For more than a month, the Ukrainian army has been resisting Russian occupation in a bloody battle. Although the people of Ukraine and Russia suffer most directly from the war, the rest of the world has also indirectly fallen victim to Putin’s decisions. I have already explained the impact the war in Ukraine has had on the freight sector as a whole, but I would now like to highlight the ongoing air transport sector. It is currently suffering not only from soaring fuel prices, but also from a lack of capacity, which is also having an irreversible effect on consumer wallets around the world.

Capacity is affected not only by ban but also by destruction

In early March, two weeks after Russia’s invasion of Ukraine, Northeast Asia-Europe’s transport capacity had fallen to 22% since the pre-war period. Now, almost a month later, it is even lower. The capacity of air carriers is most affected by the sanctions imposed on Russia. As a result, the delivery of goods to Europe is banned for the largest Russian cargo airline operator Volga-Dnepr, whose subsidiary AirBridgeCargo has more than 800 different cargo aircrafts. However, this is not the only aspect that affects the capacity of hauliers. Aircrafts destroyed as a result of war, which rubs salt into the wound of the industry, also play an important role. For example, in the battle against Hostomel Airport, the industry lost a historically unique specimen – the world’s largest cargo plane, the Mriya. Although the Ukrainian government has announced that every effort will be made to rebuild the plane, it will take time and at least $ 3 billion. It has also recently been confirmed that AN-26 and AN-74 aircrafts have been destroyed as a result of the Russian invasion.

To Asia around Russia

Due to the war, many air carriers have decided not to cross the airspace of Russia, Ukraine and also Belarus, citing the safety factor of employees as the main reason. This position has been publicly confirmed by industry giants such as UPS, DHL and FedEx, which own about 1,000 cargo planes. I believe that not only the issue of security, but also the image and political pressure of the company played a major role in making this decision. Now that most companies in various sectors are leaving Russian territory, thus clearly expressing their political position, the big logistics and freight companies must not lag behind either. It is clear to them, as to any other business expert, that the image of a company is easy to tarnish but hard to polish, and the smartest way to avoid becoming a black sheep right now is to turn your back on Russia.

Consumers become the victims

A series of all the above decisions and events will inevitably increase the costs for air cargo carriers, which will not only hurt market players but also consumers. There are already companies in the industry that are increasing the additional costs for international freight. One of them is FedEx, which took such a step in March. Although the company is one of the first to change its pricing policy as a result of events, it will certainly not be the last.

The most logical solution – more cargo planes

Once again, as in the Covid-19 outbreak, when the industry was struggling with a lack of capacity, the most effective solution is to transform passenger planes into freight transport. Such restructuring of airlines would significantly increase the capacity of air cargo carriers. Moreover, according to Insider, it is more profitable than buying new cargo planes. According to the media, such a move could save companies hundreds of millions of dollars. Airlines such as Qatar Airways and the Emirates Group, known to the general public as passenger airlines, took this step in early 2020. At the end of March, Alaska Airlines joined them, adapting five different passenger planes for cargo transportation.

Whatever the future decisions of air carriers, one thing is clear: only by working together in a crisis situation will it be possible to meet the needs of both the industry and the customer.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

The post The effects of the war on air freight will be felt by consumers around the world appeared first on Cargo News Today.

Whopping fuel prices

The war has affected the logistics and freight industry both directly and indirectly. One of them is the rise in fuel prices, which has been felt by every driver in recent weeks. Fuel prices have now reached unprecedented heights. In America, for example, this increase was last seen more than a decade ago. This inevitably affects the costs for carriers, which in turn raises the price of the service. For example, according to Freightos, global air freight rates from Asia and Europe have risen by about 80% since the end of February, reaching $ 11.86 per kilogram. Higher shipping costs are likely to affect not only carriers but also consumers. Market comparisons are already showing significant price increases for commodities such as aluminium, wheat and exotic fruits.

Longer routes

More than 2,500 flights from the United States used Russian airspace in January, according to aviation data company Cirium. However, at present, due to security, sanctions and political stance, many carriers no longer deliver goods to Russia and avoid including its territory in their route plans. Due to military threats, Ukraine and Moldova have also become countries with a curve in both land and air transport. This means that companies in the sector need to think about alternatives to travel around certain countries, thus extending flight times and inevitably increasing fuel consumption. Due to the difficulties caused, several airlines have cancelled flights to some Asian countries. Such a step has been taken, for example, by an industry giant such as Finnair, which has decided to cancel passenger and cargo flights to Seoul, Shanghai and Guangzhou, as well as Hong Kong indefinitely.

Lack of capacity and congestion

The state of war in Ukraine has also affected freight transport capacity, which had already fallen sharply during the pandemic due to growing demand for goods, and is now being further eroded. Why? One of the reasons is the aforementioned sanctions against Russia. As a result, Russian cargo planes have been suspended. One of the most significant losses is the banning of Russia’s largest cargo air operator, the Volga-Dnepr, in the West. The Volga-Dnepr operates a fleet of particularly large cargo ships with ramps that can accommodate unusual types of cargo, such as metro wagons, as well as large general cargo shipments. Its subsidiary AirBridgeCargo has 17 Boeing 747 jumbo jets and 777 other cargo aircraft that have been banned from operating in almost 30 countries since the sanctions were imposed. Such bans have had a significant impact on the capacity of cargo aircraft, which is also contributing to the rise in air freight rates.

Congestion at borders and ports

Sanctions against Russia are also not helping the already growing congestion at the border and in major ports. As a result, all shipments of goods entering and leaving the country are subject to special scrutiny at the border to ensure that all sanctions imposed on the country are complied with. This, in turn, indirectly affects an already disrupted supply chain, creating congestion and making it even slower than before.

The air and land transport sectors are not the only ones indirectly affected by the military conflict between Ukraine and Russia. Russia’s invasion of Ukraine is also damaging world shipping, which accounts for 80% of world trade. Many Russian ships are currently stranded in the world’s oceans and seas, unable to deliver and receive cargo because they are barred from calling at ports in the Americas, England, Canada and many European countries. In addition, the crew on board has to deal with the reluctance of foreign seafarers to help in the event of a shortage of petrol. In recent weeks, the media has repeatedly published videos showing footage of the Russian ship’s crew crying for help, which has been unsuccessful.

Security risk

The war in Ukraine has also increased the security risks for logistics and freight workers. Although most logistics companies have stopped delivering goods to Russia and Ukraine, including Maersk, CMA CGM and Hapag-Lloyd, some 140 merchant ships from other countries are currently trapped in Ukrainian ports, risking being left without food or drinking water. There have been several reports in the media about the shooting of ships and the death of crew members. For example, on March 3, an Estonian-owned cargo ship with a crew of six, including two representatives of Russia and four representatives of Ukraine, sank off the port of Odessa. Three other merchant ships were sunk in the Black Sea; one of these attacks killed a Bangladeshi crew member. Undoubtedly, the security risk in the shipping industry is now higher than ever, and events are pushing up insurance prices, urging carriers to impose a ‘war risk surcharge’ and puts people in the shipping industry in fear for their lives.

All the above factors lead to the same conclusion: no matter how much we want to send Russian freight and logistics companies to hell because of their political position, we must understand that their absence from the market makes it difficult for the entire industry to function effectively. So let us hope for an early end to the war and a faster recovery of the industry, which will benefit everyone.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

The post Security risks and rising costs: the consequences of the Russia-Ukraine war on freight transport appeared first on Cargo News Today.

Where’s the beginning?

Although the shortage of semiconductors hit the world in 2021, the roots go back to 2020 with the arrival of the Covid virus. Countries, in an effort to protect society from a deadly disease, have forced everyone to isolate themselves by shutting down factories and halting many production processes, including car production. With the closure of factories and low demand for new vehicles, car manufacturers had cancelled orders for microchips one after another. As people’s need for a new car declined, their desire to buy electrical appliances increased, and so did the industry’s demand for semiconductors. While the demand for the product decreased in one industry and increased in the other, everything was fine. The problem began when countries eased the restrictions and people began to buy cars to avoid using public transport. On top of that, the growing demand for delivery service of various goods, and therefore for new trucks, was surging. As a result, microchip manufacturers now had to supply enough semiconductors to meet the needs of the industry as well. At this point, microchip manufacturers no longer had the capacity to produce so many products to meet the needs of all industries. In other words, the demand for semiconductors was much higher than the supply.

The already difficult situation in the industry has also been exacerbated by natural disasters, such as the fire at a Japanese microchip factory, which produced around 30% of the world’s microcontroller chips used in cars. The same microchips are used not only in the production of cars, but also in the production of trucks.

Where does it lead us?

As in any industry, the demand execution time was affected by the fact that the demand exceeded the supply. The production and delivery of new cars took at least three times longer than before the market crisis. According to ACT Research, manufacturers of Class 8 cars produced a total of 262,100 units in July 2020, but the plant was only able to produce 14,920 units in a month due to a shortage of semiconductors, according to the Wall Streat Journal. This affected not only factory revenues but also logistics companies. In the past, buying new cars was a way to successfully increase work capacity, but now that you had to wait at least three times longer for a new vehicle than before, it no longer seemed like a good decision. Therefore, logistics companies relied on the purchase of a used car, but there they also received an unpleasant surprise – a rise in prices. According to the Cox Automotive Manheim Used Vehicle Value Index, wholesale prices for second-hand vehicles in the first 15 days of March 2021 increased by 3.74% compared to average prices in February. In the middle of March, the index reached an all-time high of 175.5, which is 24% more than a year ago and 8% more than at the beginning of 2021, USA Today reported.

What is being done to remedy the situation?

Many technology-based industries suffer from a lack of semiconductors, so everyone is ready to make a difference as soon as possible. For example, Samsung has announced it will invest $ 17 billion (€ 15 billion) in the construction of a new microchip plant in Texas. The new plant is expected to start operations in 2024. STMicroelectronics, one of the largest French and Italian microchip manufacturers, is also building a new plant near Milan, Italy. Car customers are expected to receive chips from this plant by the end of 2023. These are just some of the companies that are willing to invest extra money to grow the microchip industry and put an end to this crisis. While this is definitely better than sitting with your arms folded, the construction of factories does not solve the current situation. Yes, it will help avoid similar incidents in the future, but what can car manufacturers and logistics companies do now? Settle on the situation, rely on existing trucks and temporarily abandon the idea of growing the company and buying a new one? Or should you decide to buy a car as an investment into the future? The answers to these questions can be found within each company.

Where’s the end?

We can speculate on various predictions about when the semiconductor crisis will cease, but unfortunately there is no concrete answer to this question. According to new estimates from AutoForecast Solutions, the number of vehicles removed from production plans worldwide due to a lack of chips in the second week of February was up by 61% from the previous week. This shows that the problem has persisted in 2022 and that again this year, manufacturers and customers will have to deal with the shortage of semiconductors and its consequences.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

The post The global shortage of semiconductors imposes a considerable effect on land freight appeared first on Cargo News Today.

I have previously analyzed the consequences of congestion for cargo ships in the logistics sector. Not only have they significantly reduced the speed of delivery of goods, but they have also increased the cost of services, adversely affecting both suppliers of goods and consumers. In order to continue to work efficiently and reduce waiting times, companies are trying to find other ways to deliver cargo from point A to point B. One of them is by air freight. The strong desire of companies to switch suddenly from sea to air transport has led to an unexpected increase in demand for air freight, which is difficult to meet with current capacity. For example, in 2021, a total of 183,362 tonnes of air cargo were handled at Budapest Ferenc Liszt International Airport, which is 36% more than in 2020.

Does all the blame lie in ship congestion?

It would be foolish to think that the situation was exacerbated only by congestion in cargo ports. Other factors have also made an impact. For example, changing consumer habits. At the beginning of the pandemic, when countries closed their stores for several months to fight the virus, people began to shop online, which led to a sharp increase in demand for goods. Air transport is clearly the fastest way to transport goods between intercontinental routes. Those companies that were initially willing to pay more, knowing that the product will be delivered on time, immediately increased the demand for air transport. Others, on the other hand, preferred maritime transport to save money, but rushed to find available carriers due to congestion.

An increase in demand raises the price

As in any other industry, including logistics, when the interest of service recipients exceeds supply, the price of the service increases with the increase in demand. Until now, this has been the case in maritime freight transport, but it is now slowly beginning to affect the aviation sector as well. It has been observed that air freight rates have remained well above the 2019 price level in recent months due to high demand. WorldACD data show that global rates reached $ 4.57 / kg in the first week of December, compared to $ 4.26 / kg in 2019. (https://cargoworldtoday.com/air-cargo-capacity-climbs-but-rates-remain-high/) Data from the Baltic Exchange Airfreight Index (BAI) show that prices from Hong Kong to North America were at a record high in the same week – 14 , 30 USD per kg compared to the previous week, when the price per kg was only 12.41 USD. IATA data also show that it was three times more expensive to transport three kilograms of goods by cargo plane, for example, in September 2021 than by sea. However, compared to the time before the pandemic, this price was even 12.5 times higher.

It may seem that the increased transport costs make some retailers think twice about switching from sea to air freight, but this is not the case. Many are willing to accept a higher price. Why is it? Because, undeniably, in the intercontinental freight market, air is the fastest way to deliver goods from point A to point B.

Relieving tension by increasing the amount of cargo planes

One of the most effective ways to prevent air freight from entering a crisis with even higher prices is to balance supply with demand. How to do it? Passenger airlines must carefully consider the idea of ​​offering freight services as well. Qatar Airways and the Emirates Group, known to the general public as passenger airlines, have already taken this step in early 2020. Thanks to this decision, both companies earned more than half of their 2020 revenue from air freight. At the beginning of the pandemic, many companies may have moved in the direction of freight, desperately trying to avoid bankruptcy, but this could be a strategic and growth-enhancing decision that would help the company continue to make money in the face of repeated passenger restrictions.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

The post How congestion of cargo ships influences air freight appeared first on Cargo News Today.

Labor shortages will continue

In the past, when I wrote about cargo ship congestion in the world’s largest ports, as one of the challenges and main issue in 2021, I mentioned the shortage of logistics workers. The biggest challenge is the shortage of truck drivers, which, according to the American Trucking Associations (ATA), reached an all-time high in America in 2021, with more than 80,000 shortages. Europe is struggling with a similar situation: according to the Transport Intelligence (TI) study, the shortage of drivers in Europe exceeded 400,000.

Unfortunately, available data and expert opinions indicate that labor shortages in the logistics sector will continue in 2022. The ATA says there could be a shortage of 90,000 truck drivers in America next year. In addition, data from the The National Transportation Institute in America (NTI) suggests that nearly a quarter of the road transport workforce will retire in the next decade, leaving even more vacancies.

One of the solutions that will help the logistics industry to slowly get out of the current shortage of workers is autonomous trucks. In 2022, they will conquer highways at an ever-increasing rate, leaving man-made vehicles behind. Read more about autonomous freight transport and its future here.

Demand for environmentally friendly logistics is growing

Sustainability is an ever-growing trend that will continue to grow in the coming years, including in 2022. Over the last five years, more and more industries have voluntarily taken steps towards environmentally friendly practices, and logistics is no exception. Businesses are encouraged to do so not only by consumers, who are increasingly choosing companies that adhere to the principles of sustainable business, but also by leading industry associations and countries, imposing ever new conditions.

It is inevitable that all sectors, including freight transport and logistics, will increasingly have to make sustainable decisions. We can also see this from this year’s UN Climate Change Conference (COP 26), where the main message was that countries and companies need to set more ambitious decarbonization targets and do everything they can to curb global warming. Although the current targets for climate-neutral freight transport seem quite ambitious, they are clearly not enough and those working in the logistics sector need to go further. Read this article about the goals set by companies and whether climate-neutral maritime transport is a free choice or a survival strategy for companies.

Even greater digitization is inevitable

The McKinsey study found that in just a few months, the pandemic accelerated the digitalization of customer-supply chain interactions by three to four years. Consequently, it seems inevitable to think about digitalization now, thinking about the future. Whether we like it or not, there will be new developments in digitalization in the logistics and freight sector in 2022 as well.

One way in which the latest technologies will enter the logistics industry more and more rapidly will be robotics. Experts estimate that more and more companies will choose to implement robotics in their warehouses, thus saving money, reducing labor costs and speeding up processes.

Automation will also be one of the most important aspects of digitalization in 2022. The aforementioned autonomous vehicles and drivers, which will be equipped with AR (augmented reality) glasses, ensuring coordination between robots and humans, are only part of the digitalization process that will begin in 2022.

These are just some of the trends that workers in the logistics and freight sector will face in 2022. While next year will probably not be the time when we can take a breather and regain our strength, it will be full of exciting events and unexpected turns.

Author: Rolands Pētersons, logistics expert

Image: www.pexels.com

The post The three main trends in logistics and freight in 2022 appeared first on Cargo News Today.

According to the latest UN estimate, cargo ships carry 10.7 billion tones of cargo in the oceans each year. Almost all carriers have so far used fossil fuels, which currently account for 2% -3% of global carbon dioxide emissions. This means that if the shipping industry were a country, it would be the sixth largest emitter of carbon in the world. If shipping companies do not take additional measures to reduce emissions in the coming years, the sector’s CO2 emissions are projected to increase by 50-250% by 2050.

Carbon emissions are one of the main causes of adverse climate change, including rising average air temperatures and increasing rainfall, which in turn is accelerating the melting of ice, increasing salinity and water levels in water bodies, and increasing coastal erosion.

To prevent the world from reaching a climate crisis, many industries, including logistics, are looking for effective ways to reduce their negative impact on nature.

The goal is to become a carbon neutral industry

At present, maritime freight companies are ambitiously moving towards the goal of becoming a carbon-neutral industry. However, this is not a one-day issue, and carbon emissions need to be reduced gradually to reach this goal. The International Maritime Organization (IMO) has set a target of reducing total international GHG emissions from international shipping by at least 50% by 2050 compared to 2008.

The decarbonization of the shipping industry will not only help reduce the sector’s negative impact on the environment but will also help to achieve other climate-related goals, such as the switch to renewable fuels by 2050. The Environmental Defence Fund estimates that this could boost up to $ 6 trillion in renewable energy infrastructure worldwide.

The first steps towards the goal

The Danish freight company Maersk has taken the first serious step towards decarbonization. The company has announced the purchase of eight cargo ships that will run on methanol, reducing CO2 emissions by 1 million tones. This decision follows the carrier’s commitment to become a fully climate-neutral company by 2050.

Maersk is not the only industry to start realizing its ambitions to become an environmentally friendly company. Similar decisions have been made by other companies, such as DHL and UPS, which offer their customers the option of delivering orders using sustainable fuels for a fee. Amazon, meanwhile, signed a commitment in October with companies such as Ikea and Unilever to make sure that by 2040 they could only transport goods on carbon-free ships.

Choice or necessity?

Over the last five years, the number of players in the logistics, freight and shipping sectors that are moving towards a greener future is growing, and the above companies are just some of the players in the logistics sector who have already made their first choice in favor of decarbonization. That, of course, is to be welcomed, but before companies are praised and put on the podium, it would be important to understand their motivation. Here are some facts that can help you find the answer to this question!

A study on corporate social responsibility conducted in 2017 found that consumers today increasingly choose companies that adhere to the principles of sustainable business. 87% of people are more positive about companies trying to reduce the environmental impact of their industry in various ways. In turn, 88% of respondents trust service providers to contribute to the fight against social and environmental issues. The research data show that the position of companies on environmental issues is especially important for the younger generation of adults and millennials. This means that promoting an environmental awareness plan is an effective strategy to increase customer purchases, gain trust and maintain loyalty.

Account must also be taken of the fact that the goal of making shipping an environmentally friendly industry is being set not only by companies or leading associations, but also by countries. For example, from 2030, Norway has committed to purchase only those cargo ships that will have access to zero-emission technologies. Norway’s climate strategy also provides for an international ban on the use of non-climate-neutral fuels from 2050 onwards. This, in turn, could mean that the demand for water transport that is not fueled by this type of fuel will fall sharply over the years.

Under the EU Emissions Trading Scheme, which will be phased starting 2023, the European Union (EU) will also start regulating shipping emissions. In addition, legislation is being proposed requiring shipping companies to pay for the carbon dioxide emissions they emit when traveling to, from and between EU ports.

These are just some of the facts that make it clear that the noble step towards climate-neutral action is not only a free choice of companies, but also a strategic step in gaining customer loyalty and surviving at a time when tackling the climate crisis is a top priority. As the Latvian poet Rainis wrote: “Only that which remains in constant change, shall persist!”

Author: Roland Peterson, logistics expert

Image: www.pexel.com

The post Climate-neutral maritime transport – a business choice or a survival strategy? appeared first on Cargo News Today.

Since early October, about 50 cargo ships have been waiting in line to unload containers at California’s largest ports, Los Angeles and Long Beach. The situation is similar in the ports of Hong Kong and Shenzhen, where more than 100 cargo ships are waiting to unload. Congestion is also occurring in England and other parts of the world. It is estimated that more than 580 container vessels are currently waiting to enter ports worldwide.

Due to the congestion, transshipment from ships takes three times longer than before the pandemic. For example, China’s largest ports are open 24 hours a day to handle all incoming ships. Meanwhile, to address the situation in the United States, President Joe Biden has persuaded some bigger companies, such as Walmart, UPS, and FedEx, to extend their working hours. However, these are only temporary solutions that cannot completely solve the problem.

What contributed to the increase in queues and when did it start?

Cargo queues in ports began to emerge with the rapid spread of COVID-19. The countries declared a state of emergency in the fight against the virus and severely slowed down their economies for months, urging people not to leave their homes unnecessarily, closing shops, cafes, restaurants, and other entertainment venues. This action by public officials has boosted consumer demand for the supply of goods. For example, according to container trade statistics, in the first eight months of 2021, about 25% more cargo was shipped from Asia to the United States than in the same period in 2019 before the pandemic.

For many transport companies and ports, the rapidly growing demand for logistics services came as an unexpected wave that highlighted a growing problem: the shortage of logistics workers. It was revealed that the ports have an insufficient number of employees and there is also a lack of truck drivers who take the brought containers further by road. At present, those working in the sector have not been able to cope with a large amount of work, which in turn has significantly increased waiting times in ports as a result of the domino effect.

However, staff shortages and the growing demand for goods from both traders and consumers are not the only reasons for cargo ship congestion at ports. The freight container crisis, which is another domino in this chain of problems, has also had a major impact on the situation.

What does this mean for the consumer?

High demand for the supply of goods, staff shortages, the container crisis, and queues for cargo ships for unloading has contributed to a significant increase in freight rates. The Financial Times reports that the average shipping cost for a 40-foot container in the world today is almost $ 10,000, which is three times higher than at the beginning of the year and 10 times higher than before the pandemic. Rapidly rising transportation prices also affect the prices of goods in stores. This means that the wide range of problems has a negative impact not only on the carrier but also on the consumer.

In addition to rising commodity prices, consumers also have to deal with longer delivery times. The longer the queues of cargo ships at unloading, the longer they will have to wait to receive the order. For this reason, many logistics experts call on people to prepare for Christmas in time to keep the industry from getting worse.

How long will it last?

The duration of congestion at ports depends on a number of factors: demand, staff numbers, pandemic outbreaks, and weather conditions. Yes, weather conditions also affect port operations – snow, strong winds, and rain can be a reason to temporarily close cargo terminals.

Economic analysts and logistics industry experts agree that the current situation will continue in 2022. The only question is – for how long? There are specialists, such as Detlef Trefcger, the head of Kuehne + Nagel, who believe that the congestion at sea will last at least until February next year. Still, others think – the worst is just ahead, and the problem could last even after the Chinese New Year. In turn, one of the largest international logistics companies DP World has expressed the opinion in the media that the current situation could last up to two years.

While it is not possible to determine the exact time of the crisis in the logistics sector, one thing is clear: as long as countries are unable to fight COVID-19 effectively, logistics companies will continue to operate in crisis, container prices will not fall and freight queues at the world’s largest ports will continue to grow.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

The post National economies are blooming – what difficulties does this create for sea freight carriers? appeared first on Cargo News Today.

Autonomous transport in the world

Several countries in Europe and elsewhere in the world have embarked on a path towards autonomous freight transport. The first autonomous caravans appeared in Europe last year, when they started running on German roads. Such a caravan consists of two trucks traveling in a column one after the other. The first is controlled by a human, and the second by a robot. The United States, on the other hand, has taken a step further in using autonomous trucks, not only by testing them, but also by actively using and expanding them. For example, TuSimple plans to increase its fleet of autonomous cars to 50 vehicles this year.

In the world of maritime transport, too, autonomous transport is slowly beginning its winning streak. The Japanese and Chinese at the forefront of technology plan to launch their first autonomous ships on the high seas in November this year and February 2022. However, sea carriers are also trying to go a step further by making autonomous vessels more environmentally friendly. For example, the Norwegian company Yara International has created a zero-emission vessel capable of carrying cargo without a crew.

Benefits of autonomous transport

There are several reasons why the world of freight transport is moving rapidly towards autonomous vehicles. One of them is work efficiency – with the help of autonomous vehicles or ships, it is possible to employ your cargo carrier without interruption – 24 hours a day, which is not possible if the ship or truck is driven by a person. Autonomous lorries also allow companies to circumvent many of the conditions in the Mobility Package, such as drivers having to return home every four weeks. Security is also an important aspect. Data from the study “The human factor and maritime safety” show that about 70% of accidents at sea are caused by human error. Autonomous vessels controlled by robots would make it possible to reduce these harsh statistics.

The challenges of autonomous transport

The above benefits and the acceptance by many technology experts, as well as sea and land freight experts, that autonomous transport is our future are creating a pink spectacle effect for the forthcoming technology boom. It is rarely said that autonomous technology experts have not yet been able to solve a number of problems. As machines become more complex, the risk of technical problems will inevitably increase. Cyber-attacks, hackers that can break into a system and cause a ship or vehicle to change course or even cause an accident, weather conditions – heavy snowfall, heavy rain, wind or storm, calculation of stopping distance on various surfaces, including slippery surfaces – these are just a few from the challenges that technology experts need to be able to find solutions to build people’s confidence in autonomous transport.

Another topical question is whether countries are ready to introduce autonomous transport. Unfortunately, the answer is ambiguous, as while European powers such as Germany are planning to change their legislation to allow cars with electronic steering to participate in traffic, one of the most influential maritime associations in the United States, the International Longshoremen’s Association, said its members would not serve ships without crew. The association has already shown strong resistance to all forms of automation in the maritime world. Another important aspect is that international shipping law currently requires all cargo ships sailing in international waters to be manned. This means that fully automated vessels are not allowed to sail outside their national waters.

There are countries that are not ready not only for autonomous sea but also for land transport. It is considered that, for safety reasons, virtual haulers need at least two lanes of carriageway in each direction of travel along the entire route, separated from the carriageway of the opposite direction. However, the road infrastructure of many countries does not currently provide for such roads, which means that autonomous land trucks would not be able to enter these countries at all for safety reasons.

Undoubtedly, autonomous control systems go hand in hand with the endless development of technology, as a result of which they will enter the world of freight transport more and more rapidly. The car and ship industry will also sooner or later solve all the above problems, but we will have to wait a long time before autonomous goods vehicles can travel safely on land and water. And to the question of whether the future of computer-controlled vehicles is as bright as it seems, the most accurate answer seems to be – time will tell!

Author: Roland Peterson, logistics expert

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Logistics – where technology enters rapidly

According to experts, logistics is one of the industries where technology has entered the most and fastest in recent years. Artificial intelligence, which makes it possible to analyze consumer habits, plan exact delivery volumes and make data-based decisions, has become the “new normal”.

Digital, data-driven and sustainable logistics

Supply chains are a complex process that depends on a number of external and internal factors. In addition, due to the pandemic, few now question the impact of smart logistics on the company’s development. Former beliefs that supply chains are linear flows of goods and services are being replaced by a vision of logistics as a highly integrated system network. Therefore, supply chain and logistics managers need to re-evaluate their roles to ensure a digital, data-driven and sustainable future.

Technological change is happening at an unprecedented rate and scale

However, expert research shows that only 4% of supply chain and logistics managers believe that they are ready for the future. Many supply chain and logistics managers do not have a clear vision for future change and face significant resource, technology and funding constraints. Although 81% agree that technological change is happening at an unprecedented rate and scale, it is constrained by outdated legacy systems as well as the educational aspect of the logistics sector. However, with the right solutions, it is possible to overcome these challenges and build customer-oriented supply chains that are more resilient to external shocks.

Optimal balance between people and technology

To achieve improvement, think big – supply chains play a crucial role in meeting the ever-changing needs of customers, and companies need a comprehensive strategy with the customer at the center. Many leaders point out that the challenges they face are rooted in a lack of strategy. It is important to remember that automation has an important role to play in these strategies, in addition, to promote the development of knowledge and skills in logistics. Most supply chains use automation and artificial intelligence (AI) to reduce manual tasks in areas such as demand planning, logistics, and after-sales services. Investing in automation should also enhance the skills and competencies of employees to work with AI and integrated solutions, achieving an optimal balance between people and technology in the supply chain.

Entrepreneurs in the industry are optimistic

The pandemic has acted as a catalyst for supply chains, rapidly increasing the burden they had to withstand. Out of the crisis, this experience will provide an opportunity to find new business directions and digital solutions. Various studies show that entrepreneurs in the sector are optimistic and ready for change – 34% plan to be ready for the “new normal” and AI entry into logistics by 2023. Creating flexible, responsible and unbreakable supply chains will allow companies to operate consistently and provide high quality services.

Author: Roland Peterson, logistics expert

Image: www.pexels.com

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Creating a level playing field

To improve multimodal traffic, in addition to technical innovation and addressing the challenges of competitiveness, it is necessary to fully internalize external costs for all modes of transport in order to create a level playing field. It also means taking serious steps to maintain and restore Europe’s separate wagonload system, to connect strategic infrastructure (such as ports) to rail solutions, to invest in industrial access roads and to involve large logistics companies in the modal reorientation of their flows.

Efficient and continuous multimodal freight flows

Attention must also be paid to other problems associated with multimodal transport (excluding the additional costs of transshipment and additional transaction costs), such as long delivery times, complexity, higher risk and less reliability, which make it difficult to deploy multimodality. Measures are therefore needed to make multimodal freight transport competitive and to create efficient and uninterrupted multimodal freight flows that cost as much as one mode of transport.

Adequate infrastructure

There is also a need to encourage the railway sector to better adapt to the open market and to address the lack of punctuality, reliability, predictability and flexibility that negatively affect multimodal solutions involving rail transport, while inland waterway transport needs to improve cross-border transport capacity. Adequate terminal infrastructure is essential for the future of the transport and logistics sector to be truly rooted and successful.

Smart digital solutions

For multimodal transport to be successful, it is essential to ensure that regulations governing, for example, the transshipment of dangerous goods between different modes of transport are harmonized and that other regulatory and practical issues that may hinder the interoperability of different modes of transport or transport between countries are addressed. A number of barriers to intermodal transport could be addressed through smart digital solutions, such as tracking and tracing capabilities and other digital solutions that facilitate the efficient management of multimodal transport flows.

Reduce the predominance of road freight

Multimodal transport would also to some extent facilitate the interaction of environmentally optimal modes of transport, including reducing the dominance of road freight transport. Multimodal logistics, including in cities, would facilitate more efficient planning and avoid empty journeys, and the need to include freight transport in urban mobility planning.
It is equally important to avoid complex rules defining combined or multimodal transport, which would ensure that the providers of these transport services are entitled to financial support and special market access rules.

Author: Roland Peterson, logistics expert

Image: pexels.com

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