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Columna De Expertos Deciphering the Supply Chain with Satellites Part 1

Fecha de inscripciónMAY 21, 2024

Deciphering the Supply Chain with Satellites Part 1
During the Cold War era between the United States and the Soviet Union, satellite technology developed in a competitive context has evolved over time thanks to advancements in technologies such as satellite technology itself, computer science, artificial intelligence, and big data analysis methods. It has become an essential tool in various fields. Especially in modern times, these technologies combined play an important role in understanding and predicting global-scale disasters and emergencies, and their role is emphasized in important areas such as climate change and environmental monitoring. In this context, the information collected by artificial satellites serves as a vast source of data without geographical constraints, indicating that its value as an information resource in modern society is becoming increasingly high. Especially, analysis utilizing Earth Observation (EO) and Satellite Imagery is expanding the potential applications in various fields. The quality of images captured through satellites is continuously improving, and the computer capabilities to process such imagery are also advancing. Furthermore, with the addition of AI technology to high-resolution satellite imagery analysis, it is expected that the areas where satellite imagery will be applied will continue to expand. The 'Global Satellite Imagery Market Research Report 2022'[1] also forecasts rapid growth in the global satellite imagery market, showing an average annual growth rate of 17.93% from 2022 to 2028, reaching an estimated market size of approximately $8,047.19 million in 2028.

As such, satellite imagery is a valuable resource with vast potential and is being utilized for various purposes domestically. Utilizing satellite data, it helps produce land imagery information and provides various spatial information to support land policies. South Korea has successfully launched the 3rd Nuri rocket and continues to explore new application possibilities through satellite data analysis. Particularly, satellite imagery of North Korea is not only used for military purposes but also plays an important role in preparing for inter-Korean exchange and cooperation through analyzing North Korea's land information, population density and distribution, analysis of deforestation and desolate areas, and understanding the characteristics of the Mount Kumgang-Wonsan tourist zone.

Cases of applying satellite imagery analysis in the supply chain sector are continually being announced. Particularly, political and social issues as well as natural disasters occurring in various regions increase supply chain risks. Events such as disruptions in the supply chain due to the COVID-19 pandemic have highlighted the importance of research and practical application of supply chain analysis using satellite imagery. Moreover, with the increasing trend of companies providing on-demand satellite imagery services, it is expected that satellite imagery will be used diversely in supply chain management not only by corporate and related supply chain management departments but also at the national level to enhance transparency in the supply chain and swiftly identify and respond to potential risks.

Thus, this paper aims to divide " Deciphering the Supply Chain with Satellites " into two parts. In Part 1, we will review the application areas of satellite imagery that have been traditionally utilized, mention use cases in ports, and explore the potential of satellite imagery in the supply chain field. Then, in Part 2, various use cases of satellite imagery in the supply chain sector will be introduced, examining future application possibilities in this field, and providing conclusions.

(Due to copyright issues, satellite imagery discussed in this paper has been replaced with images. The original source and link of these images are detailed in the references section, allowing readers to access the specific material.)

1. What Can Satellites See Nowadays? Satellite reconnaissance and imagery analysis have long been utilized primarily for military purposes. South Korea is familiar with obtaining information on North Korea's nuclear tests and missile launch sites through satellite image analysis. Examining overseas cases of satellite image analysis for military purposes reveals the following:

Since June 2022, maintenance work has begun at the Ream Naval Base in Cambodia, which has been interpreted as the potential construction of a naval base capable of accommodating not only Chinese naval vessels but also aircraft carriers from China. In response, the United States monitored the progress of this work in real-time using satellite imagery, confirming an increase in construction materials, vehicles, and containers. There have been cases where it was confirmed that China is constructing a dock large enough to accommodate its aircraft carriers in Cambodia. Through this, not only the scale of construction but also the predicted completion date and the potential for stationed troops could be estimated.
[Construction Project of a Large Pier at Ream Naval Base in Cambodia [2] (Construction of Chinese Naval Base)] Construction Project of a Large Pier at Ream Naval Base in Cambodia (Construction of Chinese Naval Base)
The collection and analysis of satellite imagery have traditionally been the exclusive domain of governments and military agencies, which have monopolized the relevant hardware and technology. However, with private companies gaining the ability to collect and analyze satellite images, the scope of satellite imagery utilization is expanding, and it is being used for various purposes across different fields. For example, the volcanic eruption event on the island of La Palma in Spain in 2021 was disseminated worldwide through satellite imagery (Figure (a)). These satellite images were crucial in assessing the extent and severity of the damage. Additionally, satellite monitoring companies based in Seattle analyze smoke and debris from bombing areas in Ukraine using satellite imagery to assess the extent of damage and contribute to collecting evidence of war crimes (Figure (b)). In the United States, satellite imagery is even used to estimate the attendance at concert events by counting the number of vehicles parked in parking lots (Figure (c)). Thus, the range of applications for satellite imagery is becoming increasingly diverse.
[Various Analysis Cases Using Satellite Imagery (Natural Disasters and War Damage Assessment, Concert Attendance Estimation)] Various Analysis Cases Using Satellite Imagery (Natural Disasters and War Damage Assessment, Concert Attendance Estimation) (From the left: Figure(a)[3] Figureb)[4] Figure(c)[5])
Nowadays, satellite imagery analysis allows for the identification and precise counting of various objects such as trucks, ships, aircraft, and containers, and even enables the prediction of their movements and patterns. These analytical capabilities have been further advanced through machine learning algorithms implemented on massive on-demand cloud-computing platforms like Amazon Web Services[6]. These technologies not only facilitate the commercial utilization of satellite imagery in the private sector but also increase the commercial potential and expectations by applying satellite imagery to various industrial fields. 2. A New World Revealed Through Satellite Imagery: Cases Utilized for Commercial Purposes One widely known example of the commercial utilization of Earth Observation (EO) data and satellite imagery involves analyzing parking lot images of retail chains to assess their business situations.

"Orbital Insight," a company in the United States, captured satellite images of parking lots at various locations of major retail chains such as Sears, J.C. Penney, and Macy's. By analyzing these satellite images, they measured the number of parked vehicles in each store's parking lot, estimating customer visit frequency and sales trends, thereby analyzing the business performance of each store. In particular, for Sears stores, the increasing vacant spaces in parking lots were observed through satellite imagery, which served as crucial evidence for predicting sales decline. Subsequently, Sears filed for bankruptcy protection, confirming the alignment between the analysis results from satellite images and the actual business situation.[7] Furthermore, similar analyses were conducted for J.C. Penney and Cabela stores, revealing a decrease in the number of vehicles parked in their parking lots compared to the previous year. [8]

Similar analyses are also being conducted in China. According to reports from CNEvPost, a Chinese electric vehicle news platform, China is utilizing its satellite technology to understand economic value and industrial trends. Specifically, in the case of Xiaomi's electric vehicle factory, satellite imagery was used to confirm the number of completed vehicles parked at the factory's construction site as of February 2024, since its groundbreaking in April 2022. [9] Through satellite image analysis, the number of vehicles can be calculated, and based on this, an approximate economic value can be estimated. This highlights the importance of real-time monitoring using satellite imagery in assessing economic value and understanding industrial trends.

Among various cases of satellite imagery analysis, an interesting example is the utilization of building shadow lengths, which has been developed and advanced over the past decade. In satellite imagery, tall buildings cast relatively long shadows. This is based on the principle that as the height of a building increases, the size of its shadow also proportionally increases. Through this analysis, it becomes possible to understand construction activities and economic trends in specific areas. The analysis of shadows in satellite imagery is also being applied to estimate oil storage volumes. Initially, oil tanks are detected in satellite imagery, and then shadow areas are calculated to estimate the volume of storage.

Furthermore, examples of estimating oil consumption in a particular area by detecting and counting oil tankers moving on roads through satellite imagery analysis are readily available. Satellite imagery analysis is also utilized in analyzing energy production levels in a given area. An example of this is the collaboration between BlackSky, a company in the field of Earth observation and data analytics, and analysis company SynMax. [12] These companies are conducting a project to monitor the amount of coal stored in over 100 power plants in the United States using satellite images and data analysis. Through this monitoring project, they receive crucial information about coal usage and inventory levels at power plants.

Furthermore, it also contributes to analyzing the gradual decline in coal-based power generation and changes in energy production within the United States, aiding in data-driven policy decisions to reduce coal dependency.

This case study demonstrates how satellite-based monitoring can influence energy management and policy-making.

As such, satellite imagery analysis has established itself as a crucial resource for extracting and predicting information tailored to various perspectives and purposes, thereby generating economic value. Moreover, due to its ability to support decision-making processes using satellite imagery information, the potential of satellite data utilization has already garnered attention across various industries. In the supply chain sector, satellite data significantly contributes to tracking, tracing, and supply chain visualization by integrating into global positioning systems. Forbes, an American economic journal, mentioned the potential of satellite image data for supply chain improvement in a 2019 article titled "Satellite Images as a New Data Source for Supply Chain Management." [13] With advancements in satellite technology and cloud computing, the collection of high-resolution satellite images has become feasible. Coupled with technologies like AI and machine learning, it's now possible to identify and analyze objects in high-resolution satellite imagery, ushering in an era of more precise supply chain analysis. Therefore, satellite imagery analysis is poised to establish itself as an essential resource and tool supporting decision-making in supply chain management. 3. How is Satellite Imagery Being Utilized in the "Supply Chain" Field? A case study of supply chain processes within ports
In the past, satellite navigation using the Global Positioning System (GPS) has been applied to various modes of transportation such as ships, aircraft, and vehicles, contributing to route optimization and reduced transportation times in the logistics and transportation sectors. Additionally, satellite information has played a significant role in enhancing transportation visibility through tracking during the transportation process. Furthermore, satellite data has been utilized to identify delays occurring during transportation and storage processes, and to understand the impact of such delays on last-mile transportation routes.[14] Moreover, the recent utilization of satellite imagery information in supply chain management indicates the expectation that the advancement of satellite and image analysis technologies will have a significant impact on future supply chain management.

The image below illustrates an example of satellite imagery and analysis results provided by BlackSky. Satellite imagery can track temporal changes by capturing the same area multiple times in a day. Therefore, leveraging this capability, it can be useful for monitoring the status of approaching ships, tracking their movement paths, and monitoring containers and vehicles awaiting import or export within yards. This can contribute to reducing congestion within ports, enhancing the efficiency of port operations, and facilitating flexible logistics flow between land and sea. As a result, it is expected to contribute to cost and time savings across the entire logistics system.
[Satellite imagery and analysis target in Australia’s Fremantle Harbour [15]] Satellite imagery and analysis target in Australia’s Fremantle Harbour
4. A case study of satellite information matching analysis in Busan New Port Accessing the aforementioned satellite imagery and data still poses limitations primarily due to cost considerations. While real-time satellite imagery and data may not be available, an analysis case demonstrating the potential use of satellite data in ports is presented using the "Berth Allocation Status" data from the Busan New Container Terminal (BNCT) and vessel location information from the "Marine Traffic" website. Both datasets are freely accessible without the need for registration. The process of matching these two datasets is illustrated in the figure below, where connections can be made between the data using vessel names. Through this, not only can information regarding vessel berthing and handling be obtained, but also insights into vessel operations. (It should be noted that the figure presented in this example is not directly linked to the BNCT Information Service and Marine Traffic platform. Additionally, the imagery used in this figure, sourced from Google Maps, is provided by Marine Traffic and represented using ship shapes and colors to denote real-time berthing and operational statuses. Ships berthed are marked in green (indicating cargo vessels) to facilitate user recognition of vessel locations. The delineation of the Busan New Port piers and boundaries in the image is separately indicated by the author for clarity.)

As of April 16, 2023, at 10:00 AM, using BNCT's Information Service, you can verify the berth allocation status of vessels berthed at Pier 5 of the Busan New Container Terminal. In particular, you can see that two vessels, 'ALS LUNA' (represented as "B" in the illustration) and 'CMA CGM EVERGLADE' (represented as "D" in the illustration), are currently berthed at the terminal and undergoing handling operations. Both of these vessels belong to CMA CGM, and they are berthed at Pier 5, Slot 1 and Slot 4, respectively, as indicated in the berth allocation information table. Here, "(S)" denotes that the vessel is berthed on the starboard side, while "(P)" indicates berthing on the port side. Additionally, through this service, you can also obtain additional information about vessels currently berthed or scheduled to berth at Pier 5, such as pilotage schedules, berthing and departure records, and operations (container handling quantities indicated in '1 VAN' units). Although not shown in the illustration, information about the 'Bay-wise workload' for each vessel undergoing or scheduled for handling operations is also available.
[A Case of Matching Info between BNCT Information Service[16] and Marine Traffic[17]] A Case of Matching Info between BNCT Information Service and Marine Traffic
Among the various data provided in the berth allocation status information, the voyage route information listed below the vessel name (e.g., 'CBX' under 'ALS LUNA') offers specific details about each vessel's navigation route. By comprehensively analyzing this data, one can obtain key voyage information for vessels calling at the Port of Busan, including destination ports. Furthermore, it enables the identification of information regarding the shipping lines affiliated with each vessel calling at the port, providing insights into the operations of various alliances within the port.
[CMA CGM’s CBX (Chesapeake Bay Express) Route[18]] CMA CGM’s CBX (Chesapeake Bay Express) Route (Source: CMA CGM website)
In this case, an attempt was made to integrate the satellite position and vessel information provided by Marine Traffic with the metadata (berth-specific and berth allocation information) provided by the port. Currently, these two types of information are separate, but in this case, they were correlated and presented together. If such information could be integrated and analyzed comprehensively for all ports worldwide, various synergistic effects could be expected, and the scope and content of analysis would be expanded. In other words, by utilizing satellite data and imagery along with the metadata provided by each port, it becomes possible to confirm the current location and calling information of vessels and to explore ways to enhance the operational efficiency of shipping lines and port operations. This integration can contribute significantly to seeking ways to improve efficiency in vessel operations and cargo handling at ports.

So far in Part 1, we have examined various use cases of satellite imagery and reviewed some examples of utilizing satellite data in ports, focusing on satellite imagery information. We explored the potential of satellite imagery while examining its current applications. In Part 2, we will analyze diverse use cases of satellite imagery in supply chain management fields, predict the potential applications of satellite imagery in the supply chain domain, and present conclusions. # Reference [1] Global Satellite Imagery Market Research Report 2022, https://www.giikorea.co.kr/report
[2] [Original satellite image source] Andrew Salerno-Garthwaite, “BlackSky details building of China’s secret naval base in Cambodia”, Naval Technology, (2023.02.28) https://www.naval-technology.com/news/blacksky-details-building-of-chinas-secret-naval-base-in-cambodia/?cf-view (Original source: BlackSky)
[3] [Original satellite image source] Satellite image of a volcanic eruption on La Palma Island (2021.11), European Space Agency (2021), “La Palma as captured by Copernicus Sentinel-2”, https://www.esa.int/ESA_Multimedia/Images/2021/10/La_Palma_as_captured_by_Copernicus_Sentinel-2
[4] [Original satellite image source] Satellite imagery analyzing bombing damage in Ukraine (2022.03), Jennifer Dowling, “Seattle-based company's satellite images show damage done in Ukraine”, FOX13(Seattle), (2022.03.31) (https://www.fox13seattle.com/news/local-companys-satellite-images-show-damage-done-in-ukraine
[5] [Original satellite image source] Satellite footage from Taylor Swift's performance (2023.07), BlackSky Twitter (2023.07)
[6] Alexander Gelfand,”Eyes In The Skies", Harbard Business School, (2022.06.01)
[7] [Original satellite image source] Cade Metz, “‘Businesses Will Not Be Able to Hide’: Spy Satellites May Give Edge From Above”, The New York Times, (2019.01.24) https://www.nytimes.com/2019/01/24/technology/satellites-artificial-intelligence.html
[8] ] [Original satellite image source] Adrianne Jeffries, “J.C. Penney’s troubles are reflected in satellite images of its parking lots” The Outline, (2017.02.28) https://theoutline.com/post/1169/jc-penney-satellite-imaging
[9] [Original satellite image source] Phate Zhang, “From empty land to parked cars: Satellite images show how fast Xiaomi's EV plant was built”, CNEvPost, (2024.5.13) https://cnevpost.com/2024/03/13/satellite-images-show-xiaomis-ev-plant/
[10] [Original satellite image source] Zachary Romano, “Orbital Insight Exemplifies How Artificial Intelligence (Ai) can be used to Study Images from Space”, Geography Realm (2021.03.31) https://www.geographyrealm.com/orbital-insight-exemplifies-how-artificial-intelligence-ai-can-be-used-to-study-images-from-space/
[11] [Original satellite image source] https://ep.naraspace.com/ko/post/how-to-easily-grasp-global-oil-storage-volume
[12] Miriam Kramer, “New partnership will monitor coal power plants from space”, Axios Space, (2023.05.30) https://www.axios.com/2023/05/30/tracking-coal-supplies-from-space
[13] Steve Banker, “Satellite Imagery A Potent New Data Source For Supply Chain Management”, Fobes, (2019.07.08) https://www.forbes.com/sites/stevebanker/2019/07/08/satelitte-imagery-a-potent-new-data-source-for-supply-chain-management/?sh=4d74da957bfd
[14] Kandel, C., Klumpp, M., & Keusgen, T. (2011, June). GPS based track and trace for transparent and sustainable global supply chains. In 2011 17th International Conference on Concurrent Enterprising (pp. 1-8). IEEE.
[15] [Original satellite image source] BLACKSKY, “Blacksky Achieves World’S Highest Revisit, Time-Diverse Dawn-To-Dusk Satellite Constellation with Three Successful Launches in Three Weeks", Press Release, (2021.12.13) https://www.blacksky.com/blacksky-achieves-worlds-highest-revisit-time-diverse-dawn-to-dusk-satellite-constellation-with-three-successful-launches-in-three-weeks/
[16] BNCT (https://info.bnctkorea.com/esvc/codeChk/vesselRouteSrch) (Accessed at 16. April 2024)
[17] Marine Traffic (https://www.marinetraffic.com) (Accessed at 16. April 2024)
[18] CMA CGM, “Chesapeake Bay Express (CBX)“ route, https://www.cma-cgm.com/products-services/line-services/flyer/CBX (Accessed at 10. April 2024)

Sung-Ho Shin ProfessorSung-Ho Shin Professor

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