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Home Industry Opinions Linking the supply chain with common standards, Part One

Linking the supply chain with common standards, Part One

Part One looks at the background to supply chains and how common standards can benefit stakeholders using a number of transport modes, offering a digital link between the seller and buyer. Bringing standards together will provide visibility along the whole of the supply chain.

End-to-end supply chains typically involve several modes of transport and a wide range of stakeholders. The original seller, as well as the final buyer of the product have little visibility of the location and condition of the product during the transportation phase(s).

The original shipment from the seller is represented as a consignment under contract with each transport operator and may be identified using different identification methods. The shipment also may be consolidated with other non-related seller to buyer shipments in different ways, depending on the mode of transportation.

Various standards organisations focused on individual modes of transportation have developed methodologies that have been adopted by their stakeholders in their supply chains. But in the larger picture, the ability to accommodate all modes of transportation by a single set of standards has been elusive. Some of the standards referenced have been developed and available for years but have not been universally adopted.

Due to advances in technology and increased cost effectiveness, several international organisations are now developing key new standards for communication and interface technology implementation. Co-operation and adoption of international standards are the building blocks that will facilitate data visibility for intermodal transportation communications and interoperability between the stakeholder platforms.

Background
We are now in a transition from older standards adopted by individual transport modes to the current effort conducted by multiple international standards organisations to identify a normalised method of identification of required data that will be applicable to any seller to buyer shipment, regardless of the transport mode. Any authorised stakeholder to the transaction should be able to access the same data in near-real time.

In order to enable end-to-end tracking and to enhance the collaborations between all stakeholders involved, there is a need for standards for intermodal transport and interoperability in the exchange of data across varying modes of transport platforms.

Several standards organisations and initiatives are beginning to focus efforts on identifying and addressing the gaps and challenges for specific domains. The standards organisations for the most part tend to organise themselves by transport mode, e.g. World Road Transport Organisation (IRU), or the International Air Transport Association (IATA) with a focus on road and air transports.

Other organisations are concerned with the specifics of the transport mode,  e.g. Digital Container Shipping Association (DCSA) concentrating on container-based transportation,  or a sub-segment of the supply chain. In the latter category, examples for marine shipping are Sea Traffic Management (STM), a concept programme that provides services to the maritime industry for improving connectivity, facilitating information exchange, and driving maritime efficiency, working in conjunction with the International Taskforce on Port Call Optimisation (ITPCO) to further benefit shipping companies. Nearly all of these focused standards groups are now addressing the need to co-operate and normalise their differences to close the gaps between transport modes. Such efforts have the power to facilitate more effective and transparent intermodal supply chains.

Identifying Common Data Requirements
This article identifies some of the gaps and common requirements needed to enable effective end-to-end tracking across all modes of transport. The authors’ joint vision is to emphasise the need for international standards development, adoption and co-operation working toward more normalised processes that will readily provide shipment data to all authorised stakeholders for both transport and trade in a near-real time manner.

In the end-to-end transfer from a seller of goods to a buyer of the goods, the movement of the goods (termed ‘shipment’ in UN/CEFACT and GS1 terminology) may often be handled by many operators through several modes of transport in the supply chain.

These shipments may be transported individually or be consolidated over the various movements of the end-to-end supply chain. The operators execute the individual stages of transportation under various forms of contracts of carriage that cover a consignment. There may be multiple consignments or contracts of carriage concurrently active during the transport phase due to these consolidations that facilitate greater efficiency in the transport processes. This seller to buyer shipment approach has been modelled for multi-modal transportation by the United Nations Centre for Trade Facilitation and e-Business (UN/CEFACT) in the Buy-Ship-Pay (BSP) and Multi-Modal Transport (MMT) reference data models.

Due to the usage of different standards for identification and tracking between the various transportation modes, it is often difficult to transmit all the information regarded as pertinent to the varied stakeholders in an intermodal transaction. Visibility of the shipment may be lost to parties other than the current transport operator until arriving at the destination of that transportation mode.

Beneficial cargo owners (sellers and buyers) would prefer to track their shipments, using their own shipment identifiers end-to-end. Operators in different modes of transportation, however, when they are party to the same journey of a specific seller to buyer shipment, need to receive information about transport steps taken when changes in mode of transport are planned or occur due to unexpected events.

The European Interoperability Framework (EIF) refers to two types of ‘interoperability’ that identify the data communication needs and the system requirements in order to effectively communicate between stakeholders:

  1. Semantic Interoperability - Ensures that the precise format and meaning of exchanged data and information is preserved and understood throughout exchanges between parties, in other words ‘what is sent is what is understood’.
  2. Technical Interoperability – the ability for systems to communicate effectively and efficiently between platforms. This covers the applications and infrastructures linking systems and services. Aspects of technical interoperability include interface specifications, interconnection services, data integration services, data presentation and exchange, and secure communication protocols.

These two dimensions are used to identify current efforts now underway in the transportation industry.

Operational Shipment ID
Some concepts and identification schemes are now in development to enable more seamless end-to-end tracking and visibility.

In order to locate the shipments seller to buyer end-to-end as they are transported to their final destinations, it is currently necessary to link a unique shipment ID with all the various consignment IDs used for consignments assigned during the transport of the shipment.

The cargo carrier or operator has the burden of keeping track of the links between the shipment ID (assigned by the cargo owner - usually the seller) and possibly multiple consignment IDs currently. In many cases, the cargo owner has no direct relation with the actual carrier, which means the cargo owner has no way to make the link between his own shipment ID and the consignment ID used by the actual carrier. Clearly, in those cases end-to-end tracking through multiple transport modes may not be possible.

In general, the customer does want to be able to find out where the purchase is along the way or trace the movement history, particularly in case of loss or damage. The identity of the type of transport and key locations captured during each operator’s movement of the goods may also be preferred or required.

Carriers transport consignments and transport units (such as bulk commodities or liquids) in transport equipment (e.g. intermodal containers or unit load devices [ULDs]) and on transport means (e.g. maritime vessels, road trucks, aircraft, inland waterway barges, short-sea ships). To keep track of the transport units, it is imperative to know by which equipment and/or by which transport means they are carried. Only then, stakeholders will be able use information related to the location of the transport means or transport equipment as reliable information about the location of the consignment, the shipment, the transport unit and ultimately the actual location of the goods.

Keeping track of consignments means it is necessary to know what transport mode is transporting it and in which cargo unit.

For example, the position of a maritime vessel (using Automatic Identification Systems) or an airplane (using live plane tracker services) is known. Assuming a shipping line or airline accurately captured (and shared) the consignments that were loaded on board, the geoposition of the vessel is also the current location of the consignment. In container shipping, the shipping line generally knows exactly which containers (transport equipment) have been loaded and even where they are in the vessel. The same is true for an air carrier, which has control of where and when their containers are loaded on an aircraft. Therefore, it can be assumed with a great level of confidence where a specific container (and the cargo/shipments inside) is at any point in that transportation stage.

Identification of the goods may be limited to consolidated consignment IDs or shipment IDs. To know for sure what cargo/shipment/s are inside a container, it is necessary that the organisation that “stuffs” or “loads” the container accurately logs what is put into the container. The transport unit IDs may be recorded, if available, for the goods put into the container.

Other modes of transport may record which transport units (e.g. pallets/ULDs) that were loaded onto the transport equipment (e.g. trucks, trailers, rail wagons or aircraft). In all those cases, knowing where the transport equipment is provides reliable information on the location of the transport units carried therein.

Information captured during the transport movement may vary, dependent on the transport operation or even by mode of transport. However, this information may be important to making critical and timely decisions by primary stakeholders during or after transport of the shipment. Therefore, multi-modal supply chains currently require unique ID’s for:

  • The shipment (Master transport ID assigned by seller)
  • The packages within a shipment (transport units)
  • The transport contracts, consignment notes (like CMR)
  • The transport means (like IMO vessel number)
  • The transport equipment ID (like shipping container/ULD/rail car)
  • The movement of the transport means (like flight for air-cargo)
  • The movement of the goods by a transport means (i.e. manifest)
  • All events and related data for each unique ID can be captured and cross-referenced for that particular operator and stakeholders of that mode of transport, but can also be related to the Master Transport ID assigned by the Seller
  • Other IDs assigned by a stakeholder that relates to the shipment such as Trade Item ID (product code), Sales Order ID, etc.

ISO standard 15459-1 provides a method to assign globally unambiguous Transport Unit IDs to the packages created at source when the seller dispatched the goods independent of any carrier and independent of any shipper. This standard is well over twenty years old and already in use in many parts of the supply chain and in transportation as well, but as yet has not been universally adopted. It enables consistent tracking (and tracing) of the individual transport unit and the shipment associated with it and associated consignments.

Similarly, the ISO standard 15459-6 provides a method to identify the shipment (Master Transport ID) in a globally unambiguous way. The European Commission Customs Guidelines for compliance with the new EU VAT Ecommerce regulations also reference this approach.

Numerous supply chains have implemented this approach quite successfully. In many cases, it meets the requirements of both cargo owners and authorities. However, the approach does not meet all business or regulatory requirements in all cases.

The maritime industry currently uses the Bill of Lading (BoL) as their primary consignment identifier across a multitude of its operational processes and activities. Once a maritime consignment arrives at port, the containers may be subsequently unloaded and re-loaded onto rail wagons or inland waterway barges to be transported further inland. There are even ship-to-air transfers currently in use for transporting goods in Australasia and the South Pacific. Transfers to these alternative forms of transportation may require use of alternative consignment identifiers to be compatible with their current common practices.

In the case of rail transportation, Consignment notes (CIM) and wagon notes trace shipments involving handovers between shippers, forwarders and one or more rail undertakings (RU). These documents do constitute a contract between client and carrier.

IATA Resolutions specify the Air Waybill as the primary key identifier. IATA Resolution standards are in effect regulations with which IATA members (airlines) must comply. This AWB mandatory standard has been universally accepted not only by the air carriers, but also by enactment in law by the world’s governments for this mode of transportation and applies also to associated trucking (referred to as ‘flying trucks’), facilitating the transport to and from airports, which may be part of that supply chain.

Although commonly referred to as an air cargo ‘shipment’, this is technically a forwarder’s consignment to the air carrier, a consolidation of individual cargo owners’ shipments, where each shipment is identified by a forwarder’s housebill number. In the case of air, although not currently an IATA standard, a reference in the Forwarder’s housebill to a cargo owner’s shipment ID (Master Transport ID) may allow the information to continue to be passed through the supply chain.

In standard ‘cargo’ consolidated consignments from forwarders, there could be multiple cargo owner IDs, for shipments grouped into consolidations. Splitting of a large air consignment into different ULDs allows the movement of partial shipments of the consignment in multiple containers on different aircraft or even different routes on different days. It can become complicated to maintain the relationship of a cargo owners’ shipment ID, in relation to the Master Air Waybill, and the underlying housebills of the forwarder, particularly if the forwarder’s housebill number in the consolidated consignment to the air carrier is not the same as the cargo owners’ shipment ID. The cargo owners’ shipment ID would need to be another data element in the forwarder’s housebill.

It is not likely, the long and well-established primary identifier standards mentioned above for modes of transportation such as air and related trucking will change rapidly for intermodal transport. Future developments to accommodate new technology and communications standards, however, for interoperability, such as IATA’s ONE Record are currently in proof of concept.

During intermodal transport, some type of standard identification or cross-referenced key data elements must be used to capture and pass the information easily to other stakeholders in the transaction, uniquely identifying the specific shipment. Perhaps a subset of information, normalised to accommodate each mode of transportation, might enable the sufficient pertinent details to describe the shipment as unique in the seller to buyer transaction, and be recognised and acceptable in the future by regulatory officials.

In order to accommodate this development for intermodal transport, the information needs to be provided and accepted into an information-sharing network from which all authorised stakeholders can subscribe to the data for that shipment.

UN/CEFACT has also initiated a new project requested by a number of member states and governmental organisations for tracking and tracing with the aim to track, trace and monitor anything considered a product or service that may be identified by an ID from seller to buyer, and vice-versa in case of returns.

This project will identify how global (data) standards, such those described in this article, may be used to deliver seamless end-to-end tracking across any mode of transport for a variety of use cases occurring most frequently in supply chains. The solution to this data communications impediment in today’s supply chains is an imperative building block to providing more seamless intermodal tracking, which will help facilitate future international trade.

Commonly adopted standard international identification method(s) and incorporation of them in operational processes need to be acceptable to all parties. Regulations recommending, endorsed or even enforcing those methods will be introduced in the future so that shipments and goods may cross international borders more smoothly than is customary today, thus enhancing trade facilitation.

Part Two, Technical Interoperability will be published on 17 October

Authors: Hanane Becha, Todd Frazier, Rudy Hemeleers, Steen Erik Larsen, Bertrand Minary, Henk Mulder, André Simha, and Jaco Voorspuij.

Hanane Becha is actively driving smart assets standardisation for key industries such as maritime and rail freight. She is currently the DCSA IoT program Project lead. She is also the UN/CEFACT Vice Chair for Transport and Logistics leading the UN/CEFACT Smart Container Project as well as the UN/CEFACT Cross Industry Supply Chain Track and Trace Project. Hanane has received a Ph.D. and an M.Sc. in Computer Sciences from the University of Ottawa and a B.Sc. from l’Université du Québec.

Todd Frazier is Strategic Project Lead in the U.S. Regulatory Compliance group and is the FedEx Express Accredited Representative to the International Air Transport Association (IATA). He is also Chairman of the Cargo Services Conference, the cargo standards formulation body of IATA, and participates in several projects in UN/CEFACT.

Rudy Hemeleers is director of 51Biz-PPMB Luxembourg, a management consultancy and policy advisor with private and public customers in multiple modes of transport including air-cargo, road and inland navigation.  He represents INE (Inland Navigation Europe) in the EU DTLF (Digital Transport and Logistics Forum). 51Biz Luxembourg is an external advisor of the Luxembourg Government (e-CMR, eFTI, EU RISCOMEX). 51Biz coordinates the FEDeRATED EU-Gate living lab.

Steen Erik Larsen is the head of Technology M&A in A.P. Moller – Maersk, the global integrator of container logistics, connecting and simplifying the supply chains. Larsen has the responsibility of the enterprise risk management aspects pertaining to information technology in integration and partnering. He is also representing Maersk in the Digital Container Shipping Association (DCSA).

Bertrand Minary is Chief Innovation & Digital Officer at SNCF Logistics Rail & Multimodal Division, the 3rd rail freight company in Europe. Due to his important experience in Supply Chain, Rail and Digital, he is in charge of reinventing rail freight business with added value, using Lean startup, UX and Agile approaches.

Henk Mulder is Head of Digital Cargo at the International Air Transport Association (IATA). He initiated and leads the ONE Record data sharing standard. Henk has degrees in IT Engineering and Mathematics.

André Simha is the Chief Digital & Information Officer at MSC Mediterranean Shipping Company, the second largest container carrier in the world, whose team is responsible for implementing and developing the complex data flow between the company’s headquarters and its agencies around the globe, as well as steering the business towards the digital future of the shipping and logistics sector. Simha is also the chairman of the Digital Container Shipping Association (DCSA).

Jaco Voorspuij is responsible for Industry Engagement Transport & Logistics at GS1, and has worked developing global data standards with various standardisation organisations (e.g. GS1, CEN, UN/CEFACT) and is co-chair of the International Taskforce Port Call Optimization.

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