CAI International Blog

HFO: End of an era

Since the 1960’s, Heavy Fuel Oil (HFO) has been the king of shipping fuels. A byproduct of crude oil, HFO expels 35,000 ppm into the environment and accounts for 8% of the sulfuric dioxide in the air. The arrival of the IMO 2020 fuel regulation in 2019 signaled a formal move toward alternatives to HFO like biodiesel, hydrogen, methanol, and even battery-powered ships. While each of these has been pursued incrementally in the past, the breadth and urgency of a regulated shift is changing the dynamic. Domestic shippers, such as retailers and raw material manufacturers, are tending towards low-sulfur diesel oil alternatives, whereas ocean liner companies are embracing exhaust cleaning systems known as scrubbers. Even during times of lower fuel demand, we can anticipate ongoing forward motion in alternative fuel adoption. Let’s look into it…

4 technology trends influencing logistics

Using Technology to meet evolving customer demand in the new decade

In the past two decades, tech innovations, the rise of e-commerce, and evolving customer demands have had a significant impact on the logistics industry. Today, customers want products and services delivered faster and more cheaply than ever before. In this ‘smarter and faster’ era, efficiency and staying ahead of the curve are key for logistics providers. Here are some of the latest technological advances that logistics experts can integrate into their operations to meet these new challenges.

The future is here for healthcare cold chain logistics

With the healthcare industry projecting global growth of $8.39 billion over the next five years, concentrated primarily in the United States, the logistics space is bracing for cold chain challenges. Due to increased demand for specialized shipping needs, the healthcare industry is already dealing with tightened capacity, overnight delivery challenges, hidden costs, and drug shortages. However, emerging innovations promise to address many of these issues, and logistics providers are preparing to adopt and deploy them for their healthcare clients. Let’s review the ways that tech is addressing the challenges for the cold supply chain and providing solutions.

IMO 2020: Supply chains brace for market challenges on the horizon

As the end of 2019 approaches, supply chain and logistics professionals alike are bracing for the effects of the International Maritime Organization’s low-sulfur regulations. What CNBC coins as “the biggest change in oil market history,” the new IMO standard will reduce sulfur emissions by over 80%. Under the new regulations the maximum fuel oil sulfur limit will reduce from 3.5 weight percent (wt%) to 0.5 wt% starting January 1, 2020. Currently, the most commonly used marine fuel 

Shaping the future: 5 AI innovations with the potential to reshape supply chains

Self-driving trucks, procurement chatbots, and equipment failure predictions...if you haven’t seen any of these artificial intelligence-driven innovations in your supply chain yet, you likely will in the near future. They are just a few of the many future-focused technologies under development that are poised to reshape the global supply chain and empower supply chain leaders to make smarter business decisions.

How will IMO 2020 affect ship capacity and freight rates?

Fuel costs will rise by an estimated 25 percent (approximately $24 billion) in 2020 when the new International Maritime Organization (IMO) sulfur rules take effect.

The IMO, the United Nations body responsible for the shipping sector’s safety and environmental performance, aims to cut maximum sulfur emission from 3.5% m/m (mass by mass) to 0.5% m/m starting in January 2020.

Even as the new sulfur emission rate deadline draws near, the industry appears ill-prepared. The IMO sulfur rules are likely to mark the beginning of an uncertain era for not just the shipping industry, but many other sectors, as over 90 percent of global trade operates via the sea.

Let’s explore how the IMO 2020 regulations will affect capacity and freight rates:

3 ways e-commerce is changing the logistics industry

Two decades ago, when e-commerce was a nascent idea, there were very few companies trying to sell products online. Because it took consumers a few years to warm to the idea of online shopping, early e-commerce operations didn’t have the need for the expansive logistics operations that currently power giants like Amazon or Wal-Mart.

However, as e-commerce has caught on and the scale of business has steadily risen, online businesses have had to find more ways to compete in a crowded marketplace. To stand out from the crowd and maintain customer loyalty, most online retailers find themselves continually trying to offer faster, cheaper shipping or easier returns. This often means totally rethinking their fulfillment and logistics processes.