The container shipping industry decided to get serious about data standardisation in 2018, but competing initiatives and a reluctance to share commercially sensitive information could hinder faster progress.
Often criticised as an antiquated industry ripe for disruption, container shipping’s digital transformation is now well underway. Eyeing a $200 billion market, tech-investors have poured money into digital logistic start-ups focussed on removing paper-based processes and automating cargo bookings, quotations, and pricing.
However, long term incumbents – including carriers, forwarders and ports – have also invested heavily in digitalising their operations, setting up the battlefield for the next evolution in container supply chains.
What many have recognised, however, is that competing parties developing tech-solutions in silos will not advance the industry in any meaningful way. With each link in the supply chain vital in supporting the next, IT systems need to “talk” to one another freely and share information on everything from vessel movements and container locations, to freight rates and bills of lading. For this to happen, data must be standardised.
Following a year of announcements on competing initiatives – mostly surrounding blockchain adoption, five major shipping lines launched a neutral and non-profit association to harmonise digital standards.
While the group so far only includes Maersk Line, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express, the industry welcomed it with open arms.
Alvin Ea, CEO and co-founder of Haulio, a Singapore-based digital container haulage start-up, said the success of data standardisation would depend on industry-wide adoption.
“The challenge, however, will be to get different competing stakeholders to learn to put aside their differences for a common goal to digitalise the standards. I believe that establishing a standard is just the start, and successful adoption will be crucial to driving the industry forward.”
Putting aside differences may be easier said than done. Indeed, the five carriers announced the initiative in November, just days after the launch of the Global Shipping Business Network (GSBN), a blockchain group comprised of Ocean Alliance members CMA CGM, Cosco/OOCL and Evergreen, as well as Yang Ming, DP World, Hutchison Ports, PSA and Shanghai International Port.
It was widely interpreted as an alternative to the Maersk/IBM-led TradeLens, another blockchain-based digitalisation initiative. There are many more, including Zim’s recently announced blockchain bill of lading solution; APL’s partnership with Accenture, the Blockchain in Transport Alliance; and CrimsonLogic’s Global eTrade Services (GeTS).
Rolf Habben Jansen, chief executive of Hapag-Lloyd, a major carrier yet to join any of these blockchain groups, is on the record highlighting the contradiction in these initiatives. He noted that their weakness lies in trying to offer industry-wide platforms that they own and control.
One industry insider said that, despite all the talk, the carriers aren’t effectively collaborating. As a result, customer service is “taking a back seat”.
“They continue to build their own single-carrier portals in the hope of world dominance,” he remarked. “They think narrowly on their own value chain, hoping to optimise their own result; and end-to-end thinking across the broader eco-system is limited.”
Perhaps hoping to be the neutral party that makes the breakthrough needed in data standardisation, US-based software provider INTTRA has launched CONNECT. INTTRA claims to have successful experience in this area, having spearheaded a system of sharing container weight data known as Verified Gross Mass (VGM).
Inna Kuznetsova, INTTRA’s president and COO, told Seatrade Maritime News that the lack of data sharing is the root cause of the industry’s major inefficiencies, including container visibility tracking, trade lane overcapacity, and ghost bookings.
“The industry needs to come together to set standards for the free flow of data across the maritime ecosystem,” she said. “Standards need to be set by the industry itself rather than having to wait for the regulators.”