Chains that should not be broken

What can bring logistics to a standstill, and how do we prevent gridlock? In HHLA Talk, a logistics professor and a port expert discuss.

  • Interview
  • Supply chains
  • Digital
  • People

Logistics and transport are a complex network of interconnected processes. The system is becoming more and more complicated and, as a result, more susceptible to disruption. Professional supply chain risk management must therefore play a greater role, says Dr. Meike Schröder, Chief Engineer at the Hamburg University of Technology. Her area of research is supply chains, and in the following HHLA Talk she shares some of her thoughts on this topic. HVCC Managing Director Gerald Hirt will explain what the Hamburg Vessel Coordination Center (HVCC) is doing to improve the coordination of ship traffic and which forward-looking solutions are conceivable for the shipping industry.

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The interview

When chains break, it doesn’t always bring a release. Supply chains are an example of this. Disruptions and backlogs are currently putting huge pressure on the worldwide logistics system of the global economy. The theme of today’s HHLA Talk is this crisis in supply chains. It is affecting seaports and shipping, as well as rail and road transport, storage and industrial production. It is a highly complex issue, so we have invited two proven logistics experts to give their input. First, I would like to welcome Dr. Meike Schröder. She became a professor in the Institute of Business Logistics and General Management at the Hamburg University of Technology, permitting her to teach academically. The topic of her professorial dissertation was supply chain risk management and the development of a method to structurally improve this risk management. No doubt we will take a detailed look at precisely this topic during our HHLA Talk. Ms. Schröder’s institute conducts application-focused research and teaching on questions like supply chain management and supply chain security, as well as technology and process innovations in logistics. The institute thus operates at the interface between engineers and economics, and Ms. Schröder has the impressive title of Chief Engineer there. Welcome! Are there many chief engineers in the academic field?

Dr. Meike Schröder: Yes, first off, thank you very much for the introduction. This is actually a term that we only find at universities of technology. It results from the fact that in the past engineers were taught and the chief engineers had a leading function. As a result, this particular title established itself at the universities of technology. As to your question whether there are many chief engineers in the academic field: definitely not. They are permanent positions and they are very rare in academia in Germany.

My second guest is a seasoned practitioner in port economics, Gerald Hirt. He has known the shipping industry at least since his military service as a lieutenant in the German Navy. Later, Mr. Hirt studied seaborne transport and port economics and completed his master’s degree in shipping and logistics in Copenhagen. His career has included positions at the shipping company P&O Nedloyd, Hamburg Port Consulting and, later, the HHLA Container Terminals. He has worked at the HVCC for almost ten years now. This acronym stands for Hamburg Vessel Coordination Center. It is a joint venture in which HHLA is involved, and Mr. Hirt has risen up the ranks to become its Managing Director. As the name indicates, the HVCC is in charge of coordinating ship traffic. No doubt he will explain to us in a moment what exactly the centre does. But first, a warm welcome to you too.

Gerald Hirt: Thank you very much for the invitation. I’m happy to be here.

Yes, so, the first question on our topic is for the practitioner in port economics: how and where specifically are the supply chain problems currently manifesting in the Port of Hamburg?

Gerald Hirt: I would like to start here with an image. A port, a terminal is a like a large clockwork. And every single crane, every gear, that handles a ship is itself another clockwork where people and machines work interlocked with each other, where there is a process to retrieve a container from storage, transport it horizontally across an area and load it onto a ship. Then we have to remember that there isn’t just one crane handling a ship, but eight cranes. There are trucks and rail traffic at a terminal, so it is a complex network of interconnected processes. And we don’t just have one terminal at Hamburg, but four container terminals alone. So the system is becoming more and more complicated. Apart from the container terminals, there are other loading points, bulk terminals like Hansaport, rolling transport at Unikai ... So the whole thing is getting bigger. And if we look at it from an even higher metalevel, we see that the Port of Hamburg is just one of many, many ports in this container shipping industry, which makes the system even more complex, of course. And then back to your question: where, where specifically do we see capacity utilisation, the problems at present? We have been experiencing massive delays in container liner shipping for many months. And this has led to a situation at the container terminals where we have an extremely high level of yard capacity utilisation at the facilities. Initially during the coronavirus pandemic, this was driven by export containers in particular. So the containers were delivered to the terminals as if the ship was on schedule. However, the ship was not on schedule, so the containers spent 3 to 5 days longer with us in the yard. Now we have a situation where we are moving into inflation. So everyone is reducing their consumption, and we are finding that the storage areas for importers are full. The IKEAs, the New Yorkers, the Deichmanns – these days they aren’t taking their containers as quickly as we were used to. So the dwell time of import containers has almost doubled now. And now if we bring all of this together, we see exactly where the problem arises, and that the container terminal’s productivity is decreasing in turn as a result of this high level of yard capacity utilisation. So the ships are not processed as quickly and are further delayed reaching their next ports of call. The whole system is therefore becoming slower and slower – you could say there’s a spanner in the works. And the problem that we haven’t even looked at yet is the problem of equipment. This concerns the container that should be collected from the import area now, is meant to be at BMW in Munich tomorrow or the day after, is supposed to be used again next week to export something – and it is stuck somewhere. The whole system for global container equipment is out of balance.

You have now mentioned a key phrase – the global system. Ms. Schröder, please list what you regard as the other factors which are affecting the global difficulties in supply chains.

Dr. Meike Schröder: Mr. Hirt has already mentioned a number of factors that are very port-specific and are disrupting processes there. The ones we are all most familiar with, of course, are the factors associated with the effects of the coronavirus pandemic. Here, we have the absence of employees, who are either sick or in quarantine. In almost every country in the world, we continuously have operational disruptions or even operational suspensions in an effort to control the coronavirus. The result of this, of course, is that we have a shortage of staff who perform all these processes. And these processes can vary widely in nature. They might be production processes, or they might also be transport processes, like those just described. Maybe it is simply the lack of a truck driver, or we have long waiting times at borders. All of this leads to corresponding delays or even interruptions to the supply chain. But we now also have other, quite different factors that are not necessarily due to the coronavirus pandemic. These might be quite different causes such as extreme weather, where entire infrastructures are destroyed by floods, fire or earthquakes. Or to give a current example: the outbreak of wars that make it simply impossible to drive through entire regions. When we talk about the supply chain, we quickly come to the topic of the digitalisation of the supply chain. And important factors here, of course, are IT disruption and cyberattacks, which lead to operational processes being completely interrupted here as well, especially at smaller companies that maybe don’t have as good a defence function with regard to their IT system.

That is an impressively, and indeed worryingly long list. A question for both of you – how many of these factors need to come together to cause a serious disruption at ports like the Port of Hamburg?

Gerald Hirt: So I think that sometimes even a single factor is enough. Think of the “Ever Given”, which, when it ran aground in the Suez Canal, brought an entire system to a standstill that had to be shaken back into operation again. Or now, as Ms. Schröder already mentioned, a port closure in Shanghai that sends similar major shock waves around the world. I think it is probably not possible to say at all whether there needs to be one or three factors – sometimes just one major factor is enough to cause a system like this to stumble.

Dr. Meike Schröder: Yes, I can definitely only agree with that. You can’t pin it down to a specific number of factors. You mentioned a good example there when the waterway was blocked. We could also imagine a situation where we have 400 employees in quarantine at the same time or five accidents within the port – this generally wouldn’t bring any port to a standstill. By contrast, if just one container holding dangerous goods exploded, something like that would cause considerable disruption, of course. The question is always: what is the extent of these disruptions?

Yes, Ms. Schröder, with regard to the research, we hope that the analyses conducted there can identify threats in good time and indicate ways out. But in the current supply chain crisis, are we now seeing, as a result of the almost simultaneous occurrence of many factors – coronavirus, war, climate change – a kind of perfect storm that really nobody could have been prepared for?

Dr. Meike Schröder: Without doubt nobody expected anything like the scale of the coronavirus pandemic across every continent, and the war took all of us by surprise as well, I think. But it isn’t the case that nobody was prepared or could have been. Because there are also the companies that have a high degree of transparency, in other words digitalisation throughout the supply chain or cross-border supply chain risk management, too, as we call it in the field. They were aware of the disruption much sooner, so they knew what was happening in Asia, for example, before the wave reached Europe. This, of course, gave them more time or freedom to think “what countermeasures can be taken to alleviate this disruption?”

Which companies were these, for example? Who was in this fortunate situation?

Dr. Meike Schröder: These are large companies in particular, which are already investing heavily in their risk management, so must really have a high degree of transparency in the supply chain. This means they are already prepared when it comes to emergencies and are able to run through corresponding situations or scenarios. This is particularly helpful in this case, of course.

Mr. Hirt, was that the case for you as well? Did you know what was coming your way? Did you have any idea?

Gerald Hirt: So I think we had a feeling that something big was coming our way. But on such a scale, I think, we too were very surprised.

Yes, what outlook is being made by the researchers who deal with this? Will the problems improve by themselves if, for example, the worst of the coronavirus is past?

Dr. Meike Schröder: So we will all learn to live with the “new normal” as it is called, with the effects of the pandemic. There will be problems that will improve, such as sickness among employees, because companies now have good hygiene practices or strategies to deal with the pandemic. But there will be new, different problems, because natural disasters, wars and cyberattacks, for example, are very difficult to predict.

How do you view this from practical experience?

Gerald Hirt: I agree 100 percent. I’m afraid, too, that it will definitely be necessary to make regulatory interventions here and there. Our Chairwoman of the Executive Board at HHLA, Ms. Titzrath, recently brought up a Sunday vehicle ban, for example. That, I think, is the new normal that we have to get used to, that the world, the globalised, interdependent economic world, has changed. So we, too, focusing now on HHLA, have to adapt as an organisation with our IT, with our processes, with the people who work at HHLA, to this new normal.

So we have now come to solutions, potential solutions. We can only address the most pressing issues in this regard. But maybe it would be good if you, Mr. Hirt, could start by explaining briefly what your company, the HVCC, Hamburg Vessel Coordination Center, is doing in this regard.

Gerald Hirt: We are a very unique company in many respects. This begins with our shareholder structure. We are a joint venture between HHLA and the Eurogate container terminal here in Hamburg. It continues then with the operational role we play. In other words, the role of coordinator between shipping companies, between terminals, between public authorities, between the nautical service providers so that ships can call at and pass through the port much more efficiently. And we do this in two departments. One of them is the Feeder Logistics Center, where we coordinate feeder ships and inland waterway ships through the port and where we also conduct the stowage planning for the ships. And then our newer department, Nautical Terminal Coordination, where we coordinate the large ships as they make their way to Hamburg. Not just container ships, but also ConRo ships, bulkers and cruise ships. And to do all of this, we have built software in recent years. So we have added certain tools to our toolbox to perform this role properly. Today, this software is used by over 1,000 users at the Port of Hamburg who have One Single Truth, a data set where everyone knows what is happening at that moment in the condition. We do this with eighteen employees around the clock, 360 days a year. For example, in the last year we coordinated 3,000 mega-ship calls and over 7,000 feeder and inland waterway ship calls in our coordination department.

And coordinating means you ensure that there are no backlogs, that they get in and out as smoothly as possible, without major delays, and that the supply chains are subject to as little disruption as possible in this regard.

Gerald Hirt: Exactly. And the process, to continue with mega-ships, is as follows: the shipping company notifies us in the middle of July when it will be coming to Hamburg in August and September and with which ships. At this stage, however, it only has a date in the schedule. It then approaches HHLA with this date at some stage and says: I would like to be with you at Burchardkai on 15 August with ship XY. There is then this agreement between the shipping company and the terminal. Then when the ship is on its way, so has departed from Asia, the shipping company provides us with what’s called a coastal schedule at some stage. This includes the details of what day and at what time the shipping company wants to be in Hamburg. And good shipping companies, they will also have the ship’s draught included so that they can factor a tidal level in Hamburg or Antwerp, for example, into their coastal schedule. Our company will then have the ship on its radar from Gibraltar, meaning that our software will automatically plot the ship’s course as well. At any moment, we have 50,000 ship positions in our system. We have defined 800 waypoints across Northern Europe, providing us with a continuous profile of the ship as it makes its way to us. And the actual work begins four days before the ship arrives. So, today is Thursday, which means that staff in the Nautical Terminal Coordination department are already preparing for the traffic situation on Monday, so at what time a particular ship will be on the river Elbe and possible conflicts it will have with other vessels there. And this is also the moment when we start to look at the predictions. That means coordinating the ship’s specific situation with the shipping company in order to make a recommendation to the shipping company in the form of a passage plan regarding when it should leave the port, what speed it should enter the river Elbe so that all traffic arriving and leaving is synchronised with each other at a specific tidal level.

So this means being in contact with shipping companies worldwide, and the closer they get to you with their ships, the more up-to-date and precise the information, the data is then. A very important partner country for the Port of Hamburg, as well as HHLA, is China, with its massive container shipping companies and ports. A question for both of you: do you believe that China will remain the most important hub for the global distribution of goods in the future? Because other Asian countries are continuing to massively expand their ports and logistics services.

Dr. Meike Schröder: I think China will continue to play an important role in the future, but other Asian countries, as you said, are rapidly catching up. I’ve been looking into a study about this for the past few days. It was about freight transport in South-East Asia. It predicted that freight transport will increase by almost 80 percent by 2030 compared with 2015. That means the tonne-kilometres of all eleven countries could more than triple by around 2050. And that, of course, is very dynamic development. And if we look at the ranking of the top 30 container ships from 2021, in addition to Singapore we find ports in Malaysia, Vietnam and Indonesia. So for the future this means: we will have immense growth there, investments in infrastructure and an expansion of important logistics hubs outside China.

Gerald Hirt: I agree with this scenario. If we look back 20 or 30 years, we had two fundamental events, I think, that led to this global economy. One of them was a free trade agreement. China joined the WTO in 2001. At the same time, of course, our shipping companies invested massively in new capacities, in bigger and bigger ships. And that is what made this outsourcing of production possible, of course. You mentioned the top 30 ports. I looked at the top 10 ports again. Added together, the Chinese and Hong Kong ports handle almost 200 million TEU. I think it is utopian to believe that this wheel can be turned back. There will definitely be some businesses, fashion company Zara is a prominent example, to operate based on near sourcing again and again. So that means producing in Spain or North Africa instead so that it can respond quickly to fashion trends, which isn’t possible if I make this on the other side of the world.

Yes, you are talking about the proximity of production or warehousing. Is it not possible to simply say: we will bring production and warehousing operations from all over the world back to Europe, maybe even to Germany. Wouldn’t everything no longer be so susceptible to disruption?

Dr. Meike Schröder: There are already wide-ranging discussions about whether to bring production facilities back again. To bring them back to Germany, I see that as simply utopian in many cases, because there are good reasons why the production facilities were outsourced abroad. We have lower procurement and wage costs abroad, we have the proximity to raw materials or even the opportunity to enter the sales market. Companies are also definitely saving on taxes. These advantages aren’t there when production is based on the Made in Germany model. Maybe there are no problems or risks, or at least lower risks in terms of the transport landscape, but there are other problems instead. Like the availability of raw materials. So for this reason I don’t think there will be a dramatic shift. You always have to keep in mind that customers ultimately have to hand over more money and suddenly pay double for products or services. They won’t be willing to do this.

We have now heard quite a bit from Mr. Hirt about how his company communicates and manages data communication. A general question: will we need more or less digitalisation to solve the supply chain problems?

Dr. Meike Schröder: We definitely need more digitalisation and indeed to make it end-to-end – that means throughout the supply chain. To be able to prepare for supply chain interruptions, you need timely information about the current situation, in other words about possible disruptions, and you need it in real time. However, you only get this if you have sufficient transparency in your supply chain. So if you know: where are my upstream suppliers based in Asia or in South America and how can I communicate with them, or what data can I exchange with them? And that can only happen if your processes are well digitalised.

Gerald Hirt: If I may add to that, that is precisely another one of the factors that we listed earlier. The fact that our industry still has many manual gaps and has not implemented an end-to-end digitalised process there. And we see this in our communication with our shipping companies, with other ports and so on, that there is still a great deal of work to do in this area in our industry.

So let’s discuss specifically how it would be possible to create more reliability and less susceptibility along the supply channels with the help of digitalisation. Mr. Hirt, your Hamburg Vessel Coordination Center set up a digital platform for container transport by inland waterway ship in 2019. And on it, shipping companies, terminals, ship managers and public authorities are all connected to each other. What was the result of this?

Gerald Hirt: I would like to talk not just about inland waterway ships but more generally about the platform that we set up and the effects that it has had. They are just as applicable to inland waterway ships as to feeder ships or mega-ships. One aspect that has resulted from it is a high degree of transparency. Transparency is something that many operators did not always regard as good – that it shows where are delays occurring and how an individual operator is performing. However, I already mentioned this phrase One Single Truth. This is exactly the point we were missing a little, that we receive information about the arrival time of a ship, to give an example, from the shipping company, information from the terminal, information from the brokers and maybe even from the pilots. But we didn’t have this One Single Truth and that was one of the effects that really showed up, so a high degree of transparency of the data. The second thing to result from it is a high degree of planability. And planability means, for a ship of course, knowing with reliability: When am I supposed to be entering the river Elbe? For the terminal, of course, this means a high degree of reliability, of resource planning, to plan availabilities. And for all the subsequent modes of transport, of course, this also means a high degree of planability. When can the container realistically be loaded onto the train, the truck, etc.? So that is the second issue, and the third: we have put in place a high degree of collaboration. You can see that in our shareholder structure, but also in the way we work together as a private company with the public authorities. And also with the shipping companies and the nautical service providers here in the port. So those are the three pillars that I see as effects of our work.

Yes, Ms. Schröder, it is very clear that this kind of interconnectedness is a step towards risk minimisation in logistics chains as well. This is one of your areas of specialisation. Can more be done here? Is there academic research working on even more extensive networks?

Dr. Meike Schröder: Yes. In research, we try to look at the network beyond a particular hub. So from an end-to-end perspective. That means from materials, from raw materials, to the end customer. If we take a T-shirt as an example, this would mean from the cotton on the plantation to the T-shirt ready for sale in the shop. As Mr. Hirt just said, it is about improving the ship’s call, which is ultimately a sub-area of maritime logistics. And if we now go back a step in the supply chain or take a step towards the end consumer, it is also our aim to increase this transparency even further, beyond the entire chain, and to improve the information between these participants in the supply chain.

You, Mr. Hirt, are in the process of enhancing the digital interconnectedness of participants in supply chains on a global scale as well. Digital Container Shipping Associates, as it is called, is working with the HVCC to develop and test standards for uniform data communication between shipping companies  and terminals. What kind of data are we talking about here and what should this achieve?

Gerald Hirt: Yes, in the partnership with the Digital Container Shipping Association or DCSA, the focus is on adding a digital agreement between the shipping company and a port berth. I like to compare it with the arrangement of this meeting here, where you suggested, let’s meet at 3.00 p.m. Maybe I say: 2.00 p.m. suits me better, and the whole conversation goes through Outlook, as we are used to. And that is exactly how we plan this digital arrangement with the contract data that the shipping company forwards us. When do I want to be there with a particular ship? How many containers do I want to move? To completely digitalise this and no longer detail it through phone calls, Excel, PDF and so on. The aim of this, as is already normal practice in the aviation industry, where there are required standards that every airline, every airport has adopted, is to have uniform standards here too. What do we mean by the departure time of ship? Is that when the last lines have been cast off, or when the ship passes the port boundary? This is precisely the aim of the partnership with the DCSA.

If the aim is to get rival companies, and not just partners in a supply chain, to share data with each other and have this coordinated by agencies like the HVCC, is that not much more difficult?

Gerald Hirt: Yes, to put it simply. We don’t exchange any commercially sensitive data but rather arrival times, departure times, maybe sometimes the ship’s draught. But you have mentioned an important topic there. In addition to all of these technically functional issues that we exchange, this topic of change management, in other words switching people to new ideas, new processes, is an important topic. So maybe thinking outside the box sometimes, sharing data with each other, because then an entire system like the Lower Elbe will work better. However, there is one big hurdle in what we have built up over the last few years. As an example, perhaps, our interface with the Port of Rotterdam. Building it took a day and a half, but establishing a data exchange agreement took six months.

So there is some kind of an impulse, an instinct, with people somewhere: oh, I’d prefer not to show my cards too much? And that has to be overcome first?

Gerald Hirt: Exactly. In shipping, we are definitely a bit more traditional than in other industries. But that is exactly where in the last ten years – where we have digitalised our processes, where we have interconnected with partners, very much day-to-day business – we have met with such sensitivities, such resistance.

Ms. Schröder, how would you persuade the various participants in the supply chain to accept the authority of a common agency? Would it help to appeal to them as it being in everyone’s interest, in other words to create a more robust, more efficient supply chain? Or does there really need to be this change management that Mr. Hirt is talking about?

Dr. Meike Schröder: So, appealing to them would definitely not be enough. And as you already said: change management is a very important topic here. If we look a little bit at the history, the management of almost all companies is aware of the advantages of a crisis-proof supply chain, and not just since coronavirus. In spite of this, however, companies are investing much too little in corresponding proactive measures. What’s often missing is the understanding that both financial and human resources are needed in order to implement measures for a problem that hasn’t even occurred yet. That means a lot of awareness needs to be created here. The benefit associated with this supply chain risk management has to be made clear, and attention must be continuously drawn to what a big advantage it is. Participants will only accept the control of a central coordination agency if it becomes standard practice. As you already said, a single standard must be established, ideally for the entire industry. Unfortunately we are a long way off having this.

Can new technologies, such as artificial intelligence or blockchain, help us to make supply chains more resistant? Is there scientific research on this or perhaps even practical applications already?

Dr. Meike Schröder: Artificial intelligence can definitely help to make supply chains more resistant. Here, there is also a wide range of solutions in theory and in practice, often in the form of software, that are specialised in supply chain risk management. You have to imagine this: All of the available data is gathered, evaluated and combed through for potential risks that could have an impact on the supply chain. If, for example, we have a trade union at the port that is calling for a strike, and an article about this appears on the internet, this information is picked up, evaluated and assessed to determine whether this could lead to delays unloading and loading ships. The customer receives a push notification saying: warning, something could happen here, maybe you will need to respond. So by using artificial intelligence across national borders, it is possible for us to obtain data much faster and evaluate it more quickly than a person would be in a position to.

Gerald Hirt: I would like to add to that from an operational perspective. For us in the communication department, this traffic situation is continuously being generated, 3 to 4 days in advance. That means exactly what Ms. Schröder just said: from a range of information, ship and movement data, terminal and weather information, traffic flow management is preplanned. And that is in fact something that we have been looking at closely in recent months. Would it be possible to use artificial intelligence here to perform all this pre-aggregation of the data so that the people can concentrate on the value-adding processes of moderating and choreographing the traffic management?

However, if you hear that artificial intelligence is making autonomous decisions or calculations that could have an impact on real things, the example of the capital markets could very much serve as a warning. There, autonomous decisions by algorithms led to significant turbulence and share price falls because automated effects reinforced each other upwards. Could AI potentially do more harm than good in logistics as well?

Dr. Meike Schröder: No, I don’t think so. However, that is based on us still having employees in logistics who question the decision that is made on the basis of AI. In other words, processes must largely be monitored by people. So you cannot blindly trust that an algorithm will independently solve every problem for us. Because AI assists with decision-making. But ultimately there always has to be somebody that actually bears the responsibility for the decision.

At the moment, all of us simply want supply chains to function as smoothly as possible again. However, the issues affecting the global trade of the future include the reduction of emissions in general, the environmental friendliness of transport. Has the port made improvements here in recent years?

Gerald Hirt: So I can look back quickly at the last 20 years in the HHLA Group and I would definitely say: yes! I would like to give five examples. The first is our Terminal CTA, which was the first terminal in the world to be certified as climate neutral. With Metrans, we have a hinterland transporter that uses highly efficient locomotives. At HHLA, we have engaged in a wide range of hydrogen initiatives. At the HVCC, we have coordinated the arrivals management, the routes of ships within the port. And in the end it is also the shipping company that invests a lot, for example in new propulsion technologies. So I think, overall, our industry is making progress – but, of course, there is still a lot of potential to realise.

Yes, Ms. Schröder, this potential perhaps includes the transportation of goods by land. Experts say that 20 to 30 percent of road and rail capacities remain unused. This means that hundreds of thousands of CO2 is being emitted unnecessarily. Could that be avoided by pooling cargo better and using freight space better?

Dr. Meike Schröder: That is definitely a good start, provided that the technological capabilities are created here – namely that the relevant information needed for this can be exchanged widely. Because even though 100 forwarders pooling their cargo will have a positive effect, it still won’t be enough. So here, too, we need solutions that cover the whole of Germany, if not beyond. But logistics, of course, also offers a range of potential to improve this sustainable development. This is linked to propulsion technologies – that could be optimised route planning for better capacity utilisation. But it also has to do with packaging. In other words, the possibilities for making improvements here are limitless.

Gerald Hirt: Maybe to highlight again how this works in practice: we once calculated together with a machine manufacturer what the savings would be if an 18,000-TEU ship sailed at 14 knots instead of 18 knots just from Rotterdam to Hamburg, which is 220 sea miles. That alone would save 22 tonnes of bunker fuel, a CO2 reduction of 66 tonnes. And if we imagine how many ships are sailing from A to B at this moment, it shows the enormous potential that this “Just in Time Arrival” concept offers the industry.

What we haven’t talked about at all yet, and can only touch on, is climate change. To the extent that extreme weather and severe storms at sea and on land are increasing. And that, too, of course, has the potential to cause massive damage to supply chains. Ms. Schröder, do you have any ideas how modern technologies and structures could make supply chains less susceptible to these effects of climate change?

Dr. Meike Schröder: As a general rule: the earlier the warning, the better. So companies have to move away from reactive risk management towards proactive risk management. We’ve already spoken about artificial intelligence. Here, machine learning in particular offers numerous possibilities for identifying potential risks at an early stage because we have a range of data from various sources, such as company data, data from the internet, from insurance companies or social media, that can be evaluated. Patterns can be identified from this and indications given about whether there will be an interruption to supply chains or not. The other issue which is also very important is data generation, which plays an important role here. The keyword here is “sensors”. Using sensors we can, for example, identify the smallest deviations like temperature differences or an increase in air moisture and draw conclusions here as well. However, the important thing to always remember is that everything can’t originate from one company alone. We will only have long-term success if there are many participants.

Yes, the issue of susceptible supply chains is likely to be with us for longer despite all our efforts, as I learned today. What will help the most in the long term seems to be improved communication and cooperation between as many participants as possible. I would like to thank you, Ms. Schröder, and you, Mr. Hirt, very much for your time. Hopefully both of you will continue to play a part in strengthening Hamburg as a logistics location with your expertise. Thank you very much!

Dr. Meike Schröder: We’re happy to do it!

Gerald Hirt: Exactly, thank you very much!

The interview was conducted by Oliver Driesen.

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Updated: September 12th 2022.