Will The Shipping Industry Ever Digitize?

Posted on: October 5, 2021

Waiting for the shipping industry to digitize has become frustrating and exasperating for everyone involved. What’s taking so long?

Admittedly, Digitization might not be sexy – unless efficiency, tied to a robust system of digital infrastructure and technology, is sexy.

Efficiency means getting away from the idea of “passing information around between the participants”. The idea is to bring data and information out of silos. All the participants involved in the international supply chain must be able together to work together in a standardized and controlled environment, on the same set of data representing all of the command and response sets associated with a shipment.

And it’s not a “Chicken or the Egg?” question. The software that makes digitization possible must come first before people will move to join together and digitize. The software creates efficiency by making better organization of complex data possible, and establishing proper access controls and workflow. There must be demonstrable functionality that can serve as the joining hub available to everyone at a low / affordable cost.

Coming together in one place and working on the same data set means:

  • No more email exchanges that are often piled up, lost, and forgotten.
  • No more telephone calls that go to voicemail because the parties at the other end are too busy dealing with the blizzard of problems that got to them before you did.
  • No more “forgetting” because there are just too many details to remember at any one time and, besides, the details keep changing anyway.

Coming together and working in one place together is efficient. That immediately leads to significantly increased reliability, which is the lifeblood of successful supply chains.

And, our expectations have to shift. Making the change happen is up to us. There will never be a big moment when government(s) or industry leaders roll out the new digital unifier and everyone can clamber on board. Progress is going to be slow and step-by-step. But, it’s going to be step-by-step in multiple directions, with early adopters and forward thinkers joining together first and pulling more and more of the general community with them.

The forward thinkers will not necessarily be the big players. Smaller players can use the opportunity to become better organized and, as a result, nimbler and more capable of navigating the logistical labyrinth and congestion threatening our supply chains around the world today. In doing so, they will create their own competitive advantages and grow because they will be providing the reliability that the industry has been demanding for many, many years.

Big or small, these early adopters are already beginning to share a vision: that early visibility from the time cargo is booked at origin, well organized information in terms of future events, dates and times, will combine to give them far forward planning capabilities and the ability to avoid last-minute scrambles to secure shipment data to arrange Customs Clearance, or cargo pick-up and delivery.

Forward planning leads to efficiency. Customs Clearance can be planned and executed well in advance of vessel arrival. Warehouse planning and trucking arrangements can also be planned in advance. Potentially, that information can be communicated to the carriers and terminals, so that terminals know which containers will be picked up right after they are available. That will reduce the number of containers shoved into the “Brush Pile” where they become inaccessible because there is neither the equipment nor manpower available to dig them out later.

A worldwide supply chain crisis such as the one we are now facing is the best time to move forward and embrace digitalization – and collaborative communities in particular. End customers are desperately looking for solutions that will provide reliability at a time when chaos seems to rule. The customers wishing to become “Shippers of Choice” will be willing and able to modify their business practices and work collaboratively with their vendors if doing so equates to reliability.

If you are an importer and you want to be a Shipper of Choice, then you will ask your overseas suppliers to work with you on a collaborative portal. You’ll ask them to book their cargo online with carriers well in advance and against an allocation algorithm. You’ll ask them to file the ISF through that same portal, so that Customs Clearance is initiated with the initial Customs review. You’ll ask your overseas suppliers to use the portal to communicate the Bill of Lading instructions to the carrier and to upload the Commercial Invoice, Packing List, and any other regulatory documents to that shipment file so that everything is in one place and available to all the other authorized parties.

You’ll ask your Customs Brokers to look to the portal for the documents and shipment data rather than to an email with scanned documents attached. The advanced brokers will ask for the data as a feed to their system so that the data can be classified and fed to US Customs without having to be manually re-typed.

You’ll ask your warehouse to plan their deliveries weeks in advance and to hold to those times and appointments. And, lastly, you’ll ask your truckers to come online and commit to the deliveries you’ve set up for them weeks in advance, so that they in turn can plan the moves and set up the appointments with the terminals as far in advance as possible.

What will Trade Tech do? We will continue to push forward with connecting the portal to as many parties in the supply chain as possible. We will push forward with the terminals so that Shippers of Choice can see the importers who are planning in advance and work with them in their day-to-day terminal operations plans.

We will develop the feeds and connections to Customs agencies so that the data used to order the goods and set up the shipments is identical to the data used to report the shipment to Customs.

And, finally, we will tie this information back into the importer’s warehouse and inventory systems so that they have effective replenishment data, thus completing their supply chain planning loops.

So, is Digitization sexy? It’s about efficient administration of a complex set of command and confirmation data sets and smooth, real-time exchange of information. Efficient information flow among the designated supply chain participants promotes adaptability, trust and manoeuvrability, and opens the door to a large step forward in supply chain reliability.

The international shipping industry should be thinking that digitization is very sexy indeed!

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