Shipping and freight insight in the best logistics industry.
Executive Insights is a series by Shipping and Freight Resource that provides useful insights and thoughtful analysis on what is happening in the maritime, shipping, freight, logistics, supply chain and trade industries.. Executive Insights is your chance to pick the brains of industry veterans, leaders, and enablers..
Data the “new” gold, is in high demand all over the world and especially now in the shipping and freight industry.. But just data alone is not going to assist.. Data and its usage must be standardised and there must be a standardised approach to digitalisation..
A financial modelling exercise to quantify the potential cost savings of the usage of digital shipping documentation, namely the electronic bill of lading (eBL) showed that at a global economic growth rate of 2.4% through 2030 the industry could potentially save an estimated $4 billion+ every year if a 50% eBL adoption was achieved..
In this edition of Executive Insights, we caught up with Thomas Bagge, the CEO of the organisation that did this exercise Digital Container Shipping Association (DCSA), to discuss the various data standards available in the industry currently and how these standards can assist with the current issues plaguing the industry..
Executive Insights - Thomas Bagge - CEO, DCSA - data standards - shipping and freight resourceSFR: Welcome to this edition of Executive Insights Thomas. It has been two years since DCSA came into existence. Could you give us a bit of background on the genesis of DCSA and how the progress has been since its inception..??
TB: Thank you and glad to be here. One of the reasons why we started DCSA, back in 2018-19, was because we saw many other industries that were significantly more advanced than we are when it comes to digitalization.
We wanted to see what we could learn from other industries, whether it’s banking, telecom, retail, or media, there are a number of them, to see what we could condense and take into our industry. Additionally, we wanted to see whether we could aid the digitalization of container shipping and pull it up towards the 21st century.
And in terms of what we’ve been up to, we’ve certainly been busy. The first thing we needed to do was have a discussion with our members around the process landscape or the way of doing business for non-competing processes. We call that the industry blueprint.
The industry blueprint is essentially meant to simplify and standardize or harmonize the way we do business as it pertains to non-competing processes. We have seen this in other industries like the airline and banking industries which are great examples.
For example, in the airline industry, everything is digitalized now and this happened because IATA has been defining the data requirements to book an airline ticket like the first name, surname, passport number and so on. At DCSA, we believe that by doing the same thing in container shipping, by harmonizing and standardizing what information is required, as an example, to make a booking, we believe that we will be able to further the digitalization of the documentation process. So that Industry Blueprint was quite crucial.
On top of that there is a data model, which is the architecture that we then use when we talk about the standard. For example, what kind of data goes into the arrival notification. We have done and continue to do work on cybersecurity, IoT, documentation, and we are working on operational processes. That’s what we’ve been up to for the past few years.
SFR: Ok, it seems like DCSA has definitely been doing a lot of things.. While standards are not a new thing, standards in the shipping industry, though, has been quite a challenging task based on the enormity and diversity of the industry.. What was DCSA’s strategy in first of all getting the industry to listen, because we are a tough bunch to listen to and follow standards among other things..??
TB: I think first and foremost, our membership group consists of nine of the top 10 container shipping lines representing more than 70% of the world’s containerized trade. So, I think that that’s one way of becoming a credible voice but another one is also the fact that we were not for profit. In addition, we are Open Source and DCSA is not an initiative that is in any way intended to generate a profit for our members, or sales.
We hope that by the introduction of these standards the wider industry will get involved and add more credibility to it. In practical terms, a lot of the work that we do is with international bodies like the United Nations, IMO, BIMCO, European Commission, with the US regulators and other authorities to the world, like customs organisations, and ISO for that matter. So we try and bring various stakeholders together not just international organizations, but also freight forwarders, ports and terminals, and technology service providers.
Basically, we try in our approach to invite everybody to the table, to have a say about how we should proceed, but of course, we can’t promise anything. That’s really a challenge due to the enormity of the industry which can be quite overwhelming at times. But, if we don’t get started now, then everybody tends to lose.
SFR: How many standards does DCSA have currently, how many are in progress..??
TB: We have many standards that are already in place. On the customer facing side we have the Track & Trace API which is out there in several versions, the electronic bill of lading, and the booking API that we are planning to release shortly. And there are a few other smaller ones on the customer facing side.
We also have the ones that deal with operations like the Port Call standards, operational business schedules. We also have a number of IoT standards to make sure that over a period of time we will create an interoperable ecosystem where the IoT containers of any given carrier can speak with the partners on the VSA that they have, which we think is very crucial. Those are the fundamental ones that we have at the moment.
If we look at electronic documentation, personally I think that this will have a tremendous impact to global trade. For example, the UK Law Commission has just estimated that the world can have 24 billion pounds of additional trade if we were to go from paper to digital. And they also said that the environmental impact of removing paper from international trade would be equivalent to planting more than 400 million trees every year.
The opportunity is enormous and we are in a time where the need for sustainability is so high on everybody’s agenda and we cannot/we should not keep on perpetuating the way that that we’ve always done things with bills of lading when we have technology at our disposal to solve these things.
So that is something that really resonates with me, the sustainability measures and the data quality issues that will be resolved as a consequence of further digitalization, I think that’s really important.
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