In the morning we boarded the bus and met Mac Sullivan, an American who now lives in Shanghai with his wife and two kids. Mac works in the third party logistics industry; companies come and talk to Mac to make sure that their goods are transported quickly, cheaply, and safely. The third party logistics industry is one of service, as it helps make warehousing, shipping, and distribution much more convenient. In Shanghai, it’s an especially large business because of the city’s many ports, the largest of which is the Yang Shan Port. On our bus ride to the company, Mac talked a little about his life and how he ended up in China, as well as the specifics and terms of his trade.
We soon arrived at the Ocean East International Logistics, a third party logistics company owned by DAMCO. Lin Sen was the company representative who talked to us about third party logistics in the past and present. In relating to e-commerce, Lin Sen explained that logistics was often a bottleneck for e-commerce companies, but the rapid expansion of this market has driven a large amount of capital investment in the industry. China is starting to experience the same kind of shortage in blue collar workers that the United States is experiencing, and it is starting to drive a push towards automation. A majority of a logistic company’s cost is in people, so DAMCO is hoping automation will not only lower their cost, but also free people from doing mindless repetitive tasks and put the manpower into creative innovation instead. At Ocean East, they are in the first stages of using automation in their warehouses with the use of Automatic Guided Vehicles (AGVs), which they say will decrease labor costs and improve productivity.
It was very interesting having Mac in the room during Lin Sen’s presentation, as he had some different ideas about the direction the logistics industry is taking. While Lin Sen is confident that companies will soon be providing a platform for users to directly interact with delivery services, Mac believes that the existing platforms such as Flexport are still in a very basic stage and a lot more innovation is necessary before platform services become the dominant force. Mac also saw Ocean East’s implementation of AGVs as more of a marketing ploy than an actual tool. This is mainly because the current technology is still more expensive than using actual people, and there is a lot of the warehousing process that still needs human intervention. Both Lin Sen and Mac Sullivan agree that there is a lot of room in the logistics industry for future innovation, especially from computer engineers passionate about logistics.
Following the presentation, we were able to go out to a warehouse and actually get a look at the AGVs, which I thought was the coolest part of a company visit so far. It was fascinating see how accurately the forklifts navigated the warehouse, leaving perfect tire tracks on the ground. They were able to “see” where other forklifts were moving and make space accordingly, and they were able to line up with the slots of the pallets perfectly every time. We were luckily able to take pictures and film them, here’s three AGVs navigating around eachother:
Following the company visit, we took our bus to Yang Shan Port, a deepwater port built on an island off of Shanghai’s coast. To get there we crossed the Donghai Bridge, one of the longest bridges over water in the world at 20.2 miles. Shipping containers are brought to and from this port exclusively by truck, because the bridge is only road and not rail. The Yang Shan Port was humongous, we started seeing row after row of container cranes, something that continued for fifteen minutes before we stopped at an overlook to take in the sight. Containers would come into the port three days before they were meant to be shipped, and when a container ship docks at the port, its hundreds of shipments are unloaded and a new new is loaded back on in only 24 hours. It was an impressive sight to see and shocking to see just how many shipping containers filled the Yang Shan Port.