Stefan Kalmund is right on time for the interview in downtown Munich, orders coffee and water and puts a small box on the table. “This device sits on containers like a mobile radio for logistics data,” says the 50-year-old.
The boss of the technology company Nexxiot wants to build the “Google Maps of logistics” with millions of copies, as he explains. Every single steel box should be made traceable at any time and anywhere in the world.
Kalmund has just come from morning exercise and is telling his story at the pace of a long-distance runner. At first glance, the plan and announcement seem as grandiose as would be typical for a US tech entrepreneur. But business IT specialist Kalmund, a Munich native, heads a previously largely unknown company.
Nexxiot is a spin-off from the Swiss Federal Institute of Technology in Zurich and currently consists of around 100 engineers and data specialists from around 30 nations. A small detail on the device, the size and weight of a milk carton, reveals that the developers have big plans:
The device is painted in orange, the corporate color of Hapag-Lloyd. The largest German shipping company intends to equip one million containers with precisely this technology by the end of next year. Today the shipping companies know where their ships are located. But they do not know where each individual container is located.
Technical solutions are urgently needed in global logistics. At the latest, the corona pandemic has shown how quickly deliveries can be canceled and what consequences this has for everyday life and industry. The term “supply chains” has become part of the daily news over the past two years.
According to the Statista data portal, far too many of the around 5,300 large container ships worldwide spent more time in queues than on their sea voyages. Several weeks of traffic jams for individual freighters off Asian or North American ports turned the shipping companies’ schedules into wishful thinking. And about every third box is still empty or in the wrong place.
These problems create shortages not only of consumer goods such as electronics or hardware stores, but also of industrial parts. The consequences are drastically increased transport prices, up to a tenfold increase per container journey. The beneficiaries are the large shipping companies, which are currently swimming in money with annual profits in the double-digit billion dollar range.
The companies are now investing part of the record earnings in technologies such as shipment tracking from Nexxiot. The main purpose is always a more effective use of the steel boxes. After all, it is the data that the apparatus sends from each transport container that turns it into a transparent container transport. In addition to the location, the devices also transmit information on the temperature, vibrations and possible departures.
If the shipping company and its customers know the exact location of the individual container, they can, for example, send the ships or trucks on a different course if individual routes are overloaded. Instead of a congested port, the captain then drives to the neighboring port.
It also makes little sense that shipping companies or freight forwarders have so far brought all empty containers to central depots first. This can be changed thanks to the new technology. In the future, individual locations of companies with replenishment needs can be targeted.
Hapag-Lloyd tested the system for two years. It officially starts at the end of this month. The Hamburg-based company wants to take advantage of being the first shipping company to be able to track all containers and thus become more attractive to major customers.
Manufacturers such as Siemens and Bosch pursued similar plans for a while. However, results are not known. Only in Israel is a similar project running. The local shipping group Zim wants to equip its containers with the tracking technology from the Israeli manufacturer Hoopo Systems.
In addition to the equipment, Hapag-Lloyd has concluded a temporary contract for data delivery with Nexxiot. The container tracking data does belong to the buyer of the devices, in this case Hapag-Lloyd. But the evaluation and processing via algorithms, which only bring benefits for the control of the container fleet, is the task and business of Nexxiot.
“For us, the equipment with the devices is always just an entry ticket,” says Nexxiot boss Kalmund. “The associated data contracts and data analysis are the business of the future.”
From the information sent millions of times around the world, an electronic map is to be created on which each container can first be found in a region and later down to the street – a “Google Maps of logistics”.
However, the data can initially only be viewed by the individual company and its own container fleet. Manager Kalmund’s thinking in large dimensions could come from his ten years of work at the management consultancy Accenture. He then moved to his father’s company. Together they have taken shares in distressed medium-sized companies and have rehabilitated them.
Experts from the insurance industry advocate such digitalization steps in shipping. Live cargo monitoring, i.e. real-time monitoring of the cargo, has been used there to prevent damage for several years, especially in the case of very high-value cargo.
“With the implementation in Hapag-Loyd’s containers, the technology is becoming more widespread by leaps and bounds,” says Piotr Szymczak, Shipping Safety Advisor at Allianz Global Corporate Specialty. Nexxiot’s devices could also help to locate and recover containers that have fallen overboard, for example.
The Nexxiot transmitter and location device contains around 600 components, including a SIM card for data transmission. Solar cells on the box charge the battery. The device should run for eight years without any power connection.
Due to concerns about overdependence on Chinese manufacturers, just under a third of the components come from the country. The devices are assembled in contract manufacturing in Europe, the USA and Asia. According to Nexxiot, the number of units in production is currently around 100,000 units per month.
In the version for Hapag-Lloyd, a device costs around 100 euros. It is also more expensive: For the other major customer Knorr- Bremse, which uses the technology to monitor braking systems on railway wagons, 1000 euros per unit are required.
The brake manufacturer has just invested around 60 million euros in Nexxiot. At Hapag-Lloyd, the total investment, including acquisition, installation and data use, is likely to be around half a billion euros. The attachment of the apparatus to the outer wall of the container will take place during ongoing operations of the shipping business.
For the major order, Nexxiot tested the devices for seven years in 167 countries. Around 200,000 devices are currently in use. To send the data, the company has concluded contracts with 700 roaming partners from the world of telecommunications. Commercial ships or cruise ships are also used as floating transmission masts, so to speak. After all, the vast majority of them have up-to-date technology for sending data.
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