Unlocking Digital Efficiency in Logistics – Data Standards and Integration

FreighTech 2024 Key Themes Series: 

Unlocking Digital Efficiency in Logistics – Data Standards and Integration

Freightos was delighted to host its seventh annual FreighTech conference recently, bringing together leaders in freight technology and digitalization across carriers, forwarders, BCOs and tech providers once again to discuss progress achieved, explore opportunities for collaboration and imagine the future.  One of the key themes that emerged was the growing importance of data standards and integrations.

The rate of tech adoption in logistics continues to grow. But the volume of available digitalized data, and the number of tools, solutions and platforms that supply chain stakeholders are using (juggling?) are growing too. The increase in the volume and use of digitized freight data has made the need for – and lack of – industry data standards all the more acute. Likewise, the use of multiple tools and systems (for now) means effective integration is becoming more and more crucial too. 

The Logistics Data Standards Gap

Industry-wide data standard initiatives like those by IATA to develop and push the adoption of digital standards for customs documentation and air waybills, and DCSA’s work on a range of standards like track and trace, booking data and bills of lading continue to make progress. But even for standards that have already been developed, the adoption rate by the industry is far from comprehensive.

These and many other needed standards would make it much easier for logistics players to share information, provide and receive services, or collaborate. But when no standard exists, tech-forward BCOs, forwarders, carriers or tech providers are pushed to build their own, and encourage their customers or partners to adopt them too. And so, in the meantime, the diversity of individual “standards” grows, possibly representing another barrier to eventual industry-wide standards adoption.

One speaker – Megan Kelley of Crane Logistics – for example, shared that Crane aims to have their partners use the standards they’ve developed in-house. But custom integrations – like when a partner uses their own or a different format – are still sometimes necessary and can take months, slowing the onboarding process, absorbing IT resources and pushing back the horizon of digital efficiencies for both Crane and their partner. Oliver Esch of procurement platform Shipsta by Freightos – which also asks their partners to use their formats – explained that this approach can really only provide piecemeal improvements in efficiency until industry-wide standards are developed.

The alternatives that have emerged for standards may have a silver lining.

As Zvi Schreiber, Freightos CEO, pointed out though, the success of some “private standards” – like WebCargo’s carrier API – may prove that when industry standards do get adopted, progress could be fast. WebCargo received its first airline API in 2018, and by last year there’ve been dozens more airlines sharing data by these APIs, enabling more than a million eBookings a year on WebCargo.

Here’s How We Get There

Part of the frustration stems from comparisons to other, similar industries including air travel for passengers. Mark Drusch of Qatar Airways Cargo, who comes from the passenger side, pointed out that, in order to quickly and easily serve passengers who need to change airlines unexpectedly,  boarding passes already have a universal barcode that allows any carrier to access passenger information immediately. 

QUOTE: “To really get there, the industry needs leaders to rally their peers, and champion the things that will benefit everyone. They’ll need to build the business case for it internally and externally, create buy-in and then set aggressive timelines to get it done.” – Mark Drusch, Qatar Airways Cargo, 

And despite the slow progress of the existing initiatives, Drusch is convinced that it can happen for air cargo too. But to really get there will require bold leadership from major players in the industry who will need to: build and communicate the business case for why investing in and adopting data standards will provide industry-wide benefits and grow the pie; communicate and get buy-in for collaboration among competitors; and then push for execution.

Streamlining Complexity: The Importance of Integration

At the same time, the growth in the number of digital tools and platforms in logistics – built to simplify operations and processes, and increase efficiency – can sometimes create a new type of complexity.

QUOTE: “Digitalization should add value not complexity.” Megan Kelly, Crane

Even if data standards existed and eased collaboration between partners, the multiple tools, solutions and platforms that many forwarders, carriers and BCOs interested in leveraging tech are starting to use can butt up against the desire for a single source of truth for all that data.

Paolo Galli of Electrolux and Martin Polakovic of Lenovo echoed this sentiment from the shipper side as well saying that what they’d like most from logistics technology is better control and accessibility of their data, all in one platform – preferably the one they’re already using. 

This state of affairs is making integration of multiple systems more and more important. At Crane, successful integration of disparate data sources is already leading to cost savings by eliminating duplicate work and many errors. It is improving efficiency as information is shared more easily and made actionable; and integrations are also enabling better visibility both internally and for their shipper customers.

These discussions reflect an industry in flux, facing challenges to leveraging the benefits of digitalized data but also a lot of optimism that the digital journey for freight, despite these hurdles, continues in the right direction.