World’s five top-tier liner companies MSC, A.P. Moller – Maersk, CMA CGM, Hapag-Lloyd, and Ocean Network Express have revealed their intentions to set up an association aimed at digitalization, standardization and interoperability in the container shipping industry.
Speaking to World Maritime News, André Simha, Global Chief Information Officer of Mediterranean Shipping Company (MSC) and spokesperson of the group, said the key driver behind the association was to make something for the customers that is common and open.
“It’s in the customers best interest, if container shipping companies operate with common set of standards. When we collaborate, we can deliver better technological changes to our customers and more quickly compared to working alone. Customers don’t want to connect to multiple different systems, so you need something that is common and open,” Simha said.
The association plans to start operating from early 2019 and the next steps will be to establish it as a legal entity, involving relevant regulators. It has been devised as a neutral, non-profit body, which doesn’t plan to develop or operate a digital platform.
Importance of Cooperation
Simha has been a vocal advocate of industry cooperation on standardization and technology development. When asked why was that important, he said:
“We believe that we’ve reached the point in the carrier world where we need something that is common, open and done in the framework of a neutral and non-profit association. Also, the timing is right because new emerging technologies are creating more opportunities to help our customers’ businesses.
“The plan of the coming association is to discuss the digital future of container shipping by being the industry’s collective voice on issues relating to information technology standards, working towards standardization, setting the frameworks for effective and universally adoptable solutions developed by other parties, exploring possibilities of innovation and in general, moving the industry forward.”
The five members of the association said they were eager to welcome new members.
“Collaboration and getting other carriers joining the association will be key for the success of this initiative. I have personally no doubt it will succeed because there is a strong interest between the members to collaborate and our customers are also asking for more standardization,” he said.
There are numerous alleys to explore in the IT world, which have been very popular in the industry, including blockchain, big data, the Internet of Things, Artificial Intelligence, and autonomous shipping.
According to Simha, the association is yet to define its priorities in this respect and specific projects would be considered once the association is established.
“However, we see some trends in the market such as data standards, blockchain, cybersecurity, that could be of relevance. For example, today, we have hundreds of different types of messages for different ports and terminals around the world, all with the same basic information. That’s an overhead that is inefficient for everyone,” he pointed out, adding it could be important to discuss cyber security best practice in the future association.
Digitalization a Matter of Survival
Digitalization is no longer just a buzzword in the shipping industry, it has been identified as an issue of survival. Namely, those who don’t adopt new digital technologies in the coming years risk being left on the sidelines.
“The container shipping industry is at a fairly low start of digitalization (if we compare it with other sectors like the aviation industry). Hence, the future association aims to accelerate and shape digitalization of the industry to help achieve higher level of standardized processes. The idea is to deliver better technological changes to our customers and more quickly compared to working alone,” Simha said.
As explained, digitalization benefits include:
- For Customers: Less red tape and bureaucracy. Better service.
- For Authorities: One point of contact
- For Container shipping lines: Access to best practice and standards, supporting increased inter-operability
- For Ports and terminal operators: Potential for more efficient collaboration with carriers through use of common technology standards.
“Today, implementation of digital technology happens by working in closed silos. It leads to frustration and more bureaucracy for customers and other collaboration partners,” he explained.
“We believe all stakeholders in the industry can benefit from digitalization and standardization leading to increased interoperability.”
Liner heavyweights, including Maersk, MSC and CMA CGM have been at the forefront of the industry with numerous projects aimed at transforming the container shipping’s way of doing business and improving its efficiency and productivity.
Maersk and IBM teamed up on a blockchain joint venture targeting the need to simplify the entire global shipping ecosystem and the movement of goods across borders and trading zones and make it more transparent.
Other liner majors followed suit as well. For example, MSC is supporting the work of Traxens, the supplier of smart-container monitoring solutions, which also counts CMA CGM among its core backers.
On the other hand, numerous startups are making their way into the shipping industry with the aim of disrupting business models. Fears have been raised that these startups might be a threat to the traditional players in the industry, especially if they fail to evolve.
Nevertheless, Simha thinks that the trend is not something to be seen negatively.
“Not at all. The future association plans to develop standards, which both their future members as well as other stakeholders in the industry can adopt, as they will be made available to all freely and this of course includes startups or new comers. Future common standards could be a lever to enable the use of new technologies and improve the way existing solutions from different stakeholders work.”
When asked how will the industry cooperation among top-tier carriers impact the separate digitalization initiatives each company has, Simha replied that the association’s work will be the facilitator for more collaboration between the different digital initiatives.
“We collaborate on information technology standards and let CEOs and commercial do their part.”
In conclusion, when asked whether digitalization, big data and autonomous shipping can live up to the hype we have seen over the recent period, commenting from a personal perspective, Simha said:
” I have no doubt that this is the future and we’re on the right track to tackle those challenges and transformations provided we have standards in place.”
Interview by Jasmina Ovcina Mandra; Image Courtesy: MSC, PxHere, Pixabay