Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
After more than 18 months of theorizing and tinkering, Maersk Line and IBM Corp. today announced the formation of a joint venture to apply blockchain technology, a distributed ledger that creates a transparent and indelible trail of each transaction, to global trade and transportation.
The venture, which had been rumored for some time, will use blockchain to, in the companies' words, "provide more efficient and secure methods" for conducting global trade. Today's announcement means that "a beta version involving all players of the ecosystem along a specific trade lane can be launched," said Michael J. White, former president of Maersk's North American division and the head of the new venture, in an email today.
Copenhagen-based Maersk, the world's largest container line, and IBM, based in Armonk, N.Y., began work in June 2016 to build technologies that would be relevant to the process. Since then, various corporations, marine terminal operators, and government organizations such as the U.S. Customs and Border Protection have piloted the platform.
The venture, which will be open for members across a trading network to join, will allow Maersk and IBM to market the process to a broader range of commercial and government interests, the companies said. The venture is subject to various government regulatory approvals, and it has yet to be named. It is expected to start six months after regulatory clearance is received, the companies said.
The companies said they are encouraging other shipping lines to join, noting that container flow data considered proprietary would not be visible unless the ship line wanted it to be. In an interview today at the National Retail Federation's (NRF) annual convention in New York, Karl Haller, partner and global leader for IBM's Consumer Center of Competency, compared the joint venture's platform to a big, distributed database with functionality constantly enabled so no user can change any details without those actions being logged for all to see.
Blockchain's name comes from parties in a transaction adding "blocks" of information to the wider chain. The blocks identify as much information as the stakeholders deem necessary for the transaction to progress and be completed. Fraudulent activity would be virtually impossible because the transaction would represent a single view shared and witnessed by all participants. A transaction can move forward free of hackers and the need for so-called trusted third parties such as lawyers, bankers, and other intermediaries who've historically filled overseer's roles.
At the core of a blockchain's appeal is the development of self-executing, or "smart," contracts that would not require a third party's validation. Contracts could be converted to computer code, stored, then replicated on the system and supervised by a network of computers that run the blockchain. Smart contracts enable the exchange of money, property, shares, or anything of value in a transparent and conflict-free way, while avoiding the services of a middleman, according to supporters of the blockchain process.
Originally utilized to support the Bitcoin crypto-currency, which buyers and sellers use to execute transactions outside of the normal banking ecosystem, Blockchain is gaining interest across multiple industries, not the least of which is transportation and trade. The "Blockchain in Transport Alliance," (BiTA), a group created in the U.S. to develop industry standards, has received 975 applications to join and has 175 members, according to Craig Fuller, a transport IT executive and the group's co-founder. It is by far the largest industry-specific blockchain association, Fuller said.
Maersk and IBM said blockchain could revolutionize the ocean shipping industry, which moves about $3.2 trillion of goods worldwide and which has been a notable laggard in digital development and implementation. According to the companies, the overreliance on paper transactions has driven up the costs of processing and administration to as high as 20 percent of the costs of transportation.
According to White, most inefficiencies are caused by "information silos and ineffective data and documentation sharing. For example, information at origin was not always known by the destination customers in a timely manner." Missing documentation has also attributed to delays, a scenario that could be avoided with a blockchain-enabled program in full swing, White said.
Connor DiGregorio, a procurement research analyst at supply chain market research firm IBIS World Inc., said the databases of parties involved in a transaction are stored separately, which requires the exchange of paperwork. The IBM-Maersk platform will "allow easier coordination of documents on a shared distributed ledger, eliminating much of the need for physical paperwork," said DiGregorio in an email. "Additionally, through the distributed ledger and with the use of smart contracts, approvals and clearing through customs can happen much faster, reducing the time goods are processed through ports and other checkpoints."
Inna Kuznetsova, president and chief operating officer of Parsippany, N.J.-based Inttra, a multicarrier pOréal that tracks the status of more than 40 percent of the world's ocean containers, said the success of the IBM-Maersk venture will depend on the companies' ability to attract a large number of shippers and customs authorities to the platform. "Blockchain represents an attractive means to build a distributed network," Kuznetsova said in an email. "Yet it requires certain changes to the IT and business process of each company joining the platform, in addition to adopting common standards. Both historically represent a challenge in shipping."
She added that participants with multilayered operations, which represent many in the sea carrier trade, will also need to decide if they want to invest in participation in many networks or wait for a true standard to emerge.
Haller of IBM said the venture is all about inclusiveness. "IBM wants to work with standards and regulatory bodies to make sure all these blockchain networks are interoperable," he said at NRF. "We're working to jointly develop a solution that will work for anyone in the industry that wants to be a part of it. Then it will go from being about blockchain to being a solution for global trade."
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Economic activity in the logistics industry continued its expansion streak in October, growing for the 11th straight month and reaching its highest level in two years, according to the most recent Logistics Managers’ Index report (LMI), released this week.
The LMI registered 58.9, up from 58.6 in September, and continued a run of moderate growth that began late in 2023. The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
October’s reading showed the fastest rate of expansion in the overall index since September of 2022, when the index hit 61.4. The results show that the industry is continuing its steady recovery from the volatility and sluggish freight market conditions that plagued the sector just after the Covid-19 pandemic, according to the LMI researchers.
“The big takeaway is that we’re continuing the slow, steady recovery,” said LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. “I think, ultimately, it’s better to have the slow and steady recovery because it is more sustainable.”
All eight of the LMI’s indices grew during the month, with the Transportation Prices index showing the most growth, at nearly 6 points higher than September, reflecting increased activity across transportation markets. Transportation capacity expanded slightly during the month, remaining just above the 50-point threshold. Rogers said more capacity will enter the market if prices continue to rise, citing idle capacity across the market due to overbuilding during the pandemic years.
“Normally we don’t have this much slack in the market,” he said. “We overbuilt in 2021, so there’s more slack available to soak up this additional demand.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."