Up until now, investing in shipment tracking solutions was like buying travel insurance - it was usually purchased in the last step of the transportation contracting process. Much like insurance, you would add it at the last step in the cart as an optional item when purchasing your air ticket, and often only if the firm had previously bitter experiences. However, COVID-19 is changing the way companies are looking at investment into visibility. The following are real industry examples of why they are looking at visibility as the “air ticket” itself and not just as “insurance;” a switch from “nice-to-have” to “must-have.”
Here’s how it used to be!
How many times have you purchased travel insurance by spending an additional 3% of your ticket cost? Probably never, or maybe just occasionally!
Many manufacturers and shipping companies were approaching supply chain monitoring solutions with the same mindset. Transportation was like their “ticket” and visibility was their “insurance.” Supply chain monitoring solutions like GPS vehicle tracking, RFID, Bluetooth, and IoT-enabled sensors when applied correctly to transportation can provide you with good control over your logistics execution.
“Prior to COVID-19, if the transportation was like an air ticket, monitoring was like travel insurance.”
Investments in these visibility technologies were typically discussed for months, extensive pilot projects undertaken, ROI assessed, and if feasible, then deployed across the supply chain.
What changed with the COVID-19 pandemic?
Why are companies bypassing these processes and scrambling to deploy tracking solutions for their shipments or vehicles, and RFID or Bluetooth implemented in their warehouses today?
How did things change?
The COVID-19 pandemic is hampering businesses across the world, the abnormal has now become the new normal in the past few weeks. Companies around the world are facing disruptions in their supply chains.
They are shipping goods into the unknown and have no clue about where it is, how it is doing, and what needs to be done.
“ Today, amidst COVID-19, investment in monitoring shipments have become as important as the shipping operations itself. ”
Ironically, like the battle with the COVID-19 itself, you cannot beat what you cannot see when it comes to your supply chain too. Therefore, visibility into the supply chain from end-to-end is becoming vital.
Companies which already implemented end-to-end shipment or asset tracking solutions are better positioned to combat the impact of COVID-19 today. Here’s how they are making their business more predictable and keeping everyone on the same page during these tumultuous times.
1. On-road Delivery Planning
Lockdowns were imposed in many countries without much time to prepare, much like a tsunami alarm going off. Many shipments were already on the road.
Land shipments typically take anywhere from 1-10 days to reach their destination. We think shipment through air mode is quick, but with the first mile and last mile in consideration, it takes anywhere from 3 to 15 days.
Therefore, many shipments were miles away from their destination when a lockdown for a region or country was announced, with state, national borders, ports, and airports shut.
What this meant to many companies like GlaxoSmithKline, Mondelez, or Polycab was that shipments needed to be re-routed. In many cases, essential goods like medicines, vaccines, or food needed to be filed as essential items to pass through police check points.
- Jude Carey, Global Logistics Execution Manager
With sensor devices like Bees on shipments and visibility into the location of the goods, companies could make decisions on the resources or communication needed to mobilize and resume goods delivery or re-route to an alternate storage and distribution center nearby. Visibility & data analytics drive decisions on which lanes to use, which airports/ports are open, and where the choke points are to plan the least path of resistance for your deliveries.
2. In-transit Cold Chain Goods Salvaging
For a company like Mondelez (one of the world’s largest chocolate manufacturers) it is not just about where the goods are stuck which is critical, but also its condition.
Temperature-sensitive food products like Mondelez’s, vaccines from pharma majors like GlaxoSmithKline, or consumer goods companies are facing two problems related to condition:
- Whether the product is still stored in the right conditions in transit, at a port, airport, or warehouse.
- Whether the containers have enough power-backup or fuel to keep the goods refrigerated.
- Nilesh Dhoke, Transportation Manager
With visibility through IoT sensors and assistance from control towers like BeeCentral, many of these goods are:
- Re-routed to a nearby warehouse for re-refrigeration if they are located midway between the origin and destination.
- Returned to destination in case much of the journey hasn’t been traversed yet.
- Expedited to the destination in the case of rush orders, with close coordination with government authorities.
- Maintained at the right temperature in the truck, at airports, or ports through daily monitoring of temperature excursions and on-site visits.
If you are shipping condition-sensitive cargo, you will have the ability to instantly decide what to do and how to act rather than spending time figuring out where your goods are and how they are doing.
3. Cold Chain Warehouse Compliance Automation
With social distancing measures implemented at many levels, warehouses are facing a major shortage of manpower. In a regular cold chain facility, compliance is maintained by using wired temperature sensors or data loggers, with readings captured manually every hour.
However, due to a manpower shortage, compliance protocols are suffering. This could be dangerous at times like this for two reasons:
- Contaminated vaccines or food products can cause further harm to society and further increase the toll on healthcare infrastructure.
- If you were to decide to junk a product when in doubt about temperature excursions, it leads to further demand volatility of essential items like pharma or food products.
Visibility is enabling companies to build the automated warehouses of the future — today — amidst the COVID-19 pandemic.
Real-time sensors like the BeeBeacons continuously upload real-time data at a package level to the cloud, and analytics about real-time Mean Kinetic Temperature (MKT) provide signals and warnings on when to act, making the most of a skeleton crew.
- Sridhar Iyer, Manager, Air Export Team
4. Protecting High-value Inventory In-transit
How much would a Porsche 911, Mercedes CLK, or Audi A8 cost you?
Now imagine 15 of these stacked in a container, and hundreds of these containers park on the side of a freeway or rest area for weeks, either on the way to a port or on the way to their final destination.
Due to regional lockdowns for non-essential goods, these containers are parked along the curb or at rest areas waiting for restrictions to be lifted, putting millions of dollars worth of inventory at risk of theft. Many drivers are staying within isolation in temporary boarding arrangements and may not be by the truck every day, and these lockdowns are going on for weeks.
To make matters worse, some countries are releasing some prisoners on parole to implement social distancing inside prisons. Limited people on the highways only increases the risk of illegal activities on deserted highways.
- Dattatraya Sakhare, Manager of Quality, Vehicle Preparation Center
Therefore, companies like Mercedes Benz are leveraging real-time data and analytics about their trucks and goods safety through the Honeycomb platform to keep an eye on their trucks and safety of their goods. Sensors like the BeeLock also help, indicating exactly when and where a container door is opened or closed in real time.
5. Auto-updating Transport Compliance Paperwork
What’s worse in a lockdown state than getting in trouble with the authorities for expired paperwork?
This is precisely what is happening in regions of the world where Goods Consignment Notes or GCNs or e-Way bills expire.
Let us consider a 7 days shipment for where you have pre-declared the GCN to expire on day number 7 with local tax or transport authorities. Your goods are stranded on the road due to lockdowns and it’s well past the 7-day limit.
Imagine both you and a competitor are working with authorities to get access to deliver goods in a region. Whom do you think would have a better chance to get special permissions? The one with unexpired consignment notes or the ones with those that have already expired?
Companies are using real-time estimated time of arrival (ETA) through the Honeycomb platform to predict how many additional days they need to renew their transport documents by, so as to keep costs low, while still staying renewed dynamically – so they are fully compliant with guidelines and processes during a time when entry into regions, countries, or states are being rationed.
Read how IoT + AI + RPA could automate processes like automatic renewals of e-way Bills across disconnected systems.
Will Supply Chain Monitoring Remain a Must-Have After COVID-19 Recovery?
Just like 9/11 made security systems vital at airports and other public places, visibility will be a must have.
However, when it comes to logistics & supply chain tracking systems, it will not be due to paranoia or government regulations. Monitoring will remain a “must-have” because the problems during COVID-19 recovery will remain almost exactly the same as the problems during COVID-19 lockdowns, and after that the efficiency experienced will drive further adoption.
“Data & analytics will help flatten the curve of rising supply chain unpredictability, just like data & analytics is helping flatten the curve of the COVID-19 pandemic.”
Airports & ports will re-open, but they will face a heavy traffic pileup, leading to chokes in logistics & delivery.
Different parts of the world are beginning and ending their lockdowns at different periods. China is on the path to recovery. US & India are planning to open up in phases. Brazil is still contemplating whether a lockdown is needed, and if so when. Europe doesn’t seem to have an anticipated date, with the situation still grave in many countries. This means that when it comes to international shipping lanes, many regions will still have lock downs hampering the free movement of goods.
There will be a few months of demand volatility in the market. There will also be a major re-distribution of inventory stocked around the world, adding to the logistics traffic.
Many contracted transport companies and airlines could face bankruptcy, which means companies will be forced to look for new transport partners whose operations, lanes, and modes of transport they aren’t familiar with.
In view of these, shipping for the next few months — or the rest of 2020 — is going to have a lot more uncertainty than ever before. Just like we will beat the COVID-19 pandemic by flattening the curve through data, analytics, and predictions, we will win the logistics & supply chain unpredictability battle using data, analytics, and predictions that come from supply chain monitoring.