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Q&A: Standardizing Supply Chain Data Exchange For Ocean Transport

Global supply chain visibility, automation, and optimization depends on the quality of one commodity: data. While individual freight forwarders and container lines have optimized their internal processes, none have developed a standard way of doing busines...

Benzinga · 09/01/2021 10:27

Global supply chain visibility, automation, and optimization depends on the quality of one commodity: data.

While individual freight forwarders and container lines have optimized their internal processes, none have developed a standard way of doing business across shipping stages. 

Port operators, drayage carriers, warehousing companies and final mile delivery partners have their own visibility tools that require integration with carrier operating systems, but there is no standardized framework.

In 2019, the non-profit Digital Container Shipping Association (DCSA) formed, bringing together global logistics companies Mediterranean Shipping Company, A.P. Moller – Maersk, CMA CGM, Hapag-Lloyd, Ocean Network Express, Evergreen Line, Yang Ming, HMM and ZIM to create a neutral authority for establishing data standards in international shipping.

In an interview with FreightWaves, chief marketing officer Ellen Sun explains why it takes a neutral party to create these standards, describes achievements and obstacles the DCSA has faced and expresses hope for higher adoption rates from global supply chain participants.

Questions and answers were edited for clarity and length.

FREIGHTWAVES: What spurred the formation of DCSA and why was it important to create a non-profit entity to handle this project?

SUN: "In 2018, [container lines] got together and said, ‘If we keep digitizing our own systems, and those systems are not connected, we cannot get as far as we need to in regards to optimization.' There was really no option but for them to join together and try to standardize in a non-competitive way. 

"They also knew this was not just going to be a [container line] exercise. They really needed to make sure that ports, terminals, freight forwarders and shippers would benefit from this initiative. If it doesn't get adopted on a broad scale, the investment of time and money would not make sense.

"They decided to make a nonprofit organization to make sure that everything the DCSA developed would be free for everyone to use. 

"The reason we opened membership up to the carriers first is because it's easier to get agreement on standardization from nine companies than a thousand companies. Then we take input from the industry as a whole on how those standards are working within the whole ecosystem."

FREIGHTWAVES: What sparked these container lines to standardize their data initially?

SUN: "The container lines realized that all [supply chain actors] are working towards real-time data because it's what the consumers want. We've moved into a digital era and they need to catch up and start giving their customers the kind of service and access to data that everyone is used to providing. How long were they going to wait to start meeting that standard?

"E-commerce is providing that end-to-end visibility. As those trends accelerated, they got a lot of outside pressure to start moving the whole industry forward."

FREIGHTWAVES: What push back do you get from container lines or freight forwarders on standardizing global shipping data?

SUN:  "Sometimes we have people say, ‘If you standardize everyone's operations, wouldn't you stifle innovation?'. Actually, it's the opposite.

"You see this in banking standards. Banks aren't competing based on if you call them and they can tell you how much money you have in your bank account. The innovation behind the mobile application that lets you see how much money you have is what they are competing on. 

In order to apply a mobile application to banking, you need a standardized way of communicating through API integrations. We are not trying to standardized each company's mobile application but how they are communicating that data.

"Logistics solution providers and freight forwarders are trying to add these extra services for their customers, but since there is no common practice on how to communicate shipment data, they cannot offer true value to their customers."

FREIGHTWAVES: DCSA recently came out with its Adopter Program, which provides a self-certification checklist to validate adoption of your standards. What feedback have you received from members on their adoption status?

SUN: "We are still pretty small and we want our members to freely be able to show whether or not they have adopted properly.

"If somebody needs help with implementation, that is something DCSA can do. If they are having issues implementing API standards, we have libraries of sample code that they can download. Anywhere you are in the process of implementing our standards, we have people to help you.

"Today, the Adopter Program is an honor system. That's important to emphasize because we are not able to check everybody's implementation. For now, the honor system gets companies at least trying to conform to our standard. We start verifying later when we verify compliance of different tools like track and trace. 

"Think of the Adopter Program as a shortlist towards a longer process."

Related article: DCSA provides education on ‘smart containers'

FREIGHTWAVES: Earlier this month, you released version 2.1 of your Track and Trace Interface standards, which focused on standardizing API definitions for track- and-trace events, including standardizing error codes. How many members are currently up-to-date on that standard?

SUN: "We have already successfully implemented this new standard with MSC, CMA CGM, Evergreen and Yang Ming. This is exciting because now shippers, freight forwarders and other logistics providers can follow the same API guidelines and quickly connect with all four carriers with no issues.

"Those who were quick to implement the new track and trace standards also successfully implemented our standardized e-bill of lading program. Those are two of the hottest areas of standardization within global shipping.

"This shows you why we do not check the Adopter Program checklist. If you were to lie on the checklist, it would get caught every time we published a new standard for them to implement."

FREIGHTWAVES: Are there any other supply chain actors you are looking to add as members and are there any new standards you are looking to publish?

SUN: "We are actively talking with ports as we continue to work on an initiative for just-in-time call standards.I think ports and terminals have a lot of standard initiatives they are working on themselves and we want to make sure we are not reinventing those standards.

"Ports and terminals have been very open to working with a global neutral party like ourselves because most of their carrier alliances are regional.

"Besides continuously working on track and trace standards, we are focused on just-in-time, booking and time stamp standardization and getting more logistics providers to support and adopt our standards overall."

FREIGHTWAVES: What are the biggest hurdles the DCSA is experiencing when trying to get others to support your initiatives?

SUN: "The biggest challenge we have is getting shippers and freight forwarders to demand standardization from container lines. Ultimately, everybody will do what they want. When we talk to shippers and freight forwarders the value is clear, but they are not spreading the word to the carriers that are moving their shipments around the globe.

"There are a lot of operational issues shippers are trying to solve when the biggest challenge is getting these carriers to implement standards. 

"Supply chain issues are on everybody's mind today. We are hoping that we get more attention from shippers and have them help drive ocean carriers into transforming themselves digitally.

"Also, we understand this is going to take time and effort and real industry collaboration for these changes to happen. … We are in it for the long haul"

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Image by Frauke Feind from Pixabay