Containers: The Next Big Social Network


Published on

Staxxon's presentation at SXSW Interactive Festival 2011. Putting "social" into the supply chain.

Published in: Business
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • \n
  • Welcome. I’m Tom Stitt. I work as the director of corporate development for a startup called Staxxon. Staxxon is developing intelligent logistics technology for global supply chains. Today I’m going to share ideas with you about how we can make social a bigger part of supply chains. Then I’d like to hear your ideas.\n
  • Chain is the appropriate word choice. Ball and chain? Static networks operated by carriers. Shippers (buyers) make best guesses about product payloads. Limited influence/input by consumers in the chain. Supply chains involve operational, social, natural, economic and political/legal components. The social component has gotten relatively little attention - until recently.\n
  • Sustainability objectives of shippers tied to “green” brand impression programs are slowly changing the “chain” into a social network where Consumers are exercising far more influence. Carriers are jumping on the social media bandwagon - a radical move for a very conservative segment.\n
  • \n
  • Create a social supply network that removes product guesswork/uncertainty for shippers, encourages use of optimized green supply networks and gives US companies, especially startups, more incentives to export finished goods that have global demand.\n
  • Let’s step through some of the numbers, dates and times that define the potential of a Social Supply Chain network. After that, I’ll focus on one of the social network opportunities - empty containers - then I’d like to hear your ideas for bringing social to supply chains.\n
  • \n
  • 90% of all consumer products move around in containers. What you are wearing, what you are sitting on, what you are using to tweet and text arrived on a container. Odds are that much of what you will eat and drink today and tomorrow spent some time on a container.\n
  • The annualized value of goods moved in containers. (Does not include bulk products - oils, etc.) Retail is the major driver of containerized consumer goods imports/exports in the US. The US is the #1 import economy in the world. More than 50% of the imported containers arrive via NY/NJ, POLA and POLB.\n
  • About 20M containers in the active container fleet. +/- 5M are specialized - tanks, flatracks, reefers - no not that kind of reefer - refrigerated containers. The balance of 15M are “general purpose dry containers” - 20’, 40’ and 53’ long. Aka “boxes” and “cans.” Currently about 2 containers for each unit of ship or “cellular” capacity.\n
  • About 2M boxes get retired each year. Most get scrapped. However, there is a growing trend of reuse. More and more 20’ and 40’ containers are being turned into storage, housing, shelter and other uses instead of being scrapped.\n
  • First container loaded (stowed) on a ship. Malcolm McLean invents containerized shipping. Later, one of the first examples of “open source” thinking, McLean’s chief engineer contributes the IP for the key components of containers - corner posts, blocks, etc.- royalty free.\n
  • The cost to ship a ton in 1956 using traditional cargo stowage methods. Weeks and 100s of people to load/unload a ship.\n
  • The cost to ship a ton of stuff after containerization. Not everyone was happy about this in 1956 - especially the dock workers and stevedores. Some are still not happy in 2011. US productivity in ports lags Asian ports by a factor of 2:1. Hours to unload/load a ship.\n
  • Vietnam war proves that containerized shipping works. McLean’s container ships carry +40% of the Vietnam cargo with only 10% of the total number of ships. Rapid global adoption cycle. Standards emerge. ISO. IMO. CSC.\n
  • Twenty Foot Equivalents - the rough equivalent of a packet and the industry standard unit of measure for ship capacity.\n
  • \n
  • Forty foot equivalent - how most light cargo - shoes, clothing, etc. - arrives in the US and Europe. Forty foot “high cubes” allow more boxes to be stacked higher.\n
  • \n
  • The Post Panamax era begins. The Panama Canal is widened. Post Panamax vessels with 8K TEU to 15K TEU capacity can use the Canal but require 50’ draft. US west coast/east coast shipping dynamics may change dramatically. Emergence of gulf/southern ports as head-on competitors with POLA and POLB. Interesting times ahead. New export logistics options.\n
  • \n
  • New ships arriving in 2013 will carry 15K TEU of containers. This will inevitably change the way ships are routed and product is managed in supply chains. This will also require major changes in US labor practices and agreements. Two weeks to unload a 15K TEU ship at POLB won’t work.\n
  • Value of US Exports today. Mostly agricultural products and trash. Huge volumes of trash/scr Lots of cotton, soy plus various pelletized products. High cost, speciality, low volume manufactured goods - automotive. Most containers that arrive laden in USA go back empty though 2010 saw some improvement.\n
  • # of US companies that export. US companies largely export adverse. Lots of intangible exports - entertainment, software, financial services - but not much infrastructure to support physical exports. Unlike other developed countries, no integrated local, regional, state, federal infrastructrure to drive exports.\n
  • Where product and containers end up and head back to coastal ports. Shorter distance on east coast (trucks, short line rail), longer distance on west coast (long-haul rail.) Metros are where the money and markets are for containerized product. Metros are where the infrastructure is for containerized product.\n
  • One 5K TEU ship making annual transits generates the equivalent air pollution to 50M automobiles. Container ships generate between 5% and 10% of the global air pollution depending on which source is quoted. Very serious problem. \n
  • The carriers spend about $7B/year moving empty containers full of air. Repositioning empty containers is a huge logistics headache. In long countries like the US that have high imbalances, the challenges are more severe and lead to transshipment. Big oppty: fill more empty containers with export product. Find product “friends” for empty containers.\n
  • \n
  • \n
  • \n
  • Smarter routing options. Right balance of water vs. rail/truck moves. Slow steaming where it makes sense. Minimize cost to return empties to Asia. Actively manage capacity. Adopt new metrics that replace randome “utilization” and “cost per TEU” metrics and focus on profitable operation.\n
  • \n
  • Carriers guard their capacity and demand today based on huge asset investments. They don’t collaborate on asset use but they do collaborate (where legal) on price and schedule. Various pooling concepts have been suggested but without strong social pressure for adoption, won’t happen.\n
  • Every container has the equivalent of a MAC address - a unique ID. Today the ID is read using human eyes and OCR technology. Look for increasing adoption of RFID and other technology to make identity and “check-ins” easier.\n
  • Carriers using different fuel as ships approach coastal areas. Slowing down in right whale breeding grounds. Cold ironing in ports. Considering new materials and coatings for containers - get rid of lead, plywood and eventually steel. Good story on Boing-Boing about containers falling off ships, not getting report, $3M fines assessed to pay for research in undersea impact.\n
  • \n
  • \n
  • Nobody wants to be burned with excess inventory. Nobody really likes close-outs and liquidations (separate from product that is made specifically for close out locations like Marshalls/TJ Maxx.) \n
  • Personalized product is more likely to sell. Personalized can mean regionalized, localized, seasonalized - many different things. But getting personalization right usually means that product moves off the shelf at higher margins and faster inventory turns. Shippers would like a more personal relationship with consumers.\n
  • Not green-washing. Sustainability programs aimed at reducing energy consumption and carbon footprint. E.g. Working with carriers to reduce cost, impact of empty container back haul. Carbon footprint labeling now in the EU. Probably will arrive in the next year in US.\n
  • Social nets need to move beyond demand creation or brand awareness and actually connect with Shipper inventory forecasting and supply chain management. The social in supply chain is grossly undervalued. Smart startups should focus effort on supply chain social opptys.\n
  • Social nets need to create measurable ties between consumer behavior and shipper sustainability programs. Brand awareness is great but getting consumers engaged in the sustainability program will lead to much more loyalty.\n
  • The trade imbalance in the US isn’t going to be solved with trade or currency policy changes. The trade imbalance needs viable finished goods matched to sensible local, regional, federal infrastructure. Social nets need to be developed that kick-start and support new and existing businesses to consider export.\n
  • Develop social nets that help Shippers predict demand and match inventories to predicted demand. Make the prediction nets work to help shape personalization profiles.\n
  • Create social nets to engage consumers in shipper sustainability programs. Identify points of engagement where consumers can help reduce energy and carbon impact. E.g. What is the impact of Black Friday campaigns? \n
  • Make it easier for small businesses with viable product to get access to affordable empty containers and carriage to the east, west or gulf coast ports. Make it easier to aggregate less than full loads.\n
  • Turn end of life containers into affordable housing, offices, shelters, storage. Build social networks to tie together the teams of planners, architects, mechanical engineers, affordable housing and disaster relief organizations to share know-how about re-use.\n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • \n
  • Containers: The Next Big Social Network

    1. 1. Containers: The next big socialnetwork? Tom Stitt corp dev director/Staxxon @tstitt/@staxxon
    2. 2. (Pre-Social) SupplyChain SilosShippers (Payloads/Product)Carriers (Packets/Network)Consumers (Users/Interface)
    3. 3. Social SupplyNetworkConsumers (Users/Interface)Shippers (Payloads/Product)Carriers (Network/Packets)
    4. 4. Social Supply NetLike & “Tweet” Product Prefs Buyers get direct inputFriending Green Supply NetsMore Export “Check-In” Options
    5. 5. Factoids
    6. 6. 90%
    7. 7. $4T
    8. 8. 20M
    9. 9. 2M
    10. 10. 1956
    11. 11. $5.60
    12. 12. $.16
    13. 13. 1968
    14. 14. TEU
    15. 15. FEU
    16. 16. 2014
    17. 17. 15K
    18. 18. $1.57T
    19. 19. <10%
    20. 20. Metro
    21. 21. 50M
    22. 22. $7B
    23. 23. Trends
    24. 24. Carriers:
    25. 25. Routing
    26. 26. Pooling
    27. 27. Identity
    28. 28. Green
    29. 29. Shippers:
    30. 30. Inventories
    31. 31. Personalize
    32. 32. Green
    33. 33. Beyond Liking
    34. 34. BeyondFriending
    35. 35. BeyondCheck-Ins
    36. 36. Prediction
    37. 37. Sustainability
    38. 38. Exports
    39. 39. Reuse
    40. 40. Empties
    41. 41. Unfolded
    42. 42. FoldedFront Panel and Doors foldto the insideUp to 5 containers can benested in the space of 1
    43. 43. Thanks!Tom Stitt, @tstitt+1.650.523.4944 Skype: tom_stittStaxxon Blog: (FAQ, linksto YouTube, Facebook, Twitter, Flickr)