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Shipping Industry Bets Big on IoT in Bid to Save Billions

Across the shipping industry, IoT technology is finally graduating from pilots to real-world commercial products

3 min read
Photo-illustration of a cargo ship with lines indicating technological communication.
Shipping companies that are investing in IoT technology believe monitoring shipments more closely will help them to make better decisions about their goods.
Photo-illustration: Traxens

In a bid to save billions of dollars annually, the shipping industry is graduating from pilot projects and finally starting to adopt a smattering of Internet of Things (IoT) technologies for real-world, commercial use. Lately, several large and small shipping companies have turned to Traxens, a French technology firm, to help them deploy IoT devices across their fleets.

Traxens develops technology that tracks and monitors cargo. Since it launched in 2012, the company has earned investments from leading shipping companies. Shipping is responsible for carrying 90 percent of the world’s traded goods, according to the International Chamber of Shipping. This year, A.P. Møller—Mærsk A/S, which is the world’s largest container ship and supply vessel operator, became a Traxens shareholder and customer. 

Then, earlier this month, Traxens equipped Indonesian shipping company, PT TKSolusindo with a set of devices, each slightly longer and thinner than a brick, with sensors including GPS.  These devices can track geolocation, detect shock and motion, and check the temperature, humidity, and alarms on refrigerated containers, often called reefers. 

PT TKSolusindo is a reefer container company that serves clients across the Indonesian archipelago. The company transfers ice cream, meat, medicines, and produce. Indonesia’s islands are spread across almost 3,200 kilometers (2,000 miles), and these goods must be kept fresh in tropical weather. PT TKSolusindo has 125 6-meter (or 20-foot) reefers, and 30 12-meter (or 40-foot) reefers in addition to many refrigerated trucks and cold storage units on land. 

Each container is fitted with one Traxens device.This plastic container includes one Traxens IoT device.Photo: Traxens

By mid-2020, Traxens says 150,000 shipping containers will be equipped with their devices across all of the companies they plan to serve. When Maersk invested in the company, it committed to ordering 50,000 devices. Eventually, Traxens’ devices will not just monitor containers, but also allow customers to regulate internal temperature, which is especially important when shipping food.

According to a 2015 report by McKinsey & Company, a management consulting firm, location-tracking IoT technology could reduce ships’ navigation time by 11 to 13 percent. IoT technology that tracks packages and containers could also reduce the number of damaged goods by 30 to 50 percent, and increase the utilization of containers by 10 to 25 percent. And if companies are better able to track the status and contents of their containers, they could reduce the amount they spend annually on containers by US $13 billion.

Still, shipping poses special challenges for IoT technology. In Traxens’ case, each container is fitted with one device that relays information by cellular communication, and the device’s batteries need to last for months. The hardware is customized by Traxens to reduce power loss and increase energy efficiency. And the devices do not constantly transmit information—they send out information when they reach a certain point in the journey, according to geozones set by Traxens and the customers. 

“We also use our low-energy mobile ad-hoc network TRAXENS-NET to [allow devices on board the same ship to] communicate between each other and elect a single device to communicate for the others to extend battery life,” says Lucas Moulin, program and solution director. “Another possibility is to have a TRAXENS-NET gateway supplied with power to gather data and improve even further energy efficiency, for instance on a vessel,” adds Moulin.

Tracking shipments more closely could raise new security concerns, though, which could induce significant costs to shipping companies that decide to adopt IoT devices. And shipping companies have been the target of security breaches in the past. In 2017, Maersk fell victim to a major cyberattack which reportedly cost the company hundreds of millions of dollars.

To avoid unwanted interception, Traxens made its data accessible only through encrypted authentication. And Traxens’ approach is hard to penetrate, says Moulin. “Our devices are not permanently connected and cannot be reached from the Internet. They connect to our server only at their initiative periodically,” he adds.

Though Traxens has gotten a lot of attention recently, shipping companies have been looking at IoT solutions for years. Since 2015, Maersk has made multiple major investments in IoT to improve the efficiency with which it ships large numbers of products. These investments have included deals with Ericsson and the development of a Remote Container Management system, which is an interface that allows customers to check the location and conditions of their container. 

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Carl De Torres
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When the COVID-19 pandemic erupted in early 2020, the world made an unprecedented shift to remote work. As a precaution, some Internet providers scaled back service levels temporarily, although that probably wasn’t necessary for countries in Asia, Europe, and North America, which were generally able to cope with the surge in demand caused by people teleworking (and binge-watching Netflix). That’s because most of their networks were overprovisioned, with more capacity than they usually need. But in countries without the same level of investment in network infrastructure, the picture was less rosy: Internet service providers (ISPs) in South Africa and Venezuela, for instance, reported significant strain.

But is overprovisioning the only way to ensure resilience? We don’t think so. To understand the alternative approach we’re championing, though, you first need to recall how the Internet works.

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