The humble shipping container has existed for over 60 years, admirably facilitating global trade through intermodal supply chains with great efficiency. In recent years, however, there have been numerous innovators seeking to harness emerging capabilities and imagine boxes integrated into broader supply chain activities.

In the digital age, there is no escaping the fact that the standard freight container is simply a disconnected solitary box. Opportunities to make it smart are plentiful.

Smart might mean the capability to geolocate the unit, or enhance security, or monitor and control temperature for reefer containers; there are numerous use cases for a smart container. There are also potential safety gains – imagine a single smart container, positioned in stack of several thousand, that is able to announce an unexpected spike in internal temperature, facilitating early response to a cargo fire.

Reliable communication has been a fundamental challenge, not least in the middle of the ocean. Advances continue to be made to deliver resilient communications between ship and shore, enabling smart containers and internet of things (IoT) devices to leap forward.

Imagine the possibilities

As all involved in the global freight supply chain consider what ESG means to them and begin to assess their own emissions and potentially those of their counterparties with a view to reaching net zero, a connected smart container might also present opportunities.

• More effective fleet utilisation, reducing repositioning.
• Visibility and control of the cargo space, potentially mitigating cargo damage and consequent waste. Imagine timely intervention to stabilise temperature fluctuations or adjust humidity settings, precluding damage at destination.
• Transparency for the beneficial cargo owner, driving operational efficiencies. Accurate arrival dates or details of transport routing would afford opportunities around staffing levels, warehouse utilisation, and production modules.
• Sensing and/or imaging that detects, records and reports issues, providing myriad benefits. Early detection of a developing fire, for example, is critical to successful response – integrating precise location, declared cargo type, and other metadata would be invaluable at every point through transit.
• Detection of movement, heat sources or increases in CO2, providing invaluable assistance in security and potentially saving lives in the context of clandestine migration.
• Identification, through camera technology, of unexpected items in the cargo space, disrupting the movement of illicit goods.
• Improved security, greater visibility and the ability set geofences, ensuring that the container remains on the expected route – or otherwise early alerts to deviations. There would also be opportunities to mitigate the risks of container theft.
• Ability to self-diagnose damage, whether it be a hole in the roof of the container or a developing weakness following an impact event, enhancing safety and cargo protection. This could be an interesting future iteration of smart container technology.
• Functionality to prevent the allocation of a unit until repaired, reducing wasted journeys where a damaged container is positioned and then rejected.
• Lighter composite construction materials that lead to greater payloads per container, reducing the overall number of trips required.

For insurers, there are also potential benefits, from the ability to quantify the exact volume of each type of unit on risk at any given time, including condition, through to real-time visibility of container numbers and volumes in the path of a windstorm. The availability of these types of data has the potential to reduce burdensome and often lengthy correspondence.

From a claims handling perspective, post incident, having an audit trail and therefore the knowledge of the seat of a fire or being able to readily identify a potential liable party at an early stage would be beneficial. This might reduce lengthy expert investigations or provide early corroboration of findings, both targeting and containing associated costs, whether handling a first-party claim for the container equipment, a counterparty claim for damage to a cargo therein or a third-party liability assertion.

Interoperability

Recognising that ownership of freight containers is widely dispersed – not only amongst container lessors and the diverse range of shipping lines (global, regional and niche), but also certain NVOCs (particularly tank container operators) and beneficial cargo owners, there is the need for interoperability and standardisation in order to maximise the potential benefits. Organisations such as DCSA are working tirelessly to develop such standards and resolve these challenges. IoT gateway connectivity and IoT remote reefer container monitoring on board are two such initiatives underway.

With well in excess of 20 million freight containers currently in circulation, it will clearly be some time before the entire global fleet becomes smart; fragmented ownership and use will be compounded by differing replacement and fleet management strategies.

Fragmented ownership and use will be compounded by differing replacement and fleet management strategies

While the cost of the technology continues to reduce, retrofitting existing fleet units might not be an attractive proposition for now. Rest assured though that the disconnected solitary box, that has arguably revolutionised the way we live today and has certainly been a catalyst enabling globalisation over the last 60 years, will not escape digitalisation.

A future vision where all containers are connected and able to communicate is no longer something of a fantasy. Indeed, the ability to integrate this freight facilitator into a multiplicity of business operations opens significant opportunity for numerous counterparties across the global supply chain.

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If you would like further information, or have any comments, please email us, or take this opportunity to forward to any others who you may feel would be interested.