Container News talked with Shachar Tal, founder of Loginno, about its IoT start-up company, the new initiative “The Contopia Factor” (“TCF”), as well as the digitalization and the automation of the container shipping industry.
Shachar Tal, in conversation with Antonis Karamalegkos, expressed his ideas about the future of the industry and how Loginno with “TCF” can lead the way.
CN: Tell us some words about Loginno and the new initiative “The Contopia Factor”.
Shachar Tal: Loginno provides a unique disruptive solution to convert normal containers into smart IoT containers, able to transmit crucial real time data as an industry standard. Loginno managed to secure several disruptive technological, operational and design advantages, which enable Loginno to be the only company in the world able to offer Return-on-Investment projects to equip entire container fleets.
Loginno’s focus is on enabling the Shipping Container IoT infrastructure, in order to provide the logistics chain with extremely valuable data and software products, which dramatically improves – and sometimes clearly disrupts – current logistics processes.
The Contopia Factor is an all-star initiative, led by Loginno and some of the biggest names in the market, to select one shipping company, whose entire container fleet will be digitalized in 2019.
During the 6-month process, shipping companies of mid to small size now have the chance to submit an executive summary, detailing what they will do exactly if they are selected to equip their entire fleet with Loginno’s patented AGAM devices. A panel of industry leaders will then decide who will be the lucky winner to be propelled to the forefront of marine innovation.
The difference is that this is not just another trial. It’s the real deal: 100% of the fleet converted, real time data, real applications to be sold to real customers.
CN: What inspired you to come up with “TCF”?
Shachar Tal: We have been at this discussion for quite some time, with almost everyone in the marine sector. Everybody agrees that shipping containers will not remain “dumb” for long, and it’s just a matter of time for the long-awaited IoT revolution, i.e. “Contopia”, Container Utopia.
Logistics research is full of examples of how IoT can optimize, and sometimes even disrupt, current processes, from border security to container fleet management. Yet, when we want to approach and test a use case, searching for an IoT “sandbox” to test these Contopia use cases, we discover that none exists.
So we decided to create one!
TCF is all about choosing the best shipping company who is truly fit to be the first one to go 100% digital, and reap all the relevant benefits that comes with this status.
CN: Recently, we have seen many digitalization and automation trials in the maritime industry, as well as more especially in the container shipping industry. What will make you special and unique? What will make the difference for Loginno and “The Contopia Factor”?
Shachar Tal: The difference is that this is not just another trial. It’s the real deal: 100% of the fleet converted, real time data, real applications to be sold to real customers. There is a saying in English: “the proof of the pudding is in the eating”. We are finally creating a scenario to eat the pudding, not just have a taste.
Regarding what separates our solution from others in the market, I can say that for a start, we are one of the very few that aim to convert entire container fleets with a fixed solution, rather than sell removable devices to shippers, like 99% of the competition does. In this sense it is only us and Traxens, with other initiatives by big shipping companies in various stages of maturity. And in this very small space, we have secured several patented competitive advantages, that allow our solution to be the most standard and the most cost effective, while bringing unique features such as 6-sided intrusion detection or SOLAS VGM weight measurement.
We used military technology previously unseen in the commercial sector to create a “brain” which understand everything that’s going on with the container and its cargo. Something like a smartwatch that understands when you run, sleep etc – but for containers.
CN: Do you believe that the “traditional” container shipping is dying?
Shachar Tal: If there is something that you can’t take away from container shipping is that it proved that standardization is the key to the development of a global infrastructure. Case in point: logistics, or in other words: moving stuff from here to there. Because of containerized shipping my stuff can be anywhere around the world at an affordable cost. All due to standardization, which cut logistics costs and times.
Having said that, I don’t see the shipping industry dying, but rather evolving. In our development, we took the same standardization approach to the electronics and digital world. For example: we’ve patented the use of a standard part of the container called the container vent. This gives us a lot of operational advantages as we can use the global depot infrastructure for installations with zero training, among other benefits that derive from the electronics being in a very defined and fixed location.
In that mindset, we are continuing to develop more and more features, both hardware and software/AI related, which “ride” on some of the existing shipping container standards, or providing an extension to others.
Not only is digital shipping achievable, it’s just around the corner in terms of timing.
CN: Are there ways to combine the “traditional” container shipping with the innovations of technology or do you believe that a radical change is needed?
Shachar Tal: This brings us again to the standardization issue. The only way you can succeed in our world is by being frictionless, and in our case, it means that you are part of a standard: physically (like using the standard vent), process-wise (like conforming with SOLAS VGM requirements) and also digitally – conforming with the old and new documentation standards.
Contopia will come when big players will understand that these new building blocks that we are creating can be used to make them 10X or even 1,000X more efficient. Case in point: frictionless borders, which can be achieved by replacing the physical container seal with a software certificate that can be transmitted in real time to let customs/border officials know if the container has been breached since stuffing. This green lane/red lane approach has been talked about for years and it is perfectly achievable with Contopia, and that is what we are beginning to advocate through TCF.
CN: We read in “The Contopia Factor” press release that there will be a competition for the full equipment of a mid to small size company’s fleet. Why can’t big companies take part in the competition?
Shachar Tal: For one thing it’s because we don’t have that kind of money, to digitally convert the entire fleet of any of the big players. But frankly, the big players themselves are waiting on the line trying to prove to their investors that the switch to Contopia is worthwhile. We don’t need a huge player to prove that Contopia is an amazing investment – a smart mid-sized player will do, and once that happens, we would gladly duplicate the achievement at any big or small shipping company.
CN: Which are the criteria for the choice of the final winner?
Shachar Tal: All applicants will be judged based on these 5 criteria:
– Best RoI (Return on Investment) plan to monetize smart container data with existing/new customers. Meaning: what is their proposed plan to sell the data we extract from the containers to customers? To whom does the shipping company recommend to sell and what exactly will we sell to them?
– Best RoI plan to conduct operational savings, managing your own container fleet. Meaning: how will you modify your operations based on the new data? Will you manage your container fleet differently? How? What do you expect to save (time/money/fleet size), and can these savings count toward the RoI?
– Minimization of risk to investors. Meaning: any additional guarantees/acts the shipping company wishes to provide to make investing into that shipping company’s fleet a better investment, with less risk and more return.
– Highest management/organizational attention and support. Meaning: how much effort will you put into making Contopia a commercial and operational success? Who will be appointed to the project? What will their roles be?
– Quality and effectiveness of sales plan. Ties in to point #1 but on the sales side. How will the data be sold? Who will sell it? What sales efforts will be done?
CN: Can you forecast how container shipping industry will work in ten (10) years from now?
Shachar Tal: If we work smart, we can achieve Contopia in less than 10 years.
CN: How would you want container shipping industry to work? Tell us your ideal “modus operandi” of container shipping industry.
Shachar Tal: Once Contopia is achieved, there will be huge opportunities for much better logistics, and even total disruption in some areas.
Cost-wise, a very big shipping company had recently done a study showing that every year without Contopia it’s more than $100 billion losses to the industry on the security aspect alone! Add logistics inefficiencies and the inability for the entire container market to move into the digital age and we are talking huge numbers.
And even that is just a part of the picture. Imagine that you have two competing ports advertising 90% operational efficiency, meaning containers are handled on time 90% of the time. Today we have no way of know whether they are right or not, but in Contopia, we will know the exact QoS indexes of these ports. Imagine the implications, if we discover that port X is about 92% operational efficiency but port Y is actually 73%. This has huge consequences on the competitiveness, and survival of these ports. Now multiply that by every port in the world, every terminal, every trucking company, every depot etc. – you get the idea. This is Google-level stuff.
CN: Contopia, a mesh of Container and Utopia: Will digital shipping finally be a reality or is a utopia, which we just aim for?
Shachar Tal: Not only is it achievable, it’s just around the corner in terms of timing. We just need to play our cards right.
CN: Digitalization will definitely bring many benefits and advantages for both shippers and companies. Which are the possible new challenges, which industry will face? Which are the ways to overcome these challenges?
Shachar Tal: One obvious challenge is data security and privacy. Although we are not talking about data on humans (which is the main focus today, with initiatives like the GDPR), data on cargo is not less sensitive. Case in point: the odd container carrying missiles for the US army, or a shipment of gold for a federal bank. You really don’t want to have that information compromised. In that aspect, we have devised a 17-point data security protocol, which basically makes it impossible to match contents or customers to geographical data. Cyber security is also something that will be implemented, with new data technologies such as Blockchain to secure the integrity of the information.
Another challenge is the unveiling of bad conduct because of the increased transparency. This is bad new for players who capitalize on the under-rug-swept inefficiencies, but excellent news for the well-performers and the customers, because it will be much easier to know who makes the best effort for your cargo and who doesn’t. Well-doers will be rewarded and wrong-doers will be penalized or eliminated altogether. That transformation is inevitable, and we can see countless examples from other industries.