The Importance of Standards
The relationship between data standardization and technological innovation has become one of the most hotly contested topics in the industry of ports, terminals and logistics.
While some corners of the maritime sector are calling for a clear set of standards, to bring together the various parties in the wider supply chain, others have asserted the need for advanced solutions in the quest for connected shipping.
It is apparent that both developments – new standards and new solutions – will be necessary, but which shift in the industry will drive the other, what challenges are created by a lack of standards, and how can the implementation of standards solve these problems?
At the Smart Ports and Supply Chain Technologies Conference 2018, which hosted keynote discussions on the subject of standardization, a pivotal debate emerged.
Will the introduction of new technologies and systems in ports and terminals, such as the Internet of Things (IoT), force standards to catch up, or will standards need to be implemented first before any substantial progress can be achieved?
In the recent Business Bellwether Report, produced by terminal solutions provider Navis, the adoption of new technologies was cited by participants as one of the top three priorities for improving operational performance.
Respondents to Navis’ survey clearly signalled that improved collaboration and operational planning across the supply chain, to be facilitated by an increased capacity for data sharing, would also be necessary for ports’ and terminals’ future development.
Despite calls for the maritime sector to evolve, some of the key voices within the industry have encouraged a more pragmatic approach.
Andy Barrons, Chief Strategy Officer at Navis, has underlined how “we are also seeing that data standardization is needed,” requiring a change in “industry culture” and further cooperation between the various different nodes in the supply chain.
Patrick Verhoeven discusses how to create interconnectivity between smart ports in a recent Port Technology technical paper
The Problem of Standards
For companies working within the global supply chain, one of the greatest challenges is gaining access to information.
Inna Kuznetsova, President and COO of the recently acquired logistics leader INTTRA, has pointed to "different levels of digitalization” and “different standards” as some of the key factors preventing the shipping industry from exchanging data efficiently.
While an “intelligent supply chain” is “predictive, flexible and reactive to changes”, according to Kuznetsova, “a lack of standards gets in the way of cooperation”.
The ‘lack of standards’ is a common complaint, yet this terminology might not tell the whole story.
There are standards, such as the UN Edifact regulations, which affect both trade in Europe and around the world, but “while they may be in existence”, as Yilport CIO Mark Wootton explains, “not everyone follows them religiously”.
In addition to this, Wootton suggests that “current standards may not be dynamic or responsive enough to cater to what everybody wants, or how quickly they want things”, the real-time aspect of data sharing still limited in scope.
The concern, as far as Wootton and others in the industry are concerned, is that digital solutions are being developed “without a really strong standard base to build on”, the scaling and implementation of emerging platforms still distant for many ports and terminals.
Mark Wootton discusses Yilport's global logistics centre in a recent Port Technology technical paper
What is Preventing Standardization?
With so many leading figures and authorities within the industry calling for standards, as demonstrated by the content of discussion at this year’s Smart Ports and Supply Chain Technologies Conference, what is stopping the shipping world?
Guenter Schmidmeir, SVP Global Terminal Operators, opened the Standardization & Collaboration session at the #SPSC18 with a speech about the importance of openness and standardized solutions in our industry to enable terminals to reap the benefits of automation quicker. #openness pic.twitter.com/21wpWRLjVf— Kalmar (@Kalmarglobal) October 3, 2018
While there has been some effort to define standards, highlighted by an international agreement on data exchange made at the Port of Rotterdam, limiting new solutions to those which currently exist is "essentially holding the industry hostage", as argued by Robert Inchausti.
The Chief Technology Officer at XVELA believes that "many of the current standards were developed at a time when data exchange between partners was limited to a minimum of data", and that "we need a more collaborative and flexible approach to defining, adopting, sharing, and improving new standards.”
A significant part of the problem, especially for ports and terminals which are less technologically advanced, is that each standard needs to be developed in a unique environment; what works for some businesses will not work so well for others.
Kuznetsova has asserted that “the most important thing to look for is the neutrality of standards”, which need to be developed “by the industry for the industry”.
Companies of all sizes must collaborate together to decide what is best for the shipping community, instead of major carriers, terminal operators and industry leaders dictating terms that a majority of ports and companies cannot meet.
Standards as a Solution
While standards may have not been implemented quickly and widely enough, to keep up with the technological evolution of ports, terminals and logistics, there is still cause for optimism.
Major international bodies are beginning to collaborate on the improvement of data sharing, with the World Trade Organisation (WTO), UN Conference on Trade and Development (UNCTAD) and International Trade Centre (ITC) working together to provide businesses with better access to information.
While developments like this agreement are an important step forward for shipping and global trade, the systems used to exchange data between separate nodes in the supply chain also need to be standardized.
Derek Kober, Navis, emphasises the importance of data sharing as a method of collaboration in a recent Port Technology technical paper
As Inchausti emphasizes, there is “a great need for new innovative solutions to solve the many inefficiencies and lost opportunities in our industry, and this will only be achieved by being open to a more flexible approach to the creation new standards and the adoption of new technologies - both by the developers and the consumers of these new solutions.”
To return to the debate, of whether solution or standard will come first, it is still too early and difficult to predict as we prepare to enter 2019.
Port Technology is excited to see how this situation develops during the next twelve months, and you can follow the story through our print and digital platforms.