Innovating. Shipment Success through Intelligent Visibility

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1 Innovating Shipment Success through Intelligent Visibility WELCOME to the inaugural issue of Innovating, CargoSmart s complimentary, monthly newsletter for the ocean shipping industry. Innovating is designed to provide you insights about cargo delays around the globe that you may use to improve your daily operations and strategic planning. What happens when there is a strike, a hurricane, or a ship with mechanical problems? When do you find out about the delays? Is it possible to find out about ETA changes earlier? Based on over 12 years of shipment management systems experience and data, we have found that on average 95% of shipments move according to plan, while 5% of shippers valuable shipments have exceptions. Sourced from live vessel GPS updates, information from ocean carriers, and published sailing schedules, CargoSmart s established Global Vessel Voyage Monitoring Center uses the latest developed in-house technology to analyze vessel, route, and cargo level details to discover the exceptions to shipment plans earlier than ever made possible before. Innovating focuses on three exceptions: skipped ports of call, missed transshipments, and delayed ETAs. Based on aggregated data, the newsletter will reveal trends of shipment delays. Subscribers will gain insight about where delays are happening and the reasons for the delays. The introduction of the newsletter is timely with the unfortunate Hurricane Sandy that passed through the East Coast of the United States on October 29. The storm was one of the widest reaching and powerful storms in the US. It has caused the Port of New York and New Jersey to close with over 40,000 imported containers diverted to other ports. From vast power outages, blocked roadways, and flooded facilities, the world ABOUT INNOVATING CargoSmart is creating a whole new visibility model for ocean shippers and logistics service providers to monitor their shipments. The rules of the game are changing in the global shipping and logistics industry. CargoSmart s innovative methods offer insights for the industry to manage the 5% of shipments that have exceptions. CargoSmart s monthly, complimentary Innovating newsletter delivers refreshing insights for you to make intelligent decisions for your supply chain. Contents Welcome 1 Eye on the Storm 2 Global Vessel Voyage Monitoring Center 4 The Captain s View 6 Subscribe 6 1 CargoSmart Innovating

2 has watched the extent of the storm s impact on the region unfold. Its ripple effects will be felt for the foreseeable future as the East Coast rebuilds its infrastructure and schedules and shipments return to normal. In this first issue of the newsletter, we provide insight on some vessels evasive actions from the port of New York and New Jersey, an interview with the manager of CargoSmart s Global Vessel Voyage Monitoring Center, and a captain s view of one vessel s maneuvers to avoid the worst of the storm. We hope you find this report useful for your strategic planning and daily shipment management decisions for the year ahead. To continue receiving this report, please subscribe at EYE ON THE STORM After the arrival of Hurricane Sandy, numerous container vessels and their shipment routes have been disrupted. CargoSmart s Global Vessel Voyage Monitoring Center (GVVMC) monitored how the hurricane affected ocean vessels by observing vessel movements through their reported Automatic Identification System (AIS) data that provides their position, speed and heading every 15 minutes. Take the vessel ZIM LUANDA for example: Upon departing her berth at the port of New York, ZIM LUANDA continued to steam Eastwardly instead of turning her heading towards her next scheduled port of call at Savannah. GVVMC compared ZIM LUANDA s route to her recent historical movement pattern on this service loop rotation. According to historical movement patterns and the carrier s sailing schedule, this vessel should be going next to Savannah. A GVVMC analyst opined - the captain or the shipping line may have decided to stop loading early in New York then travel east to avoid confronting Hurricane Sandy which was approaching from the south of New York. ZIM LUANDA arrived from the Northeast and berthed at New York. After departing New York, she went to ride out the worst of the storm in a relatively-safe position in the East, while Sandy was moving up from the South towards the coast. Historical tracking pattern showed ZIM LUANDA normally went due South after New York, as indicated by ZIM Line s sailing schedule for this service 2 CargoSmart Innovating

3 Despite steaming Eastwardly temporarily, would ZIM LUANDA arrive on-time at Savannah? GVVMC considered the probability of ETA delay was not high. AIS data and GVVMC analysis indicate the vessel departed New York well ahead of schedule. Expecting to depart November 1, she actually departed the morning of October 28. The vessel gained a generous time buffer for the longer roundabout trip to Savannah. Would she skip the next port of Savannah? GVVMC considered the chance was low. NYK RUMINA is another example. She had departed Norfolk and should have proceeded to Savannah but instead anchored near Cape Charles to ride out the arrival and passing of Hurricane Sandy. NYK RUMINA moved North to anchor near Cape Charles. NYK RUMINA would usually go East then turn South towards Savannah 3 CargoSmart Innovating

4 Usually the transit time from Norfolk to Savannah is less than 1.5 days. Although the shipping line has updated its website schedule to reflect a revised call schedule at Savannah, GVVMC suspects the vessel may now incur a net delay against the long-term schedule and may attract further analysis and interest as an exception for the GVVMC. NYK had revised the schedule in its web site. The vessel was now targeted to arrive Savannah Port on November 1 instead of October 28/29, the diversion adding nearly 3 days GLOBAL VESSEL VOYAGE MONITORING CENTER : POWERING VISIBILITY WITH NEW TECHNOLOGY How easily can you monitor the progress of your shipments? When you need to monitor any sizable number of shipments and containers, do you find it difficult to detect if an exception is occurring, a deviation from the shipment s intended plan? Conventional tracking solutions are not able to warn you what is happening, only what has happened in the past, usually too late to be useful. CargoSmart has established a center to spot exceptions as they are happening so that the industry can be better informed, earlier. Alex Ng manages the complex vessel monitoring and analysis that takes place at CargoSmart s Global Vessel Voyage Monitoring Center (GVVMC). We recently spoke with Alex to provide more background on the center and its role in providing the data and analysis for Innovating. Q: What is the Global Vessel Voyage Monitoring Center (GVVMC)? A: After initial analysis of sailing schedule data and shipment information in CargoSmart s system, we found that while 95% of all shipments are delivered as planned, approximately 5% of shipments experience an exception to the shipment plan. We decided to form a center and solutions to detect and analyze exceptions that have the potential to impact in-transit or planned shipments of shippers, consignees, forwarders, and NVOCCs. Located in Hong Kong and opened in October 2012, the GVVMC monitors and analyzes 17 ocean carriers vessel movements covering over 3,400 vessels and 500 ports around the world. Using advanced analytical software tools, the center analyzes standard vessel patterns, compares them with actual vessel movements, and detects deviations that have the potential to cause shipment-plan exceptions. Innovating s monthly report provides an aggregated view of the shipment exceptions. The mission of the newsletter is to empower logistics executives with knowledge about exceptions earlier to support sourcing and booking decisions, re-plan shipments if necessary to meet distribution targets and production line schedules, and gain a competitive advantage in their industries. 4 CargoSmart Innovating

5 Q: What is the infrastructure behind GVVMC that makes the new visibility possible? The mission of the newsletter is to empower logistics executives with knowledge about exceptions earlier and gain a competitive advantage in their industries. Q: How does the GVVMC manage and analyze the exception data? A: An experienced team of industry specialists, with strong analytical skills, staffs the center to closely monitor and analyze vessel movements. We also are fortunate to have Captain L C Chan, CargoSmart s senior marine operations and fleet management advisor, who brings to CargoSmart 37 years of sailing container vessels and fleet management experience. The center s world-class, large-scale infrastructure enables us to maintain efficient global communications, process very large volumes of transactional data, and consistently deliver timely information. The GVVMC is equipped with large real-time monitoring display screens and CargoSmart s intelligent monitoring tools. A: The GVVMC obtains data from AIS (GPS updates about vessel location through the Automated Identification System), shipment data, carrier websites, and marine terminals. We ensure the data quality by observing and reconciling multiple data sources. We maintain data latency of less than one hour. In order to spot exceptions and analyze the reasons, the center reviews massive volumes of data to compare the real-time actual vessel movements with their known regular trade and service patterns. We analyze the data at the vessel, route, and shipment levels to identify exceptions. The GVVMC analyzes three types of exceptions: skipped ports of call, missed transshipments, and late arrivals at the port of discharge. After identifying the exceptions, the center investigates the reasons for the exceptions. Reasons for delays may include terminal congestion, labor strikes, previous port delay, weather, engine problems, or lack of vessel space. We have developed unique monitoring and analysis tools including a Vessel-Segment Tracker for daily monitoring and a GeoLocation tool for monitoring vessels around an event by location (geo-fencing) to ensure the accuracy, timeliness, and relevancy of our data analysis. The center s world-class, large-scale infrastructure enables us to maintain efficient global communications, process very large volumes of transactional data, and consistently deliver timely information. Q: What is the future of the GVVMC? A: We are excited to provide valuable insight, a whole new visibility, to the industry through Innovating. We will continue to explore the vessel, route, and shipment data, find insights, and develop solutions to improve shippers supply chains. 5 CargoSmart Innovating

6 THE CAPTAIN S VIEW After analyzing GPS vessel data and speaking with the captain, CargoSmart s senior marine operations and fleet management advisor, Captain L C Chan shares insight about the safety, speed, and ETA decisions made onboard one vessel at sea during the hurricane. Adverse weather conditions can endanger the safety of a vessel, its cargo, and the crew. It is very important that the captain take appropriate actions to avoid any kind of loss. 4. The Northeast-ward wind and swell/wave were relatively small compared with the Southwest-ward wind 5. The east side from the U.S. coast had plenty of space 6. Moving the vessel Eastward could make use of the prevailing wind to keep steerage speed 7. In the northern hemisphere, the vessel should always be careful to avoid being in the hurricane s right semi-circular track Let s look at the vessel OOCL Kobe (4,500 TEU class) as an example. When Hurricane Sandy was classified as a Category 1 hurricane on the morning of October 27, the vessel was at the port of New York and would depart from New York for Norfolk on October 28. After dropping off the outbound pilot at the New York port in the afternoon of October 28, OOCL Kobe was 460 Nautical Miles (NM) away from the center of Hurricane Sandy. It was windy, and the swell and wave were around 4-5 meters high. As the storm was strong, Captain Pi Xiu An, the captain of OOCL Kobe, took actions to avoid adverse effects. In his mind, he reviewed information about the vessel, ports, weather, and his experience. 1. OOCL Kobe is a panamax size vessel, with a rather narrow beam and extra length for capacity 2. The Norfolk agent confirmed the closure of the next due port, Norfolk, which would be closed at 23:00 UTC/GMT on October The weather forecast stated Sandy s movement would be Northward, then Northeast-ward, and finally West-Northwest-ward Finally, Captain Pi made the decision to move Eastward, away from the U.S. East Coast and kept a safe distance of about 300NM. This avoidance action consumed extra fuel, and of course took extra time. After the wind abated and veered, the vessel continued its journey to Norfolk. Although the vessel would be surely late, it kept moving at the moderate steering speed around 9-10 knots. The captain wanted to ensure the safety of the vessel, cargo, and crew, rather than taking a risk and wasting fuel to speed up in the high sea. The captain, Norfolk agent, and the marine operation party contacted each other to refine the schedule for the Norfolk port arrival time and decided to speed up for the next ports of call. With such refinement, the vessel would be able to recover one day before arriving in Panama in its schedule to the Far East. After arriving safely in Norfolk, we see that the time loss was 44.5 hours and the vessel moved about 420NM more than the original route. SUBSCRIBE To receive the monthly Innovating newsletter for the shipping industry by , please subscribe at We value your feedback and want to continue to improve our service and information that we provide to you. To provide feedback or ask questions, please contact us at innovating@cargosmart.com. China Germany Hong Kong United Kingdom United States CargoSmart Innovating