How does connected, smart cargo do more for you? In this episode of the Expeditors Podcast, we return to our series on Digital Solutions with Global Director of Cargo Signal Randy Gould to learn how the Internet of Things is bringing change to the logistics industry and what that means for visibility and supply chain resilience.
Chris Parker: Hello, everyone, and welcome to the Expeditors Podcast where you can hear about front-of-mind topics in the logistics and freight forwarding industry through the lens of a global logistics provider.
Chris Parker: I'm your host, Chris Parker, and today we're returning to our visibility economy series to discuss the Internet of Things and what it does to enhance critical decisions and longevity, with the right approach.
Chris Parker: There's a lot more to visibility than just slapping a sensor onto a pallet. So returning to talk about this is the Global Director of Cargo Signal, Randy Gould. Randy, welcome back.
Randy Gould: Thanks for having me again, Chris.
Chris Parker: So it's been almost a year since you've been on here. What's been going on with Cargo Signal in that time?
Randy Gould: Well, we've had a ton of disruption in supply chain in general. And because we're a risk management company and we're trying to help people out we've been really busy.
Chris Parker: With this sensor-based logistics that Cargo Signal does it sounds like response, quick response is something that is definitely a benefit. But there's a visibility aspect that allows you to take the information that you're getting from real-time tracking and make better decisions.
Chris Parker: And since that's what we're going to be talking about today, to start off I wanted to address a survey that had been done by the Korber group where they surveyed 1200 supply chain specialists. 91% said that they were having a hard time managing their supply chain complexities and about 48% reported that the problem had only gotten worse last year. By now, we are all well aware of the impact that the pandemic has had on shipping but when it comes to visibility specifically what issues did the pandemic expose?
Randy Gould: The supply chain has always been complex, right, and I think what the pandemic has really elevated to a broader visibility across everyone just paying attention to what they can go into the store and pick up or not is the supply chain is actually more fragile than everyone really expected.
Chris Parker: Fragile. What does that mean, fragile supply chains?
Randy Gould: Well, it's the ripple effect. So one small thing like a labor shortage in a port and that causing a port to shut down for a small amount of time has those ripple effects that slows down all of the other links in the supply chain and that's part of the complexity. And in a pandemic where you can't take for granted the ability for large labor forces to come in to work consistently, it's just causing all kinds of havoc.
Chris Parker: So before we dive a little deeper into this topic I want to set or at least refresh myself and the audience really on a couple of key terms here. One of them is the Internet of Things. What is it and how has it been used in supply chain so far?
Randy Gould: Sure, so things, physical objects. Think about smartwatches, smart cars, smart speakers that you are interacting with over the internet. You can control or see the status of remotely, maybe through an app on your smartphone or on a web portal. That is the internet of things, to be able to interact with a physical object over the internet.
Chris Parker: Okay, so then bringing IoT closer to logistics with sensor-based logistics, what is that and what is it supposed to tell me?
Randy Gould: IoT powers our sensors, which are attached to cargo and that makes it smart cargo and once it's smart cargo it can generate alerts. It can give us alerts on its location, on the quality, if it's maintained its integrity moving. If there are security issues with it or not and then those alerts will feed into our command center and our command center can take action on it and fix those problems before they become a serious issue.
Chris Parker: Back in episode three, we talked a lot about cargo security benefiting from these devices. Could you refresh me on what you would call the visibility economy? I mean, Jose talked about this a few episodes ago but what would you define as the visibility economy and what role does sensor-based logistics play in it?
Randy Gould: Well, it's pretty simple. Visibility equals revenue. And so when I hear visibility economy that's where you can really leverage visibility to add value within your organization and ultimately increase revenue and service your customers better, right. If you have visibility, the visibility doesn't create value in and of itself, it's what you do with it.
Randy Gould: The benefit that you get from visibility is you can fix something before it breaks and if you can start to fix problems before the supply chain breaks that's where you could really start to increase your revenues through getting product to final destination, to be able to sell and increase your revenues by better customer experience.
Randy Gould: For example, if you're an automotive company and you're trying to run a production line and you're short a part, our clients get to log onto Cargo Signal's portal and then look for that individual part and if they see it's delayed then they can go back and immediately change their operation on the production line.
Randy Gould: So it's things like that, that keeps the supply chain moving and doesn't grind it to a halt like all of these other issues that we were talking about.
Chris Parker: Alright. So, help me understand the landscape of IoT solutions out there. So there's got to be a lot of companies out there in the tech space that are trying to solve these complexity issues. How have you seen the industry change and where do you think it's going with these as they are coming out or evolving?
Randy Gould: Well, logistics and supply chain is a massive industry and it's one of the last that's analog. So it's pretty attractive for technology companies to try and tackle this huge industry that's traditionally very analog through digital solutions. But the problem that I find more commonly is tech companies underestimate how analog the logistics industry still is.
Randy Gould: So the technology-based solutions that they're positioning can't really be as effective in other industries, right? If you look at Cloud computing you have a lot of access to tons of data, advanced algorithms, ML, AI, those sorts of things, that we just haven't really seen the adoption rate in the logistics industry because the underlying data is still so analog.
Chris Parker: There are still a lot of paper trails out there, essentially, right. I mean, there's a lot of manual processes within logistics.
Randy Gould: There is.
Chris Parker: Yeah.
Randy Gould: Yeah, because it's just been that way for so many years and there's a lot of different factors at play there. So that's where we think sensors cut through a lot of those issues because you don't have to ask, right, you can just rely on a higher quality data source and then build technology solutions on top of that.
Chris Parker: When you come in with a, I guess, very digital solution to an analog process what happens when there is a disconnect?
Randy Gould: Yeah, there's an execution component of this. We're talking about freight moving still, right, and it's moving fast. It's got to be easy. It's got to be convenient. It's got to be simple in order to execute at the scale and volume that logistics operates today. So you can't come in and do it halfway. You really have to dive in and invest and think about how are the teams going to implement the necessary components to bring something from analog to digital.
Chris Parker: Right. You can't just jump in with a solution and expect things to just continue humming along. It'll have disruptions itself.
Randy Gould: Yeah. You can't stay surface level. Sometimes you got to attack the source and get to a higher quality source of data in order to digitize something. Technology companies, they typically lead with a hardware or a software-oriented solution but they miss the mark on the realities of how logistics work, right.
Randy Gould: I always go back to the warehouse. It all starts and ends in the warehouse, right. So we spend a lot of time working through with our clients how to efficiently scale the use of IoT within supply chain to make as much cargo smart as possible in the easiest and most efficient way possible. Where not everyone can really do that if you're just positioning with a hardware or a software solution.
Randy Gould: Supply chain is complex for a reason. There are many different parts. There are many different stakeholders. It changes hands. One domestic truck final delivery from a DC to a final delivery point, that's pretty straightforward to solve. Once you start getting into an international multi-mode environment, that's a tougher problem to solve and I think people get stuck there because if you can't have 100% visibility you can't manage my exception. You don't know where your problems are when you sit down in the morning, right.
Randy Gould: That's really where our clients are. When they have enough coverage their logistics teams can come in in the morning and they're already being delivered where the issues are. They're tackling those issues immediately instead of spending a bunch of time tracking and tracing and asking questions, trying to find where the problems are.
Chris Parker: What about positive influences that then technology companies, whether it's hardware or software or digital solutions, what are the positives out there? What's happening that's evolving in logistics right now?
Randy Gould: Speed.
Chris Parker: Yeah.
Randy Gould: Speed of data. We're accustomed to it in our personal lives. We're used to seeing deliveries come right into our homes, right? But you go into the workplace and you don't always have access to that. So if you have that visibility of access to real-time data then you can just manage completely differently than what you had previously.
Chris Parker: So now that we've heard a lot from the forwarder/service provider side of visibility when it comes to logistics and supply chains, I wanted to shift focus over to the customer side, the people who need these services. With all that visibility that's coming at them now because of sensor-based logistics or other digital solutions out there, what can supply chain leaders do with all this data that's being captured and relayed by these devices?
Randy Gould: Well, the other thing that we're seeing in the market right now is rates for moving cargo-
Chris Parker: They're high.
Randy Gould: ... are going way up.
Chris Parker: They're astronomical, yeah.
Randy Gould: Yeah. So if you're paying a lot more to move your product you're going to ask where it is a lot more often. So we're seeing that more and more and the difference with a sensor is the sensor's going to tell you where that cargo is. So you don't have to ask where it is as much anymore.
Randy Gould: You can shift that conversation and that question to, "I know where it is. It's here and why. Why has it been sitting there too long?" So you're asking different questions and you're holding your transportation providers accountable in a different way, based off of the data that your smart cargo is providing to you.
Randy Gould: In addition to just where is the cargo and has it been sitting longer than I expect it to, it can ... when we talk about condition, it could be detecting intrusion. Somebody getting into my packaging or the truck that it's riding in. Humidity, temperature, tilt, shock, potential damage, handling, all these things are also increasing with the turmoil and the complexity that's being introduced in supply chain today.
Chris Parker: So with all this data that's coming out of these sensors and that is reaching customers it sounds like a lot.
Randy Gould: Yeah. Too much data is not a good thing.
Chris Parker: Yeah, I mean I want it but how much do I need? Did I over ask?
Randy Gould: What am I going to do with all this stuff, right?
Randy Gould: We've built a rules engine to filter through a lot of that noise. So we generate alerts based off of this rules engine and it's built off of all of our knowledge of how logistics actually operates, right, that analog nature of it. So you're only going to be delivered alerts that you need to action in your day.
Randy Gould: And talking about the visibility economy, that's where it ties back in because if someone is coming into their workday and they have a very clear set of tasks to accomplish and fix problems they're going to be the hero. They're going to wrap that up a lot sooner than they would otherwise where they have to wade through a bunch of tracking and tracing and asking questions. They can go directly to fixing the problem and that's where you build efficiencies and that's where you can win in supply chain and the visibility economy.
Chris Parker: Another thing that you brought up at the beginning of the episode was this sense of fragility. Supply chains are very, very fragile. You're saying that this data that comes in, as much as it is, I mean, and you can refine it. You can choose what you need to see in order to make the right decisions but it's going to make your supply chain a heck of a lot stronger then.
Randy Gould: You can't assume that your supply chain is going to operate as planned.
Chris Parker: Sure.
Randy Gould: This is really all about reacting to when something doesn't go according to the plan and the faster and more effectively you react to something that's not going according to your plan, the more agile, nimble, and responsive you can be and fix those problems before it breaks.
Chris Parker: What about becoming proactive? I mean, if there's a lot of reacting as it's happening, what can you do to refine things for the future?
Randy Gould: Data analysis. Mine all of that data historically. Look for those light bulb moments, inquire of your data historically and then make those tweaks to future shipments. I think about, are you getting what you're paying for from an elevated service level? What's happening right now, vessels are stuck off the port, they're waiting around and everyone is very, very interested in getting the product to final destination as fast as possible.
Randy Gould: But are you getting what you're paying for with that elevated transportation level? Are the behaviors that you're expecting to get that product to final destination consistent with what is actually happening? To me, that's part of visibility. And that's the difference between milestones. Milestones only tell you, it left, it's going to arrive at this day somewhere in the future. We're operating in minutes now, not days.
Chris Parker: If there's a VP of logistics out there who's considering a lot of solutions out there, offerings, what's a good mindset for them to have or an approach to take when trying to look for the best provider?
Randy Gould: Well, there's a lot of technology solutions out there.
Chris Parker: Sure.
Randy Gould: And most of them have what I like to call the dot on the map, right. You can track and trace. You get your dot on the map. You're going to see most solutions out there with a dot on the map but not all dots are created equal. There's a lot of underlying data and that data accuracy that I talked about, there's a lot of questions that you have to follow up and ensure, is this information, is this dot on the map something that I can actually take action on, and do something with.
Chris Parker: Yeah. I think of, when I'm tracking my own personal shipments and such, Hodgkins, Illinois just keeps ... it's like the stuck point where things just hang out for three or four days and here I am as this customer, if I could find a faster place for you to move through, wouldn't that be great but you're just stuck there. I mean, I got this cool map. There's a dot on it but it does nothing for me. It just tells me where-
Randy Gould: I don't want to look at Hodgkins anymore. Move it along, Hodgkins.
Chris Parker: But there's more, right. There's more you can do.
Randy Gould: There's more you can do. That's the thing. You should have more context to just sitting there looking at Hodgkins, Illinois wondering when it's going to be delivered to your house, right. And waiting, that's a very unpleasant experience. No one likes to wait around, right. But if you have more information while you are waiting that is a much more pleasant experience. If you have to wait but you know the status, you know what's going on, that's way better of an experience.
Chris Parker: Yeah. Being productive with your time, with all the additional information that comes in, and doing more with it.
Randy Gould: Yeah.
Chris Parker: Any final thoughts for you as we wrap this up? If anyone were to walk away with this and think about the visibility economy a little bit deeper and how sensor-based logistics plays into it all, what would you want to really chew on after this?
Randy Gould: Yeah, I gave this a little thought prior to the podcast and I got three items for you, Chris.
Chris Parker: Yeah, lay it on me.
Randy Gould: All right. One, hardware is changing quickly, right, and these are built off of the cellular networks and the cellular networks are changing. You got 5G coming in. You got 3G deprecating at the end of this year. There's a lot of change there. So I want to encourage people to if they're looking at hardware, and Cargo Signal purchases the hardware on behalf of our clients, but if you're looking at purchasing hardware out there, make sure you're getting something that's going to future proof you, right, that's going to work for a good amount of time before you got to switch out stuff.
Randy Gould: Two, consider compliance, especially on the international side. If you're moving any air freight, this technology has got to be compliant moving in and out of your geographies and it's got to be compliant with the airlines from a lithium battery and going into airplane mode, just like your phone has to go into airplane mode.
Chris Parker: Yeah. Absolutely.
Randy Gould: You got to make sure that we're safe and we're implementing this new technology in a compliant manner.
Chris Parker: Yeah, totally.
Randy Gould: Third is data ownership. If you're thinking strategically about data, we've talked about some examples where data can go very well and give you the information that you need. Data can go very badly as well, if you have too much of it you can't process it. You can't make use of it, okay? So if you're thinking about data strategically, consider taking direct ownership of that data. Largely today, shippers are asking for copies of data from their transportation providers. Whereas now they have the ability to take direct ownership on that data, and then you have ... you're in a completely different and more strategic environment that you can go back and mine that data historically or take action on it with any of your stakeholders that you choose.
Chris Parker: Randy, thank you so much for talking about this. If people wanted to learn more about how sensor-based logistics can enhance visibility for them how can they get in touch with you?
Randy Gould: Smart cargo is what we do. So just visit cargosignal.com and get in contact with us and we'd be glad to talk more about it.
Chris Parker: Appreciate your time. Thank you so much.
Randy Gould: Thank you.
Chris Parker: Thanks for listening to today's episode. If you've got any questions or want to learn more about today's topic, check out the show notes for more information. And before you go, make sure you're subscribed on whatever podcast app you're using so you won't miss the next episode. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and Twitter, or simply visit us at expeditors.com. Take care, and I'll see you next time.