November 2000 | Commentary | Viewpoint

Securing America's Future by Riding the ITS Wave

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Ocean liner service is the backbone of international transportation for manufactured goods. General cargo ships, sailing on regular schedules along established trade lanes, annually move more than 1.2 billion metric tons of consumer, industrial, and military commodities ranging from fatigues and milling machines to perfume and designer jeans. In the past 10 years, the number of intermodal containers handled by the world's ports has doubled.

As key links in global supply chains involving higher-value and more time-sensitive cargoes, liner services are subject to increasing pressures from ocean shippers, who in turn are driven by their own customers' rising expectations. Shippers, recognizing the benefits of inventory reduction and compressed, transparent supply chains, want better on-time performance, improved document accuracy, greater in-transit visibility, and expedited information flows.

Economic realities and infrastructure constraints have pushed the ocean freight industry into a near-obsessive pursuit of operational efficiency and improved performance. Low return on investment rates and high capital equipment costs compel carriers to seek every opportunity to increase asset utilization, improve productivity, and reduce operating costs. Empty container repositioning and overcapacity caused by directional imbalances in cargo flows are persistent operational and financial problems.

Many ports suffer from land-side congestion, insufficient water depth, and lack of land to build on. Urban traffic and delays around terminal gates frequently make cargo movement to and from intermodal marine terminals difficult. Competing demands for waterfront property and environmental concerns about dredging also impede or prohibit ports from expanding to accommodate increased cargo and larger vessels.

Intelligent Transportation Systems

The liner sector is a vital, but challenged partner in global logistics systems. In developing strategies to deal with these issues, leading carriers are turning to approaches that fall under the umbrella of Intelligent Transpor-tation Systems (ITS). Put simply, ITS is the fusion of information technology and transportation management.

Today, much of intermodal transportation's potential for improved efficiency and asset utilization, higher service levels, tightened cargo security, augmented military capability, enhanced safety, and stronger environmental protection lies in ITS applications.

In liner shipping, a variety of ITS applications are being used or created to capture and communicate timely and accurate information concerning the location, status, and progress of vessels, vehicles, equipment, personnel, and cargo in intermodal supply chains. These include systems for navigation, collision avoidance, vessel traffic management, stowage planning, container tracking, chassis identification and location, refrigerated cargo monitoring, and communications. Marine container terminals—especially their gates—have been the focus of recent ITS advances designed to reduce paper exchanges and streamline cargo handling.

The next few years will be crucial to the future of intermodal ITS—including dealing with the question of system interoperability. Companies will have to address corporate attachment to proprietary technologies, investments in legacy systems, fragmented technological innovation, and institutional barriers to information sharing if they want to realize the benefits of ITS on a global scale. The development of systems that can communicate across diverse organizations, multiple national borders, and differing commercial and military interests will depend on the active cooperation of public and private entities.

The liner industry and its intermodal partners provide Americans with a wide array of products at prices that are only minimally impacted by transportation costs. Commercial carriers are also at the core of the nation's military transportation system. For the country's economic and national defense interests to be well served in a future that will likely be characterized by surging trade volumes and increasing physical restrictions on our logistics networks, it will be necessary to develop intermodal system productivity to the very limits of our ability.

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