Tackling ground transport losses from ports to landlocked countries

How SGS is solving the problem of loss of imported goods during ground transportation from ports to landlocked countries.

Landlocked countries, especially in emerging markets, face several inefficiencies with international trade. Movement of goods can often lead to losses and outright theft during transportation. These losses of shipped goods can lead to severe financial losses for small and large-scale businesses alike, and hence negative economic consequences. Additionally, countries with ports used by landlocked countries also suffer economic losses through tax avoidance schemes used by shippers who divert goods meant for landlocked countries into the ported home country [1]. Therefore, there is a strong need for effective monitoring and tracking of the movement of goods from they arrive at the ports to when they reach the final destination whether in the landlocked country or otherwise.

SGS, the world’s largest inspection, verification, testing and certification company has sought to tackle this issue by leveraging Internet of Things (IoT) technology. SGS has historically been at the forefront of digital innovation to make global trade and supply chain more efficient. It also has a wealth of experience operating with challenges such as underdeveloped connectivity and infrastructure. To overcome the supply challenges outlined, SGS partnered with American-based Savi Technology, a sensor and sensor analytics solutions company, to launch OMNIS a cargo tracking service for goods moving across borders [2]. OMNIS uses high quality, low-cost IoT sensors to track goods in containers to give real-time, responsive view of cargo and trade movements [3]. Savi’s sensors can track a range of cargo types via a combination of GPS, GPRS and communications satellite technology [3]. Users will be able to see cargo status at any given time and respond quickly to any diversions or anomalies. All events are recorded from source to destination, helping later statistical or auditing analysis. OMNIS is currently heavily deployed in Kenya and Ghana. In Kenya, sensors are fixed on containers when loaded on trucks at the port. Since the transit paths of trucks are already defined, trucks that divert are immediately flagged and the customs office is notified. [4] Additionally, an alarm is triggered if one attempts to detach the sensors. This monitoring is performed on all transit consignments, therefore significantly increasing the confidence level in the integrity of the Kenyan cross-border transit system [4].

SGS’s digitization efforts in Ghana were targeted towards, transportation of goods to landlocked West African countries such as Mali, and Burkina Faso. Given goods being exported to these countries were not taxable in Ghana, there were several false claims of goods being sent to the landlocked countries only to be diverted for use in Ghana [5]. As a result, the Ghana Revenue Authority needed an innovative way to track the transportation of goods earmarked for landlocked countries.  OMNIS was deployed in partnership with the revenue authority and is currently operational across the northern, eastern and western borders tracking about 3000 trucks every month [5]

Over the medium and long term, SGS needs elevate OMNIS to the next frontier to seamlessly optimize insights from the data its sensors provide. This can enable supply chain managers to perform investigative analyses, which can include the ability to run a query to generate visualized investigation results. Such intelligence can enable ports authorities redraw truck routes or ensure extra vigilance at danger-prone locations [1]. Additionally, maximizing value from this technology would require alignment and coordination across several the revenue authorities of both non-landlocked and landlocked countries. SGS must therefore aggressively scale OMNIS across multiple neighboring countries to Ghana and Kenya.

The rise of the IoT, advancements in sensor technology, and new analytic capabilities have created an opportunity for economies and companies to better manage global supply chains through actionable intelligence [1] However, to scale the adoption of sensors and other IoT to enable always-on supply chains across emerging markets, key barriers to adoption need to be addressed. One major barrier is the implementation cost [6]. Costs include not only the deployment of automation and sensors, but also the maintenance of networks and storage space needed to communicate and collect the data these systems generate – as well as the investment in analytic tools and skills to make sense of it all [1].

These benefits of IoT span across the entire logistics value chain, including freight transportation, warehousing operations, and last-mile delivery. They also impact areas such as operational efficiency, customer experience and safety and security and [7]. With IoT, we can begin to tackle difficult operational and business questions in exciting new ways.

For sensors’ continued success in emerging markets, a key question is how we operational efficiency can be achieved when goods are moving in the opposite direction (from landlocked countries to ports) especially if authorities in landlocked countries do not embrace the technology as quickly as countries with ports have.

(779 words)

Sources

[1] “The 2016 MHI Annual Industry Report Accelerating Change: How Innovation Is Driving Digital, Always-On Supply Chains”. 2016. Cpbucket.Fiu.Edu. http://cpbucket.fiu.edu/1168-geb6368x81168_emba-97075%2F2016-industry-report-2016-(1).pdf

[2] 2017. Savi Technologies. https://www.savi.com/learn/customers

[3] “Tracking”. 2017. SGS. http://www.sgs.com/en/trade/monitoring-services/tracking

[4] “Cargo Control In Kenya”. 2017. SGS. http://www.sgs.com/-/media/global/documents/case-studies/sgs-gis-omnis-kenya-case-study-a4-en-12-v1.pdf

[5] “Cargo Control In Ghana”. 2017. (4)   http://www.sgs.com/-/media/global/documents/case-studies/sgs-gis-omnis-ghana-case-study-a4-en-12-v1.pdf

[6] “Ghana – Transportation-Logistics”. 2016. https://www.pwc.com/gx/en/transportation-logistics/publications/africa-infrastructure-investment/assets/ghana.pdf

[7] 2017. Dpdhl.Com. https://www.dpdhl.com/content/dam/dpdhl/presse/pdf/2015/DHLTrendReport_Internet_of_things.pdf

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2 thoughts on “Tackling ground transport losses from ports to landlocked countries

  1. This seems like an fairly simple way of solving the problems associated with theft of containers. Operating in Iraq and Afghanistan, convoy attacks and container theft were a fairly regular occurrence, particularly in the more lawless/remote regions of the country- as I am sure is the case to a lesser degree across relatively unoccupied portions of Africa.
    I have two primary questions
    1) What are they going to do about it when they find out that a container was stolen? Will they be able to track it to the end location? Or are thieves smart enough to remove the tag? While I am used to seeing entire villages composed of stolen shipping containers in Afghanistan, I am guessing that this is not the case in Africa.
    2) This seems as though this would solve the “worst case” that entire container is stolen, but what we experienced much more often is that the locks were popped at an overnight stop and most of the contents stolen. Is it economical to tag the internal cargo?

  2. This is a nice example of technology being used to solve seemingly complex problems such as theft and tax evasion. What is interesting is that this technology also has the potential to help with something we struggle with in TOM a bit: the ability to obtain accurate data to improve operations. As we move towards increased tracking of activities – including more sophisticated technologies that permit such tracking – the ability of companies such as SGS to avoid problems such as theft and tax evasion but also to perfect its operations will be greater than ever before – and this will be game-changing in all industries.

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