JIT shipping could cut surging fuel costs and boost schedule reliability

Just-in-time (JIT) vessel arrivals could answer two of container shipping’s most pressing problems: surging fuel costs and poor schedule reliability.

Vessel tracking specialist MarineTraffic is working with the IMO’s Global Industry Alliance (GIA) to slash the time containerships spend idling outside ports by implementing a “JIT sailing” concept.

Argyris Stasinakis, MarineTraffic’s partner for business development, said the industry could achieve massive fuel savings and improved supply chain visibility as a result.

“To make the case, we have measured the time vessels spend waiting at anchorage,” he told delegates at the TOC Asia Container Supply Chain conference in Singapore last week.

“In one year, containerships spend 4.6% of their time anchored due to early arrival, which is about 15 days and quite significant.”

MarineTraffic uses Automatic Identification System (AIS) data from 4,000 stations, tracking 170,000 vessels and a billion vessel positions every day, worldwide. By geofencing individual berths, the big data company can record vessel arrivals and departures in real time.

“The beauty of the data available to us now is that we can actually measure and observe what’s happening at a port, and then predict the impact it will have on subsequent calls further along the vessel’s journey,” explained Dr Stasinakis.

He said if vessels were better informed on berth availability and adapted their speed accordingly, substantial savings could be made in fuel costs and CO2 emissions – the industry wastes US$18bn per year on “rush to wait” fuel inefficiency, according to NAPA Fleet Intelligence.

“So there’s a strong case for improving operations for JIT. It’s simple but it’s not happening now because of the lack of communication between vessels and terminals, who tend to only coordinate activities at the last minute,” claimed Dr Stasinakis.

MarineTraffic is working with GIA members – including port authorities, terminal operators and shipping lines – on improving data-sharing and communication in order to make JIT a global reality. So far, the group has identified the need for global standardisation and harmonisation of data to provide ships with regular updates on berth availability.

As well as carriers saving on fuel costs, Dr Stasinakis said JIT arrivals would see shippers benefiting from improved customs operations, stock handling and factory-to-warehouse forecasting.

“It’s no coincidence that many of our customers are shippers; they’re tracking cargo by simply tracking the ship,” he noted. “Ultimately they’re trying to measure the impact of this black hole in shipping on the rest of the supply chain.”

According to Michael Nielsen, former transportation manager with construction giant Caterpillar, greater schedule visibility would allow for better supply chain planning.

“One of the important things as a shipper is the ETA and the actual time of arrival, because it’s very difficult to predict,” noted Mr Nielsen. “It can take three to five days to get the information on container loadings, depending on how many layers it has to go through, and those days have a big impact on your ability to take a contingency decision.

“Shippers’ lead times are somewhere between 60 and 90 days, so the earlier in the process we can get notifications on disruptions then the more likely we are to be happy about it, because what happens today is we get to know two weeks too late and then everyone’s yelling at everyone else,” he added.