Digital Container Shipping Association chief executive explains the challenges and solutions being adopted by vessel operators to optimise logistics and operations
Lack of standardisation for exchanging data has prevented the container shipping sector from adopting digitalisation to optimise operations, transactions and administration. However, this is changing as a key industry association, Digital Container Shipping Association (DCSA), is creating standards and guidance for digitalisation in container shipping.
DCSA chief executive and statutory director Thomas Bagge says the industry is making progress towards digitalisation but there is still a long way to go.
“Any benefits and scope of digitalisation has been limited by the lack of technological standards in the industry,” he tells Riviera Maritime Media.
Individual companies are digitalising their own operations to “improve efficiency, reduce costs and create a marginally better customer experience” for a shipment or transaction.
“But, once a transaction involves a third party, many of the benefits of unilateral digitalisation disappear,” says Mr Bagge.
Without industry-wide standards, the benefits of one company digitalising are not systemic as they are in other industries such as banking, travel, retail and telecommunications.
DCSA is changing this by introducing new standards.
“Our container shipping industry is starting to recognise that technology standardisation is crucially important to helping every organisation innovate and create new value for customers,” he says.
“We are at the cusp of a rapid increase in digital adoption that will take us to a wide range of standardised technology implementations by 2025,” he forecasts.
DCSA is developing technology standards with its member carriers on several key initiatives, setting the foundation for digitalisation. When industry-wide digitalisation is achieved, DCSA will remain vital. “As new technology arrives, keeping the standards up to date will be an important part of our work,” says Mr Bagge.
These standards need to be free to use for carriers and ecosystem partners to “achieve faster time to market, reduce development costs and future-proof their implementation to maximise the output of their skillsets and resources,” says Mr Bagge.
“Failure to adopt these digital standards will be a significant obstacle to further digitalisation,” he continues. “The end goal is a significantly improved customer experience and increased product innovation in the industry.”
Achievements and goals
In September 2019, DCSA published the first of its standards documents, DCSA Industry Blueprint 1.0. “The purpose of this document is to establish a consistent vocabulary and propose current-state standards for container shipping processes,” says Mr Bagge.
This was followed in January 2020 as DCSA published an Interface Standard for Track and Trace (T&T), based on the Industry Blueprint 1.0.
“Our T&T interface standard puts forth a common set of processes, data and interface standards to enable customers to track containers across DCSA’s nine member carriers, with uninterrupted visibility” says Mr Bagge. It also sets five shipping phases – pre-shipment, pre-ocean, ocean, post-ocean and post-shipment.
Another standard is scheduled to be introduced this year for internet of things (IoT) solutions and technology that could be adopted within other maritime sectors, scheduled for publication in May 2020. These IoT standards should ensure interoperability of devices mounted on containers and gateways in terminals, warehouses and vessels.
“The aim of these standards is to enable scalability of IoT solutions and ensure operational efficiencies and interoperability between carriers,” Mr Bagge explains.
DCSA will also address IMO’s new cyber security rules that come into effect in January 2021. Guidance to its members should be ready later this year.
Beyond this, DCSA is in discussions with industry stakeholders to determine how digitalising documentation could be standardised. This should enable industrywide adoption of electronic and paperless bills of lading.
Mr Bagge implores container shipping to adopt these standards to enable digitalisation to benefit all stakeholders. “These standards will not move digitalisation forward unless they are adopted en-masse,” he says.
“We will do everything within our charter to drive adoption, but it is up to the rest of the industry to implement these standards within their organisations.”
One of the technologies that requires full implementation is application programming interfaces (APIs), which are modern standards for digital communications. This is compared with existing electronic data interchange (EDI) methods, which are individual interfaces between carriers and customers.
Mr Bagge says using EDI in container shipping is inefficient and expensive. “Maintaining thousands of individualised connections, each with its own data formats, is complex and labour-intensive,” he explains to Riviera. “In order to make digitalisation scalable and cost-effective industrywide, the data must first be standardised. Then the question becomes what is the most cost-effective method of exchanging it?”
EDI was developed for one-way communication of events in a supply chain that had previously been written down on paper. Mr Bagge estimates Maersk Line could have more than 10,000 EDI connections to all the parties it does business with daily. Each EDI connection needs to be customised to a particular computer and back-office system used at each end point. “Each time a company wants to make a change, they have to ensure that each of these thousands of connections is updated,” says Mr Bagge.
Alternatively, DCSA standards are based on APIs, which allow standardised two-way communication between any number of participants regardless of their underlying technological infrastructure.
“APIs will allow us to create a common vocabulary that different software systems can use to communicate with each other without any intervention from users,” says Mr Bagge.
“This will increase efficiency and lower costs to a level that will be a huge boost for digitalisation and innovation across the industry.”
Mr Bagge is encouraged how the container industry has started adopting standards and APIs for digitalisation such as DCSA’s carrier members’ response to publication of T&T standards in January.
“We do not expect an overnight change, but DCSA carrier members are fully committed to adopting standards because they will decrease infrastructure costs while enabling them to innovate,” he says.
“Over time, we expect new participants will migrate to our standards instead of creating new ones each time, which simply does not make business sense,” he explains while concluding with an analogy to commercial e-commerce.
“If you want to be a seller on Amazon, you only have to write to one Amazon API and your items can be on their platform by tomorrow,” he says.
DCSA members are Maersk, Hapag-Lloyd, MSC, ONE, CMA CGM, Evergreen Line, Hyundai Merchant Marine, Yang Ming and Zim.
DCSA achievements and future actions
Digital Container Shipping Association has introduced or is developing these elements to drive digitalisation adoption throughout the container shipping sector: