Innovating. Shipment Success Through Intelligent Visibility. Issue 60 October 2017

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1 Issue 60 October 2017 Shipment Success Through Intelligent Visibility WELCOME to the October issue of CargoSmart s, a monthly, complimentary e-newsletter for the ocean shipping industry. is designed to provide insights about cargo delays around the globe that you may find useful to improve your daily operations and strategic planning. In this month s issue of, we share four ways Internet of Things (IoT) technology can elevate supply chain visibility: demand sensing, optimization, monitoring, and customer service. Using sensors, you can track your goods from the raw materials warehouse to the retail store and beyond to improve supply chain visibility. In terms of ocean shipping, from July to September 2017, we found on average 5.4 schedule changes per sailing schedule. Of these changes, 43% of the changes were more than 24 hours. Staying on top of the schedule changes is challenging and leveraging the IoT with live data from vessels can help shippers improve visibility beyond sailing schedule updates and focus on the changes that impact their shipments. CargoSmart analyzes schedule reliability each month to provide insights about ocean carriers performance. This month, we reviewed the schedule reliability of 24 ocean carriers across 12 trade lanes in September. Overall, on-time schedule reliability was 64.3% in September, lower than the schedule reliability of 68.8% in August. 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 their shipments. CargoSmart s monthly, complimentary newsletter delivers refreshing insights for you to make intelligent decisions for your supply chain. As hurricane season continued in the southeastern region of the US, Hurricane Irma caused port closures in Florida in September. In our Incidents Around the World column featuring vessel and port disruptions, we reviewed the impact of the hurricane on the Port of Miami. The port closed for five days, starting on September 8. While several vessels that were waiting arrived after the storm on September 13, the storm did not impact vessel berth times at the port. We invite you to monitor current events affecting your shipments and to share your delay experiences with us on our visibility blog at visibility.cargosmart.com/blog or by at innovating@cargosmart.com. CONTENTS 4 Ways IoT Technology Elevates Your Visibility 2 Carrier Reliability Report 4 World Incidents: Hurricane Irma 6 Contact 7 Kim Le Executive Editor CargoSmart 2017 CargoSmart Limited. All rights reserved. 1

2 4 WAYS IOT TECHNOLOGY ELEVATES YOUR VISIBILITY In the supply chain, you can apply the Internet of Things (IoT) to processes throughout the product lifecycle. Using sensors, you can track your goods from the raw materials warehouse to the retail store and beyond to improve supply chain visibility. What does next generation supply chain visibility IoT technology offer? First, your visibility can be down to individual goods, such as at the SKU level. Second, you can have direct access and control over data about the status of your goods. Last, you can have more accurate forecasting with predictive analytics for inventory and schedules. For example, what would you do if one of your reefer containers went out of service, resulting in spoiled goods inside? If you could leverage the IoT, you would be able to track your container s condition, such as its location, temperature, power status, and atmospheric conditions. If anything went wrong, you would find out quickly and be able to minimize your risks and costs due to supply chain disruptions. IoT technology can elevate supply chain visibility in four key aspects: demand sensing, optimization, monitoring, and customer service. 1. Demand Sensing - Most firms rely on historical data to forecast the goods and services they will need in the short-run. However, historical data only provides a look back at what has happened and may not be relevant to what could happen in the future. Demand-driven planning is a more reliable approach because it uses real-time demand information. Companies can analyze customer-demand data to make timely decisions about replenishing stock. Leveraging the IoT, you can track inventory levels of individual items and arrange replenishment in time to avoid out-of-stock situations. You can also identify the best routes and delivery schedules based on the IoT data. 2. Optimization - Often, you have visibility down to the shipment level but not for warehouse and logistics planning. By leveraging the IoT, you can have visibility down to the SKU. You can track and trace not only vehicles and shipments, but also individual items along the entire supply chain. This way, you can optimize stock levels in warehouses and stores to save costs. The IoT also helps you improve the operational efficiency of production and logistics with better coordination between different supply chain parties. You can also react in a timely manner to live incidents to minimize risks, such as port congestion and traffic accidents. 3. Monitoring - With the IoT, you can access shipment information firsthand and use analytical tools for insights about your shipments. You can also provide partners with end-to-end visibility across the supply chain. You will be able to see and understand the activities and events of multiple players in the supply chain and provide timely alerts to notify customers of delivery dates, times, and any changes. You can also closely monitor the performance of suppliers and carriers to maintain supply chain excellence. 4. Customer Service - Currently, you may not have comprehensive data on how customers are using your products to improve your service. With IoT, you can gain a very clear picture on when, where, and how many products customers have purchased. You can then make timely decisions on how your supply chain should react. You can also track usage patterns with analytical tools to improve product design and production. Furthermore, based on customer usage and behavior, you can predict their needs and provide personalized products and services. Filling visibility gaps with the IoT One example of leveraging IoT to improve supply chain visibility is by augmenting sailing schedules. Sailing schedules change frequently. In fact, from July to September 2017, there were on average 5.4 changes per schedule among 29 major ocean carriers global schedules and 43% of the schedule changes were over 24 hours, as shown in Figure 1. In Europe, the average changes were higher than the global average, with 6.1 changes per schedule and 49% of the schedule changes were over 24 hours. Taking a closer look at the top three Europe container ports, Antwerp had the highest average changes with 7.4 changes per schedule, while Rotterdam had the highest percentage of schedule changes with 49% over 24 hours. CargoSmart 2017 CargoSmart Limited. All rights reserved. 2

3 Average Changes per Schedule Percentage of Schedule Changes Over 24 Hours Global % Europe % Rotterdam % Antwerp % Hamburg % Figure 1: Average changes per schedule and the percentage of schedule changes over 24 hours from July to September 2017 To keep your supply chain running smoothly, it is important to stay informed of schedule changes. Leveraging IoT technology, CargoSmart monitors the live movements of 7,000 container vessels, analyzes over one million live vessel status updates each day, and monitors incidents that may impact vessel schedules each day. CargoSmart offers solutions such as its Schedule Delay Alert to supplement carriers actual times of arrival and departure and to notify customers by and APIs of schedule delays that may impact their shipments. Shippers are able to leverage the IoT to save time looking up schedules to monitor critical shipments, improve shipment visibility to vessel status and delay information, and respond faster to potential supply chain disruptions. Businesses are devoting more resources to the IoT. Has your company started? Take the opportunity to leverage IoT technology to boost your supply chain visibility. We invite you to learn more about CargoSmart s tools that leverage IoT technology to help you boost your supply chain visibility. CargoSmart 2017 CargoSmart Limited. All rights reserved. 3

4 SCHEDULE RELIABILITY DECREASED TO 64.3% IN SEPTEMBER 2017 CargoSmart analyzes schedule reliability each month to provide shippers and logistics service providers with insights about their ocean carriers performance. This month, we reviewed the schedule reliability of 24 ocean carriers across 12 trade lanes. Overall, on-time schedule reliability decreased by 4.5%, from 68.8% in August 2017 to 64.3% in September Reviewing schedule reliability by trade, eight of the 12 trades declined from August 2017 to September The trans-pacific trade experienced the largest decrement in reliability, decreasing by 10.7%, from 74.4% in August 2017 to 63.7% in September The Europe-Oceania trade experienced the largest improvement in reliability, increasing by 35.1% from 33.7% in August 2017 to 68.8% in September The North America-Oceania trade continued to have the highest reliability with 80.5% in August Details are shown in Figure 1. Monthly Schedule Reliability by Trade 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% From the vessel discharging region perspective, as shown in Figure 2, the North America region experienced the largest decrement in reliability, decreasing by 15.4%, from 74.6% in August 2017 to 59.2% in September Several hurricanes impacted container port operations in the North America region in late August and in September, contributing to lower schedule reliability in September. The Middle East region had the highest reliability with 79.8% in September Africa had the lowest reliability of 26.9% in September Middle East South Asia Oceania South America Europe Asia North America Africa Monthly Schedule Reliability by Port of Discharge Region 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 31.2% 26.9% 68.4% 79.8% 79.8% 75.6% 72.9% 75.5% 66.0% 72.6% 69.2% 64.1% 67.1% 62.0% 74.6% 59.2% North America-Oceania Europe-Middle East Europe-South America Asia-Middle East Trans-Atlantic Europe-Oceania Asia-Oceania Intra Asia Trans-Pacific Asia-South America Asia-Europe Asia-Africa 33.7% 43.2% 34.4% 80.5% 62.2% 78.3% 60.1% 74.6% 69.2% 70.5% 72.7% 70.3% 68.8% 70.3% 67.6% 73.1% 67.4% 74.4% 63.7% 63.3% 63.0% 65.8% 60.1% 90.9% August 2017 September 2017 Figure 2: Monthly schedule reliability by port of discharge region from August 1 to September 30, of the 24 carriers experienced varying degrees of declining schedule reliability from August 2017 to September As shown in Figure 3, the top five most reliable carriers in September 2017 were MCC, CCNI, OOCL, CMA CGM, and COSCO SHIPPING Lines with an average on-time performance of 78.3%, 75.5%, 72.8%, 71.7%, and 71.0% respectively. August 2017 September 2017 Figure 1: Monthly schedule reliability by trade from August 1 to September 30, 2017 CargoSmart CargoSmart Limited. All rights reserved.

5 Monthly Schedule Reliability by Carrier 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% MCC CCNI OOCL CMA CGM COSCO SHIPPING Lines ANL Container Line Evergreen CNC Line PIL APL Maersk Line 82.4% 78.3% 79.0% 75.5% 78.2% 72.8% 73.0% 71.7% 73.5% 71.0% 72.4% 70.7% 76.2% 70.6% 70.6% 65.7% 66.8% 65.6% 68.5% 65.1% 71.8% 64.5% Wan Hai 64.5% 74.6% Hamburg Sud ZIM 68.9% 63.5% 63.1% 63.2% Hyundai 61.6% 72.2% Hapag-Lloyd Safmarine Alianca Yang Ming NYK MOL UASC 64.2% 61.3% 61.0% 61.2% 64.3% 59.0% 63.2% 57.1% 62.4% 56.3% 63.8% 55.9% 61.2% 55.3% K Line 54.0% 63.4% MSC 46.1% 46.7% August 2017 September 2017 Figure 3: Monthly schedule reliability by carrier from August 1 to September 30, 2017 Methodology: CargoSmart provides schedule reliability information for up to 24 leading ocean carriers, covering over 19,000 vessel schedules, over 700 services, 77 major container ports, and over 1,400 port pairs around the world each month. The schedule reliability is determined by comparing the estimated time of arrival (ETA) and actual time of arrival (ATA) at the discharging port. A vessel s ETA at the port of discharge (POD) is initially captured from the carrier when the vessel departs from the port of loading (POL). If the ATA is within plus or minus 24 hours of the ETA, then the vessel is considered to be on time. Reliability is calculated by dividing the number of on-time vessel arrivals by the total number of vessel arrivals within the measurement period. Would you like to review the carrier performance of your specific shipment routes? Subscribe to Big Schedules Analytics today to improve your shipment planning. Learn more. CargoSmart CargoSmart Limited. All rights reserved.

6 INCIDENTS AROUND THE WORLD Vessel casualties, port strikes, facility shutdowns, and extreme weather can all affect vessel schedules and potentially delay shipments. In this column, we cover incidents around the world that caught our attention during the previous month and their impact on shipment delays. Vessels Ports September 1 September 1 September 2 September 14 September 14 September 17 September 17 September 18 September 18 September 20 September 21 September 22 September 23 September 25 September 29 September 3 September 18 September 19 MOL TRIBUTE, had an emergency anchoring to avoid collision, Hamburg, Germany METTE MAERSK, had an emergency anchoring to avoid collision, Elbe, Hamburg, Germany KANNON BARU, ran aground in Pulau Flores Island, Indonesia DONG FANG FU, chemicals leaked from tank container, East China Sea DIMITIRS C, drugs found on board, Llo, Peru MSC SANDRA, collided with the quay of MSC terminal, Bremerhaven, Germany MSC ILONA, experienced engine trouble, Arabian Sea off the Oman Coast TOKYO TOWER, ran aground, Shanghai, China SIMA SADAF, experienced engine trouble, South China Sea CMA CGM LISA MARIE, experienced engine trouble in sea trials, Shanghai, China MOL MAXIM, 11 empty containers fell overboard, Oakland, US HYUNDAI VANCOUVER, collided with a fishing vessel, Incheon, Korea KOKOPO CHIEF, had a fire on board, Tauranga, New Zealand CMA CGM GANGES, ran aground, Guayaquil, Ecuador SWEET ISTANBUL, five workers died in an accident during the refloating of the ship, Tanjung Priok, Jakarta Evacuation shutdown DP World s Fairview Container Terminal in Prince Rupert, Canada Ports closed in Florida due to Hurricane Irma Ports closed in Puerto Rico and US Virgin Islands due to Hurricane Maria Hurricane Irma: Miami Port Closure While the memory of Hurricane Harvey was still fresh, another severe storm, Hurricane Irma, hit the US and caused massive destruction in Florida. Described as one of the most powerful storms in the Gulf of Mexico and Caribbean Sea, it brought heavy rains, severe winds, river-like flooding, and power outages across the state. The first US port hit by the storm, the Port of Miami, was closed for five days starting on September 8. With transportation infrastructure disabled, the port experienced cargo backlogs through mid-september. However, while several vessels that were waiting arrived after the storm on September 13, the storm did not impact vessel berth times at the port. Port of Miami Duration: September 1 30, 2017 Vessel Arrivals: 69 Average Berth Time: 17.0 Hours Longest Berth Time: 40.5 Hours Port of Miami Vessel Arrival Count and Average Vessel Berth Times (September 1-30, 2017) 1-Sep 2-Sep 3-Sep 4-Sep 5-Sep 6-Sep 7-Sep 8-Sep 9-Sep 10-Sep 11-Sep 12-Sep 13-Sep 14-Sep 15-Sep 16-Sep 17-Sep 18-Sep 19-Sep 20-Sep 21-Sep 22-Sep 23-Sep 24-Sep 25-Sep 26-Sep 27-Sep 28-Sep 29-Sep 30-Sep Average Berth Times (Hours) Vessel Arrival Count CargoSmart CargoSmart Limited. All rights reserved.

7 Gain Actionable Insights from Big Data Big Schedules Analytics is a new feature in Big Schedules that provides an interactive dashboard to measure and analyze carrier performance and gain market intelligence for better decision making. You can set up port pairs to compare their performance based on your business needs. The powerful analytics include: On-Time Reliability Transit Time Reliability Vessel Waiting Time Analysis Subscribe to Big Schedules Analytics today at to improve your shipment planning! DATA METHODOLOGY CargoSmart established the Global Vessel Voyage Monitoring Center (GVVMC) to detect and analyze exceptions as they are happening so that shippers, forwarders, and NVOCCs can be informed earlier. Opened in Hong Kong in October 2012, the GVVMC monitors and analyzes 7,000 vessels' movements covering 90% of the world's container capacity and over 1,100 global container ports. Using advanced analytical software tools, the center analyzes vessel patterns, to detect deviations that have the potential to cause shipment-plan exceptions and monitor live vessel schedules to measure carriers reliability. The GVVMC obtains data from the Automatic Identification System (AIS), ocean carrier websites, marine terminals, and shipment data. The center ensures high data quality by observing and reconciling multiple data sources. VISIBILITY BLOG - JOIN THE DISCUSSION Follow updates and share your insights about vessel delays on CargoSmart's blog at visibility.cargosmart.com/blog. To receive the monthly 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 States CargoSmart 2017 CargoSmart Limited. All rights reserved. 7