New standards group headed by carriers is taking a much more direct approach to IT standards than a similar initiative from port equipment manufactures and terminal operators.
Last week A.P. Moller - Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express announced an important step towards standards for IT in container shipping. The carriers said their IT executives are “currently discussing the creation of common information technology standards which shall be openly available and free of charge for all stakeholders of the wider container shipping industry”.
“It’s in the customers’ and all stakeholders’ best interest, if container shipping companies operate with a common set of information technology standards”, said André Simha, CIO of MSC and spokesperson of the group. “We are striving for less red tape and better transparency. The timing is right, as emerging technologies create new customer friendly opportunities. Together, we gain traction in delivering technological breakthroughs and services to our customers compared to working in our own closed silos”, he added.
Rather than use one of the many industry groups already in existence, the lines said group members “identified a need for a neutral and non-profit body for ocean carriers that is driven by delivering benefits for the industry and its stakeholders,” and welcomed other carriers to join the new association they intend to form.
The focus is very clear: “The association has no intent of developing or operating any digital platform, but aims to ensure interoperability through standardization. Similarly, the association will not discuss any commercial or operational matters”. The association is expected to start operating in early 2019.
The group is formed at a time when the shipping industry is investing heavily in IT as carriers race to try and gain an advantage in service delivery, reduce costs, offer differentiated services, and identify new sources of revenue by leveraging data and data services. However, whether it is a cloud-based booking platform, reefer monitoring system or blockchain for managing bills of lading , all these IT initiatives keep running into the problem of interoperability.
In an industry where all the players share infrastructure, including containers, vessels, and ports & terminals, proprietary systems that cannot share data across the supply chain have a limited value. Blockchain has yet to make any real impact on the industry, but in other systems, such as reefer monitoring and telematics, the industry is already seeing interoperability issues with different hardware and software platforms.
The shipping lines are looking for a better way forward: “A joint set of technical standards will ensure interoperability and enable all parties to concentrate on value adding differentiation as we move the container shipping industry towards further digitalisation,” said Adam Banks, Chief Technology & Information Officer, A.P. Moller -Maersk. “Ultimately this will benefit all parties in our customers’ supply chains”.
By contrast FEPORT (the Federation of Private Port Companies and Terminals) and PEMA (the Port Equipment Manufacturers Association), are moving much more cautiously with the Terminal Industry Committee 4.0 (TIC 4.0) initiative announced at TOC Europe this year.
TIC held its first plenary meeting in September and agreed that its first objective will be “to delineate a corpus of definitions regarding concepts and technical terminology that are specific to the container handling industry to facilitate comparatives about technical specifications for equipment, bring about objective measures of performance of equipment and constitute an important milestone towards the elaboration of standards for the industry to achieve further efficiencies.” WorldCargo News reported that this “corpus of definitions” will include very broad topics such as “what is a container move”.
PEMA has always taken a cautious approach to initiatives such as standards that might be viewed as limiting competition, but starting with a research project into what is a container move seems divorced from what the industry needs at this point. Whether it is on a vessel, in the terminal or out in the hinterland the whole supply chain wants to see connectivity and interoperability across systems to facilitate digitalisation.
The carriers, which are watched much more closely by competition regulators than equipment manufacturers, are not afraid to say they want to develop technical standards for interoperability. It has to be asked what is stopping port equipment and system suppliers and terminal operators from tackling the problem of standards in their part of the supply chain much more directly.