TT Talk - Horizon scanning - what's next
Reaching a 300th edition is a significant milestone for any monthly publication, but much is still to be done, working together with the industry to ensure so far as is reasonably practicable that TT Club supports, highlights upcoming challenges, identifies emerging trends and considers the yet unknown risks that the industry will face.
The very first edition of TT Talk, as it does today, covered a number of topical issues. It is interesting – or sobering – that several items covered in that first edition remain prevalent today. Electronic bills of lading featured, albeit then in the very early stages of development, when innovators already recognised the potential benefits of paperless trade. Weather events and the impacts of the hurricane season through the Caribbean were highlighted, which today continue to result in widespread damage and disruption. Indeed, weather events appear to be worsening and occurring in less predictable locations – arguably a manifestation of climate change.
The first edition of TT Talk also profiled a new joint initiative with FIATA, launched in Sydney, the Young Freight Forwarder of the Year Award. Today known as the Young Logistics Professional of the Year, the awards program continues to challenge and promote excellence amongst the younger generation in our industry. Many of the former winners and participants of the award have gone on to have illustrious careers.
As we turn attention to the next 300 editions of TT Talk, what do we envisage will be areas of future interest for the industry?
Collaboration and partnerships with like-minded industry organisations has been at the centre of much of the work that TT has achieved over decades, many of them featured in relevant articles. These close relationships have empowered TT to deliver against a number of initiatives and are not to be underestimated. The future is likely to see an ever greater number of such relationships forged and existing relationships strengthened.
Looking to the future, innovation holds great opportunity, whether that be driving efficiencies to assist with sustainability, improving safety or delivering ever more robust security solutions. TT works closely with innovators across a wide spectrum of disciplines with a view to understand, promote and, where appropriate, helping to shape solutions in the developmental stage.
Operational performance levels are in many cases high across the industry – innovation will be an enabler, allowing operators to achieve ever greater levels of performance. However, safety and security should remain primary objectives.
While there are numerous definitions of digitalisation, for TT Club and its Members it is essentially the use of digital (computer) technologies to drive greater insight, transparency and operational performance. From a safety perspective, digitalisation could serve to identify bad actors placing mis-declared goods into the global supply chain. Digitalisation might also provide opportunity to increase security through the supply chain, clearer more frequent communications.
Digitalisation… is essentially the use of digital technologies to drive greater insight, transparency and operational performance
Where is the shipping industry in relation to digitalisation? Diverse industries approach change, be it cultural or economical, in different ways and at different pace. There seems some consensus that the overall freight supply chain industry (i.e. ocean shipping, ports, terminals and landside logistics and carriage of goods) has traditionally been slower than other comparable industries to embrace change.
Comparisons with the aviation industry are often made and whilst maybe not always completely fair there may be some relevance to such comparisons.
As consumers become increasingly used to having goods and services on-demand, the expectations in B2B for similar swiftness and ease of access increases. Equally, the demand for data, to achieve greater efficiency and cost savings, grows. As an example, McKinsey estimates that the global adoption of electronic bills of lading could save USD 6.5 billion in direct costs and enable USD 40 billion in global trade.
As suggested in TT Club’s and McKinsey’s 2018 study ‘Brave new world? Container Transport in 2043’ there is also a risk of ‘Uber-isation’ from a disruptive start-up with an aim to change the shipping industry (as Uber did to the traditional taxi industry).
Shipping is steeped in historic processes - how can digitalisation be achieved? The first step is standardisation, overcoming a lack of conformity on terminology and data capture. Standardisation is a pre-requisite for data sharing. This is equally true for ship to port, port to port and further into the logistics chain. In comparison, IATA codes trace their roots to the 1930s.
Standardisation is a pre-requisite for data sharing
There are several initiatives to achieve meaningful standardisation within shipping but one of the leading organisations is DCSA, comprised of the main container shipping lines. On the terminal operating side, TIC4.0 seeks to fulfil a similar role. One area of focus is that of port call optimisation, also known as ‘Just in Time’ (JIT) in order to reduce time for ships waiting for a berth, with consequent fuel savings, and thereby helping avoid congestion and delays on the landside.
In other words, there are great gains to be achieved in terms of efficiency and operational planning for all actors involved, plus the obvious ‘green gains’ in a more timely and reliable schedule. The Port of Rotterdam found a 9% fuel saving in a JIT desktop trial. Coupled with efficient shore-to-ship power supply, savings would be even greater.
In terms of standardisation DCSA has been at the forefront of issuing standards. In a UN-level initiative, the IMO has amended the 1965 Convention on Facilitation of International Maritime Traffic (FAL) to include the ‘Maritime Single Window’. This will make the exchange of port data mandatory across the world and through the use of IMO’s online GISIS (Global Integrated Shipping Information System) platform and provide a so-far unseen impetus to port call optimisation and JIT (along with further digitalisation of the maritime industry in general).
In the context of future risk, it is likely that the industry will continue to contend with many of the risks present today. Innovations will assist in mitigating existing risks, but new risks are inevitably going to arise, perhaps linked to digitalisation and the journey to net zero emissions. As the saying goes, ‘change is the only constant in life’. TT seeks to understand such changes, stand with the industry and support successful implementations.
If you would like further information, or have any comments, please email us, or take this opportunity to forward to any others who you may feel would be interested.