Calling on the Cargo Connectors

By Felicity Landon

After a period of low freight rates that prompted shipping lines to go direct to EPCs, forwarders are now back in favor and re-proving their worth as value providers, cost cutters and problem solvers. In a feature story from Issue 5 of Breakbulk Magazine, we look at how forwarders are deploying the smartest digitalization tools to establish themselves once again as an integral part of the supply chain.

Logistics is in some respects a thankless task, according to projects specialist Andy Tite.

“When it’s done well, it looks so easy. Stuff just arrives. If it goes badly, there is a tremendous amount of focus and everything becomes highly reactive. That’s the case with any cargo, but especially significant when it comes to out-of-gauge or sensitive cargoes; if you are moving something weighing 3,000 tonnes and a vessel breaks down or there’s a problem with handling equipment, there is no simple alternative waiting at the end of the road or in a depot nearby.”

That is where human interaction and strong relationships come in, said Tite, vice president, global business development and commercial director at DHL Industrial Projects.

“You have to have the ability to be close to the cargo – because when there are challenges, you need to have already appreciated what the issues could be, mitigated the risks and established that in different situations, you can do X, Y or Z as an alternative.”

With that in mind, Breakbulk asked the question: does advancing technology threaten to cut out the middleman? Tite pushed back on the terminology.

“We are only a middleman if we do our job poorly,” he said. “If we provide value and direct cost savings to clients, then we are an integral part of the supply chain. If we receive a request, put the phone down and give the request to our supplier, then we are a lazy freight forwarder. If we can’t provide value in relation to schedule, operational efficiency, consolidation and environmental considerations – and ideally direct cost savings – then there is no place for us.”

Inevitably, technology is advancing. DHL has innovation centers in Germany, Dubai, Chicago and Singapore – with the focus across the DHL group, including express/parcel, containers, ocean freight, airfreight, overland trucking and global forwarding, of which industrial projects is a part.

“The innovation centers are really useful because they look at the best technologies almost irrespective of the application – what’s good in the industry, what’s good in terms of applications, hardware or ideas that we can pick up because they are directly transferable and can be adopted in parts of the business.”

At a recent DHL global conference, a speaker from the innovation centers presented a detailed ‘heat map’ of social and business trends in one half, technology trends in the other. AI, blockchains, drones, digital twins, APIs, wearable sensors and big data analytics were just some of the techs being considered. Some are more applicable than others, of course.

Tite said: “Obviously there is known technology that is readily adaptable, such as the use of drones. These can be combined with geofencing, RFID or other types of equipment tagging, which enables effective human-free inventory management. In projects, you could be looking at external or remote storage areas; you could set up a laydown or storage facility near to the job site and rather than having people stationed there on a consistent basis, you can lock the gates and manage the inventory with a drone that completes a patrol, picks up tags, logs the information and on landing provides a report on what is in that location and where it is situated. That is the sort of technology we are looking to adopt.”


Solving Problems with AI

Hamburg-based Lang.Tec is a small company focusing on natural language processing (NLP), AI, computational linguistics (CL), machine learning (ML) and software development – seeking to “solve real-world problems with artificial intelligence.”

There are many opportunities to apply Lang.Tec’s solutions to the shipping world, said team leader Dr Kilian Foth. “We are a cross-industry company – we are 12 years old and have been working with shipping for four years now.”

He is aware of the way that shipping, particularly the project cargo sector, views itself as “different”, but said: “Most of the customers we do projects with are people doing this for the first time. Usually, they are aware that they don’t understand about NLP and they assume in turn that we don’t understand their industry. That’s basically fair – we don’t. We do projects that combine IT and linguistics. There has to be a common understanding that we have to pool resources and understand what we are doing here.”

Lang.Tec has organized various types of information extraction solutions for harbor masters (for example, loading operations) and ship owners (vessel position/availability), and designed systems that extract the details of project and breakbulk cargoes from charterers seeking ships.

However, Foth expressed his frustration that the shipping industry is still, in his view, characterized by ‘the overflowing email inbox’, spreadsheets and semi-formal tables typed up. “Brokers receive 800 emails a day but say they don’t need assistance in processing them because ‘I know what’s in them and anyway the project doesn’t start until next month’.”

He believes that by using NLP, forwarders or others could respond to enquiries about potential project business faster and even consolidate back-to-back project movements. “Ideally, they would not have to read the email – it would convert automatically with opportunities going into a funnel, turning opportunities into a contract faster by processing.”

Brokers or forwarders can probably get the books filled with business with their current working practices “but they may want to reply faster to the really juicy projects,” Foth said. “What’s missing is sophisticated AI to allow you to do the same things more efficiently or maybe pick up the really lucrative contracts earlier. If they really want to compete, they should be trying to explore every opportunity they can get.”

If someone received 400 emails a day, it could take 27 hours a day to read them all, he suggested. “Our NLP has 95% accuracy of extracting information from these emails. It provides more time to choose the right contracts.”


Working Ahead

However, Tite said: “If you are waiting for the email in order to find out about the contract, you are already too late. We often work on projects two or three years in advance, ahead of the RFQ, prior even to the finalization of funding and design of the equipment to be moved, because fundamentally, it’s back to value creation. Advising clients on how big, wide or heavy they can build will make a difference to their project. We can even advise on procurement strategies.

“I think it is wrong to say that our industry is depicted by overflowing inboxes and trying to retain all the information. I think it is just the same for anybody – people won’t use technology or systems if they don’t find them useful. That’s why Excel exists. Everyone moans about it, but no one has found anything fundamentally better for certain basic tasks.”

Among the solutions provided to clients, DHL Industrial Projects has its own materials handling platform, MMS 360. This provides end-to-end tracking and visibility, with a live dashboard reporting internally and externally and clients given varying levels of user access.

“Clients can track the general progress of a project or go down to PO level, or the progress of each line item. They can see how far along the transport is and when they can expect to receive their items at the job site. We have also linked MMS 360 with our CargoWise platform.”

Tite was not keen to ‘put the project industry on a pedestal’ or say it is inherently different (“although we really like to be considered different”) but said: “The point is, some things are not transferable. AI certainly has a place – within the DHL Group it’s become even more of a focus. In the supply chain environment, with predictability of volumes and the manner in which actions need to take place, AI can obviously work very well. But it will take time and adaptability in both the technology and our approach when looking at projects.”

Customers are looking out for a new tech approach, he said. A major international energy company recently approached him with early proposals for a greenfield project in a remote location. “There were two main things they said would be advantageous to the project: environmental focus and solutions in relation to carbon neutral transport, and digitalization and the use of AI. It’s becoming more and more prevalent.

“Within projects, there are elements we can take from the wider industry relating to AI and so on. The challenge is whether we can set the boundaries within the project industry to establish at least a level of predictability so that we could apply AI. Perhaps a repeat operation such as wind turbine components being transported on the same route or from a consistent OEM could be learned from.”

Meanwhile, clients are always providing the DHL team with new challenges – in a good way, Tite said. “They are challenging us to do things better or differently. They are asking the question – why are you doing it that way? Clients for the same projects can have very different prioritizations. Such is the diversity in some clients’ portfolio that their traditional business is handled in an almost completely opposite way to their new diversified business. The reason is a different market, and fundamentally the margins are different.”

From DHL’s point of view, there is an important new opportunity for forwarders to flourish.

“In high-volume, low profitability, low return markets, where the project is not that complex and does not require a high level of engineering or technology, EPCs may not be engaged by the project owner as they would traditionally have been because it is almost commoditized,” Tite said.

“So the role of the forwarder is lifted at least one tier in the supply chain. This gives us more responsibility and also more visibility, because we are then dealing with the priorities of the project owner and project as a whole, as opposed to the priorities of the other parties in the project. This provides a much greater level of clarity.”


How to invest wisely in technology will be one of the key talking points during a panel session at Breakbulk Americas 2023. “Progress in the Digitalization of the Breakbulk Sector: Expectation Vs. Reality”, moderated by Bill Keyes, director of logistics at Fluor, and featuring project professionals from Kuehne+Nagel, Shipnext and KBX, will take place on September 27 from 3:10pm-3:50pm.



Check out the full main stage agenda for this year’s event, happening on 26-28 September at the George R. Brown Convention Center in Texas, Houston.

PHOTO: DHL Global Forwarding