Dear Ahab: What impact do you think automation, particularly AI, will have on the shipping industry? – Techno Curious
Dear Techno Curious: much like other businesses, logistics companies are starting to look at their problem areas and asking, “Which functions do we have problems that AI can help us quickly and easily improve?” While we are unlikely to see robots staffing shipping vessels in the short term, some companies may start to use AI to analyze data and build optimized supply chain solutions. Still, while AI becomes more common in the supply chain, there will always be a need in our industry to provide a human touch.
Dear Ahab: It has been a year since the Red Sea diversions began and the additional two weeks of transit continues to wreak havoc on my supply chain. How much longer do you think these diversions will continue? Is there anything else the FMC can do to help? – Cape of No Hope
Dear No Hope: Unfortunately, I don’t expect much to change anytime soon. Other than military intervention, which does not seem to be deterring attacks on merchant vessels, the FMC can issue sanctions against the government of Yemen. However, that’s unlikely to have any effect because the Houthi rebels aren’t officials of the Yemeni government.
The bigger concern that no one is thinking about is what happens when the attacks stop, and vessels start going through the Suez Canal? The vessels that go through the canal will arrive at European ports well before the vessels sailing around Africa, creating a scenario where double capacity hits European markets at one time. This will cause severe congestion at European ports, rail depots and trucking terminals, none of which have the equipment to handle two times their normal capacity. It will take a long time for patterns and schedules to return to normal, meaning that simply rerouting ships through the Suez Canal will, in the short-term, create another major headache for the industry.
Dear Ahab: I import and export a lot of cargo through the U.S. East Coast. With no long-term contract signed, what do you think the future holds for labor at East and Gulf Coast Ports? – Looking for a Sign
Dear Looking: Unfortunately, with no final agreement, once the détente is over, it is very likely we will be right back where we were on October 1. This is based on recent reports that claim that the ILA and USMX are still far apart on contract terms. This makes me think we’re likely to see more labor action before an agreement is finalized.
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