5 largest ocean carriers confirm new industry association
A.P. Moller Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express confirms plans for global association
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Ocean Network Express announced that five container shipping companies intend to create an association to pave the way for digitalization, standardization and interoperability in the container shipping industry.
The association aims to pave the way for digitization, standardization and interoperability
IT executives from A.P. Moller – Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express are discussing the creation of common information technology standards which will be openly available and free of charge for all stakeholders in the wider container shipping industry.
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Common, open, neutral and not for profit
The group believes that an association founded on a common set of information technology standards is in both the customers’ and stakeholders’ best interests. André Simha, CIO of MSC, said the group is “striving for less red tape and better transparency”.
He believes that “the timing is right, as emerging technologies create new customer friendly opportunities. Together we gain traction in delivering technological breakthroughs and services to our customers compared to working in our own closed silos”.
“The timing is right, as emerging technologies create new customer friendly opportunities”
The association has no intention to develop or operate a digital platform. Instead, they aim to ensure interoperability through standardization.
A.P. Moller – Maersk highlighted that by developing a joint set of technical standards, the group can ensure interoperability and enable all parties to concentrate on value adding differentiation as the shipping industry moves closer towards digitalization.
Hapag-Lloyd echoed this idea, adding that the challenges of the future can only be tackled with a common approach. Ocean Network Express noted that while the industry is seeing a wave of technical innovation, they remain cautious about adopting new technology by an individual company, as without a common standard there may be the additional challenge of re-integrating work among all stakeholders in the supply chain.
An industry in need of operational efficiency
For the past few years, the ocean shipping industry has been suffering from overcapacity. This has hurt margins despite the growing pace of consolidation.
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In a quest to improve revenues, carriers have turned to digital tools and services that could lower costs or allow them to differentiate in the market on service delivery. The key issue with new technology is how it can be integrated across the entire supply chain and still maintain efficiency as new stakeholders enter the mix.
Although the association is in the preparation and planning phase, it is understood that they will be considering solutions on data standards, blockchain and cybersecurity. The core goal is to streamline and standardize information technology for the entire industry to relieve some of the operation burden for carriers. This increased interoperability between ocean carriers could also have a positive impact on the efficiency of the entire supply chain.
The association will consider solutions on data standards, blockchain and cybersecurity
The industry has had past success with these types of associations. INTTRA, the neutral digital platform which now handles one out of every four container bookings, started as a joint industry effort with many of the same founding members.
What is still unclear is how regulators will respond to this level of co-ordination from the carriers. It is thought that the neutrality of the organization and the intention for open membership for all ocean carriers will be a point in its favor. Currently, the group is expecting the organization to be operational in 2019.
