A carrier-agnostic approach needs to be taken to solve one of container shipping’s great riddles for 2019, argues Stefan Kukman, CEO of CargoX.
It seems every day there’s a new digital initiative for shipping. The Global Shipping Business Network (GSBN) was announced recently, with founding members including ocean carriers CMA CGM and Cosco, and terminal operators such as DP World and Hutchison Ports. Then there’s TradeLens, the Maersk/IBM platform, plus a new association, involving five of the largest carriers, and dedicated to agreeing digital standards in the industry. It can all get a bit confusing, particularly as some of the carriers are involved in two, but not all three, of these new efforts.
To be fair, the idea of a standardised, open platform is a good one. We’re in the Efficiency Era, with everyone looking for a way to do business that means less complexity. Add to that volatile rates and changing fuel costs and having a way to complete transactions as simply and cheaply as possible is the only way anyone is going to be able to protect their business from macro-economic forces.
The question is, however, if everyone has a platform, which one do you choose?
The age of collaboration?
First, it’s important to focus on the positives. It’s heartening to see an industry that has historically not been the most open moving towards a more collaborative mindset, the digital standards initiative being a good example of where real value could come from working together.
For a sector that’s so interconnected, the lack of will to work together to achieve mutual profitability has been absurd. Granted, there are always commercial sensitivities to consider, as well as regulations around competition to abide by, yet the very fact that for years carriers, terminals and forwarders have all operated their own system, requiring time-consuming data entry, suggests little desire to make life easier for either suppliers or customers. Hopefully, however, we are seeing a sea change as the digitalisation of shipping allows for easier, faster sharing of data and greater commitment to working together.
Yet as shipping moves towards a more open future, these first stumbling steps are going to be as confusing as ever, with new platforms jostling for position. The danger is that users – shippers, customers, forwarders and even the carriers themselves – get frustrated with the types of platforms out there and shun them. We’ve already seen various parties refuse to engage with one platform due to concerns that it was simply a new approach to make everyone work the way one carrier wanted.
This is the problem with carrier-led initiatives – other carriers are always going to be wary, and if there’s lack of engagement there, shippers, forwarders and terminals may question how the platform is any different to current ways of working.
Supplier and customer
Then there’s the issue that, as the owner of a platform, you are a supplier to the platform’s users (otherwise known as your customers) – but if you are also a user, you become a customer as well. Suppliers want to make money, customers want to limit their operational expenditure (OPEX) – it’s a conflict which any organisation would struggle to overcome. Will you really invest in a platform that truly works for everyone, if it could cost you more? Or would the easier option be to invest in a platform that works for you, and get everyone to work like that too?
That’s why transparency and interoperability are critical. Users need to be confident that the platform owner is doing what’s best for the platform. Digital technologies are about connectivity and lowering the barrier to entry – platforms that stop smaller operators from being involved are the antithesis of what the industry needs.
Can carriers deliver that, even a consortium of them, or is the best we can hope for a system which works for most, but not all? If the latter, that’s not acceptable, and it’s something we’ve seen in the industry before.
One platform for all
That’s why a carrier-agnostic approach needs to be taken. One that works with all carriers, of course, but with all shippers, forwarders, customers, consignees, port operators, customs bodies and regulators. A completely interoperable, secure and transparent platform in which the owner is only the supplier, and the customers simply use it.
It’s these guiding principles that have led to the creation of Blockchain Document Transaction System (BDTS), a CargoX platform that can create, view, share, encrypt, seal, and transfer data to the intended recipient. With no links to any carrier, forwarder or terminal operator, users can use BDTS to build solutions to implement secure methods for transferring documents to natural or legal persons, maintaining clear processes, transparency, and unlimited archives. Plus, with interoperability built on, there’s minimal upfront investment required and the whole process can lower IT-infrastructure costs as it removes the need for resources to store and secure data in other environments.
It’s important to note that completely interoperable, secure and transparent does not mean that every one’s commercial secrets should be available for all users to see. Container shipping was founded on the standardisation and anonymity of a metal box, and that needs to remain the case. Beyond needing to know information relating to weight, hazardous or perishable goods (where applicable), the ideal platform would still keep data absolutely secure, only making it available to the parties that need it. If no one other than shipper and consignee need to know that the container is loaded with Ferraris, wool, waste paper or whatever else, then that shouldn’t change just because the shipment is being controlled through a platform.
Collaborate to simplify
In the drive for making business as straightforward as possible, we need to be mindful of the need for collaboration. Just because an approach works for us, doesn’t mean it will work for all. So, to be truly effective, that means a platform that works for all.
Carrier-led initiatives can only deliver so much. They will be inherently biased, at best towards other carriers, at worst only to the platform owners. What’s needed is a carrier-agnostic platform, one that treats all users equally. It is the only way the shipping sector can be truly collaborative and, therefore, operate as effectively and efficiently as possible.
