Implications of integration in global digital supply chains

As smart port and city initiatives progress, local port communities need to be aware of the technology and digital infrastructure being used to connect their port ecosystem with global trade routes, and where control of the system lies.

China’s digital leadership in integrated smart port and logistics has slipped under the radar, incorporating a level of seamless integration into their data sharing and exchange platforms within global logistics chains and that is far wider than most in the maritime industry seem to appreciate.

For example, not many appear to know of LOGINK, China’s digital trade data aggregation platform, nor that it has been in place for over a decade.

Essentially invisible to most, the platform is embedded below several State departments, and several ports within the EU and ‘western’ aligned shipping consortiums are already docked into the platform without realising that they are. They may know of LOGINK, but do not realise what this platform does or how it works or is managed.

As global trade continues to divide along the issue of closed versus open systems, LOGINK is an important data exchange tool to understand as it has been subsumed into China’s BRI (Belt and Road Initiative) and DSR (Digital Silk Road), which are closed digital ecosystems. Data leakage can occur from open digital smart supply chains into these platforms, particularly where supply chains overlap with BRI participating countries.

Does this deeply embedded data sharing network point to the emergence of a singular, closed digital trade system, potentially opening the door for China’s closed system (LOGINK) to replace the West’s open data exchange platforms?  

Typically, the West talks in terms of data silos within an open system, moving towards data exchange across these silos. This includes progressing to a level of data standardisation that would allow the development of robust APIs to securely exchange this data.

Unfortunately, policy debate within this emerging ecosystem is relatively narrowly defined. For example, the EU has narrowed its digital focus in the maritime sector to the use of technology to reduce carbon footprints i.e., an environmental ‘green view’ – maximise real time transparency on vessel location, cargo etc, to improve efficiency and create a net reduction in CO2 emissions.

Several initiatives and organisations have emerged in support of these goals, including The International Port Community Systems Association (IPCSA), The International PortCDM Council and the DCSA with its Just in Time Port Call programme, to name but a few. Their focus has been on the standardisation of data to enable improved data sharing. Rotterdam, for example, is also a leader in their development of an open global port ecosystem, with ‘live’ data interchange capabilities that facilitate efficient docking, offloading, inter-modal connections, and so on.

In contrast, there is little transparency around what LOGINK does, or what China does with the data collected within the network.

The planned China Standard 2035 programme sets out a roadmap for leadership across global IT / ICT standards rather than within a specific area or functionality. The head of the China National Standardization Management Committee, Dai Hong, summed it up in 2018 when noting that global technical standards were still to be formed, giving China an opportunity to surpass the world by influencing their formation.

Under the BRI banner, China has been able to roll out this closed digital system through data standardisation by offering cheap ICT infrastructure to participating countries. Essentially, this helps to lock partner nations into a platform by creating cost implications if they wish to switch to other platforms using international standards.

LOGINK integration

The growing importance of the LOGINK platform is evidenced by its integration into Alibaba’s Cainiao global logistics network. Cainiao’s interface software plays a key role in connecting European and Chinese digital trading systems, used by 200 Cainiao integrated logistics and service providers operating through 220 countries and regions. The Cainiao logistics hub is based in the Belgian city of Liege and integrates with the e-hubs of Hangzhou, Hong Kong, Kuala Lumpur, Dubai, and Moscow.

Within China, LOGINK is known as the National Transport and Logistics Public Information Platform. It is a platform that allows data aggregation and sharing between China and its trade partners, administered under the Ministry of Transport and operationally managed by the China Transport Telecommunications and Information Center (CTTIC). In turn, CTTIC is guided by the CCP and its DSR strategy.

CITTIC is a central bureau responsible for bringing the BRI’s strategy of seamless intermodal transport and trade together into one system. This centralised bureau for data integration of ALL IT and logistics within China was the first step in bringing together the BRI and DSR.

This level of data integration, starting well before BRI and DSR, has gained credibility as a singular platform that allows multiple organisations to communicate and interact. This includes retailers, bankers, shippers, and end customers. Essentially, LOGINK is portrayed as a one stop enquiry service for public logistics information and data resources.

As a software application, it has aligned itself with international bodies like the International Port Community Systems Association, with Director General of LOGINK Dr Sun saying that their work with IPSCA aimed to simplify logistics visibility by contributing to standard setting, information interchangeability and data services.

LOGINK has also already been incorporated into global trading systems, with several international information systems and infrastructures integrated, including technology used by 14 of the world’s 20 largest ports. It has been seen as a convenient central data system that offers real time visibility of cargo, data on storage, logistics, packing processing and distribution data, mitigating some of the weaknesses of the silo-based nature of western shipping data.

As global trade and connectivity becomes increasingly digitised and technology driven, Beijing has realised that control of these new networks, standards and platforms will offer significant global power. As development progresses, the sector needs to build robust security measures into its digital platforms and needs to be aware of the possibility of inadvertently giving up strategically important data through links with networks like LOGINK.

Just as there are complaints against ‘Big Tech’ in the West with regards to data manipulation, so too has LOGINK been scrutinised for its ability to shape information in a way that is in China’s national interest.

A crude example would be the LOGINK search facility for support services giving Chinese vendors prominence in its results. The potential to disrupt supply chains would be significant if LOGINK were to also direct traffic towards China controlled ports and shipping routes – for example, data could be shaped to re-route vessels, give docking priority to ‘favoured’ shipping lines, suggesting shipping routes that favour China ports and rail networks.

In the extreme, data manipulation could be used to cut off a country’s strategic supplies or allow transport of sensitive and listed products across national borders. This level of control, whilst not yet achievable in the here and now, is potentially within reach.

In our increasingly connected global markets, software that enables multiple organisations within and outside logistics and trade to communicate and interact in real time under one platform can be very valuable. However, there is real concern that China may try to move the world to a single platform that is under the direct control of the CCP.

What is needed is a port community platform that is independent and controlled by the participants rather than by a State, and one that has robust security and API protocols that protect the integrity of the data that is shared in an open platform.

 

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Smart Maritime Network

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About the Authors

Andre Wheeler
Andre Wheeler

Andre Wheeler is Chief Executive Officer of ASIA PACIFIC CONNEX, a supplier of business and strategic planning services for Oil and Gas, Land Use and Marine Supply Base Infrastructure and logistics, particularly in the APAC region. You can find him on LinkedIn by clicking here.

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