Digital information sharing for supply chain visibility
Supply chain operations can be complex. Especially where multi-modal transport is necessary, and where dynamic decision making is required for the routing of goods in-transit.
These supply chain operations are pursued in an environment that can be characterised as a self-organising ecosystem. Connections between various (local) data sharing environments in networks of networks enable stakeholders in the supply chain to enhance their information base.
The latest internet of things (IoT) technologies can provide complementary insights as to the whereabouts and status of goods and assets. Combining all available data improves situational awareness. Data sharing enables green and humanitarian decision making and facilitates a truly smooth and seamless movement of goods.
Information and data are the foundation of insight. Substantial investments today are being made in digital technologies allowing for more digital data streams in supply chains. Logistic Service Providers (LSP), carriers, intermodal operators (air, sea, ground etc.), port authorities and terminal operators, regulatory bodies, and Beneficial Cargo Owners (BCO) are all working on this topic. The European Commission forecasts exponential growth of data streams.
Efficient routing and high utilisation of logistics assets and infrastructure lead to cost efficiency benefits. This includes the efficient use of vessels, planes, trucks, barges and trains, as well as loading/unloading equipment. Episodically visiting actors are served just-in-time with short turn-around times at transhipment hubs, reducing waiting times to a minimum. All of these require the sharing of information about goods and transport as the basis for visibility and transparency.
Visibility and transparency are critical for condition and time sensitive goods, like vaccines and flowers, and for bringing agility, resilience, and predictability into the supply chain. Such visibility and transparency require data; about the location of shipments, about the temperature and shock conditions goods are exposed to, also the situation merchandise faces along the supply chain, like transit delays or bad weather.
Supply chain visibility is needed to realise improved outcomes for society and the environment. As a result of Covid-19 restrictions across the globe the number of people facing starvation due to food insecurity at the beginning of 2020 has doubled from a projected 135 million to more than 270 million by the end of the year. According to a July 2020 Oxfam Report, this could result in 6,000-12,000 deaths per day.
Transparency is a must to improve emergency and humanitarian support, such as with the COVID-19 pandemic. Flagging a container ‘COVID prio’ in a truly transparent supply chain would make it visible for all relevant supply chain participants, thereby allowing priority treatment to speed up movement and delivery, and pre-emptively circumvent disruptions in the system.
With the right infrastructure in place, a carrier could put such a container on deck, the terminal could off-load it first, customs could fast-track clearance or clear the container while still at sea, and the port could even make sure all the traffic lights in the port are set to green for the haulier’s truck, etc.
Similarly, the distribution of a COVID-19 vaccine is at present a logistics challenge that has never been faced before. The optimisation of insufficient and constrained air cargo capacity (due to COVID-19) as well as the limited cold chain infrastructure, combined with the short expiration dates of vaccines means that increased visibility and transparency of vaccine logistics data literally equates to more lives saved.
More visibility and transparency aid `green decision making` on transport choices and routings. Optimised routes and flows produce less carbon emissions. Visibility also allows for post transport analyses and the verification of fair charges. Price-gouging or excesses in supply chains could more easily be exposed.
Greater visibility creates new opportunities and innovation for trade financiers, risk managers and insurance companies. Ports and hinterland carriers want to know what cargo is approaching them (and how fast it), and where it is heading. All share the need for data, and all want to know more.
A network of networks
Situational awareness can be derived from combining the small pieces of information that each involved LSP (Logistics Service Provider) is willing to share. There are many sources for those pieces of information, such as IoT devices, and systems of records for engaging LSP’s that provide data on agreements and achievements within a system of production.
There are various means to share, varying from central databases such as UNCTAD ASYCUDA’s ‘Digitizing Global Maritime Trade’ (DGMT) project, or ASYCUDA (Automated System for Customs Data) Single Windows or shared blockchain ledgers, and there are various methods to control the sharing – who can see what.
Cargo being transported can take different routes through logistics networks, within regions and globally, which requires the many actors to be digitally connected. An important task for all involved is collaborative alignment, as most transport involves multiple modalities.
Initiatives such as IATA’s ONE Record, building upon the Internet of Logistics, or the TradeLens data sharing environment, originating from the collaboration between Maersk and IBM, are two initiatives intending to create a network of (local) networks. Within the European initiative of the Digital Transport Logistic Forum (DTLF), concepts for a federated environment of networks of networks are now emerging and being validated within the FEDeRATED and FENIX projects.
Multiple entities within the consumer and supply chain and transport arena are exploring the concept of data aggregation for the common good. Essentially, bringing the least granular level of anonymised data from multiple open and closed network sources (and existing aggregator platforms) together in a non-commercial, open-source global supply system dashboard (GSSD), providing system wide visibility on the movement of essential goods to vulnerable communities served by the humanitarian sector. Further, we now see the introduction of such things as smart containers (IoT), as a source of data that cuts across the different modes of transport.
When parties decide to collaborate and agree to mutually share data about a shipment, the benefits are huge: increased visibility and transparency, integrated performance throughout the supply chain, advance preparation, reduced waiting timed, increased resilience, new services, predictive action capabilities, post transport analytics, and many others.
The value of these benefits for BCO’s, carriers, LSP’s and other stakeholders, including the customs authorities, offsets the effort required, and data governance frameworks can help to overcome intuitive reluctance to sharing data.
Challenges to overcome
The transport ecosystem is reliant on many autonomous actors. Sometimes they are simply competitors chasing the same customers, yet at other times the same players seek to collaborate to reap the benefits of co-opetition. This collaboration is usually sub-optimal.
To overcome this, local information sharing communities have emerged to obtain higher performance. Port Community Systems, Government Single Windows and Trader Community platforms are all examples of this sort of development.
An issue here is to allow for the co-existence of multiple platforms, both as local information sharing communities and as horizontal information sharing communities enabling the end-to-end supply chain. Interoperability through standardised messaging and interfacing between information sharing communities is key for success.
The Data for Common Purpose Initiative (DCPI) at the World Economic Forum focuses on creating a new flexible data governance model that allows data from personal, commercial, and government sources to be combined.
The DCPI is built on a belief that orienting data policy and data models around common purposes, such as specific use cases, will unlock opportunities both for public good and commercial spheres. The view is that data can and should be treated differently depending on its actual and anticipated use, and that Fourth Industrial Revolution technologies can enable differentiated ‘permission-ing’ of the same data, dependent upon context.
At the local level there are several specific requirements and challenges to address, including overcoming resistance to new business models and data sharing, and the misconception that withholding non-sensitive data will create a sustainable competitive advantage. Thresholds also need to be lowered for new actors to become digitally included, and standard rules must be agreed for identifying the cargo being transported.
Call to action
Quantifiable economic, environmental and societal benefits originate from sharing data. However, the foundations are yet to be fully established and there are challenges to overcome.
As a result of increasing digital data sharing activity, the maritime sector is now establishing a new discipline of maritime informatics that unites practitioners and academics to jointly contribute to making shipping more efficient, sustainable and resilient, empowered by digital data sharing.
There is a need for an attitudinal shift: Everyone needs to take responsibility for promoting data sharing, and all need to help establish simple and fair data sharing models. For every player there needs to be a benefit – a commercial or a social reward, or both. Only then can the true potential of data and information sharing be unleashed.
It is not a question of which platform should or should not be used. It is not a question of withholding data waiting for monetisation or a competitive edge. Our call for action is for a collaborative effort to share data, under mutually agreed and fair sharing conditions. This is urgent for the future of our society, vulnerable communities, industry and not least, our planet!
Editor’s note: This article is an abridged version of a longer paper by the authors, which originally appeared in UNCTAD’s Transport and Trade Facilitation Newsletter N°88 – Fourth Quarter 2020