Data is the New Container
Malcom McLean couldn’t afford to go to university. Instead, he bought a truck, began hauling empty tobacco barrels, and developed a concept that would revolutionize the cargo industry: the humble shipping container. The corrugated steel structures were nothing to look at, but behind their modest exteriors, a fundamental change in global trade was taking place.
On April 26, 1956, a tanker loaded with McLean’s first shipment of containers set sail from Port Newark-Elizabeth Marine Terminal, New Jersey. Prior to that, goods had travelled the world in odd-sized wooden crates, or worse still, had rattled loose in the bowels of train carriages and boat hulls. The industry was inefficient, unreliable and laborious to its core; but the introduction of the standardized container changed all that. It transformed the supply process from a string of rusty, fragmented linkages to a smooth and well-oiled chain. For the first time, goods could be transferred seamlessly from road, to rail, to sea—in bulk and at reduced cost. Finally, merchants and customers could breathe a sigh of relief as orders began arriving, intact and accounted for.
Simply put, the simple container enabled people to do the previously undoable. Why am I talking about this now? Well, because there is a new “container” in town – only this time, it’s not made from nuts and bolts, but from bytes. What Malcom McLean’s hollow steel boxes were to 20th century, data is to the 21st, and with Industrial Revolution 4.0 plowing full steam ahead, its dominance is only set to grow.
From believing to seeing
Data now has the power to disrupt the supply chain as we know it. And, as our capacity to capture, analyze and interpret it increases, so too will our ability to address one of the biggest problems currently plaguing the industry: visibility, or more precisely, the lack thereof.
Yes, containers have transformed shipping for the better, but somewhere down the line we have lost sight of the goods housed within them. With around 1.8 billion metric tons of cargo shipped by sea each year, and a 20-foot container capable of housing anything from 48,000 bananas to 400 flat-screen TVs, it’s little wonder that companies lose track of contents. Yet, to someone, somewhere, each and every item matters.
This lack of visibility has led to serious inefficiencies in today’s supply chain, with anxious retailers forced to order more than they need, earlier than they need, just in case. What’s more, as the business world knows only too well, where there is inefficiency, there is cost, and for supply chains, that sum can run into the billions of dollars, with one study estimating the cost of time wasted at $2 billion (£1.5 billion) per year in the UK alone.
Creating intelligence out of chaos
The good news is that just as containers helped fix the problems of 20th-century trade, data can do the same today – and with an almost incomprehensible 2.5 quintillion bytes created globally every day, it is a disruptive force to be reckoned with.
By providing unprecedented insight and supply chain transparency, the vast pools of data at our disposal can provide a valuable window into the future as goods transit from A to B. Before a ship even leaves port, the when, what, where and how of the cargo and its journey can be answered, down to the minutest of details. The result? Data can strip away uncertainty and help us to make informed decisions about tomorrow, today.
Naturally, as with any industry-shaping shift, there are teething troubles and hurdles to overcome – not the least of which is the fragmented nature of the data landscape before us. But, if Malcom McLean could create order out of chaos with a steel container, then with governments and the private sector working hand-in-hand, we can do the same.
The way I see it, these are exciting times and at DP World, we are not going to sit back and let them pass us by. As I write, our teams are busy exploring the technologies and partnerships of the future. The best part in all of this? With the world still waking up to the power of the data at our fingertips, we’re only just getting started.