More digital standards implemented in Q1 2024 than 2023

Digital transformation in shipping, freight, maritime, logistics, supply chain, and trade is no longer just an option or a nice to have, but has become a necessity..

One of the key industry bodies helping stakeholders navigate the complexities and inefficiencies of the industry through its digital initiatives, standards and digital integration is the Digital Container Shipping Association (DCSA)..

Who is DCSA..??

For those who may still not be aware of DCSA and its goals, the Digital Container Shipping Association was established in 2019 by 9 founding members who are among the world’s top 10 container shipping lines..

Its primary objective is to drive digital standardization and interoperability across the global container shipping industry.. PIL joined DCSA as its latest member in 2024..

In a recent interview with Shipping and Freight Resource, Thomas Bagge, CEO of DCSA reiterated DCSA’s mission stating “DCSA’s mission is to create digital standards that enhance the efficiency, reliability, and sustainability of container shipping. We aim to eliminate manual processes and foster seamless data communication between all stakeholders in the supply chain“..

Progress in Digital Standardization

Reflecting on the progress made since his Executive Insights in 2021, Bagge highlighted significant strides in the adoption of DCSA standards. “DCSA is now five years into our journey of creating digital standards.

We’ve published a series of standards, and a recent analysis showed that 74% of data attributes used in global trade today have corresponding standards,” he noted..

While stating that this milestone indicates a substantial step forward, Bagge acknowledged that there is still work to be done..

One of the most promising developments that DCSA has seen in 2024 is the increasing momentum among carriers in implementing these standards.. “In Q1 of this year, carriers implemented more of our standard message types than they did in the entire year of 2023.

If their plans hold true, they will do more in the first half of 2024 than in the prior four years combined,” Bagge remarked, underscoring the rapid pace of adoption..

The Role of Electronic Bill of Lading

Among the various standards promoted by DCSA, the electronic bill of lading (eBL) has been a focal point, despite its potential to streamline processes and reduce costs, adoption has been relatively slow..

Bagge also shared some encouraging statistics about electronic bills of lading.. “We started tracking the eBL in 2021, and at the end of that year, adoption was just over 1%. By the end of 2022, it had doubled to 2.1%, and at the end of last year, it was 3.8%. While progress is being made, there is still a long way to go.”

“There are substantial benefits to the ecosystem from adopting digital trade. It’s not just about the eBL but also about modernizing customs procedures and other trade-related documentation,” Bagge emphasized, recalling the benefits of eBL which are well-documented in a McKinsey study..

The study estimated that removing barriers to digital trade could enable $30 to $40 billion in additional trade and save around $6 billion directly..

Challenges in Promoting Standardization

Despite the clear advantages, promoting standardization is not without its challenges, and as per Bagge, one significant hurdle is the inertia within the industry..

Bagge is of the view that many stakeholders in the industry feel that global trade is working efficiently even if it’s cumbersome and costly due to manual processes, based on the adage “If it ain’t broke, don’t fix it“..

To overcome this inertia, DCSA focuses on lowering barriers to adoption and providing implementation support.. “We try to make it easier for stakeholders to adopt our standards by offering assistance and quality assurance. Our conformance team validates implementations to ensure they meet our standards,” Bagge explained..

Additionally, DCSA is exploring new technologies such as large language models to make their extensive documentation more accessible and user-friendly..

Regulatory Support and Collaboration

When quizzed about the role of regulatory bodies in facilitating digital transformation,  Bagge acknowledged that while some progress has been made, regulatory support remains one of the hardest areas..

“COVID-19 accelerated some necessary legal reforms. For instance, Singapore and the UK have enacted legislation recognizing digital documents on par with physical ones,” he said.. DCSA collaborates with various international organizations, including the UN, to track and promote these legal changes..

Broader Adoption of Digital Standards

Beyond regulatory support, broader industry collaboration is essential for the success of digital standards.. Bagge stressed the importance of involvement from all stakeholders, including shippers, freight forwarders, ports, and technology service providers..

“We’ve recently seen a number of big US exporters write to the CEOs of our members asking for the implementation and adoption of our standards. This shows a growing recognition of the benefits of digital transformation,” he said.

To foster this collaboration, DCSA actively engages with industry stakeholders and provides resources to facilitate adoption. “We encourage everyone to join in and be part of the change. Standing on the sidelines won’t help us achieve the customer experience and sustainability goals we all strive for,” Bagge urged.

Future Prospects and Sustainability

Looking ahead, Bagge emphasized the importance of continued efforts and collaboration to drive digital transformation.. “Digital transformation is a marathon, not a sprint. But with sustained efforts, we can create a more efficient, reliable, and sustainable future for global trade,” he said..

The work of DCSA is not just about improving the efficiency of the container shipping industry.. It is also about setting a benchmark for other sectors to follow.. As more stakeholders embrace digital standards, the benefits will ripple across the entire supply chain, enhancing both efficiency and sustainability..

Conclusion

The conversation with Thomas Bagge illuminates the significant progress DCSA has made in driving digital standardization in the container shipping industry..

While challenges remain, the commitment and collaborative efforts of industry stakeholders provide a promising outlook for the future..

As Bagge aptly concludes, “Join in and be part of the change. Together we can transform the container shipping industry and set a new standard for global trade“..

Through information sharing, articles, executive insights, and webinars, Shipping and Freight Resource is doing what it can to create awareness in the industry of all the digital tools and initiatives that are in play..

It is up to the industry players and stakeholders like importers, exporters, forwarders, clearing agents, warehouses, carriers, banks, fintech, and others to ensure that they are also part of this drive to transform the industry digitally..