
Automation will quickly aid in the better visibility of cargo as it moves across the country and is essential for export strategy.
The need for establishing a common lexicon also was discussed as definitions have changed, especially in recent years. For example, a new term was created for vessels waiting offshore in Los Angeles. In this situation, the ships are not in berths or anchorages; now they are “in loiter,” when in reality, the ships are just waiting to get to port.
Federal representatives noted that commodity classifications can vary widely depending on where the data is collected and whether the source is focused on trade or transportation.
The shipper-based survey currently used asks respondents to physically classify their goods for each shipment. Use of machine learning tools will standardize the classification process so a shipper then can describe their cargo and the tool will classify it based on the provided description.
The representative from the U.S. Department of Commerce discussed the differences in the data collected by different agencies. Maritime transport data is collected mainly from the U.S. Census Bureau and from the National Oceanic and Atmospheric Administration (NOAA). The Census Bureau publishes statistics monthly and conducts a mandatory survey of national freight flows, while NOAA collects data that supports maritime transportation by focusing on nautical charters, currents, tides, etc.
Intermediaries Serving as Detectives
The February 15 meeting featured stakeholders from the ocean transportation intermediaries. Again, the consistency of terms and data was stressed as stakeholders discussed their struggle with getting a standard definition of “free days” between the carriers and the terminals.
One speaker called himself basically a “travel agent for cargo,” as his job more and more often consists of finding data for where a container is and what the best rates are for transporting it.
A comparison was made to the travel industry: when someone wants to travel, they can go to one contained website to search for all options and rates that are available. If such a localized place for information and rates existed for the maritime industry, it would be easier and faster to get information to clients and bid for projects to meet their needs.
When stakeholders have to spend time doing detective work instead of actually helping cargo move, it reduces productivity. Moreover, when stakeholders have to visit several sources to accumulate the information needed, the accuracy of the data can get questioned.
With a lack of accurate data, data often drops off as product is moved through the supply chain. At almost every step, there is a possibility of inaccuracy, which creates billing disputes and can take a huge toll on the accounting and operational teams of the exporting or importing company. Such disputes have likely added millions of dollars in extra costs to the export supply chain.
Many clients of the ocean transportation intermediaries see the real-time data they receive with their Amazon orders or their pizza deliveries, when the order was received, pizza is being made, and it’s out for delivery, and don’t see why the trade industry can’t implement a similar technology so that trade can flow easily.
FedEx/Amazon ‘Supply Web’
At the February 22 meeting featuring representatives from FedEx and Amazon, the need for real-time data was discussed once again. The desire to replicate the air industry’s sharing of data was brought up, as data is treated confidentially in the ocean environment, making that data less accessible.
Data needs to be available in a manner that allows it to be consumed by those who need it, and communicated in a common language within a common place.
One speaker quipped that the supply chain was more like a “supply web” when a participant in the supply chain has to interact with each segment individually, to piece together their own data, creating too many connection points and many inefficiencies.
The company representatives also discussed how it would be useful to know to whom a container belongs as it is unloaded from a vessel. That knowledge would allow terminals to stack goods together from the same importer, making the process more efficient overall and lowering transportation costs.
Broken Supply Chain
Noted over and over again during the meetings was that issues within the supply chain have existed for more than a decade and have been known problems.
One stakeholder likened the situation to fixing something with strings and gum, and as things keep breaking, eventually only strings and gum are keeping the whole thing from simply falling apart.
As more pressure has been added to the supply chain during the pandemic, everything started to break again at the same time, and bigger strings and more gum are no longer going to fix the issues.
Federal Maritime Commissioner Carl Bentzel will continue to lead meetings with maritime and intermodal stakeholders through April. Initial findings from these meetings are expected to be presented at the FMC Maritime Transportation Summit, currently scheduled for June 1.
All meetings are open to the public and the FMC has made available a new email address where stakeholders can communicate any concerns related to the topic of maritime data at email@example.com.
To see the dates and topics of the remaining initiative meetings, plus links for online viewing, visit the FMC Maritime Transportation Data Initiative website at www.fmc.gov.
CalChamber coverage of previous meetings is available here.
Information compiled by Nicole Ellis, CalChamber international affairs and media relations specialist.