Ocean shipping digitalisation ‘failing to optimise processes’

12/13/2017

The digitalisation of ocean shipping documents is currently being driven by paper handling cost savings but failing to answer deeper business process optimisation issues, according to Drewry Supply Chain Advisors.

In a briefing, the analyst said that electronic invoicing did not necessarily deliver better accuracy unless it included a “granular level of data capture” such as purchase order and packing list line items and matched the intrinsic value of paper documentation in terms of proof, evidentiary record, and ease of exchange.

“The immediate challenge is how to remove documents that are not legally required but contain important information, such as arrival notices, quotes or spot contracts,” said Drewry.

“The global trade digitisation initiatives of IBM/Maersk and Ericsson seek to provide scalable data pipelines using blockchain technology to support the critical paradigm of proof. They enable a network of users to collaborate under the same secured protocols. However, generating and securely sharing data comes at a cost and requires clear data governance which defines a sustainable business model.”

The majority of respondents to a recent Drewry survey on shipment visibility said the cost of cargo monitoring should be incorporated into the freight cost and the market would accept paying a premium for the service.

“A number of digital players are already engaged in developing trusted user networks, such as Bolero and essDocs for e-bill of lading or Ariba and Tradeshift for e-invoicing,” said Drewry. “While larger scale B2B providers like WiseTech, Descartes and GT Nexus are leveraging their large user base to operate as collaborative transport management systems within their own trusted digital environments.”

Tech giants including Alibaba and Amazon are also now designing paperless frameworks, covering everything from the purchase of goods to shipment execution and payment.

“The problem area remains customs and cross-border agencies, many of whom still require traditional paper-based documentation,” said Drewry. “But this provides port community systems and their customs single window initiatives a strategic role to facilitate the wider adoption of international digital B2B best practice and standards.”

According to Drewry, one solution would be for different geographic regions to move at different speeds, depending on the degree of digital adoption and integration between government and business systems.

“Economy and trade competition is now on the digital battlefield,” concluded the analyst.