A&P 2005 - Bringing steamship lines into technology loop

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By Karen E. Thuermer, AJOTIBM is now in the shipping business, but not in the way you might think. By acquiring Danish computer services firm Maersk Data, a subsidiary of the A.P. Møller-Maersk Group, last year, the IT company has now opened a new competence center: IBM Transport & Logistics. It has also purchased DM Data, an outsourcing business jointly owned by A.P. Møller-Maersk and WM Data. The reason: market and customer pressures are driving changes in the way container shipping lines currently do business.
Customers are increasingly demanding greater reliability of container shipments at lower total costs. Changes in public policy are likely to require plans for increased security throughout the industry. Meanwhile, infrastructure constraints and threats from new, more agile entrants will challenge the way industry players currently approach both asset optimization and customer relationships.
By offering this new competence, IBM is bringing real-time, enhanced viability to global supply chain operations by improving the quality of container tracking and enabling increased security of transported goods. IBM Transport & Logistics is also bringing a physical product on the scene to make sure this happens: highly intelligent, tamper resistant wireless tracking devices.
These devices, called TREC (Tamper-Resistant Embedded Controllers), which look like a box, are connected to an advanced technology network for use by manufacturers, retailers, logistics providers, carriers, and government offices to share real-time cargo information. Attached to a cargo container to read information, and manufactured to withstand the environment in which they operate, shipments can now be tracked and traced while in the hands of a steamship line. Pertinent information can be relayed concerning that shipment while en route in the container.
“TREC is unlike typical passive tags like Radio Frequency Identification Devices (RFID) that collect data only. The TREC devices incorporate significant processing power, enabling them to instantly receive and send data,” says Henrik Anker Olesen, logistics transport leader for IBM Asia Pacific Business Consulting Services in Shanghai.
The devices automatically collect information on each container, including physical location, based on GPS, and parameters such as temperature and humidity and sensory readings.
Welcomed technology ageThe acquisition, and the product IBM is now rolling out, is yet another example of how the age-old business of moving goods around the world is going high tech. The goal is not to add logistics or another product to IBM’s long list of offerings. Through innovation, IBM believes an old, stodgy industry such as ocean shipping can join the ranks of other transportation providers and move up the supply chain by adding value and additional service to its customers.
“We asked what we could offer the logistics industry worldwide that would be of interest,” says Brian Thomas Eck, Ph.D, IBM’s director, Strategy & Engineering, Senior Technical Staff member for Integrated Supply Chain Manufacturing Singapore.
After all, 53% of the world’s freight is currently moved—and thereby controlled by the steamship lines. Yet this is the last bastion in the transportation industry that has not embraced sophisticated ICT services for supply chain logistics. IBM Transport & Logistics thinks it should. By the year 2015 the percentage of freight controlled by ocean vessels is predicted to increase by 80%. When moving such large volumes, shippers want more information. Steamship lines must find ways to bring more value from their services to their customers in order to meet their needs.
The reason for these developments are obvious. Since the beginning of man there has been a need to move things from one place to another. As populations grew and trade commenced, the need to move items faster and at a profit became more and more paramount. In today’s high tech world, nearly every method to obtain speed and retain a competitive position

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American Journal of Transportation