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Globe Tracker & SeaCube for One Network Express IoT Gensets

Globe Tracker

Globe Tracker & SeaCube for One Network Express IoT Gensets

One Network Express (ONE) confirmed an IoT-focused partnership with SeaCube Containers and Globe Tracker to develop a genset solution through utilizing Global Tracker’s layered technology capabilities. This along with other market solutions continue the reported increase in maritime logistics IoT demand overall.

“The growing demand for greater tracking, transparency, security, diagnostics and asset fleet management using smart technology will continue to be a key driver for leased solutions. By partnering with Globe Tracker, we will continue to enhance our leading-edge technology solutions and expand our commitment to the intermodal industry by providing smart asset technology leased products,” said Greg Tuthill, Chief Commercial Officer at SeaCube.
At the center of the development of the solution remains increasing visibility with smarter tracking abilities, specifically impacting reefer fleets. The anticipated kickoff of full operations is currently scheduled for mid-September through the end of 2019.
“We are extremely pleased to be working with SeaCube in providing this best-in-class genset solution to ONE. In genset telematics, we are the only provider integrated into the micro-controller of 2 out of the 3 leading brands in North America. This provides ONE with the most robust amount of data and assists in setting maintenance intervals, reducing maintenance costs, extending asset life, monitoring fuel consumption and having full operational visibility of their genset assets,” notes John Harnett, Senior Director Marine and Intermodal at Globe Tracker.
blockchain

SMALL AND MEDIUM-SIZED GLOBAL TRADERS ARE BANKING ON BLOCKCHAIN

This is the second in a three-part series by Christine McDaniel for TradeVistas on how blockchain technologies will play an increasing role in international trade.

Give Me Some Credit

Every business requires capital to operate. To sell products to customers overseas, many companies also need trade financing and insurance from third-party lenders. About 80 percent of all global trade is transacted through third-party lenders and cargo insurers, but the process is complex, can be costly and many banks find it too risky to support small and medium-sized enterprises (SMEs).

Blockchain has the potential to increase transparency, speed and accuracy in assessing risk across the trade finance process, which in turn could expand the supply of credit available for international trade transactions – good news especially for SMEs that face significant hurdles accessing credit. Here’s how.

Pay Me Now or Pay Me Later

Buyers who import goods from sellers in other countries generally want to pay upon receiving the merchandise so they can verify its physical integrity on arrival. Exporters, on the other hand, generally prefer to be paid as soon as they ship the goods. Trade finance can bridge this gap.

Exporters and importers engage third-party lenders and insurers who will guarantee payments on the basis of collateral and indemnify the exporter, importer and related parties in the event that the merchandise is damaged, stolen or lost while in transit. In this way, trade finance provides the credit, payment guarantee and insurance needed to facilitate an international trade transaction on terms that will satisfy all parties.

80% of trade relies on finance

Steps on the Trade Journey

Intermediaries such as freight forwarders typically manage the physical journey of merchandise, from the original producer to the border, across the border (maybe several borders), and to the final buyer.

Each step must be verified: when was the merchandise transported from the factory or farm to a warehouse, when was it moved from the warehouse to a container, when was the container loaded onto a ship, when did the ship get underway, when was the container unloaded from the ship at port, and when was the merchandise transported from the port to the end consumer.

Different trade finance instruments, such as lending, letters of credit, factoring and cargo insurance cover legs of the journey. A letter of credit is a guarantee from a bank that a buyer’s payment will be received and be on time or else the bank will take responsibility for the payment. Factoring is accounts receivable financing to accelerate cash flow. Cargo insurance insures the merchandise while en route.

Without Finance, Trade Would Sink

The World Trade Organization estimates that 80 percent of global trade relies on trade finance or credit insurance. The global trade finance sector (i.e., the global volume of letters of credit) is worth roughly $2.8 trillion. Demand for trade financing exceeds availability, resulting in the underutilization of existing capital. According to the Asian Development Bank, the global trade finance gap — the difference between the demand for and supply of trade finance — has reached $1.6 trillion.

SMEs Face a 50 Percent Rejection Rate

The shortfall in supply reflects the complex and risky nature of trade finance which often involves multiple parties. Before banks will issue letters of credit in trade finance, they require potential customers to present a solid credit history and a strong balance sheet, conditions that tend to favor larger institutions.

SMEs typically experience more difficulty navigating the trade finance process and dealing with the cost and complexity of banking regulations than larger companies. In 2014, SMEs had trade finance requests before financial institutions rejected at a rate of over 50 percent. In comparison, the rejection rate for multinational corporations was only seven percent.

Links in the Trade Finance Chain

According to the United Nations, there are typically eight major steps required to obtain a letter of credit, although in practice the Credit Research Foundation lists more than twenty. Each step of the process is dependent on the previous steps, and some steps involve sending the same document back and forth for verification purposes. The administrative burden is greater for SMEs than for large firms.

survey of 2,350 SMEs and 850 large firms conducted by the U.S. International Trade Commission in 2010 showed that lack of access to credit is the major constraint for SME manufacturing firms seeking to export or expand into new markets and it is one of the top three constraints for SME services firms.

rate of rejection for trade finance

How Blockchain Can Help Ease Trade Finance

Requirements to authenticate each transaction in the trade finance and insurance process can engender large amounts of paperwork and cause delays at each step. Every handoff must be approved and verified.

Instead, blockchain uses digital tokens that are issued by each participant in the supply chain to authenticate the movement of goods. Every time the item changes hands, the token moves in lockstep. The real-world chain of custody is mirrored by a chain of transactions recorded in the blockchain.

The token acts as a virtual “certificate of authenticity” that is much harder to steal, forge or hack than a piece of paper, barcode or digital file. The records can be trusted and greatly improve the information available to assure supply-chain quality.

Using blockchain as a digital ledger for these handoffs would allow involved parties to instantly track and receive secure information about the traded goods. Parties can monitor the entire shipping process and verify the completion of each step in real time. This increased transparency and ease of monitoring reduces the risk that a borrower presents to a potential lender or insurer.

Banking on Blockchain

A number of financial institutions are piloting the use of blockchain-enabled trade finance platforms.

Bank of America, HSBC, and the Infocomm Development Authority of Singapore collaborated in 2016 to develop a trade finance application designed “to streamline the manual processing of import/export documentation, improve security by reducing errors, increase convenience for all parties through mobile interaction, and make companies’ working capital more predictable.” Using the application, each action in the workflow is captured in a distributed ledger and all parties (the exporter, the importer, and their respective banks) can visualize data in real time, offering transparency to authorized participants while ensuring confidential data is protected through encryption.

Barclays used blockchain in 2017 to issue letter of credit that reportedly guaranteed the export of $100,000 worth of agricultural products from Irish cooperative Ornua to the Seychelles Trading Company, noting the parties were able to execute a deal in four hours that would usually take up to 10 days to complete.

A group of European banks launched a trade finance blockchain platform in July 2018, initially focused on facilitating small and medium-sized businesses trading within Europe. In September 2018, the Hong Kong Monetary Authority announced plans to launch a trade finance blockchain platform. Twenty-one banks are participating in the platform, including large institutions such as HSBC and Standard Chartered. The Hong Kong Monetary Authority is also reportedly working with its counterpart in Singapore to develop a blockchain-based trade finance network to settle cross-border transactions.

Lessons for Trade Policymakers

As the trade finance industry begins to utilize blockchain technology, there are some potential implications worthy of policymakers’ attention.

First, the large number of intermediaries and corresponding administrative costs in trade finance tend to fall particularly hard on SMEs and the relatively higher cost of each transaction makes SME financing less attractive to banks. If blockchain can reduce the costs of trade finance, more small and medium-sized businesses could trade globally.

Second, although blockchain technology does not alter the fundamental credit risk of borrowers, the increased transparency and access to information it delivers could improve the accuracy of banks’ risk assessments. If perceived risk is greater than actual risk, a nontrivial number of loan applications may be denied even though those loans have the potential to be successful. If blockchain brings greater confidence and issuance of good loans — that is, those that are paid back — the transactions they support would bring value to the economy.

In these important ways, blockchain can increase transparency across the trade finance process and decrease risk for all parties, in turn expanding the supply of credit available for international trade transactions.

ChristineMcDaniel

 

Christine McDaniel a former senior economist with the White House Council of Economic Advisers and deputy assistant Treasury secretary for economic policy, is a senior research fellow with the Mercatus Center at George Mason University.

This article originally appeared on TradeVistas.org. Republished with permission.

security

Mozambique’s Hi-Tech Security Could be Africa’s Model

The threat of piracy has waned around the Horn of Africa in recent years, a fact that mariners attribute to the “Djibouti rules.” Countries with coastlines on the West Indian Ocean and the Red Sea abide by the Djibouti Code of Conduct, a regional response to security, environmental and administrative challenges that have confronted shipping for many years.

In even better news, there’s now a chance for “Djibouti 2.” This wouldn’t be a diplomatic accord. Rather, advanced technology offers the promise of new dynamism to cooperation and surveillance, which we can see as a follow up to the Djibouti rules. A model for the kinds of high-tech equipment and systems that can help protect assets in the seas is now in the hands of a southern signatory to the code, Mozambique.

To be precise, the model in this case are the high-speed maritime security vessels and an accompanying set of seven unmanned radar sites and VSAT satellite surveillance services that Mozambique took delivery of a few years ago.

The wide range of threats to mariners and commercial enterprises on Africa’s East coast demand not only multinational cooperation but also real-time intelligence to inform and direct law-enforcement efforts. In its recent report on maritime security, DefenseWeb, notes that the Djibouti code has been amended to cover illicit maritime activity beyond piracy and armed robbery, such as weapons, drugs, human and wildlife trafficking; illegal waste dumping; illegal fishing; and crude oil theft. Satellite and radar are needed to pinpoint these threats.

International organizations like the U.N. Office on Drugs and Crime have focused resources on the Horn of Africa, specifically in Somalia and Somaliland. But trouble has a way of migrating down the coast. Indeed, the root causes of piracy are often ignored. According to the Africa Center for Security Policy, piracy is problem that is primarily  land-based with maritime symptoms. Many of the people who were involved in piracy and other criminal activity a decade ago are still engaged in maritime crime.  

These elements are converging in Mozambique’s Cabo Delgado province. With marauding terrorist gangs crossing Tanzania’s southern border into Cabo Delgado in northern Mozambique, spikes in violence have already been seen, including an attack there earlier this year on contractors for the U.S. energy giant Anadarko. One person was beheaded. As Anadarko and other oil and gas firms develop offshore natural gas fields, terrorists and criminals will no doubt put their sights on these target-rich environments at sea. That is the moment when satellite surveillance and radar arrays will prove valuable.

Mozambique has a state-of-the-art capacity at its disposal, even if the radar systems have not yet been deployed in some cases. This equipment, provided by the global shipbuilding company Privinvest, can be used to protect and monitor the estimated $30 billion worth of gas reserves now under development in Mozambique’s territorial waters.

In addition, the country is losing an estimated $60 million in revenue each year to illegal fishing, mostly by foreign-owned ships, according to Mozambican minister of oceans and fisheries Agostinho Mondlane. Many millions more worth of ivory, minerals, alcohol, narcotics and sugar are smuggled out of Africa through scantly-monitored ports in northern Mozambique. Tighter monitoring of its ports and maritime traffic would help the country crack down on all these crimes.

Satellite and radar tracking would complement one another especially when it comes to monitoring the Exclusive Economic Zones of coastal states in Africa. Automatic Identification Systems (AIS) aboard ships, which track vessels, can also be picked up by satellite. Illegal fishing, smuggling or pirate vessels have every reason not to turn on their AIS systems. That’s where radar systems capable of running Vessel Monitoring Systems (VMS) become essential to law enforcement. Setting up VMS with equipment already purchased by Mozambique and running them through a unified command center would make Mozambique a model to be replicated across the continent.

The Djibouti Code of Conduct depends on meaningful contributions from its signatory states. By standing up its radar stations, operationalizing its satellite services and integrating its high-speed patrol boats and interceptors into this technology-driven network, Mozambique could provide the living blueprint for maritime security in Africa.

Gregory Tosi is an attorney practicing international trade law in developing countries. He also builds personal submersibles and small boats

Pros and Cons of Maritime Shipping

For a long time in human history, maritime shipping was the best way to transport your goods across the world. About 71% of Earth’s surface is covered in oceans. Therefore, transporting your goods on a ship to another continent was a relatively straightforward operation in comparison to land shipping. However, with the advancements in technology, air-shipping has become a dominant form of long-distance transportation. Still, this doesn’t mean that maritime shipping doesn’t come with its own unique pros that make it a better choice in some cases. Of course, the cons of maritime shipping exist as well.

The pros of maritime shipping

We’ll begin by discussing the positive aspects of maritime shipping. As we said, in some situations, these advantages will be enough to tip the scales in favor of choosing maritime freight services.

There’s a lot of room on vessels and they can transport heavy goods

One of the biggest advantages of maritime shipping is that ships can carry all kinds of rather heavy goods. You will have to use ocean freight services if you’re running a business that imports or exports heavy objects, as airplanes usually cannot transport such goods. And if they can, the cost of shipping will be very high. Automobiles, various machinery, industrial parts, and so on, are just some of the things you won’t be able to transport by air (if you don’t want to spend a fortune, that is). 

Generally, maritime-shipping companies provide their customers with much more space than their air counterparts. Not only can they transport heavy goods, but they can transport a lot of them. This makes for high competitive rates and allows maritime shipping companies to easily take care of large demands. Whether you’re transporting heavy goods or a very large amount of lighter goods, maritime shipping is your best option.

Maritime shipping is highly affordable

The fact that there’s so much space on cargo transportation vessels means that it’s not hard to find the space for your goods. Then, there’s also the fact that all businesses whose goods are being carried will share the cost of the specific vessel arriving at its destination. It is primarily because of these reasons that maritime shipping is among the most affordable ways to move your cargo. And when compared with its biggest rival in terms of long-distance shipping (we’re talking about air shipping options, of course), maritime freight services are much (much) less expensive. What’s more, with maritime industry reshaping its supply chain, more accurate cost models are now being introduced. 

Vessels are more eco-friendly

When compared with aircrafts, vessels also provide much better options for eco-friendly shipping. Aircrafts use a lot of petroleum, leaving a very large carbon trail. This, in turn, damages the atmosphere. Such carbon trails disrupt the ecological balance and contribute to the negative effects of global warming. Even the slight cirrus clouds that form behind aircrafts contribute to impact these negative effects on Mother Nature.

As vessels don’t use a lot of petroleum, they leave a small carbon trail. In most cases, this makes them a better option for business-owners who are concerned with helping the planet Earth.

The cons of maritime shipping

Now it’s time to talk about the cons of maritime shipping. Depending on the situation, the advantages we’ve discussed sometimes won’t suffice, as these cons could make you choose another form of shipping.

Maritime cargo transportation is slow

If you need to transport your goods quickly, then maritime shipping will prove to be far worse for your needs than air shipping. Vessels usually have a long way to travel and they’re much slower than aircrafts. In a situation where an aircraft would transport your goods in a day or two, a ship would need an entire month to do so (and that is if there are no delays). While the situation is improving and maritime shipping is becoming faster, if you need fast shipping – vessels won’t do.

The key here is in deciding whether faster shipping will bring you more profit. If a much slower transportation speed won’t negatively influence the profits, then opting for much more affordable maritime shipping seems like the right thing to do.

Ocean freight services can suffer from delays

However, keep in mind that ocean freight shipping options can sometimes make your customers unsatisfied, as they’re not as reliable as air shipping options. Namely, ships operate on weekly schedules and different problems often occur. There’s always a good chance that your deliveries will be delayed. And your customers definitely won’t be pleased with that. While you will save some money if you opt for maritime shipping, you better learn how to communicate bad news to your customers

While their goods won’t get damaged, the possible delays will sometimes make your customers choose another supplier. However, if you don’t have a strict deadline and you don’t need to transport the goods very quickly, then maritime shipping could be the best option for you.

About the author: Originally from New Jersey, Alex Durick has been working for bfslebanon.com for three years now. He specializes in freight services related to relocation and also shares bits of knowledge on his company’s blog. Six years worth of experience in the freight business has made him an expert in many areas related to freight shipping, and he’s happy to share his findings with anyone who’s willing to listen.