Ocean shipping is the most popular method of delivering
products overseas today. However, the efficiency of ocean logistics is way
below its potential. In this article, we explain the reasons for that
inefficiency and how modern integration solutions can overcome them.
Due to the ongoing COVID19 pandemic, many of us avoid close
contact with people and prefer to stay at home as much as possible.
Fortunately, the Internet and mobile technologies are tightly embedded in our
lives, allowing us to buy goods without leaving our homes.
Online marketplaces and stores provide us with services to
track the status of ordered goods and change those on the fly. All these affect
our consumer behavior and make us take a high level of customer service for
granted. When something goes wrong, and the delivery on the promised date and
time is impossible, we become unsatisfied, provide one-star ratings and write
reviews in which we suggest ourselves and the rest of the Internet never buy
from this seller again.
In today's harsh business reality, unhappy customers are a
real threat to many companies' business success. To cope with this issue and
ensure the highest level of customer satisfaction and an outstanding level of
service, businesses must ensure efficient logistic operations.
Businesses constantly demand improvements in logistic
companies' performance to whom they outsource logistics tasks. Logistics
companies, in their turn, maximize their supply chains' performance and work
only with partners that can ensure an adequate exchange of information vital
for better supply chain planning.
Since shipping goods by sea is the most popular method of
delivering products overseas, ocean logistics has become a key global supply
chain element. Visibility on an ocean shipment and meeting partners'
requirements regarding information exchange has become crucial for all actors
of the ocean logistic sector. Unfortunately, due to the industry's nature, many
actors encounter significant challenges, which leads to poor performance and
causing inefficiencies in the industry.
Although the ocean logistics industry is usually considered
a well-organized system, it is a fragmented environment composed of various actors.
An ocean shipment journey depicted in diagram 1 demonstrates the complexity of
moving a shipment by sea from one point to another.
Analyzing the diagram, we can see all the steps and
interaction points where partners must communicate. However, due to a
difference in the level of technologies involved parties utilize, those
communications are often challenging.
This happens because exchanging information between actors
happens in a manual mode or with the help of legacy technologies that are
unreliable, labor-intensive, and inefficient. They are often based on ANSI X12,
EDIFACT, or in-house proprietary formats that typically are variations of the
two mentioned above.
Although EDIFACT is the most widely used messaging format in
ocean shipping today, dealing with it implies restrictions and limitations that
often lead to inadequate or missing data.
The situation is aggravated by the fact that historically
involved parties have been competing and lacked cooperation and willingness to
work towards the common good. As a result, there is no interoperability between
the in-house data standard that actors have in place. Plus, none of those are
suitable for a direct exchange of information or interaction with modern APIs
becoming so popular today.
Despite the apparent drawbacks, companies still heavily rely
on their systems due to significant infrastructure investments made over
several previous decades. The exchange of business documents such as ocean
bookings, booking confirmations, sailing schedules, shipment status updates, or
invoices between industry stakeholders is cumbersome and hard to implement,
which slows all processes and drags the industry's performance down.
Overcoming these issues will let industry stakeholders
improve their communications and interoperability and achieve greater
transparency and visibility across the entire ocean shipment journey,
ultimately leading to increased efficiency of the industry.
Nowadays, to improve the situation with common standards and
free the industry from its heavy reliance on EDI (electronic data interchange)
technologies, several organizations have taken the initiative in establishing
common rules for data exchange and communication. Today's most prominent is the
Digital Container Shipping Association (DCSA), a consortium of the largest
container shipping companies established in 2019. As clear from the name, the
association promotes digitization to consolidate the industry and improve data
exchange between the actors.
Up for today, besides the blueprint enabling a common
language for the container shipping, DCSA has published these standards: Track
and Trace (T&T) standards helping to track container journey, the standard
for operational vessel schedules (OVS) enabling automatic data exchange between
carriers and operational service providers, Load List and Bay Plan definitions
easing communication of container load volumes and stowage details between VSA
(vessel sharing agreement) partners, terminals and ports, Just-in-Time (JIT)
Port Call program helping improve schedule reliability, and the most recent
initiative aiming to facilitate acceptance and adoption of an electronic bill
of lading (eBL).
Besides the standardization initiatives, we can also see an
increasing number of digital platforms, community systems for supply chain
visibility, and apps aiming to help consolidate the industry and foster data
exchange between the actors. Excellent examples of such innovative offerings
are XLOG, NYSHEX, and TradeLens. While the first two represent digital
platforms that facilitate booking processes and provide shippers, brokers, and
carriers with real-time freight visibility and centralized information, the
TradeLens ecosystem enables true information sharing and collaboration across
the entire supply chain, allowing for tracking and managing end-to-end
shipments.
An efficient supply chain implies parties' involvement that
can synchronize their actions and exchange information about the shipping
progress with each other in near real-time. All those companies relying heavily
on paperwork and other error-prone and outdated technologies will most likely
have challenges getting market shares or even being out of the game soon. Those
companies who realized the need for a smarter way of doing business and started
digitalization and adopting the mentioned above initiatives and platforms will
grow their businesses further and prosper.
Undoubtedly, the initiatives regarding the unification of
the industry's standard and ongoing digitalization provide new opportunities
and lots of value for the industry and its actors. However, adoption still
requires a certain level of knowledge and know-how. To enjoy the benefits of
being DCSA compliant or integrated with digital communities and platforms, the
actors still need to make significant efforts.
Adopting new standards or integrations with new systems
almost always implies significant changes to the existing IT and data
integration solutions. Such changes always go hand in hand with huge
investments in hiring and managing a team of integration experts who possess
the required skills and do the job. Due to the unclear timeline and risks
associated with such projects, companies prefer partnering with data
integration professionals instead of doing integrations themselves.
Such partners provide integrations as a service, meaning a
well equipped and experienced team will take care of the required integration
and maintenance. Due to a sharp focus on a particular sector, integration
experts have the required expertise and best practices in-house, allowing them
to accomplish integration projects in a short while with no risks of failure.
The solutions they offer often have a form of an additional layer running on a
cloud platform designed to work with many formats and protocols common for the
ocean logistic sector. Designed to complement the customer’s existing systems,
such solutions imply no change in how the client's IT systems work.
Youredi is one of such providers who offer cloud-based
integration solutions focusing on global supply chains and logistics. The
company has helped stakeholders of the industry overcome some of their major
obstacles related to bookings, schedules, eVGM, and container tracking for many
years. Today, Youredi is the leading provider of managed integration solutions
for the industry.
Besides complex enterprise solutions enabling bridging of
EDI and API worlds, Youredi offers a set of predefined managed services
allowing actors of the industry to solve many issues related to ensuring data
of required quality, transforming data to the expected standards, data
aggregation from multiple internal and external sources, extending the
functionality of main IT system (TMS, TOS, etc.) by integrating functionalities
from external applications and many others.
Besides that, being an official partner of TradeLens and
facilitating the expansion of DCSA's standardization initiatives, Youredi also
offers true SaaS connectivity solutions enabling rapid integrations with the
platform (whether you are a data contributor or data consumer) and solutions
enabling you to enjoy the benefits of the unified industry standards developed
by DCSA without changing your system.
These services are offered under Youredi Rapids' name and
imply predictable, fixed monthly pricing with no long-term commitments.
Choosing Youredi's solutions, industry stakeholders can
address specific use cases and solve common industry pain points without
committing to expensive software suites or in-house development projects.