It wasn’t a complex idea — but the most transformational ones rarely are.
As those in the maritime industry know, before the adoption of the container, international shipping was a haphazard affair. Goods were transported in barrels, sacks, crates and cartons. It could take wharf workers weeks to load a ship, arranging the cargo on-board as best they could (and often helping themselves to some of the goods along the way).
In 1937, irritated with the inefficiencies of transporting goods, US truck owner, Malcom McClean, conceived of a new intermodal shipping container — a universally-sized box that could be used across trucks, trains and ships, all across the globe.
A couple of decades later his idea gained momentum, and in time became the industry standard, revolutionising shipping in the process. The time to load and unload ships plummeted from weeks to a matter of hours, and it became easier (and cheaper) than ever to move freight from land, to sea, and back to land again, to all corners of the globe.
This standardisation of the shipping container accelerated our industry, unlocked countless opportunities and enabled the boom of global trade.
Now we face a new challenge.
As we evolved, different carriers began using different communication formats, systems and protocols. In doing so, complexity increased and interoperability became more difficult. In a communication sense, we are back to stacking the ship with barrels, sacks, and cartons. It may work, but it’s inefficient. And in an increasingly digital, on-demand world, customer expectations are higher than ever.
To capitalise on the many opportunities ahead of us (IoT, big data, blockchain to name a few), we must first improve standardisation across the industry.
It’s time for a containerisation of data communications.
An argument for standardisation
It’s only natural for us to serve our customers; to solve their problems, and in doing so, hopefully gain a competitive edge.
But in doing so, we can create unintended friction.
Ports, freight-forwarders and customers rarely deal with one carrier exclusively. And competing formats can lead to friction and frustration as information doesn’t flow as smoothly as it could. In an industry with high degrees of interaction, standardisation is essential.
In the world of consumer technology, Bluetooth is one such example of successful standardisation. This common technology made it possible for users of all kinds of devices to connect to another, seamlessly and easily. In doing so, a new market for peripherals from all kinds of manufacturers emerged, bringing with it a smoother more connected experience for consumers.
Another such example can be seen in telecommunications. By standardising SIM cards and mobile networks across the globe, customers are now able to freely travel and switch devices without the friction and incompatibility of competing formats.
Such open ecosystems can feel counterintuitive to an individual business, but the opportunities of scale that it unlocks are far greater.
Differentiate where it makes a difference
To be competitive, a business must differentiate. But we should differentiate where it will add true value to our customer.
Imagine the headaches if each carrier competed on the size and dimensions of their containers. In an industry so dependent on interaction with other parties, it makes sense for us to agree on standards that benefit all.
Airlines, for example, improved collaboration with codeshare arrangements. By implementing some standards they unlocked opportunities for all and freed up resource to focus on differentiating in the customer experience.
Competition and collaboration can co-exist, and benefit the customer.
It was precisely this sentiment that led to myself and CIOs from other major shipping carriers to announce plans for a new industry association last year. Our goal is to work together to find solutions to some of the industry’s biggest data communication challenges, for the benefit of customers and the industry as a whole.
The road ahead
It’s an exciting time for the industry. With five major carriers (A.P. Moller — Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express) forming a strong foundation to create meaningful change through the creation of digital industry standards. And we will welcome interest and engagement from across the shipping sector. True change will only come when a critical mass within the industry are willing to implement changes that will benefit all.
Ultimately, the industry must collaborate to move forward. To achieve the containerisation of data communications.