Category: Product Technology

Across the US, importers and exporters are at the mercy of terminal and port efficiency. Shippers must rely on parties that are faced with geographical constraints, altering how much freight can be moved through their boundaries. A 2019 Survey found that 81% of supply chain professionals identify the terminals as the chokepoint that creates the most friction in logistics. This is perhaps fueled by the perception that terminals can be compensated for inefficiency (demurrage). But make no mistake, there are massive opportunities for improvement in port efficiency, but success will only be achieved if constituents from across the supply chain work together to solve a wide range of issues. Three major opportunities to improve port efficiency are—

Increasing Transparency Through APIs

Data sharing has never been a component of traditional terminal and port operations. For far too long, the ports have been stuck using archaic technology and haven’t been able to offer data in effective ways. BCOs could benefit greatly layering in track and trace technology, but the dominant solution, electronic data interchange (EDI), leaves something to be desired. There are more than 2,000 variations of EDI to choose from. Forward-thinking terminals that wish to meet the needs of their shippers have a nearly impossible moving target to hit, a literal 1 in 2,000 chance of getting it right.

Enter APIs, a more modern programming language that enables disparate programs to more easily share information. APIs, which largely gained mass adoption around Salesforce, can even solve the EDI issue, connecting various EDI languages and enabling real-time data transactions.

Solving the Chassis Catastrophe

Many of the steamship lines offer shippers access to free port chassis for a day when a ship arrives. The challenge, however, is that these chassis are often late in returning to the ports, meaning there are not enough to go around. The result is a tremendous drain on the entire supply chain. Containers are left to accrue demurrage fees, often in the thousands of dollars per container, while carriers are essentially required to utilize a set of chassis that aren’t always readily available, dramatically limiting their earning potential and productivity.

Adding complexity is the fact that not every chassis is made equally; some companies offer GPS or LTE connectivity, allowing shippers and carriers alike to easily learn the location and condition of a chassis. AIM Chassis is on the cutting edge of chassis management. As with APIs, these companies are demonstrating a larger appetite for data sharing to alleviate many of these issues. However in many cases, the terminals are very limited with regards to how much impact they can have; chassis agreements and ownership are not within their overall sphere of influence.

Scaling through Scalable Solutions

Nearly every US port has geographical constraints; there is simply no room to expand beyond their current boundaries because the land around them is already owned and in use. This means ports must re-imagine the traditional means of scaling. Automation, which is incredibly expensive, is one approach to increasing throughput. Another, however, is to find space that’s not exactly at the port but is close enough that containers can be easily moved, transloaded, and returned rapidly. Companies like SecureSpace are offering AirBNB-like capabilities and access to yards.

Another less costly approach is to expand hours of operation to keep up with drayage demand. Ports on the west coast have utilized fees from drivers to enable extra staffing to remain open for more hours and increase throughputs.

The NEXT Advantage

NEXT Trucking has taken a 360º approach to solving congestion at the ports. On the technology side, NEXT has built a solution that connects more than 2,500 various EDI solutions through API, removing one of the major hurdles terminals face in creating transparency and enabling shippers to further leverage their EDI investments. Chassis management issues have been alleviated through the use of AI; chassis management is nothing more than a complex mathematical equation that NEXT has cracked through a new program called Chassis Management, which is being trickled out this month and into the new year.

NEXT has also pioneered an approach that merges technology and real estate, setting up yards just miles away from the ports of Los Angeles and Long Beach. In partnership with the terminals, NEXT utilizes peel piles to move containers through the ports more rapidly.

The results have been tremendous:

• Our customers see a 167% increase in containers pulled per truck
• We’re decreasing environmental impact by limiting the amount of time trucks idle while waiting to get in and out of the ports
• We’re cutting demurrage fees out of the picture

Earlier this month, NEXT partnered with FreightWaves for an informative webinar on the importance of using data insights to drive port efficiencies.

The webinar includes insights from NEXT CEO Lidia Yan, CRO Bobby Napiltonia and Henry Byers of FreightWaves. During a live Q & A, participants were able to send live questions to the panel. We’ve compiled some of those questions and answers below.

Talk about what role you think the other “data consortiums (like the Maersk/IBM one) play with what Next is doing drayage. How do you see them working together?

Bobby: Great question. They’re definitely on our list to reach out to because they are both companies who are dominant players and have been around probably 100 years each, and we want to work with them like any providers to ensure there’s open transparency with data and information that we can roll out. We are come one, come all when it comes to data sharing, but then there are also perspectives that if you build great televisions, or you build great microwaves or refrigerators, you probably shouldn’t be in the data business. We believe there’s a time and place for everyone and that’s why we at NEXT are maniacally focused on truckers first and that makes the BCOs happy and then we are creating a new norm, which is data sharing and openness for all. And by doing that, we know we’ll win.

Ports and terminals with air quality improvement goals are increasingly trying to upgrade the drayage fleets that serve them, through cost-sharing for truck replacement, and/or mandating more recent engine models. Can NEXT gather and share any info on the trucks using the system, to enable drivers to take advantage of financial support for upgrading their trucks, or expedite approval for entry at locations where old trucks are banned?

Bobby: Yes, the ports are putting in mandates and they are really around a clean air bill act and what we’re seeing is that ports are using different systems, but all with the same goal. We at NEXT are all about having a clean port and what we’ve found is that most if not all drivers won’t actually be able to purchase new vehicles. We’ve recently invested in a piece of property close the LA ports and we have a product we offer called RELAY and this allows NEXT, who has invested significantly in about 100 trucks to pull those cans offsite, so that any driver that may not have a truck that’s port accessible can still earn a living by picking up loads that don’t require them to have the vehicle being mandated. We’re really investing in making sure they can continue having their life and my personal hope is that it follows the trends of the technology industry spills over into this industry where it appears we’re treating truckers unfairly today.

Do you foresee ocean containers ever having GPS tracking to help with tracking and tracing of our shipments?

Henry: Absolutely. It’s one of the biggest issues facing the ocean container industry. Currently, from a shipper’s perspective — they need to understand where their containers are and sure, you can track the vessel, bur being able to see it once it gets off the vessel — you just lose so much visibility of the container when it moves off that ship and into the terminal. I think from an asset management point of view in the steamship lines, it’s going to be critical to identify where these containers are at all times.

Question about chassis: What have you implemented to increase the availability of chassis and reduce the time to obtain a chassis at the port? Have these efforts had a big impact on turn time?

Bobby: I refer to it as “The Chassis Catastrophe” because I’ve never seen anything like it. Rickshaws in third world countries are run better than the chassis in the port here. At NEXT, we’ve invested and now have just under a thousand chassis and we’re partnering with smart chassis companies that have digital tracking systems because we’re trying to figure out what the best chassis is. We are working with the chassis companies and the port to help them advance it in a way that makes it more fluid than any other industry in the world.

This question is for Lidia: Bobby mentioned the automation of ports and I was curious if you could speak to the role or opportunity of autonomous trucks in the Drayage market? Especially as autonomous ports become more prevalent globally. How would Next interact with these technologies in the future?

Lidia: We’re a technology company, so we do love technology and we actually initiated conversations with autonomous truck manufacturers in the past to understand their pace and where they are. It seems like the technology probably requires a little more time. We’re looking at probably five years and the biggest hurdle is probably government and regulations. Right now, autonomous trucks can only be operated in Arizona and Florida, I believe. Ports are relatively more complicated. I don’t know if any of our audience has a Tesla, but you can drive on the freeway with confidence on autopilot, but local traffic and local conditions are very, very different, especially when it comes to terminals. And also, every terminal is different, so that adds more complexity. In five years autonomous trucks will be operating mostly for long haul and NEXT will be interested in working with them, even though we’re a trucker-centric marketplace and empower truck drivers because we believe autonomous trucks will really alleviate burdens for long haul truck drivers. They can drive more hours and take a break whenever they need to, but it will take more time for these trucks to come into the terminals considering the technology limitations at this point. The average truck driver age right now is over 50-years-old, so in ten years we will lose drivers. We believe with the implementation and maturity of autonomous trucks, we’ll get more capacity from the industry, while those autonomous trucks can empower drivers to be more efficient, make more money and of course the priority when I talk to those manufacturers is… you guys need to make a truck affordable for drivers because they are the true entrepreneurs and they keep our economy moving and we want to give them the technology and empower them to have a better life.