Perhaps the most difficult aspect of reefer – refrigerated ocean container – shipping is simply knowing whether a ‘temperature excursion’ or temperature spike is taking place in a box at sea a thousand miles from destination.
With great fanfare, shipping behemoth Maersk Line announced late last June that it was launching a telematics system that could monitor remotely its more than 270,000 refrigerated containers.
“For every refrigerated ‘reefer’ container on the road, at sea or in a port somewhere in the world, there is a customer in the dark, forced to run their business without valuable information about the condition and location of their products,” Maersk wrote. “For customers of Maersk Line and the Maersk family of container shipping lines, that ends on 24 July with the commercial launch of the “Remote Container Management” system, RCM.”
In fact, this wasn’t exactly breaking news, nor was the monitoring technology described that new. It’s at least a decade old. Maersk bought the technology in 2011 from a company that is now part of ORBCOMM, a leading developer and provider of machine-to-machine technology. (see story, page 6). The system went live operationally in 2015. Maersk’s own Executive Vice-President Vincent Clerc wrote about the system in detail in April 2016.
“It’s been the worst kept secret in the industry,” quipped one technologist.
Yet, the fact that Maersk unveiled its technology in such dramatic fashion and the buzz that came with the announcement speak to a large gap in temperature-controlled logistics and a major need by shippers and steamship operators alike. That’s because what in the business is known as a temperature excursion, a temperature spike that is usually the result of a failure of the refrigeration unit, usually spells the complete ruin of the cargo inside a container. It can easily mean the loss of tens of thousands of dollars’ worth of frozen or chilled goods.
“I am confident that seafood players in Boston can sleep better at night,” blogged one sales executive for a logistics provider, commenting on the Maersk announcement.
Remote container management piggybacks on micro-controllers built into a reefer unit. These micro-controllers, with their probes and sensors, monitor and control a modern-day reefer, insuring not only temperature, but humidity and atmosphere are at optimal levels. The RCM units can, in turn, monitor the micro-controllers, extract data from them, and, depending on the issue, control the micro-controllers, commanding them to raise or lower temperature and humidity.
According to estimates issued in an October 2016 white paper by ORBCOMM, only about 20% of the 1.5 million reefers operating around the globe had been equipped with some kind of remote sensing technology. That percentage is increasing at a good clip, in part because Hamburg Süd, now owned by Maersk, is in the process of installing RCMs on its 70,000 reefers.
That low level of usage contrasts greatly with similar technology used on refrigerated trucks, which have seen large-scale, almost universal adaptation in recent years.
Of course, monitoring the refrigeration of a truck is far simpler, since temperature-control diagnostics are integrated into the vehicle’s operating system monitoring, which includes everything from idling speed to excessive braking.
“I don’t think we can count on that degree of simplicity and conformity with regard to containers,” said Foster Finley, a managing director at AlixPartners, who heads the consultancy’s operations practice. If nothing else, there’s no equivalent on ships to a vehicle’s onboard diagnostics port. Refrigerated containers “have not really been harmonized,” said Finley.
Technical hurdles are only one reason why it’s taken so long for remote container management to gain ground, however. “There are a ton” of challenges, Finley said.
To begin with, getting the information while in the middle of an ocean to both the vessel and interested parties onshore involves some sophisticated cellular technology. To accomplish this, ORBCOMM, for one, has developed remote container management in conjunction with providing technology that provides a vessel with a wireless local data transport network. Then, the ship itself can act as a kind of cell tower, uploading the data to a satellite.
While communications network costs have declined dramatically over time, and will continue to do so, the expense of outfitting containers with these devices remains considerable, especially given the scale of reefers that need the devices. After all, even a smaller steamship line may own 5,000 to 10,000 reefers.
Although the process is straightforward and takes very little time, retrofitting containers with RFMs is no simple matter, either. It involves taking a reefer out of service and shuttling it to a center with trained staff. Multiply that by several thousand.
That’s why some vessel owners are opting to equip only new reefers coming off the manufacturing line.
Perhaps counter-intuitively, some of the smaller shipping lines, those less than 10,000 reefers, have been the early adopters and “they tend to be the quicker adopters,” said Al Tama, ORBCOMM’s senior director, product management. “They can get through their fleet of 5,000 fairly quickly and justify the cost.”
The Price of Knowledge
Now, vessel owners appear to be shouldering the costs of these systems and are offering shippers the most basic information. Some steamship lines are providing a premium service as well, sharing more of the data with the cargo owners for a fee.
Knowing when a reefer fails, obviously, is the biggest advantage of having a remote container management system. It’s part of what’s called managing by exception. A shipper or vessel operator is far less concerned when everything goes smoothly than when it doesn’t.
“The most important thing is knowing that the reefer is OK,” explained Tama “So, the way our system works, we focus on exceptions, if there’s an exception, you get an immediate alert, in real time.”
This removes the need for manual onboard inspection by a crewmember. “When the guys move around with their clipboards, they have to check 1,000 reefers,” said Tama. “With our system, they’re just looking at the exception.”
But what can a ship’s crewmember can do if there’s an alert? If it’s just a matter of, say, a plug coming loose, that’s one thing. But if the gen set or the compressor fails, that’s not something that a crewmember can – or will – fix. Containers stacked five high under deck pose a considerable challenge. And, insurance regulations and the vessels own rules prohibit a container from being opened.
However, those in the industry say that it’s far better to know about a problematic container when it’s at sea than having a nasty surprise two weeks later when the consignee opens a reefer and discovers a load of rotten fruit. “It’s a means to an end,” said Finley.
Given advanced warning may allow expediting another container or diverting one, or something as simple as notifying an insurance agent in advance. Everyone is better prepared. “One layer is knowing there’s a problem, the second, how to react,” said Tama. “There’s no panacea. But the more you know, the more you can actually take action.”
Not only have costs declined, but the data bandwidth has dramatically increased as well. According to ORBCOMM, these advances allow “faster message delivery, larger message sizes and better [satellite] coverage at higher latitude, while significantly increasing network capacity.”
So, shippers and shipping lines alike can receive more information, more frequently. This aids an increasingly sophisticated, more complex and faster global supply chain, knowing where a particular cargo is at a particular time. In this age of big data analytics, that’s vital.
Shippers can demonstrate to customers that the integrity of the cold supply chain hasn’t been broken. Also, as regulations increase and tighten around the globe, this ability to plumb and present data to authorities becomes more critical.
“Data is becoming greatly integrated, and can get many people to make decisions based on their point of view,” said Tama. “One person’s concerned about when it gets there, another about the health of the reefer, and so on.”