The global shipping crisis in the months following Covid-19 highlighted some of the inefficiencies in the global trade value chain. While the shipping crisis has eased over the past few months, inefficiencies in global trade prevail, such as low transparency, duplication of effort, inefficient planning and vehicle congestion, amongst others. Some of the challenges in EXIM value trade stem from a complex value chain comprising multiple stakeholders which include exporters/importers, government agencies (e.g., Customs), freight forwarders, Customs agents, ports and airports, shipping lines and airlines, container freight stations, cargo handlers, truckers, and many other facilitators. Each stakeholder is responsible for multiple activities and could often have competing interests, which further increases complexity.
Over the past few years, multiple automation solutions have emerged that can significantly enhance efficiency across the EXIM value chain. Here are some of the prominent solutions:
Document digitization
Navigating EXIM processes could involve management of tens of documents for each shipment, adding to the complexity of the operational workflow. Often, data required across documents is duplicated. Digitization reduces the need for physical submission of documents to liners, airlines, authorities etc., while also reducing duplication of effort. In addition, it could also reduce the scope for human error. For example, a leading forwarder was able to increase labour productivity by 8 per cent by adopting digitized documentation processes.
Further, digitization can lower operating costs related to document storage, handling and maintenance, and also facilitates faster retrieval of documents for issue redressal, regulatory or other requirements. Reducing paper consumption supports participants in advancing towards their carbon neutrality objectives.
Truck slot management solutions
Historically, larger ports have been plagued by long truck queues due to unstructured processes and limited communication. Truck slot management solutions help schedule truck berths, eliminating the need for queuing. Lower idle time increases the potential vehicle utilisation, resulting in higher asset and driver productivity. This in turn lowers trucking costs. Adoption has lowered trucking costs by up to 25 per cent in highly congested ports.
Tracking and transparency
Tracking solutions at ports can enable real-time status and location updates. This can be especially beneficial for monitoring of products that have unique transport needs.
For example:
* Delays in time sensitive e-commerce shipments can be tracked
* Adherence to temperature control norms for pharmaceuticals can be tracked on a real-time basis, resulting in lower losses
* Visibility solutions also enable end-to-end transparency (particularly for transhipped cargo) and enhance decision-making for ports and even policy makers
Insurance and compliance
Digital application interfaces can enable faster application of insurance and other compliance documents (e.g., phytosanitary, chemical/microbiology test, fumigation, country of origin certificates, etc.)
Partner selection
Platforms also connect stakeholders with potential partners across the value chain – forwarders, truckers, warehouses and free trade zones, clearing agents, airline/shipping agents and cargo holders. This increases access and lowers costs, particularly for smaller participants in the value chain. For example, an exporter with five FEUs (forty-foot equivalent units) per month with limited visibility of berth pricing can use platforms such as Cargo Community Systems (CCS) adopted by entities such as Dubai Ports to find an agent or forwarder that can provide more competitive pricing.
Data harmonization
Data discrepancy stemming from physical documentation across multiple stakeholders can result in delays and losses. Harmonized data across the value chain, enabled by digitization, potentially limits losses. For example, inconsistencies in EGM (export general manifest) and shipping bills in India could result in delays in receiving an IGST refund – this occurrence can significantly be reduced by using a harmonized digital system.
Vessel visibility and scheduling
While airports typically have stronger visibility and scheduling systems, seaports have typically lagged. Integration of ports with vessel automatic identification systems enables live visibility of vessels. For example, if a vessel is likely to be delayed, visibility can enable ports to revise berthing schedules and forwarders could reprioritise trucking schedules.
Berthing planning and management solutions can streamline berth allocation, which can increase port utilisation and reduce vessel dwell times.
Control tower and lifecycle managementTraders and forwarders are increasingly adopting automated monitoring control towers, which facilitates centralised tracking across shipping lines and stages of the value chain. Advanced solutions also provide predictive analytics to enhance planning and enable prevention of inefficiencies such as detention/demurrage.
Freight sourcing and price discovery
Freight sourcing automation can enable better visibility of current prices across service providers, which could enable stronger price discovery, particularly for smaller traders and freight forwarders.
The adoption of point solutions has demonstrably brought sustainable benefits to individual stakeholders, addressing specific challenges effectively. However, the potential for even greater advantages lies in the entire value chain embracing a singular or interoperable comprehensive solution. In pursuit of enhanced efficiency and reduced carbon footprint, seaports and airports are progressively adopting cargo community systems. These integrated, automated solutions bring together multiple functional components, fostering collaboration among stakeholders on a unified platform. The implementation of such systems not only facilitates digitization and transparency, but also contributes significantly to streamlining processes across the value chain.
(The views expressed are the authors’ own.)