Despite huge strides being made with digital transformation in logistics, there are still some areas where a long road lies ahead. A key example is original bills of lading. These original bills, which make up a 1/3rd of all bills produced, are 95% paper based. However, determined to accelerate change,, most of the world’s largest shipping lines have joined the Digital Container Shipping Association (DCSA), an organisation that fosters digitalisation in the sector and common standards for various digital technologies.
Last year, we spoke to DCSA CEO Thomas Bagge to get the inside track on the organisation, as well as the roadmap for electronic bills of lading (eBLs) becoming the new normal in maritime transport.
Now, roughly a year on, we took the opportunity to catch up with Bagge to see how the digital transformation journey is developing, and learn not only about eBLs, but also the importance of common standards in Track and Trace (T&T), Internet of Things (IoT) and Just In Time (JIT) Port Calling.
Electronic bills of lading
During last year’s interview, Bagge declared that DCSA’s target was for 5% of bills of lading to be in electronic format by the end of 2023.
At the time the interview had taken place, the last annual average, from 2022, was 2.1%. A year earlier, the equivalent figure had been 1.2%. In 2023, the percentage rose significantly to 3.7%, but admittedly fell short of the 5% target.
Asked to reflect on the progress made here, Bagge told trans.iNFO:
“We ended the year at 3.7% on average. So obviously it wasn’t as much as we’d hoped for, but the target was based on a mathematical calculation, and we know these things are difficult. Each member must make choices about which window they want to use. They must configure their infrastructure and so on to be ready for the electronic Bill of Lading. Importantly, they also need to be ready for meaningful conversations with shippers about using electronic Bills of Lading.”
Bagge added:
“We know that how much of a priority the eBL is varies between carriers and shippers. Yes, eBLs are important for all carriers, but each carrier is at a different stage. Some are very advanced while others are in the process of selecting vendors. We can say that the vast majority are making a concerted effort.”
Track and Trace
Another common standard DCSA is pushing concerns Track and Trace, which helps with freight visibility.
DCSA says the adoption of a common T&T standard alongside standards for vessel schedules will simplify shipment visibility across multiple carriers, enabling everyone to better plan and optimise shipment handling activities.
Moreover, the organisation adds that a common standard will help carriers by unifying T&T information sharing with other parties, ensuring accurate and efficient communication regardless of the underlying technology or platform.
According to Bagge, progress here is going well, with the vast majority of major lines having already adopted the technology:
“The Track and Trace API standard is essentially just an integration that makes it easy for any stakeholder to implement the standards that we have. 8/10 of our carriers have adopted Track and Trace, and that should become 9/10 in the summer.”
However, in addition to the widespread adoption of T&T, there are clear benefits to be extracted from the use of common standards.
On example Bagge stressed in relation to this is the fact that some customers may receive different ETAs for the same vessel due to the different systems and standards currently in use:
“You do have customers today that receive different ETAs concerning the same vessel. For instance, even if there is a vessel sharing agreement in place, customers can still book with each carrier respectively. So that cargo may be loaded on the same vessel but receive different ETAs because there are no common standards with regards to scheduling.”
Highlighting a specific example, DCSA’s CEO then told trans.iNFO:
“I recall a case where a specific freight forwarder had made 3 different bookings for the same shipment. The cargo was loaded onto the same vessel, and they had the same portal from Asia to Europe, and the freight forwarder got three different ETAs. That’s a bizarre scenario.”
In Bagge’s opinion, the example above shows how “It’s not the technology that’s the problem, but rather the process”.
Drilling down into more detail, Bagge added:
“A shipping alliance should inform its partner members at the time it changes its ETAs. But the way the process frequently works in shipping is that an email is sent and then forwarded to somebody else, which then goes to a service centre before they can pick it up and update the schedule. What if they lose the email? It’s not often an automatic process, partly because members don’t use the same standards.”
Bagge then went on to spell out how the adoption of common standard will help provide shippers with better transparency:
“The idea of having a track and trace API is that it links to our underlying scheduling APIs. It pulls the data from there, and then you receive the same information irrespective of which alliance member is asked. What we’re trying to do here is harmonise it so that at the end of the day, shippers get better transparency about when they can expect their target to arrive. It does not matter who they ask, they must be getting the same information.”
The aforementioned API certainly seems to be increasingly busy according to figures Bagge told trans.iNFO.
DCSA’s CEO says the API had 137 million calls in March, which is well up from September, when the equivalent number never surpassed 100 million. Bagge thus stresses that the 40% or so increase seen here points towards the industry converging on T&T standards.
IoT
In addition to T&T, another technology that’s boosting freight visibility is IoT.
One of the leaders here in terms of IoT adoption has been Hapag-Lloyd, who recently announced that more than two thirds of the dry container fleets have already been equipped with Nexxiot tracking devices. The company said the installations are continuing globally, while it is hoped the process can be completed during the summer.
This is a development that has pleased Bagge, who notes that Hapag-Lloyd have worked hard to equip both reefer and dry containers with IoT devices. “A couple of others have followed suit; we know most of the carriers have some level of play in the IoT space, but I believe Hapag-Lloyd has come the furthest,” Bagge told trans.iNFO.
What visibility benefits will IoT offer? In Bagge’s opinion, IoT will really come onto its own once containers are on land:
“What I think is really positive about IoT is that it brings visibility – especially when it’s on land. You always know with very high or very low error margins. If a container is linked to a ship, then the supply chain visibility problem we talk about is the ETA of the vessel. But once it’s on land, the way many container lines operate is that you get information on when a container has been discharged, is ready for pickup, or has been gated out. However, what if a container has been gated out in Bremerhaven? How close is it to reaching its inland destination in Hannover? And, by combining different sources of data, how long is it going to be stuck in traffic? IoT comes into play here as it allows you to more accurately plan at micro level.”
Digitalisation at sea ports and Just In Time Port Calling
Aside from eBLs and freight visibility, the digitalisation of ports is also paying dividends in the industry.
The use of Just In Time Port Calling, for example, has the means to improve efficiency and cut emissions. So just how big an impact can the systems have?
According to Bagge, a very significant one indeed:
“There was a study published in 2022 by the IMO [International Maritime Organisation] where they looked into the impact of it. If you were to do it 6, 12 or 24 hours before, and if you were to do it just-in-time, 24 hours before arrival, it would save the industry just under 6% in fuel. That’s an astonishing number in my opinion. Naturally, for any of the container carriers, fuel burn is a very substantial, if not the most substantial, operational cost. So Just In Time is essential,” Bagge told trans.iNFO.
As for the implementation of Just In Time Port Calling across the globe, Bagge emphasised the importance of collaboration:
“We believe that it really needs a collaborative space, not only between the container shipping lines – which may be able to share some of this information between them – but also the terminal operators and the ports. It would be advisable to have general regulators be part of this as well.”
Asked about which ports in particular appear to have taken the lead in their digital transformation efforts, Bagge was keen to stress how difficult it is to have a detailed insight into all the world’s ports. Hence those that he did list would be by no means the only ports making strides with their digitalisation.
DCSA’s CEO then went on to explain his admiration for the progress made at PSA Singapore, and also highlighted other ports in Europe and the US where digitalisation is being harnessed to effect.
“In Asia, we had a tour of the PSA’s new Tuas facility, which is a 100% digitised and automated terminal, which will be the largest container terminal in the world once it’s completed. It’s just amazing to see – everything is fully digitalised including all the cranes and the moving of the containers. It’s all done using sensors, IoT and 6G technology.
Finally, Bagge underlined his belief that digitalisation will not lead to job losses:
“I am sure there are some concerns about digitalisation leading to lost jobs. We don’t see it that way. Absolutely not. We see it more as a retooling exercise and something that will actually create more jobs overall, and make the industry both more efficient and effective.”