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IoT and Maritime Container Tracking with Erik Lund
103 Plays4 months ago
In this episode, Erik Lund, Managing Director Maritime & Logistics at Nexxiot, joins Host Brian Glick, CEO of Chain.io, to discuss:
- The tech behind real-time visibility like the IoT and tracking devices
- Boosting time to value for large shipping lines
- Container shipping innovations and their efficiency impacts
- The potential of data across global trade, especially in trade compliance
Erik serves as the Managing Director of Maritime and Logistics at Nexxiot, a provider of sensors, hardware, software interfaces and analytics to optimize transportation on a global scale.
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Transcript
Introduction to IoT in Maritime Tracking
00:00:05
Speaker
Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO at Chain.io. On today's episode, we are going to go very deep on the logistics of rolling out IoT, specifically in maritime and container tracking.
Nexian's Role in IoT Deployment
00:00:23
Speaker
It's one of those topics that It seems like this magic thing that's going to be out there someday and it's really happening and there are live products in the market. And we are right at that inflection point for being able to actually know where our containers are and the health of those containers beyond just the reefers.
Eric Lund's Background in Logistics
00:00:41
Speaker
So we're going to be chatting with Eric Lund. Eric is the managing director for maritime and logistics at Nexian, one of the leading solutions for deploying IoT devices onto containers.
00:00:55
Speaker
So I hope you enjoy the episode.
00:01:04
Speaker
Eric, welcome to the show. Thank you very much. Great having me. Yeah, it's good to see you and looking forward to chatting. Why don't we start? Just ah give us a little bit of your background in the industry. Yeah. So in my case, you need to define the industry. I've been having a path across a few industries. But in the context of logistics and transport or logistics and maritime, I have an original background from MERSC. Started out at the headquarters in Copenhagen and spent a total of 12 years around the world with MERSC. Building the organization in Indonesia was part of what became Damko at MERSC when MERSC entered into 3PL.
00:01:49
Speaker
back in the days and I spent quite considerable time also in Africa for MERSC before I went into technology, both log tech and other technology areas, but made it back to what we're doing now.
Evolution and Essentials of IoT in Supply Chains
00:02:05
Speaker
through a ah period of maritime and transport innovation, the consultancy, ultimately ending up in ah supply chain visibility, driving a business unit within Sony, and now joining since almost a year. Next year, ah looking to you know put every single logistics asset online, make ah all the non-powered
00:02:32
Speaker
assets, containers, chassis, rail cars, whatever you have it, smart with an extra device, being able to send information about what am I doing and starting to work with this data together with our customers. So I am curious, and I do want to get back to some of the IoT and device things, but You're one of the very few people I know in the industry who got out and came back. So what was that like? What prompted you to do other things and what prompted you to kind of come back into logistics?
00:03:06
Speaker
I'd say ah my life path turned away from logistics for a number of years, but I am one of those guys that get excited when he sees a container, when he sees a ship, when I'm standing at a 45-degree angle with my nose into a storm, and I have maintained my network from days and have always enjoyed the complexity, the diversity, the undervalued impact the logicians have on, ah particularly, I guess, maritime transport, has on global transport. And, you know, as I made my way back to the industry, it has truly been a true pleasure for me to come back to address
00:03:48
Speaker
You know, the same talent is that remain as when they left to a certain extent and trying to address them with, you know, these ah technologies that we are bringing to the market
Real-World Benefits of IoT
00:03:59
Speaker
before next. ah When I was ah focusing on you say the supply chain visibility part of it and more looking at what's happening with shipments, goods cargo is moving about rather than necessarily the assets, the containers, the chassis, the railcars, you had ever given stock in the Suez Canal.
00:04:20
Speaker
and There's basically something like one or two billion dollars of cargoes being clogged up behind ever given that could not pass the vessel in the Suez Canal and it is such a beautiful picture. of how impactful this industry is. It's like the plumbing in your walls. You couldn't care less when it works, but when it doesn't and when it starts to smell, then it does become top of mind. And during that period of time, ah during the pandemic time, with all the supply chain disruptions, you did see, you know, the logistics managers, the supply chain managers, you know, being taken out of the basement and being put into the boardroom because it was
00:05:04
Speaker
you know, of critical importance for companies to actually efficiently manage their supply chains. So given all of that and given how important all of this, I think one of the things that has struck me about asset tracking and about the kind of the space you're living in now, it seems a little bit like self-driving cars to me in that for my whole career, next year is the year when it's going to explode. Right. And what I've noticed in the last two years is actual news about actual things happening.
Challenges in IoT Deployment for Maritime
00:05:42
Speaker
Right. So the actual deployment of devices, ocean carriers seem to be getting on board, you know, but what was the inflection point for that momentum really getting going? You're absolutely right. This is a topic that has been ongoing. You know, this was a topic about 20 years ago. Can we put a, uh,
00:06:01
Speaker
a barcode on the containers. Can we put a QR code on the containers? Can we scan them? Can we do this and that, right? If you look at where we and our competitors were coming from, you know certainly you're seeing the emergence of a number of logistics IoT companies coming out 10 years ago. Now look, all of us, we, TIVE, ROMB, you name it, more or less found it at give and take the same time, ah seeing that this technology is done to become mature enough for what we want to do.
00:06:34
Speaker
you know, battery lifetime, global connectivity and and stuff like that, understanding of what we want to do with the maturity of being ready to do something. I think those are some of the key points. And all of us did have a discussion with, now we're talking in the maritime space, with shipping companies at that time, and they were not really ready to roll. ah multiple aspects of it there's certainly a pricing aspect there's a perceived value of what the technology could do versus what they were trying to do at that point in time. They're built to take in the information from the devices again very much the question of the technological maturity of the shipping industry and of the individual players within the shipping industry.
00:07:20
Speaker
And three, four years ago, you did have a concerted effort by a couple of the players, basically focusing on ah IoT as a part of a security play. We all, you know, hear about the the smuggling issues, ah bananas with complimentary cocaine pouches, and so on and so forth, coming up from various origins in Central America, that there were true problems, right? And you had a grouping of three of the largest carriers, so MSC, CMA, CGM, and MERSC, starting a project together, a project that will start with CMA, CGM, at the same time when they were trying to come together on electronics, BLs, or bill of lading with trade lens.
00:08:05
Speaker
At that point of time, I was convinced that this would be the inflection point. This would be when we'll see an industry-wide
Different Strategies for IoT Adoption by Carriers
00:08:13
Speaker
adoption. And it didn't, because while the Chicago Safety and Security illicit trade issues are very real, the ability to justify the business case for bringing a total fleet of what is a CMA, CDM, give and take, three and have four million containers online was not really there by getting greater visibility into riskful behaviors out of Central America or out of other risk origins. Then you saw during the pandemic time where carriers obviously
00:08:53
Speaker
had a um quite substantial increase in earnings and profitability, where you know each carrier were taking sort of a different path. MSC took an opportunity to massively increase their fleet. MERSC was investing in logistics infrastructure for them to pursue their integrated logistics play. CMA, CGM did a little bit of both and Hapagloid said that, you know, we believe that this technology can bring us something. And I'm now talking from my own interpretation of the case. We have an assumption that this technology can do a number of things for us that can improve our productivity
00:09:40
Speaker
and improve our operational efficiency, can improve our custom value proposition. And we believe that we have the surplus to take a qualified bet on this. And of course, Hapagloit, as the first carrier, made the commitment to go fleet-wide. on the dry containers. And we, as Nick said, we've been fortunate to be know selected as one of the two partners that are supporting them on that journey. And generally for the industry, that, well, two things, it meant that there's a reference point now. And it also meant that the discussion was starting to be ah broader than what it was before in terms of creating insight
00:10:28
Speaker
for safety security related use cases. And that is a game changer because certainly if you look at the ah operational efficiency opportunities carriers can have, there you find ah that is our very much our very strong belief and a very strong assumption based on the insight that we have that most carriers, those that seen as the operational benchmark, as well as others that have yet further opportunities to grow, that for all of them, they are able to find the business cases based on further fine-tuning operations to justify this investment. The moment that you do have a fleet-wide deployment, then not only what you can do operationally, you know how you can turn your containers more efficiently, how you can deploy other assets more efficiently, how you can make decisions on the optimal infrastructure. You can also start to truly look at what are the customer value drivers, where is it that we really bring a differentiation to our customers. And coming back again to the highly important, you know, cargo security asset and cargo security use cases, whether it is combating illicit trade,
00:11:48
Speaker
whether it is to manage risk cargoes, whether it is to get a better insight into, you know, theft or loss prevention on a broader scale.
Value Layers of IoT in Logistics
00:11:59
Speaker
So it sounds like there's, when you're building like the business case for this, that it's a very layered set of values, right? There's the security layer, there's the kind of operational layer, there's the, you know, the cost saving side of it, there's the creating new products for the customer, kind of all of these different things that have to come together, you know, an aggregate this is worth doing, but maybe not any particular one of them doesn't pay for it on day one. I would imagine, and I'm thinking back to my career for, you know, trying to justify the budget for something like this years ago. And I was sitting with the CFO and I said, you know, let's do an ah ROI on renewing our subscription to Outlook.
00:12:42
Speaker
Like some things are just once you have them they become so embedded in the value of everything you do in the organization that you can no longer pick apart like what the company would look like without this is this one of those inflection things where. 10 years from now, you just won't even be able to think about a world where this didn't exist. Is that a good way to think about this? Absolutely. and You're very right in saying that this is a layered process. you know If you look at telematics for a vehicle, that's relatively straightforward. you know
00:13:15
Speaker
you want to understand. Of course, you like to see where it's going from A to B to C. You're looking at the vehicle performance. You're looking at a maintenance. You're looking at insurance use cases, no driver performance, stuff like that. Straightforward, looking at the telematics adoption for reefer containers. Also straightforward, you're bound to understand if the compressor is working. you know You're bound to understand that the cold chain is respected for these types of transports, maintenance, so on and so forth. Whereas for dry containers, ultimately, you don't care, strong word, you care less what might happen to a $2,000 container, right? in As for the asset itself, but then start looking at what are the respective opportunity areas where the respective use cases
00:14:13
Speaker
in your network, in your operations, towards your customers and so on and so forth. So truly bringing that patchwork and and to documenting and justifying that patchwork of use cases that will bring your ROI is extremely important. And for us, you know, It is also a part of of our journey per se, because if our you no commercial approach will say, here's a device that can give you a ping, it's the best ping in the world, nobody would ultimately buy it, right? Of course, having the best ping in the world is important, but if we cannot throw our insight into actually the value drivers,
00:14:57
Speaker
If we're not going to bring that into the mix, if we're not going to help to you know educate and support customers with that journey, then it will be a commodity. And then I'm sure there are Chinese ah manufacturers that could ultimately do that volume at a different price point at some point in time that we might. so For us, it's the foundational technology of the devices onto the containers or onto any logistic assets, but it also very much for us building a business and supporting a business to help realize the you know operational commercial safety and security values that this technology can bring. And that is certainly a, um how to say, a non-trivial part of the discussion.
00:15:47
Speaker
Yeah, that's really interesting because I had that over the last, say, five, seven years, I've seen that conversation evolve here in the US around after we got the telematics mandate on trucking, right? That it was a less sophisticated conversation at the beginning. It was, let's get the device on the truck and we will be the company that sells the device. And then I watched a number of those my friends at those companies say oh my god now we're in a position where we're just in a price war right where we didn't and they've now gone back to market and say okay we actually need to be the company that tells you what to do with this information or sells you the geofencing solution or sells you the analytics solution on top so you guys have made like a sort of a preemptive decision that that's a valuable thing that that has to be part of your service offering is that that i hear that.
Global Deployment Challenges of IoT
00:16:39
Speaker
Properly very much so at the end of the day than any of the large shipping lines with very few exceptions and would be doing a multi sourcing when it comes to the hardware. It is extremely important that the devices that go out on the containers have the quality that allowed them to perform in a relatively ah unfriendly environment for the duration of a container's lifetime. And from a hardware development point of view, that is challenging. When a container is fitted with a device, the next time you want to touch that device is when the container is taken out of service. And it is as this right now, then ah the average lifetime of a dry container.
00:17:25
Speaker
within shipping is 10 to 12 years. and And certainly any touch point anywhere in the world has a cost to it and that has a disruptive effect on the business case. But when that is done, then it's really making sure that the understanding both of what is happening with the container or the situational awareness and actionable insight both for the container itself and ultimately what's on the inside of container.
Complexities in IoT Device Deployment
00:17:53
Speaker
that we help to support and qualify what it means for carriers. And the the large carriers, of course, have massive IT organizations themselves. However, with our exposure to the market and our insights, then we can help them accelerate ah time to value for a number of of these use cases, also through you know the technology that we are bringing in play on the solution sites with them or towards them.
00:18:22
Speaker
So one of my favorite things to say about this entire global trade space is that every time you see what looks like a very simple problem, there's a thousand foot hole that you don't see underneath of complexity. And under every one of those holes is another thousand foot holes of complexity. This is a really interesting one of those situations where I think a lot of us in the industry who don't think about this problem every day, you know, you see an article in the journal of commerce and say, Oh, there's a device. And you go, Oh, well, they just slap a device on the side and move on. Why is this so hard? And you don't think about maintenance. You don't think about touch points or, you know, can someone in the field service a battery or, you know, like all of these things. And it's, it's just, I think a constant reminder to all of us that
00:19:12
Speaker
every other piece of this business is as complex as the piece that we particularly work in. and Truly, right the IoT device, and they don't serve a purpose if they stay in the box. If you take one of the large shipping line with three, four, five million containers, time to value is imperative. so How do you get three million containers, four million containers fitted within let's say 18 months, that means that you are out onboarding installation sites all over the world. In our case, between Maritime and Rail, we are supporting something like 400 and different service points right now across all geographies in the world. Just take the journey that Hopperkleut did, they brought a million containers online in not much than
Impact of Real-Time Tracking on Logistics
00:20:06
Speaker
a year, which again,
00:20:08
Speaker
talking about the complexity as you said, then it becomes imperative if it takes one minute or if it takes five minutes to install the device onto the container. Because five minutes type five million containers is a lot of manures, right? Yes. All of those things come together. It's not only what's inside the device and stuff like that, but it's truly the ability to operation to execute lifting devices out on the containers, getting them working to getting them paired to getting them pinging.
00:20:42
Speaker
When that is done, then you know you can start the journey of harvesting the value from the pings, right? so I'm going to ask you to make a little bit of a prediction. Nobody will hold you to this, but if I'm sitting as a shipper, right nowm I'm an import manager sitting in an office somewhere in the world, and you know I've read these articles and I've seen this progress, when and how do you think shippers are going to start feeling this? Is it to direct data feeds into the TMS? Is it, oh, they're going to have you know, websites like, what's this going to mean to me? Hubbegloid launched their live persistent service a month and a half ago, two months ago. Now they have, that they feel they're comfortable having ah so large percentage of the fleet fitted that they can offer a consistent service to BCOs, but they're the only ones. And everybody else today, of course, offer checkpoint-based tracking trace
00:21:41
Speaker
But besides a very few, then checkpoint based tracking trace means that you're blind when it leaves the gate out or when it gates out. Whereas with a tracking or a telematics solution on it, Then you covered the critical first mile and particularly the critical last mile from which gate it out until it's arriving at its final destination with everything that relates to that as a consistent service.
Indispensable Role of IoT in Future Logistics
00:22:12
Speaker
And then you can say, well, you know, trucks have telematics. There are other ways of acquiring. We're putting a type device inside it. That can be true, but if you're looking really on a global scale,
00:22:25
Speaker
then you cannot guarantee that every truck driver will participate or every truck has telematics and that you can acquire this. Similarly, I can of course decide to put an in-cargo device, a monitoring device with my goods. But again, we are seeing certainly a struggle that is not a um consistent service. You also have other challenges when it comes to that. I think a wake-up call for other carriers was certainly when hypergloid, beside announcing their live persistent service, was that they announced that they would have a 15-minute monitoring frequency with that. Because most of the other discussions have been circling around, acquiring an upload every hour, every second hour, or something like that, when the container is moving, which potentially is not sufficient.
00:23:21
Speaker
But actually now, Happaglide is offering 15 minutes monitoring frequency. And that certainly does make a difference. It certainly means that when you are looking at the security situations, no deviation from route, ah unscheduled stoppages, containers doing things that are not supposed to do, door opening events, or intrusion attacks, and so on and so forth. you start to maybe not necessarily act in the moment, but you start to be able to recognize risk patterns and take protective actions towards them. And it also means that you start to having a predictive ETA that you can rely on, that you can plan for, that you can have your warehousing staff ready for and stuff like that. It means that whether it goes into a TMS and stuff like that, as you said,
00:24:15
Speaker
that you can actually start to include into your logistics and supply chain planning. And that means that the operational efficiencies will then extend from the carrier discussion we have to also look at what are the real BCO measures taking to be delivered here.
Passion for Maritime Logistics
00:24:32
Speaker
And I think one of the main things in our point of view that this brings towards the BCOs from shipping lines is a regularity. Trustworthiness is what is being told. It's not a question of getting an ETA that will be here, you know, give and take tomorrow or the day after tomorrow, but you are starting to actually come to your 15 minutes, 30 minutes, 60 minutes windows. And ah those that can offer that earlier than others, for them it is a competitive advantage. It's a quality of service, it's a reliable just aspect that they can offer to customers that
00:25:13
Speaker
other shipping lines would have to work harder to document. So let's pull back from the inner workings of all of this. What gets you personally excited getting up and and going to work every day and working in this space? Besides my mortgage. Besides your mortgage. You know, as we talked about before, I am truly passionate about this industry. You know, 40 ton containers are cool for me. And everything that relates to that is cool to me. And it's truly exciting to be a part of this journey for shipping lines, being able to influence shipping lines, and taking this journey. We might in many cases have a mindset for many things that date back to ah when we had the tea clippers or steamships, when we had the incident in Baltimore.
00:26:04
Speaker
There was a lot of people that woke up to trying to understand what general average is all about. um Finding out that is a maritime law to date back to what, 1840 or something like that. But that is easy. We are an industry that is dating back hundreds of years, if not millennia, maybe is drawing a little bit too far. But it is also an industry that innovates carefully right But I do see that we as an industry, meaning you know global transportation or maritime transportation, is taking a number of quantum leaps right
Sustainable Innovations and Historical Evolution
00:26:37
Speaker
now. But in terms of the sustainability footprint, seeing a massive amount of things happening in terms of you know new fuels, new engine types and stuff like that, what we are being a part of,
00:26:50
Speaker
is to bring the cargo handling and utilization of our cargo carrying assets into a new millennium and really fitting it out to achieve the efficiencies that you know, Malcolm ah hadn't even envisaged when he created the first shipping container back in the fifties, right? You know, I think it's always a good reminder, especially on the maritime side, that the timescales that we're talking about here are more like building cathedrals than they are like building model cathedrals. so We're doing big things, you know, that could be frustrating in the short term, but build for a very, very long term future. And, you know,
00:27:32
Speaker
What you and I have just been talking about now are only sort of the first part of the journey to primary use cases. And certainly if the data is democratized one way, shape or form or the other, the immense opportunity for insight into global trade cannot be understated and how it can be applied towards so many secondary use cases that we're all pursuing that could be far from and far beyond the core logistics scenarios that we've been talking about today. I think one of the things that always excites me about technology is that when you do things at the foundational level, right like getting raw facts on containers, it's the only thing we know is that we don't know what the really great use
Conclusion and Future of IoT in Logistics
00:28:21
Speaker
case is.
00:28:21
Speaker
but They were the really interesting things. you know We build the internet, e-commerce, or telemedicine. They think they were trying to just share academic papers back and forth. right yeah you know For good or for bad, you go from that to TikTok. right so you know I'm excited to see the carriers deploying this technology because whatever comes from it, I'm sure it will be more interesting than whatever we're thinking of today. very much so Very much so. Thank you so much for being on the show. This is a really, really insightful, deep dive into something that I think a lot of us just see as a headline every once in a while. It's a great pleasure. So thanks again to Eric for a really fantastic conversation. Again, and the reason that I do this podcast in the first place is because I love to learn and I love to talk about all of these topics and, you know, whether it's
00:29:17
Speaker
trade compliance or IoT devices or how pricing works in this industry. It's just so interesting to see how deep we all can go into these very, very specific topics sometimes. So so I hope you enjoyed that content and have some optimism about how this is going to help make all of our jobs easier. We'll have some links to both Naxiad and to some of the things that we were talking about with Hapag's live service available in the show notes. And thank you for listening.