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October 1 2018

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70 The Journal of Commerce | October 1 2018 www.joc.com Trading Places Peter Tirschwell WHEN MY JOC colleagues and I were building the Port Productivity da- tabase a few years ago, we slammed head on into an issue that is core to the reason why container trade remains highly inefficient despite the best efforts of technology: a lack of standardization on terms and data formats. If we are going to say that the clock starts on a calculation of total berth moves per hour, we need a common standard for when a ship is deemed to have arrived at the berth. Is it when the first line is secured, "lines down," or is it when the ship is fully tied up, "all fast?" There was no right or wrong answer because no one had ever sat down and agreed on what the answer should be. But if you are going to set up a benchmarking exercise, as we did, to allow container lines to know if their total berth moves per hour are better or worse than similar-sized ships calling at the same terminal, and to allow terminals to compare their performance with one another, a common definition would be needed. For berth productivity, we settled on "all fast." That is just one of numerous similar examples. What should be the common definition of estimated time of arrival? That depends on who you are. "There is no clear definition of ETA," said Michael Bergmann, a vet- eran aviation expert who has been among those leading a major effort to create true standardization of maritime terms and data formats. "When you are a pilot, ETA means arrival at the pickup point; they are not concerned when the ship is at the berth. When you are a terminal, you are concerned with when the ship is arriving at the berth, so to them that is the ETA. They don't care when the ship picks up the pilot. The tug operator is concerned about when the carrier will be at the place where they need to connect to the ship. "There are different actors that each have different definitions based on their own point of view," Bergmann said. There is less confusion over the potential of communication based on standardized terms and data to deliver a host of performance, safety, and cost benefits. Whether between actors in a port or carriers and terminals or even competing ports, better communication can reduce ship transit, waiting times, and fuel costs; increase terminal asset utilization; and improve transport chain reliability for beneficial cargo owners (BCOs). If the captain of an 18,000-TEU ship leaving Rotterdam can be told the ship needs to travel at 14 knots instead of 18 knots to reach its destination terminal in Hamburg on schedule, he will save 22 metric tons (24.25 short tons) of fuel. Similar benefits prompted the international organization Eurocon- trol, responsible for air navigation safety in Europe, to create the right conditions for European airports to talk to each other in a live environ- ment to address growing perfor- mance and capacity challenges. Today 28 airports including all major gateways participate in a collaborative data-sharing program addressing similar inefficiencies to those in maritime because of poor in- terface between container trade actors and lack of access to systems showing what is happening in live networks with multiple dependencies. The lack of common data defini- tions and messaging formats is one reason why increasingly sophisticat- ed port community systems — Port Optimizer at Los Angeles, NxtPort at Antwerp, Nextlogic at Rotterdam, the Hamburg Vessel Coordination Center, the Shanghai E-Port, among many others — are largely siloed systems with limited ability to interact with those of other ports to facilitate end-to-end supply chains. The data is optimized around ports, but ports are, by definition, only the beginning or end of an ocean transit, not both. Ports may be open to collaborating, as Rotterdam and Ham- burg have started to do in monitoring ship transits, but not always. "We see a lot of local solutions, different port community systems; they are different and propriety," said Mikael Lind, a professor at Re- search Institutes of Sweden who is also leading the effort to create mari- time data standardization. "If a ship is going to Shanghai to Rotterdam to Hamburg, they need to communi- cate to different systems." Part of the problem is compet- itive. Common data standards and even the entire concept of data sharing sound good in principle, but the sharing of certain kinds of data could reveal poor performance and jeopardize commercial relationships. Carriers, for example, have asked for assurances that data provided to certain port community systems doesn't get resold to their customers as that would provide the latter with a window into, say, on-time performance that might be detrimental to the carrier in a commercial negotiation. "The culture of shipping is rather closed, especially when it comes to data," Bergmann said. This serves to underscore the point that while the container itself may be one of the world's greatest standards, creating untold benefits to trade and prosper- ity, the process of standardization around the movement of the con- tainer remains woefully incomplete. Bergmann and Lind with others have made progress. Standard terms and data formats are working their way to international committees thanks to more than $70 million in support from the EU. JOC email: peter.tirschwell@ihsmarkit.com twitter: @petertirschwell. Missed connections "The culture of shipping is rather closed, especially when it comes to data."

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