What do tapioca, shipping containers
and artificial intelligence
have in common?

How innovative tech like AI can revolutionize the shipping industry

July 5th 2021

Y ou may have heard about the bizarre shortage of tapioca in the news recently. Despite the popular demand in North America, bubble tea sales slowed down since drinks were being sold with a lot less tapioca back in April 2021, an item that is usually imported in from Asian markets. What most may not know is that this was tied to a much larger issue that has been affecting the shipping industry all across the globe. Due to the COVID-19 pandemic, the shipping industry has faced a shortage of containers in the supply chain with markets either having too few containers, or some ports overloaded with them. With implications on supply chains everywhere, ports and understaffed crews were left scrambling to get each container where they needed to go. A major vulnerability in supply chains that has existed for a long time was exposed by the pandemic, many calling it “the perfect storm”. This left everyone in the shipping industry wondering how things could change, leading them to think outside the box to come up with alternate solutions. It turns out, innovations in artificial intelligence and IoT technologies are proving to be the saving grace for the future of the shipping industry. To understand this problem, it’s best to start at the cargo routes connecting Asian and North American ports. As the first country to be struck with the virus, China also became one of the first countries to recover from COVID-19. While many countries were in lockdown, and imposed restrictions on shipping imports and exports, China had resumed shipping activity. Since they began to export goods in containers however, Chinese ports were having a hard time getting their containers back. For every 100 containers that were being shipped from China, only about 40 made its way back. China got desperate for containers, and ended up paying premium prices for empties, with some 40 ft containers rising in price from $2000 to a whopping $9000.

Meanwhile in the US, ships were waiting to be docked at ports such as the Port of Los Angeles, sometimes waiting for weeks for a spot to open up at the port. As of June 2021, some 5.5% of the world’s container fleet was waiting outside of a port. And once docked, the containers that were unloaded and eventually emptied couldn’t be returned to China due to COVID-19 restrictions. The flames of this crisis were fanned further as demand for overseas goods skyrocketed. Online shopping became increasingly popular during the pandemic, and Chinese ports were under pressure to export all these goods, as most of these goods are manufactured in China. American ports couldn’t keep up with the volume, as labour shortages caused backlogs and delays, reducing capacity in logistics systems, while China kept losing containers and were unable to meet the demand.

So with empty containers piling up in North America, and China lacking containers to ship their surplus of goods, container prices rising high and along with that the price of products, where do we go from here? How do we keep goods moving smoothly along the supply chain and on time while we wait for the pandemic to subside? Exciting and innovative technologies such as artificial intelligence and IoT are proving to be the answer. AI driven software such as Canscan’s Virtual Checker system are changing logistics by automating container checking processes and how containers are being handled at ports, terminals, and yards.

There are about 170 million containers in circulation globally, with 80-90% of goods being shipped in these containers. Yet almost 1 in 5 containers are damaged on a container’s journey. While China is still waiting to get its containers back, what if they were able to quickly identify and track damaged containers that are at their disposal, and get them to work and continue exports? Canscan has been developing AI driven damage detection software that makes this possible. This system connects to existing camera infrastructures at ports and terminals, and analyzes the video feeds as well as pictures from smartphones on site. Inspectors can visually check containers for damages in a fully remote process, which provides instant analysis and automated repair cost estimates. This inspection process is traditionally done manually, which causes inconsistencies and is prone to error, not to mention causes safety issues and backlogs.

But when this process is automated, it is highly advantageous for many reasons: inspectors can focus solely on exception cases, and delegate work to half the checkers than before, optimizing the reduced workforce caused by the pandemic; the automation of the checking process and repair cost estimation speeds up the process so that damaged containers can be repaired much faster; and with social distancing still the priority in many workplaces, the remote method of checking reduces contact between workers, and largely eliminates workplace accidents.

 

Digital technologies such as AI and IoT are transforming all the related industries such as food and agriculture, yet the highly traditional shipping and maritime industries have yet to embrace such technologies. However, bringing innovation to this industry doesn’t have to be complicated. For example, Canscan’s Virtual Checker system can be integrated into any existing camera infrastructure, with no hardware upgrades required. While there is a lot of work that needs to be done to fix the vulnerabilities along the supply chain in the shipping industry, taking small steps can help move things along towards an equilibrium in the future. If we can get creative and turn existing problems into solutions, such as fixing up damaged containers quicker with the help of AI technology to fill the container shortage gap, we can get things moving again. Who knows, that could be the thing that gets tapioca supplies back up in the US and into bubble tea drinks again!