When the MV Ever Given ran aground in the Suez Canal, it caused chaos for the shipping industry –with 12% of the world’s shipping industry delayed or rerouted.
With so many goods re-directed and dates out of synch with consignments, it created a logistics nightmare that forced many companies to go back to the drawing board. But the incident also shone a light on a more fundamental challenge for the logistics and shipping industry.
The problem is that practically the entire industry is highly dependent on manual processes – from managing cross-border customs and regulatory processes through to monitoring and tracking shipments. We are looking at an industry that is hundreds of years old and has processes that have pretty much remained unchanged.
It takes time for all new technology to take root and become accepted parlance in the industry, yet in logistics and shipping – and indeed, across global supply chains more broadly – the biggest barrier to technology adoption and digital transformation is accepting that change is needed.
Even the companies that are using technology are doing so with outdated tools which are no longer fit for purpose given the complexity of today’s operational and logistical demands. Teams continue to rely on email, phone, texts, spreadsheets and even fax! That’s a lot of siloed systems, all harbouring fragmented pieces of information, slowing processes down and impeding efficiency.
What’s more, with the added burden of the pandemic affecting staffing levels, processes and administration have increased significantly for supply chain businesses all over the world.
This has led to manpower shortages, steep wage increases, and shipping delays that continue to cost companies money in lost revenue and spoiled goods. One large freight forwarder recently told us they needed to hire 40% more staff to deal with extra administration. Similarly, a seafood wholesaler has had to bin thousands of pounds of fish each week because they cannot fill in the customs forms fast enough.
Technology to the rescue
As the volume of freight rises around the world, so does the amount of administration. It is estimated that the shipping sector needs an additional 500,000 20 foot containers – enough to fill 25 ships of the equivalent size of the MV Ever Green – to meet current demand.
The pandemic has caused so much disruption, and so many supply bottlenecks for essential goods such as PPE and essential toiletries, that the shipping industry has been forced to accept the need for change. Finally the door is open to new technologies and new ways of doing things.
And the good news is that emerging Artificial Intelligence (AI) tools can solve many of these soul-destroying process and admin issues with speed and simplicity, easing the pressure on stressed-out employees drowning in manual data processing requests.
For example, AI can automate the data required to fill in customs and freight dockets. One freight-forwarder, for instance, estimated that using AI had reduced a 40-minute manual system down to four minutes. Computers make far fewer mistakes than humans in these roles. They do not get bored or tired of repeating the same tasks.
A recent vector.ai poll of firms across the global supply chain showed that three-quarters (75%) think AI technology could alleviate the staff burden around handling and processing import and export checks.
Not only that, but when major disruptions happen, such as the Ever Given disaster, AI tools can plan and re-route shipping consignments at a fraction of the speed needed by manual planning. They can even empower human team members to respond to these challenges more effectively, for example, automatically analysing incoming communications and documents to identify ‘actionable’ information and assign actions to the correct team members.
Slaying the admin burden
The world’s demand for goods and services has never abated during the pandemic. The priorities may have shifted as we tackled the crisis – let’s face it, who would have thought that toilet roll would be a precious commodity – and so has our approach to tackling it.
We are still battling our way through a period of lockdowns, quarantines and self-isolation. Ongoing business disruption is inevitable, and we must all make the best use of the manpower that we have available. We’ve seen brokers’ salaries almost double in the last year as companies search for the skills needed to keep shipments moving.
We can alleviate and ameliorate these burdens by switching to technology. It will never replace the human element, but it can help humans do their jobs better.
We know, from experience, that staff enjoy their jobs more when they are free to fulfil their human potential. They can’t do that if they are filling out forms when they can be employed on much more satisfying work.
To keep our particular logistics ship afloat, we need to ensure that every person knows how to do their duty to their maximum potential. The last 18 months of the pandemic has been an interesting journey for the industry, but we are sure that AI will make it much smoother sailing ahead.