Digital transactions for the ocean shipping industry have arrived. Are you part of it yet?
It may well be true that INTTRA is today the largest neutral electronic transaction platform, software and information provider for the ocean shipping industry. At the same time, however, it is also a fact that fully one-half of all shippers still book container orders in a manual fashion. Technology, often a trailing development for the global waterfront, has fully arrived for the international container shipping industry. Convincing everyone that this is the way to go hasn’t been easy, and it is very much a work in progress. Nevertheless, those who do not get on board the ‘e-train’ risk being left behind forever, once it leaves the station.
According to INTTRA, leveraging innovative products and the vast scale of its network empowers customers to trade with multiple parties and leverage ocean industry information to improve their business. Connecting over 225,000 shipping professionals with more than 50 carriers and 120 plus software alliance partners, INTTRA aims to streamlines the ocean trade process. According to the firm’s President and COO, Inna Kuznetsova, more than 700,000 container orders are initiated on the INTTRA platform each week, representing more than one quarter of global ocean container trade. And, she says, those shippers who do not leverage one booking e-system or another are quickly ceding a competitive advantage to their industry rivals.
Before joining INTTRA in early 2015, Kuznetsova was the Chief Commercial Officer at CEVA Logistics, and prior to that she spent 19 years at IBM. As the first Vice President of Russian origin in IBM headquarters, Kuznetsova is a frequent speaker at industry events and has two best-selling career books in the Russian market. In October, she shared her insights with MLPro on the future of digital transactions in the intermodal equation.
Robust, Flexible IT Solutions
INTTRA’s solutions are designed as Software as a Service (SaaS) and provide the flexibility of either using INTTRA’s interface or being integrated with a customer’s existing internal infrastructure. That’s because greater network connectivity, insists INTTRA, is needed to drive the industry forward. But, that can also create problems. “In the physical world of logistics, the bigger your network, the more value you can create for your customers. Now, each of the connections with customers, partners and agents needs to be digitized,” explains Kuznetsova, adding quickly, “That not only creates inconsistencies, but can be costly to maintain hundreds of EDI connections or train the staff to fill forms on multiple sites. Therefore digitization elevates the importance of networks and platforms, allowing stakeholders to connect once and reach many trading partners. An average shipper connects to 25 carriers on INTTRA’s platform. That’s a real-world example of how booking and shipping instructions through INTTRA’s digital platform reduces costs compared to doing it one-on-one, or going to multiple web sites.”
There will be, according to INTTRA, interconnections across operational, informational and financial data in the future. In other words, the end of so-called ‘siloed business practices.’ From INTTRA’s perspective, it is this digitalized, unified approach that is the panacea that industry craves today, especially in an era of massive over-capacity, wildly fluctuating (but often too low) freight rates. Hence, in a time when overcapacity causes high fluctuation of prices, maintaining high controls on operational efficiencies becomes an important way to grow profitability without impacting the quality of service.
Kuznetsova explains it this way: “Improving operational excellence starts with standardization as well as visibility and the ability to compare units in the same chain with how they perform against each other. You have to standardize everything, and then you can compare various segments in the chain, so you can then identify actions that will improve your weakest links. It starts with digitization, which reduces silos by bringing operational and financial data together to allow you to optimize by different aspects and parameters.”
INTTRA, like everyone else, addresses the cyber threat daily. To that end, there were, says Kusnetsova, lessons to be learned from the most recent cyberattack on shipping. For example, those looking to find another layer of protection in these uncertain times might consider leveraging INTTRA as a booking channel may create an alternative in situations where the primary system goes down. Like many stakeholders, INTTRA also sees promise in so-called ‘blockchain’ technology as another way safeguard critical and proprietary data.
“The neutral digital network means that we are not owned by a single Carrier or Freight Forwarder, so that allows us to create value for all customers. Blockchain potentially has great value across a neutral network since it provides secure transactions with information only going to the parties that need to be involved. However, scaling from pilots to full implementation will require a use of a platform with strong identity management. It is needed to avoid the anonymity, typical for bitcoin implementation, as well as a disproportional impact on IT resources by requiring every supplier or vendor to become a part of hundreds of different blockchain networks,” said Kuznetsova. INTTRA, she said, is currently involved in a pilot right now to test this approach.
Big Data Defined - & Delivered
Predictive analytics is a term often bandied about, but seldom fully understood. In context of what it means to ocean container shipping, data analytics, for all stakeholders from every part of the supply chain, provides a way to build and maintain high standards of operational excellence. In the carrier business, as one example, it may facilitate a better pricing planning based on the uptake in bookings. Freight Forwarders can use analytics to develop more accurate plans by comparing past shipment reliability with the initial ETA of a container against the actual travel and arrival time. But transitioning from ‘big data’ accessibility to a more user-friendly business analytics tool is another thing altogether.
The INTTRA approach involves the packaging of data products to quickly deliver a return on investment for customers. But, logistics, and especially for the shipping industry, operates with low margins and thus has a low appetite for huge, massive IT projects, which typically can take three to five years to show a return on investment. That’s where INTTRA comes in.
Kuznetsova told MLPro in October, “In our experience, packaging access to data with an easy-to-use interface with targeted tasks to address, such as reducing dwell time, has great success. We develop our Decision Support Dashboard products with that in mind. For example, we offer a Dashboard that enables customers to analyze shipment reliability, comparing container ETA versus actual arrival time, which allows them to identify the most reliable shipping plan. Another helps to analyze detention and demurrage in various ports. All these solutions are packaged as separate products allowing our customers to select which features match their strategy, needs and operational priorities, and most importantly deliver the best return on investment within the same year.”
A Look Ahead
Digitization is rapidly transforming the ocean container shipping industry. The intermodal supply chain has come a long way, to be sure, but there is more work to be done. In fact, as many as 51% of all shippers still book manually – meaning either by telephone, email or fax – far from realizing the full benefit of digitization. The adoption rate is, nevertheless, accelerating. For example, says Kuznetsova, the filing of VGM, done predominantly electronically today, following INTTRA’s eVGM initiative last year calling for a preference for digital has been a particularly bright spot in that way.
Digitization can benefit the industry in many ways. Looking at operational and financial data on the same cloud will potentially enable shippers to analyze and reduce dwell time charges. Kuznetsova points to another advantage, saying “Another area where we expect to see convergence driven by digitization is with the ocean and land movement of containers. Traditionally, these two areas have been handled separately, but we’re now seeing companies look for ways to reduce those inefficiencies, such as managing empty containers to avoid excessive charges. It’s one of the reasons behind INTTRA’s acquisition of Avantida, which enables a more efficient utilization of containers by enabling a driver to pick up one locally when possible rather than drive to the port.”
All parties in the transaction win, while improving the in-land movement of containers. The driver spends less time on the road, the customer receives the container faster and the carrier is compensated while avoiding unnecessary delays. Even the environment can win, since CO2 emissions are reduced as delivery trucks spend less time on the road as they drive more efficient routes. And in ports like LA / Long Beach, the so-called Clean Air “CAAP” program that mandates zero port emissions by 2030, and small advantage that can be leveraged will be important, especially since all the low hanging ‘environmental improvement fruit’ has already been picked.
Don’t Miss the Boat
In the end, industry looks at targeted solutions, ones that offer quick analysis of specific problems with the ability to solve them cost effectively. Digitalization of the supply chain is one vehicle that will allow just that. And, without a doubt, the digital divide between companies embracing full digitalization and those lagging will widen. Tomorrow, advanced technology will be an absolute business requirement. For those who do not jump on board, it could create a two-tier marketplace where laggards will not be able to charge top rates for their services.
Kuznetsova agrees. “We do see a lot of former ‘nice to have’ services becoming a standard of good customer service today, such as the full and timely information on container tracking or the booking response time. So, yes, the digital divide will continue to grow further and it will reflect on the ability of some customers to compete.”
Today, says INTTRA, it is not uncommon for alliance partners to provide booking instructions through INTTRA, offering a standard interface, access to ocean schedules and container tracing events. Reducing the errors and time associated with accessing multiple sites to book containers is a good example of the value that can be provided when that happens.
Ultimately the ocean industry will use technology to drive out costs and increase efficiency. Using electronic booking and shipping instructions through a common platform reduces the time spent by shipping professionals on performing those operations as well as reduces the potential errors and improves data quality. INTTRA’s COO sums it all up nicely, saying, “Performing those operations through one platform such as INTTRA as opposed to multiple connections reduces IT costs. Managing and checking on sourcing a container at a loading facility rather than bringing it all the way to port improves the utilization of the container for the carriers.” Isn’t that what we’re all looking for?