50 years ago container shipping changed the world. By making maritime shipping cheap, it allowed companies to move manufacturing away from population centres to areas where land and labour were cheap.
But since then, not much has changed with the basic container, which is often referred to as a “dumb box.” Containers are hard to track in the logistics chain and are vulnerable to all kinds of delays — from port congestion to adverse weather conditions. Compounding the difficulty of tracking containers is the unpredictability of marine transit: container ship average on-time performance in March 2016 was a poor 68%.
Why does container tracking matter?
Accurate tracking of supply chains is critical to improving just-in-time inventory management. If a manufacturer has limited visibility on when and what state goods arrive in, it creates uncertainty in supply and production forecasting. To address uncertainty, the manufacturer will hold more inventory. And holding more inventory results in higher costs. Accurate tracking can therefore reduce costs by increasing visibility.
Why is tracking so difficult?
Accurately tracking containers in transit has historically been very difficult as most containers are only tracked as they pass through key infrastructure hubs. While refrigerated containers are powered and can connect to communications networks to broadcast their location, standard goods containers do not have access to power. Installing and maintaining separate tracking technology has historically been expensive and only considered relevant to shippers of high-value cargo. Additionally, containers are often left empty at their destination locations due to asymmetric trade flows, making the installation of expensive tracking equipment impractical.
What can be done to improve the situation?
French company Traxens believes the opportunity lies in making containers “smart.”
Traxens has developed a new container monitoring and coordination system. A low-cost hardware device with limited energy consumption is built into a container during the manufacturing phase and stays with the container for the entirety of its working life. The device communicates with the “Trax-Net,” a narrow bandwidth meshed network comprised of other containers in the vicinity of the device. Such a meshed network can encompass an entire container ship. The network then connects to an available communications network, such as the container ship, in order to access the internet. When the network is not based on a ship, it accesses GSM or satellite communications.
In addition to communicating whether it is on schedule, a smart container can also provide other valuable information to shippers of cargo. If the container experiences a bump or if its doors are opened during transit, the container registers when and where this happened and relays this to the shipper. Knowing there has been damage or theft, the shipper can take appropriate action to avoid supply chain disruption.
Traxens intends to sells this container monitoring service to shippers as a standard add-on during the container leasing process. And once it has collected extensive information on shipments, Traxens will use big data techniques to analyse the efficiency of its clients’ supply chains and provide optimisation advice.
Coming soon to a port near me?
In order to roll out its container monitoring devices and associated services, Traxens will need buy-in from the various constituents in the industry including the container manufacturers, lessors, shipping lines and freight forwarders. Who should Traxens approach first? Clearly the data gathered by the containers is most useful to end customers, but who should pay for the technology?
As it currently stands, MSC Mediterranean Shipping Company and CMA CGM, which on a combined basis transport approximately 25% of the world’s shipping containers, have announced plans to roll out Traxens devices across their fleets. CMA CGM has also taken an economic interest in Traxens and has stated that it wants the technology to become industry standard. In October 2016, the Traxens system was rolled out on the CMA CGM Bougainville, a 18,000 TEU capacity container ship. Traxens is also working with container manufacturers to ensure its hardware is included in their containers.
Yet with significant overcapacity in shipping, is the industry prepared and financially able to make investments to roll out a new “industry standard” technology? And what role will container shipping play in the future? If robotics and 3D printing are potentially reducing the global wage arbitrage, we may be at the tail end of the container era.
 Levinson, M. (2006). The box: How the shipping container made the world smaller and the world economy bigger. Princeton, NJ: Princeton University Press.
 Boile, Maria, S. Theofanis, and Neha Mittal. “Empty intermodal containers—a global issue.” Proceedings of the 2004 Transportation Research Forum Annual Forum. 2004.