tion. According to the companies, the overreliance
on paper transactions has driven up the costs of processing and administration to as high as 20 percent of
the costs of transportation.
According to White, most inefficiencies are caused
by “information silos and ineffective data and documentation sharing. For example, information at origin
was not always known by the destination customers
in a timely manner.” Missing documentation has also
contributed to delays, a scenario that could be avoided with a blockchain-enabled program in full swing,
White said.
Connor DiGregorio, a procurement research ana-
lyst at supply chain market research firm IBISWorld
Inc., said the databases of parties involved in a trans-
action are now stored separately, which requires the
exchange of paperwork. The IBM-Maersk platform will
“allow easier coordination of documents on a shared
distributed ledger, eliminating much of the need for
physical paperwork,” said DiGregorio in an e-mail.
“Additionally, through the distributed ledger and with
the use of smart contracts, approvals and clearing
through customs can happen much faster, reducing the
time it takes to process goods through ports and other
checkpoints.”
Inna Kuznetsova, president and chief operating offi-
cer of Parsippany, N.J.-based Inttra, a multicarrier
portal that tracks the status of more than 40 percent
of the world’s ocean containers, said the success of
the IBM-Maersk venture will depend on the com-
panies’ ability to attract a large number of shippers
and customs authorities to the platform. “Blockchain
represents an attractive means to build a distributed
network,” Kuznetsova said in an e-mail. “Yet it requires
certain changes to the IT and business process of each
company joining the platform, in addition to adopting
common standards. Both historically represent a chal-
lenge in shipping.”
She added that participants with multilayered oper-
ations, which represent many in the sea carrier trade,
will also need to decide if they want to invest in partic-
ipation in many networks or wait for a true standard
to emerge.
Haller of IBM said the venture is all about inclusiveness. “IBM wants to work with standards and regulatory bodies to make sure all these blockchain networks
are interoperable,” he said at the NRF conference.
“We’re working to jointly develop a solution that will
work for anyone in the industry that wants to be a part
of it. Then it will go from being about blockchain to
being a solution for global trade.”
—Mark Solomon with Ben Ames
18 DC VELOCITY FEBRUARY 2018 www.dcvelocity.com
newsworthy
go figure …
88%
The percentage of shippers surveyed experiencing
tight truckload capacity, the highest level in three
years. The number has exceeded 90 percent only twice
in the survey’s 17-year history, in 2005 and 2014.
SOURCE: WOLFE RESEARCH
For truckload rates, 2018 could be
one for the books, analyst says
Truckload contract rate increases “could break records”
in 2018 and are likely to remain strong for the next two
years after that, a transport analyst said.
Benjamin J. Hartford, analyst for investment firm
Robert W. Baird & Co. Inc., said contract rates could easily rise 5 percent over 2017 levels and could approach,
if not surpass, double-digit increases on some lanes.
Speaking at the SMC3 annual winter meeting in Atlanta,
Hartford noted that spot, or non-contract, rates, which
generally lead contract rates by six to nine months,
escalated through most of 2017 after bottoming out
early in the year. In the week ending Jan. 13, spot rates
for dry van freight—the most commonly utilized type
of truck trailer—rose to $2.28 a mile, 17 cents above
year-end 2017 levels, which were already the highest in
three and a half years, according to figures from consultancy DAT Solutions LLC, which tracks spot-market
activity.
Hartford said that 2005 and 2010 were the last two
years when rates saw significant firming. In 2005, the
industry coped with a driver shortage and strong demand
from a surge in residential housing, the latter of which
turned out to be unsustainable. The 2010 increases came
on the heels of the first full year of recovery after the
Great Recession in 2007–09, which had been precipitated
by the bursting of the residential and retail real estate
bubbles.
Hartford forecast strong economic growth through all
of 2018, which will bring the demand for freight services
that folks in the industry had hoped for, and at the same
time, had feared. Capacity is already tight due to a shortage of qualified drivers and the transition to electronic
logs, which are expected to reduce driver productivity by
ending the practice of drivers’ clocking more miles than
allowed by law. In addition, carriers are being forced
to pay significantly higher wages to attract and retain
drivers, and will seek to recoup those costs by asking for
higher freight rates.
