Covid-19 will lead to new technology and a focus on resilience in the cargo sector

posted on 28th July 2020 by Eddie Saunders
Covid-19 will lead to new technology and a focus on resilience in the cargo sector

The importance of the cargo sector has been highlighted during the Covid-19 pandemic with massive shocks to global supply routes, but the disruption has led to an increased focus on supply chain resilience and the opportunity for the rapid adoption of new technology within the industry. These findings emerged from an expert panel discussion of the subject of a Covid-19 technology recovery in the cargo sector hosted by Resilience First in partnership with Intel.

A McKinsey survey has revealed that a huge majority of supply chain leaders are planning to increase resilience in the light of the disruption wrought by Covid-19, and many are prepared to improve resilience at the expense of short-term efficiency. New technological solutions are already available in the sector and their acceptance and adoption is likely to be fast-tracked in the wake of the pandemic.

Syamak Nazary, Global Sales Director IoT Transportation, Intel, said: “Covid-19 has had a big impact on the cargo industry but the pandemic will not by itself change the cargo industry it will only accelerate the change that was already coming.”

“Today you can see the importance of the ecosystem coming together. We need consultants to have an overview, we need technology partners to provide solutions and we have Intel as a technology enabler to complete the ecosystem.”

Andy McKeran, Commercial Director – Marine & Offshore, Lloyds Register, said: “With 90% of goods moved by sea, shipping’s critical role in the global supply chain has been brought into focus by the pandemic. There will be a predicted 5.2% contraction in global GDP this year. Some 15% of the global fleet of bulk carriers and containerships has been removed from trading and 40% of the 1.5m global ship crew have been impacted directly by the crisis.”

“Many of the technologies used during the pandemic already existed but suffered from slow take up in shipping. Covid-19 has forced a global behaviour change and made us all more adaptable. The acceptance of new technology will move the shipping industry forward.”

“Technology is an enabler, but the value continues to be in the human expertise and experience. Technology needs to support and assist people.”

Jürgen Rachor, Senior Expert Operations, McKinsey & Company, said: “The time to reimagine the supply chain for resilience was yesterday. Now we must consider how we can learn from this and set up to manage the next disruption. Recent history suggests that the severity and frequency of supply chain disruptions are increasing. We estimate that up to $2trn in goods trade flows will be rebalanced to improve resilience.”

“We need full visibility of our supply chain to assess our vulnerabilities and risk. 93% of supply chain leaders are planning to increase resilience. 44% would increase resiliency at the expense of short-term efficiency. Actions to build resilience include dual sourcing, more inventory of critical products, near shoring of supplier and production, higher safety stock and regionalization. But it is also time to not just re-balance the supply chain, but to re-imagine it incorporating newest developments.”

Talking about one technology innovation, Isabelle Miller, Head of Business Development and Partnerships, GPC, said: “Making use of the limited flights available for cargo during widespread air groundings is now vital. Ground handling staff are also in short supply with furloughing. Our 3D imaging software can generate complete volumetrics about a cargo consignment from a single image. They have led to IAG cargo handling efficiency being increased by 40% during the pandemic using the solution.”

Thierry Batut, Director, Digital Engineering and Manufacturing Services – IoT Business Line, Capgemini, spoke about another innovative solution: “Global transportation of high-value cargo entails a number of risks including accidental damage, theft and loss of quality during transit. Covid-19 has highlighted the need for effective solutions to monitor the safe delivery of high-value cargo shipments and our track and trace platform can provide complete logistics monitoring assurance.”