Multimodal transport is imperative to container shipping. So is digitising the process.
Multimodal transport sits at the heart of international trade, moving cargo along supply chains by sea, rail, river, road and air. It benefits shippers through a single transport contract, but it has challenges too. It depends on the processes along the journey that dictate how easily and effectively information is exchanged. Digitalisation in container shipping can transform multimodal transport, helping it be more efficient, sustainable and deliver a better experience to supply chain partners.
Multimodal transport, or multimodal shipping, refers to the transportation of cargo through more than one mode of transport. It is a natural, popular choice for shippers, compared to intermodal transport, because multimodal involves one contract for the entire journey, whereas intermodal has separate contracts for each stage.
A single contract is easier to oversee and manage. It saves time because journeys can be planned to reduce the waiting time in between stages, and it helps budgets by reducing custom and monitoring costs.
Despite the benefits, multimodal transport has its challenges. Container shipping processes, which impact multimodal transportation, rely heavily on paper-based information exchange, digital systems that cannot automatically transfer data to different platforms, and an old electronic format for communication. Let’s consider the impact of each of these:
Shipping processes haven’t changed much over time, despite advances in technology that have seen other industries digitise. Stakeholders in the supply chain still exchange paper documents; the bill of lading (B/L), for example, remains stubbornly paper-based despite the many benefits of an electronic B/L (eBL).
Paper isn’t environmentally sustainable. It’s expensive to keep stocks of, print onto and move around. Worst of all for efficiency and streamlined trade, paper can stall the movement of goods. If an original B/L or title document isn’t where it needs to be, or hasn’t been processed in time, cargo can get stuck in ports. This is very bad news for multimodal shipping as disruption at any point along the transport chain can have a significant knock-on effect.
More than ever, the COVID-19 pandemic highlighted the limitations of paper as processes across many industries and sectors made the switch to digital. Container shipping and multimodal transport could benefit similarly from the cost, efficiency and sustainability benefits of paperless trade.
A lack of interoperability
Technology is not completely absent in container shipping, of course. Stakeholders use a range of systems, including digital platforms to exchange eBLs. The problem is, platforms operate in a standalone way and can’t exchange information automatically with platforms of other types.
Interoperability was not the primary consideration when technology was integrated but without it, transacting parties must subscribe to the same platforms to exchange data. Signing up to multiple platforms to manage many partner relationships takes time and resources; it is not an effective way to put the industry on a path to digitalisation.
EDI not API
Where technology is in place, the industry still relies heavily on electronic data interchange (EDI). This electronic format is used for information flow, to automate data transfers and to send invoices and other shipping documents.
EDI is an old technology now; it takes a long time to implement connections and it isn’t designed for real-time internet interactions. It is normally configured to send messages on a preset schedule, making it difficult to know what’s happening with a shipment at a moment in time. Maintaining EDI-based systems and innovating to make progress is difficult too because developers with EDI skills are now in short supply.
There are benefits in replacing EDI with application programming interface (API) to facilitate real-time data exchange. Each party only has to implement the API to connect, so getting started is much quicker – a matter of a few days, instead of weeks.
Digitalisation was expected to happen across shipping’s processes at the same time, but that hasn’t been the case. To date, digitalisation has been staggered, with analogue and digital overlapping.
How data is generated, held, used and exchanged impacts the productivity and sustainability of container shipping and multimodal transport overall, as well as the experiences of everyone involved.
Digitalisation will enable seamless information exchange between parties. It will speed up information flow for more efficient processes, and reduce time, cost and environmental impact compared to using paper.
It will also make border crossing procedures smoother and port congestion will be less of an issue thanks to improved scheduling. Track and trace systems will become simpler, and the risks associated with transition, when goods are passed from one form of transport to another, will be minimised.
How DCSA is paving the way for digital change in multimodal transport
For digitalisation to be effective, information exchange must be based on agreed digital standards.
DCSA’s role is to lead the container shipping industry towards collaboration by creating open-source digital standards based on shared industry requirements. These standards enable interoperability, for seamless data exchange regardless of technology platform, so supply chain partners can establish rapid communication pathways and act on information faster.
The standards are API-based for real-time communication, so shippers don’t have to wait for carriers to notify them of events. Instead, they can dynamically query the carrier’s system or subscribe to automatic status updates. Knowledge is power, and along the multimodal transport chain it can be used to resolve delays and other exceptions.
More efficient and sustainable multimodal transport processes that generate better experiences are possible if supply chain partners work together. Be a part of change:
Check out the digital shipping standards which establish common definitions and frameworks for digitalising data and common protocols for communicating it. There are standards for the eBL, as part of digital trade documentation processes, and track and trace, for cross-carrier shipment tracking.
We also have a range of e-books. Whether you want to learn about the future of container shipping, the impact of disruption, or how creating visibility improves data reliability, we delve into these topics to give you the information you need to drive change.
Become an active voice in the container shipping community – talk to your partners about adopting digital standards.
Contact us with any questions about how digital standards can improve multimodal transport processes.
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