Logistics

Stephen Cahoon: hands on all the decks

Stephen Cahoon portrait with filter effect
Stephen Cahoon portrait with filter effect. Image courtesy of iMOVE CRC

It’s difficult to think of many people that have as rounded and complete an experience of all things ports, shipping, supply chains as Associate Professor Stephen Cahoon. In this interview we find out more about that experience, plus his excitement about what the future holds for his industries, and for Australia.

Can we start off with you telling us a little bit about where you’re working at the moment, and what you’re doing?

I’m currently on a secondment from the Australian Maritime College, where I was the Head of Maritime and Logistics Management. I’ve been seconded to a different part of the University of Tasmania as the Director of Sense-T, which is the data and technology arm of the university. What we do here at Sense-T is to focus on how we can use data and technology to enhance business decision making.

To date we’ve done more than $20 million worth of projects, across 10 different industries, including of course transport and logistics.

Of those projects you’ve done, which one has been the biggest?

They’re all quite similar sizes, in the area of $500,000 to around $1 million dollars. We’ve done projects that have looked at tourism in Tasmania — attracting tourists to Tasmania, finding out whereabouts they go, how long they stay there for, and of course importantly, where they don’t go. That project now has been commercialised, because at Sense-T that’s one of the things that we look at. We work along what we call a data value chain, in which we find opportunities for commercialisation of the projects we work on.

Another example that is a co-development with Data61, is a data platform. Data 61 has taken that data platform and is now commercialising it, so that’s another success story for us at Sense-T.

Data has always been important, but in an increasingly connected transport world, that importance has stepped up a few notches.

Definitely, and when I reflect on when I go out and speak to industry, and it doesn’t matter what industry really, when I speak to them the people fall into one of three camps.

They either collect a lot of data, but are not sure why do, but they know it’s important. Trucking companies would fall into that sort of category. Some trucking companies, get GPS pings of where the truck is, but why they are collecting that data, and the amount of it, they’re not entirely sure. But they think it’s a good idea that we talk to them about how they could utilise that data.

The second category would be companies that want to collect data, but they don’t know how to do it. We worked, for example with a perishable goods producer, and they were having trouble with retail companies rejecting truckloads of their vegetable products. So we put sensors all the way through their refrigerated trucks. We also looked at their operations to help determine how they could provide evidence to the retailers that the fault could not lie with them. Or, if the fault did lie with them, how they could improve their operations.

The third category would be people who say, ‘Look, we don’t need computers or data to tell us what to do. We’ve got all these years of experience, and that all sounds a bit too much like black magic to me, so we don’t need data.’

But more and more what we find is that having the data can be evidence that supports their intuition. Or conversely may even prove that rather than being intuition it is in fact a myth.

In that third category, are there many of them left out there?

Oh yes, all in different ranges. I think people are starting to understand it, but, once you start talking about technology, and let’s look at new technology like blockchain, for example, it’s getting a lot of attention, as it should. Blockchain is perhaps something that does provide an answer for supply chains, as it will bring in visibility and integration throughout the chain.

But as with all technology, unfortunately, all it needs is one cybersecurity breach to occur or some other issues, and then people will drop it very, very quickly.

Sorry, not to harp on it, but those people in that third category who don’t believe in all this black magic, when you do get a chance to show them what you do and what it does, what’s their reaction generally?

Well, I think they still say that the business game is about experience, local knowledge, and how they apply that knowledge and that intuition because they’ve worked in the industry for so long.

But one of my comments back to them is alright that’s all fine and good, I understand that and I would see that they can make some good decisions, or maybe some bad decisions, but what’s going to happen after they retire? Then what are we going to do about all that lost knowledge, all that tacit knowledge that’s caught in their heads?

How do we actually make that into explicit knowledge that other people can use, so if you think about that from an agricultural perspective, a farmer with all this local knowledge, how does he or she pass on all that knowledge to the upcoming generation. How do you record and extract that knowledge back out in a usable format?

And to stop it resembling a game of Chinese whispers, where the next generation doesn’t access the ‘true copy’ of the knowledge?

Well, that’s right isn’t it! And of course, then when we add in the effects resulting from additional or new elements, for instance climate change, to what they perceived as their business intuition, then what they are doing is comparing apples and oranges.

We work in a very dynamic environment where there is constant change. So therefore some of the decision-making processes we use may or may not still be relevant. But by using the right types of technology and collecting the right sort of data, and increasingly using tools such as machine learning and artificial intelligence, then their business adjusts dynamically.

Indeed. So back to you, before the University of Tasmania and Sense-T, where did you start, where did you study, and what other roles have you had?

I went to college with the purpose of undertaking subjects to become a doctor, so I did all the science subjects. After the first year, I realised that that path definitely wasn’t me, physics and chemistry were not my strength.

After that I went to work full-time in a supermarket for two years, where I had been working as a casual since I was 15, and then after that I worked in a woodchip mill as a ship loader and mill operator. I did that for 10 years, so my early, early work within transport, was in shipping. I never imagined at that point that I would end up at the Australian Maritime College researching shipping, transport logistics and seaports.

But part of the way through my work in shiploading I became very interested in industrial relations. I was involved with trade unions and that brought on a desire to go to university as a mature-age student.

So I went to university at the age of 28 and studied a Bachelor of Business in Human Resources Management and Industrial Relations. And it really was a great move for me! I started off part-time, went full time, and continued on to an Honours degree in Industrial Relations, and then I had an opportunity to do a PhD in seaport marketing strategies. It was the PhD that brought me to the Australian Maritime College.

Sorry just to jump back a little bit, all of that study you did as a mature-aged student, where was that?

At the University of Tasmania.

So it was all a full circle?

For sure! so like I said, starting off working as a ship loader, and then going to University to study and then to the Australian Maritime College, to then be teaching subjects related to shipping, port management and supply chain management was something that was totally unintended and certainly unplanned.

And actually I’m going to jump in at the maritime aspect. I get to talk a lot of people about connected and automated vehicles, but not so much about autonomous ships. What can you tell us about that branch of autonomous transport?

Well that future is already here. About two months or three months ago in Denmark, the first autonomous tugboat began trials. Companies such as Rolls Royce are now working within shipping to develop autonomous ships and I think it’s by around 2035 they’re predicting the first fully autonomous ocean-going vessel will be in operation. There will be autonomous oceangoing vessels prior to that, but they’ll be staying close to the coast.

So as I said, it’s not that it’s coming, it’s already here. So when you think about that from a people perspective for the seafarers, how do we then help to transition them during this period of moving from slightly autonomous ships, or enhanced shipping, through to autonomous ships? Because there will be a transition period of 10 to 20 years, so how do we start to retrain our seafarers in readiness for that? In an era of fully autonomous ships what will become of a seafaring career?

There are some very interesting times ahead, not just for shipping of course, as it’s quite a similar story for the trucking industry.

Yes, I was going to say that everything you just said at the end rings true for road-based transport as well. Do you think it’ll be easier to get autonomous transport happening on the ocean than it will be on the road?

No, I think it will be more difficult. A ship’s payload can be at times up around millions of dollars. And if we think about that, from the perspective of oil tankers, for example, the social license to operate autonomous ships may be something that becomes challenging.

And of course we still have to get through all the regulatory bodies as well, which is the same story with trucking. The technology may be there, but the regulatory bodies, the insurance bodies, they all have to be onside, as do governments.

I think there’s some fairly giant steps to go through, less so the technological challenges than the regulation and approvals. But also, we were talking about ships that can be high-risk, and high-cost. If a ship is going up through a river system to the port, and becomes stranded and blocks the port, that’s a huge loss in economic revenue for that particular region.

Okay, that’s interesting to hear that it’s no easier a challenge ahead on the seas. You might have answered this question before but I just want to go in on it a little bit more, what sort of moment was it for you that pushed you into the transport field, or was it a gradual path?

When I first started at the woodchip mill, I was a labourer, and part of that role was chipping the logs was also shiploading. So the introduction to transport was just something that I had to do for the job.

But my real career into the transport supply chain area, was when I was doing my PhD. Initially I looked at exporters into Southeast Asia. But as I read more about the topic I started to find out more about the pivotal role of seaports. In particular how the environment for seaports was changing, where they needed to become much more competitive, as they couldn’t rely any longer on government assistance.

That really triggered quite a bit of interest for me. And when you put together all the work I did on seaport marketing and seaport management, that gets you into the shipping area because it’s all connected to the port. And from there you’re connected to supply chain management and logistics and all the other modes of transport – air, sea, road and rail.

So it’s the integration aspects of supply chain management that I find interesting, because there is great complexity within that because it’s reliant on some of the actors to come together and work in an integrated fashion.

And not to mention it involves a fair chunk of Australia doesn’t it, something like 10% of our GDP?

I think it’s higher than that, around 16 percent or even more.

I haven’t checked for a couple of weeks …

And of course the problem with transport and logistics is that it’s also hidden within all the other economic activities. It’s built into, for example, mining. It is actually quite difficult to isolate the contribution of the transport and logistics industries. Whatever the figure is, I would be saying it’s much higher than the figures provided.

When you think about retail, there’s a huge amount of logistics and transport that’s also built into retail.

Alright, let’s venture into the world of hypotheticals. Someone has come to you and asked what project would you like to take on, or what would you like to fix. They can provide you unlimited budget for this. What is it that you’d like to do?

For me, it would be about the data. As a result of my work with Sense-T I’ve become a bit of a data and technology evangelist. And what I can see is, the data is going to make the difference. So if I had a huge budget, I would start to look at particular supply chains. I’d probably start with the perishable food supply chains because I think they’re the most complex. When you consider that there is something like $900 billion dollars a year globally that is lost in cold chain management and in food waste, it’s an important sector to improve.

I’d look at these perishable food chains, and then collect a whole range of data, all the way from farm to the consumer’s house. With that you’d be able to start to obtain predictive capabilities, linking up when products become available due to harvest, linking that up to the supply chain, and having full visibility across the condition of those products as they move through the supply chain. And using smart sensors to actually make changes on the fly. You could then know in what sort of condition products arrive at the end of the supply chain, and what condition they are in for consumers.

If we can start to reduce waste that would be a terrific outcome, because so much effort goes into growing products that we forget that if we’re losing 10%, 20%, 30% through the supply chain, all of those efforts right at the beginning aren’t needed as much. We would become a lot more efficient and a lot more effective.

Of such a project, what do you think would be the most resource-heavy part of that project?

I think it’s collecting the data and getting buy-in from a whole range of people. One of the challenges we have within supply chains is interoperability, so that everyone’s using the same platform. To an extent blockchain starts to do that, but I think there’s still some way to go yet.

We need to be able to have the full system sensored-up, sensors all the way through, allowing us to collect the data. When you think of the size of Australia, and of course us being an island, how do you get the data back when it travels overseas? How do you get the data back when it’s in the outback?

That’s some of the issues we’re investigating at Sense-T. For telemetry issues, do we use satellite, do we use technologies such as LoRa? How can we utilise NBN more effectively, and if we can get that cheaper, then I think we’ll get more people engaging with the data.

What might happen is that as machine learning and artificial intelligence become more and more refined, we might find that deploying sensors is only the first stage. After a while, we might be able to remove those sensors because we’ll have validated the models. Then the system or the algorithms that we’ve developed will do the work that’s been refined, refined, refined as new data starts coming in.

For me the exciting part in all of this is discovering how predictive we can make our businesses, and how valid those predictions are. Really what I’m talking about here is that movement from working with hindsight to working with foresight.

I’m interested in your mention of eventually being able to lose the sensors. Wouldn’t you need to keep quite a lot of them in place because of things like provenance, or treatment, temperature control and so forth in the supply chain?

Yes, true and I think that staging will last for sometime. But I think eventually once you put those systems in place and you start to see what sort of variabilities occur and what sort of factors start to impact on those changes, and start to manage based on that. So the machines will start to predict some of that variability. Every now and then you may want to put them out just to validate, but I think within a few years, the reason for having the sensors will be more to make adjustments.

At the moment with temperature sensors, they will tell us what the temperatures are within the reefer (refrigerated) containers. But imagine having the sensors there that start to say, ‘Right because of this change that has occurred, now I need to put more oxygen or more Co2 into the reefer, to control the ripening well enough, whether that’s to increase it or reduce it.’

Currently we deal with a lot more of the dumb sensors, that simply report. Wait until we get the sensors that start to actually make the changes, and make those changes autonomously.

Okay, part two of the hypotheticals, same deal, but this time it’s quite a finite budget, a tight timeframe, and a small project that will make a big impact. What would you like to do?

A big impact with low money? Oh, now you’re really asking a hard one! For me, it would be it’d be a similar situation. It would be choosing a smaller supply chain or a particular company and looking at the issues.

When I think about the job that we did for the perishable food producer, the vegetable producer, helping them to understand how to improve their operations by giving them the data … and by also providing them with the data so that when they’re having discussions with retailers, it gives them evidence in cases of arguing who was at fault. I think that was fairly high impact, in terms of the changes made to that company, and serves as a good model of big data helping a small company, for a modest investment.

Another example is a telemetry project that we’re doing at the moment. It too is fairly low cost, but what we will find out from that will have a big impact. It will mean that we can go out to, say for example to farmers and say, ‘Look, even though you’re in a bit of a black spot, and you’re away from NBN, we’ve now got a way for you to monitor the pumps that are operating on your farms, monitor to the levels of the dam, receive alerts when your gates are left open. We could even send alerts when your animals are no longer moving much, which may mean that they’re sick.’

So those things are low-cost but high-impact. A lot of work we actually do in Sense-T revolves around two things: the high-level engagement with industry, and the impact that engagement through the projects will actually make.

So, basically projects that act as terrific test cases for larger implementations?

Yes, so we look for the proof of concept, and we’ll do the proof of concept sometimes on a smaller business to see then how we can translate that into a supply chain or into a larger business.

There’s a very exciting project that we’re in the middle of getting signed off at the moment. It is about looking at how can we embed data and technology through a complete supply chain for mangoes. The whole cycle, from farm to international markets. When we get it right it will start to make the supply chain more seamless, it will provide high visibility right the way through the supply chain, and will determine where and why we need real-time data. It will involve a lot of telemetry issues for remote regions, and being at sea, but importantly may also enable predictive capability.

Excellent. I look forward to hearing more about it. So of the many, many things you’ve done so far what work is it so far you’ve been most proud of?

I think the development of the Sense-T team is probably what I’m most proud of. The team is a very special group of people, a very capable group of people, and when we start to engage with industry, the way that we all come together to make projects work, we work together exceptionally well.

It’s something that’s very good to step back and reflect on how well it came together. A range of people, with a wide range of capabilities, across multi-disciplines. Yet it works with industry, and sometimes with government, to actually make things happen and to make a difference. So I think the work in Sense-T would rank up there amongst the things I’m most proud of.

Last question, we I think are living in exciting times in terms of all things related to transport, what in the next three to five years are you most excited about?

I’m most excited about what might be possible. There’s a good quote from Bill Gates and he says something like, I really am paraphrasing, that we overestimate what will happen in the next few years but underestimate the change that will occur in the next 10. And I’m really looking forward to see what changes will actually occur because being at that cutting edge of how data and technology is used, you can just see so many possibilities.

We’re starting to think of a world of autonomous everything. That’s pretty exciting to sit back and look at, little bit scary as well, as you think about the amount of change that will bring. If, for example, we think about personal mobility, for people who’ve got various disabilities to then have autonomous vehicles that they can call up, or communicate with that will take them where they need to go, the independence that may provide some people is quite remarkable

I think I’m in agreement with you Stephen, it’s hard to isolate just one, there’s so many things coming at us that will change our lives in so many positive ways it’s hard not to be excited.

I love reading science fiction anytime I can get some spare time, and when I look at some of the things I read when I was a teenager, well you think, some of that is actually coming true. But what that will all mean for our population and for our economy, and that could be where some concern starts to feed in.

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