Jul 28 | 2020
Project Cargo’s Missing Tech Link?
The breakbulk and project cargo market is ripe for an independent third-party supply chain management platform, said Brian Putallaz, global community manager of GE, during a Breabulk 365 webinar July 23.Technology’s role in selecting and cooperating with logistics service providers “is not as much as I’d like it to be,” Putallaz said during the question-and-answer webinar on project cargo service provider vetting. “When I look at the chartering and breakbulk industry, I still feel it’s one of those spaces that haven’t been disrupted, and there’s a number of reasons behind that.”
Through its vetting and qualification process with carriers, intermediaries, charterers and third-party logistics providers, GE can be dealing with as many as 40 carriers, charterers, intermediaries and third-party logistics primary providers across all businesses and modes, each with a disparate system, he explained.
“I don’t want to learn 40 different platforms and I don’t want to have 40 different log-ins,” he said.
Further, Putallaz points out that much of the project owner’s communication is via email.
“Sometimes I think we’re email wranglers with all the position reports that we get and the various updates,” he admitted.
Keeping It Neutral
His proposal is for an innovator to develop a neutral third-party platform “where I can log into one place and have a dashboard that connects me to all our different carriers, cradle to grave, from vetting to RFQ (requests for qualification) to execution to big data analysis,” he said.
He compared the concept to long-time third-party provider GT Nexus, which developed back in 1998 at the peak of the dot-com boom-and-bust.
GT Nexus and its early competitors were able to gain traction with their technology focusing on container-shipping, which is more of a commoditized industry and more receptive to standardization, compared with the complex and unique requirements of a given project cargo shipment. Certainly parcel, and other simple repeat delivery options enjoy more predictability than potential project technology providers can scale. Still, the majority of shipments within a project move goes containerized, so project shippers and EPCs are familiar with what’s possible.
Putallaz said that GE has “been in conversations with some of the guys … to see what’s out there.” He said he is optimistic to see “where it’s going to go the next three to five years.”
A neutral third party makes the most sense for a platform, he maintains. “The solution is not going to come from us with GE digital, and it’s not going to come from the carrier or forwarder side.” If a carrier spends seven figures to develop a platform, it’s not going to be enthusiastic about sharing it with competitors, nor would a competitor find it palatable to piggyback on a competitor’s system, Putallaz noted.
Further, he recognizes that the funds are not available on the carrier side for such an investment, even if a return on investment could be proven.
“Part of it is the money has not been there on the carriers’ side,” he said. “Carriers haven’t financially been in the best spot the last 10 years. If you’re a carrier and you invest a million dollars into a great platform, does that guarantee you the business? Well, if your ship is not positioned where I need it, I’m not going to hold my cargo for 30 or 60 days to position the ship over there, just because I like using your system.”
Other Functionalities
Pascal Ochquee, director global logistics, Halliburton commented on some of the features that an envisioned project cargo platform might offer: “One of challenges we see is something as simple as tracking information all the way down from vessel carrier to port to the custom broker to the logistics service provider,” Ochquee said. “It’s a popular comment in my organization that, ‘if Amazon can track all your small parcel shipments, then why can’t we do the same thing?’ Our business a little different than shipping parcels to home addresses, but that transparency of where your cargo is and where is it sitting, that technology and providing that technology is one thing.”
Ochquee agreed with Putallaz that such a system can’t “come from just one carrier or one logistics service provider, because not everyone is going to be on board working on the platform of a competitor or semi-competitor.
“It’s one of the challenges that we’re hopefully going to solve over the next couple of years.”
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