Global Supply Chain Logistics Redesign: Potential is the currency of the day

Authors

John P. Walker II, CEO of Holo Sail Technologies, Inc. | 20+ years in shipping and logistics and United States Marine Corps veteran

Contact: JWalker@HoloSailHoldings.com

Dr. Jasmin Cowin, Holo Sail Technologies, Inc.: Advisor to Executive Management

Assistant Professor and Practicum Coordinator at Touro College, Graduate School of Education

Co-team lead and co-author SDG 4 corporate guidebook series at the SHERPA Institute.

Maturation, Domination, and the Maritime Industry

As the world economy steps over the threshold into becoming an exchange full of mature industries, a handful of global companies and a few countries have monopolized much of the market, including in the maritime industry.

Mature companies typically improve their profits “through improving operational efficiencies to decrease costs or to expand through capital expenditures to capture a larger portion of the established market share of the mature industry.” However, as Jan van Casteren, Flexport’s Vice President for Europe, told World Finance,

“It can take up to 18 different companies to get a single shipment from point A to point B. The shipping industry must adapt if it is to survive in the modern world.”

The maritime industry plays a dominant role in the supply chain and in the delivery of goods across all continents. It encompasses shipping businesses, freight and logistics services, supply chains, and trade. The top shipping companies in 2021, measured by twenty-foot equivalent unit (TEU) capacity, are:

Company: P. Moller Maersk (Danish), TEU Capacity: 4.1m TEU

Company: Mediterranean Shipping Company (Swiss-Italian), 3.8m TEU

Company: COSCO Shipping Lines (North America), 3.1m TEU

Company: CMA CGM Group (French), 2.7m TEU

Company: Hapag-Lloyd (German), 1.7m TEU

Company: Ocean Network Express (Japan), 1.5m TEU

Company: Orient Overseas Container Line (Hong Kong), 733,580 TEU

Company: HMM (South Korea), 728,416 TEU

Company: Yang Ming (Taiwan), 616,000 TEU

The underrepresentation of the Americas is evident, especially that of South America, Central America, and the Caribbean as a major collaborative maritime and shipping force.

The Trade Logistics and Regional Integration in Latin America and the Caribbean (ADBI Working Paper Series) states that “developing countries are finding themselves hard pressed to adjust their policy agendas to take into account costs not covered in past rounds of trade negotiations.” The use of Holo Sail Nodal Neural Networks driven by Reactive (and other) AI on a Peer-2-Peer Digital Ledger technology will facilitate the entry of enterprises from Latin America and the Caribbean into the transportation and logistics market and provide scalability at low cost. Private companies and individuals can bypass the political and governmental obstacles that stand in the way of freight logistics integration as an important value-added service in production and delivery to the US and other markets. The development of collaborative and cooperative supply chains for the Americas would result in self-reliant resource distribution for agricultural products, mineral resources, and energy resources, including oil and natural gas.

The Internet of Things 4.0

The authors predict an integration of the communications internet, a digitalized energy internet, and an automated transportation and logistics internet that come together to collectively form an intelligent twenty-first-century infrastructure in the shape of an Internet of Things (IoT) 4.0 on a broad scale.

Transportation and logistics are essential components of industrial productivity and are dependent on access to real-time data. The logistics and transportation industry of the United States is highly competitive and attracts a high level of foreign direct investment (FDI), which totaled $1.5 billion in 2018.

The top recipients of this FDI appear at first sight to be in a wide range of projects. However, a closer look shows that investors from the UK have focused on 36 projects, investors from Germany have chosen 14, and those from the Netherlands have sent funding to 11 projects. Latin America’s resource-rich environments and easy access to ocean trade routes, along with its deep ports, warrant infrastructure investments. For example, the port at Puerto Cortés in Honduras currently handles 900,000 TEU a year but is capable of 1.8 million TEU a year. At present, large-scale FDI projects generally ignore South America, Central America, and the Caribbean.

Predictive Analytics, Data Visualization, and Holo Sail Technology

Holo Sail’s patent-pending technology offers:

  • Predictive analytics using statistical algorithms and machine learning to identify the likelihood of future outcomes based on collected shipping data.
  • In addition, Holo Sail offers free data visualization through the app, both of existing data and extrapolations into the future.

Holo Sail’s predictive analytics and data visualization will allow improved utilization of infrastructure inland and on the wharf, as well as vessel stowage and future project planning. Holo Sail’s technology has the ability to control equipment, due to the detailed and customer-specific data collected from its artificial intelligence (AI) and nodal neural network, which are better targeted and specific than any data available from data-brokering firms.Customer-specific predictive analytics can enable Holo Sail customers to base business decisions on personalized, relevant, and real-time data.

Holo Sail Technology’s cloud-free services, data analytics, and licensing will revolutionize the maritime industry, with only a modest use fee being paid by customers when they utilize the system in relation to cargo shipments and send/receive payments. This fee structure levels the playing field for market entry due to its significantly lower costs. Holo Sail’s technology will allow smaller companies to compete and give new companies a low-cost avenue into the supply chain industry. As a result, retailers, manufactures, and end customers will have more, and lower-cost, choices.

Disruption, Defragmentation, and Demand

Trade between the US and Central and South America have fallen steadily year over year, and the cost of importing goods from Asia has risen over the same time period, for raw materials, packaged goods, and other goods, sometimes at a galloping rate. Leaf Logistics CEO Anshu Prasad said that one of his customers is paying 700% of its current contracted ocean shipping rate on some lanes from Asia to Europe.

“There’s just no way to insulate your budget against that. I absolutely think that we’re going to see the impacts of those six, seven months in the numbers that get reported.”(Maiden, T., 2021)

Disruption of long-established business models and shipping routes with a focus on the localization and consolidation of supply chains will necessarily trigger shifts in production supply chains.

The demand for customized products is rising as consumers are increasingly calling for made-to-order and artisanal products. The rise of Etsy, an e-commerce website focused on handmade or vintage items and craft supplies, shows robust consumer demand for unique and custom-made goods. Deloitte’s Consumer Report “Made to Order, The rise of Mass Personalization” predicts that the demand for high-volume, generic consumer products will decrease and demand for product personalization will increase. Smaller, more agile economies, such as those in the Americas, which are geographically closer to the US, are better positioned than those in other geographical areas to take advantage of personalization trends and can offer shorter transport routes. Dr. Martin Stopford, Non-Executive President at Clarkson Research Services, a provider of data and market intelligence for the shipping sector, told World Finance that,

“In future decades, the focus is likely to be on regional rather than global trade… China is no longer cheap, and the developing countries are no longer willing to do deals for raw materials or to import foreign goods — they want to build their own economies.”

The politically formed trade agreements of NAFTA, MERCOSUR, CARICOM, and CACM have obviously failed to promote trade among the Americas. Many countries in Central America are dealing with high unemployment, crime, and infrastructure failure, due in part to being hit by multiple storms and a lack of international support in response as well.

It is time for new dynamic collaboration in the logistics and shipping industry, with a focus on a reconfiguration of alliances to improve economic efficiency, reduce marginal costs, decrease carbon emissions, and achieve market dominance for North, Central, and South America.

The existing inland infrastructure that crosses from Honduras through Mexico, the US, and into Canada could be tapped for further logistic efficiency in transportation. John G. Murphy, Senior Vice President for International Policy at the U.S. Chamber’s advocacy, has outlined the expected effects of the United States-Mexico-Canada Agreement (USMCA) on the US economy.

US trade with Canada and Mexico reached nearly $1.4 trillion last year, or $3.8 billion daily; supports 12 million American jobs in every state in the union; is vital for US manufacturers, who export more made-in-America manufactured goods to Canada and Mexico than they do to the next 11 largest export markets combined; accounts for nearly one-third of US agricultural exports; has powered growth in US services exports from $27 billion in 1993 to $91 billion in 2017; and is fueling growth among US small and medium-size businesses, more than 120,000 of which sell their goods and services in the two North American neighbors of the US.

The utilization resources from regions that are closer and easy to transport in a cost-effective manner using Holo Sail technology can decrease dependency on Asian imports. This paradigm shift will not only increase manufacturing in the Americas, with a direct benefit to their populations, but also open new markets through increased efficiency of supply chains and economic activity while simultaneously decreasing maritime carbon footprints.

Holo Sail Technology: Efficiency, Scalability, and Agility

Holo Sail Technology believes in the importance of paradigm changes, where industries, instead of becoming objects of technology, become agents of it instead.

Holo Sail combines its patent-pending nodal neural networking, reactive and other forms of AI, and peer-to-peer digital ledger technology in the form of an easy-to-use app. This combination allows for flexibility, freedom from the cloud, and tamper-proof security, and it addresses multiple pain points in one solution. The app can be customized or tailored to meet the specific needs of each customer.

Holo Sail’s user-friendly user interface can create pathways to long-term prosperity for businesses, communities, and workers. Access to granular data, free of expense, can unburden companies from their current costly data aggregation agreements, freeing up money for expenditures on infrastructure or up skilling. Holo Sail’s granular data provides:

  • production insights
  • cost tracking,
  • and can be used to identify pain points, expenses, and more.

Real-time tracking of returns to each investment is possible, relative to the investment’s cost. Live proof-of-life, from loading to delivery, instantaneous tampering alerts, instant spoilage alerts for perishables, constant temperature monitoring, and the ability to identify human trafficking through the technology provided by Holo Sail can all be nested within an automatic billing/payment platform.

Environmentally friendly shipping between the Americas can be achieved through shorter distances without the need for mega ships with a capacity greater than 10,000 TEUs. The average capacity of container ships deployed on the Asia–Europe trade lane have become especially large, resulting in bottlenecks at marine terminals due to the massive volumes of cargo. While the use of very large container ships might make sense from the perspective of an individual company vis-à-vis its main competitors, it is less so for an industry as whole, as it results in growth in fleet capacity that is not in line equipment control.

Utilization of small vessels produces lower emissions of sulfur and carbon. “It has been estimated that just one of these container ships, the length of around six football pitches, can produce the same amount of pollution as 50 million cars. The emissions from 15 of these mega ships match those from all the cars in the world. And if the shipping industry were a country, it would be ranked between Germany and Japan as the sixth-largest contributor to CO2 emissions.” (Piesing, M., 2020, July 17). Further reducing the maritime carbon footprint is Holo Sail’s cloud free approach.

Redesign of Global Supply Chain Logistics

The Western Hemisphere is home to well over 40% of global consumerism. Products in the Americas can be produced on demand and delivered within the hemisphere more cheaply and efficiently, leading to meaningful job creation with new trade alliances and shipping routes.

The flow of trade and money can thus be targeted, flowing within the Americas between natural trade allies. The indirect benefits of this would include migration and social stability in Latin America. Economic stability and growth opportunities are major factors in migration patterns.

Job creation and trading among countries with large migratory populations will reduce the pressure of immigration into the US. Holo Sail’s technology can promote sustained, inclusive economic growth and decent work for individuals of all levels of education and social class.

Against a post-Covid backdrop, personal consumption will likely increase due to pent-up demand. As the world reopens, job gains and projected low borrowing costs will foster favorable financial conditions, with a strong profitability in the maritime market. Equity in shipping and supply chains can only be achieved through the legitimation of new conceptual frameworks and technologies, such as those offered by Holo Sail. Such initiatives will shift the focus to domain integration and communication with and through technology, enabling principal moment analysis (PMA), or the analysis and visualization of high-dimensional multivariate data.

Up-skilling the workforce in the supply chain by providing computational literacy through the use of the Holo Sail app and its personalized tools will lead to increased worker agency and autonomy as the technology is of service to the people. Holo Sail Technologies potential will be the currency of today and tomorrow!

References

Fontes, M., & Henningsson, R. (2020, March 09). Principal Moment Analysis. Retrieved from https://arxiv.org/abs/2003.04208

Logistics and Transportation Spotlight. (n.d.). Retrieved from https://www.selectusa.gov/logistics-and-transportation-industry-united-states

Maiden, T. (2021, February 17). High costs straining transportation budgets. Retrieved from https://www.freightwaves.com/news/high-costs-straining-transportation-budgets

Mature Industry — Overview, Attributes, and Valuation. (n.d.). Retrieved from https://corporatefinanceinstitute.com/resources/knowledge/strategy/mature-industry/

Piesing, M. (2020, July 17). Shipping produces more carbon than most nations — it must go green. Retrieved from https://inews.co.uk/news/long-reads/cargo-container-shippingcarbon- pollution-114721

Puerto Cortes develops its container facilities. (2017, November 23). Retrieved from https://port.today/puerto-cortes-develops-container-facility/

U.S. Chamber of Commerce. (n.d.). Retrieved from https://ustr.gov/trade-agreements/free-tradeagreements/united-states-mexico-canada-agreement/what-they-are-saying/u.s.-chamber-ofcommerce

U.S. Chamber of Commerce. (n.d.). Retrieved from https://ustr.gov/trade-agreements/free-tradeagreements/united-states-mexico-canada-agreement/what-they-are-saying/u.s.-chamber-ofcommerce

Verza, M. (2021, February 11). Desperation grows in battered Honduras, fueling migration. Retrieved from https://apnews.com/article/honduras-hurricane-iota-mexico-stormsimmigration 3cf340e556ee767d1dd3dce351c934b5

The shipping industry must adapt if it is to survive in the modern world. (n.d.). Retrieved from https://www.worldfinance.com/markets/the-shipping-industry-must-adapt-if-it-to-survivein-the-modern-world