The logistics ecosystem has left much to be desired in regard to transparency in trucking operations, with the industry still relying heavily on archaic five-decade-old electronic data exchange (EDI) technology that creates burdensome time lags in operations, and prevents businesses from gaining real-time insights into the whereabouts of their cargo while in transit.
“Technology like EDI prevents immediacy within the industry. And due to this, drivers and carriers see an incentive in not being transparent, and sometimes in not being honest. During instances where we track trucks with sensors, we have seen EDI messages coming in saying a load has been picked up or dropped off, when in reality, the truck possibly might never have been there,” said Vicki Warker, CMO of Savi Technology. “There could be hours between the time that the vehicle was actually physically present at the pickup or drop off location and the reported time.”
Warker spoke on how these issues escalate when the freight that is moved needs cold storage. An example would be the pharmaceutical industry – the supply chain of medicines come under tight scrutiny, especially when they need to be maintained in a specific temperature range while being transported.
“It is a highly regulated industry, and the best practices in transportation would be to follow the regulations that have been put forth. I think it is about having a clear view of not just the operational process, but how each piece within the end-to-end operations affects the rest,” said Warker.
In pharmaceutical manufacturing plants, there exist many crucial process indicators that ensure appropriate supply of ingredients while adhering to quality standards – such as temperature or humidity. However, most of these critical parameters are tracked in siloed environments.
“They are tracked at the manufacturing floor, while being packed, and while in transit. But no one tracks what happens during the handoffs; to see if the products are maintained in the prescribed conditions while sitting for days at a port, or perhaps when they are subject to theft or fraud,” said Warker. “The only way to ensure safety is to make sure that there is some sort of end-to-end visibility.”
Though there probably is not a one-stop solution to all the logistics issues that plague the industry, a judicious mix of technologies like the Internet of Things (IoT) sensors and blockchain traceability could help. Warker insisted that blockchain could be the answer in the future to enable end-to-end visibility, as it can act as a central ledger that traces the movement of pharmaceutical goods from manufacturers to suppliers and then finally to the consumers.
“Another solution is using sensors, as they are objective. When you get a GPS read from a sensor associated with a cargo, you know that it was physically there at the specific time and at that specific location. There’s no human intervention there, no latency, and there’s a definitive time-stamp,” said Warker. “If you have an environmental sensor, then you also have verification of what the conditions of the cargo were at that time. I think that pairing sensors with technology like blockchain for end-to-end tracking is an exciting possibility.”
Recently, Savi helped one of its pharmaceutical clients to avoid having to destroy medicines due to negligence in controlling the storage temperature while in transit. Savi installed sensors on the truck carrying the precious cargo and had enabled geofencing across corridors to stay in touch throughout its journey from the pickup point to its destination.
However, while on the road, the truck broke down. It was a Friday, and the distribution center that had to receive the cargo was closing at 2:00 p.m. The issue was further exacerbated by the sensitivity of the medicines, as they had to be stored in a refrigerated condition at a specific temperature – with any deviation from the threshold effectively rendering the drugs unfit for consumption.
Through the sensors and its geofencing system, Savi was able to identify the truck breakdown and spoke with the carrier in question. Meanwhile, the carrier management had dispatched another truck to pick up the load from the spot, assuring that there would be no harm done to the cargo.
But based on Savi’s estimated time of arrival (ETA) calculations on the second truck, the pharmaceutical company realized that the cargo would not make it on time to the distribution center, and thus asked the carrier to bring the load back to its origin site, where it would be refrigerated for the weekend before embarking again towards its destination.
Warker mentioned that this timely intervention helped save the company medicines worth $15 million. “Even if the medicine would not have gone bad while sitting in a parking lot over the weekend, the company would still have to test the medication as per regulations to make sure the cargo did not exceed the temperature threshold. This test would have cost them $1 million in itself. Thus, at a minimum, our technology helped them save $1 million, if not $15 million,” she said. “And I think it is time the leaders in the supply chain space start using technology to do better in terms of visibility and transparency, and to understand what is going on in transit with their cargo – cold chains or not.”