Long recognized as integral to the logistical efficiency of shipping agents and international freight forwarders (IFFs), the Internet has also transformed B2B supply chains. In today’s data-driven environment, the web delivers real-time info on procurement and supplies. It also facilitates direct transactions and collaboration between suppliers and customers.
These processes demand reliable and cost-effective communications. A customised software-defined wide area network (SD-WAN) solution can keep suppliers and customers ‘on the same page.’ It can often cost less than multiprotocol label switching (MPLS) or point-to-point (P2P) options.
A Nightmare to Elm Street
If you’re a freight forwarder, no doubt you’ve had to ship ‘nightmare’ cargos such as livestock. Imagine the number of contacts needed to ship a thoroughbred racer from Kentucky to Dubai. In 2014, shipping a single container of refrigerated goods from East Africa to Europe involved 30 people with over 200 different interactions. In either case, a global SD-WAN can digitally streamline processes by reducing manual transactions and improving supply chains.
Many IFFs incur avoidable costs such as demurrage, detention, or port storage fees because they lack real-time data on container turnarounds from warehouse to port. Indeed, ‘demurrage and detention charges can accrue up to 20x the value of the container itself.’ A comprehensive SD-WAN solution utilising emerging technologies such as IoT and blockchain integration can reduce or eliminate inefficiencies that result in these per diem fees.
Internet Connectivity Drives Innovation
To take advantage of emerging technologies that improve efficiency and lower costs, logistical intermediaries must harness the capabilities of a functional Internet. For example, the widespread deployment of IoT devices reduces operational costs through improved fleet management and optimal asset utilisation. Also, by analysing the data stream between warehouse and distribution, shippers can reduce inventory and predictive maintenance costs with end-to-end visibility.
Consider blockchain technology, now used for bills of lading. Blockchain will transform the freight industry by making transactions more transparent, strengthening data security, improving trackability, digitising processes, and reducing costs.
Another technology on the horizon for shipping is artificial intelligence (AI). These applications will…
- Mirror human perception in decision-making
- Optimise maintenance and reduce inefficiencies
- Quicken shipping speeds
- Precisely predict shipping times
- Improve security
Fortunately, today’s shippers have a wealth of Internet connectivity options at hand. From the muscle of a dark fiber network to managed services provided by telcos, logistical intermediaries can customise a WAN solution to fit their needs.
Different Wide Area Network (WAN) Options
Apart from a P2P configuration, shippers can choose from either MPLS or SD-WAN solutions. MPLS is the legacy option, offering outstanding QoS over dedicated circuits but at a higher cost than SD-WAN. A newer technology, SD-WAN routes traffic over the Internet. Both are highly secure, but SD-WANs offer greater scalability, more flexible redundancy, and user-friendly network management applications.
When deciding, weigh the urgency of various network metrics. In other words, how critical are elements such as cybersecurity, reliability, and uptime, and redundancy? Do some applications demand reserved bandwidth or ultra-low latency? Is ease of scalability a priority? Service thresholds determine which WAN type is right for your company.
What about deploying both options? Many enterprises do, reserving mission-critical data for MPLS while routing less sensitive traffic across an SD-WAN. Remember that while MPLS providers offer service-level agreements (SLAs), generally, SD-WANs do not.
The ongoing coronavirus pandemic has upended international shipping. The recent blockage of the Suez Canal disrupted global supply chains. Ocean freight rates have doubled, and air freight rates have quadrupled during the past year. Given the challenges, logistics services providers would do well to examine in depth all their supply chain elements, including telecommunications.
Ginger Woolridge, Head of Growth, Lightyear