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Transforming the Shipping Industry

October, 2018

Dhruv Kotak, Joint Managing Director, JM Baxi Group, writes about the use of emerging technologies for disrupting the shipping industry

Supply Chains are conventionally one-dimensional and linear, involving a sequence of processes to accomplish the critical task of supplying goods from the point of manufacture to the point of consumption.

In the arena of global trade, the quantum of goods being freighted across the world is stunning; we want to eat sushi in Canada and wear Prada in Japan, we want to visit Ayurvedic spas in America and drink fine South African wines in New Delhi, and we want it all just in time!

If too early and it adds to the costs and liabilities of warehousing; just a few days late and the market demand drops.

In the past few years, we saw a rapid digital transformation in almost every sector viz. passenger travel, communication, agriculture, education, transport, retail, business etc., the Shipping and Supply Chain industry is also now in its own digital revolution.

Digitization in the Supply Chain business, as simply put, rethinks the ‘How’, ‘When’, and ‘Why’ of data and liability transfers (communications, contracts, status-updates) between the various stakeholders of the chain; that will optimise cost and time significantly with no loss of information in translation. A win-win situation for all!

Let’s have a look at this aspect a little more deeply. Over the last 100+ years, the history of supply chain has evolved from a relatively simple and labour intensive process which was managed by experienced master mariners or ex-military personnel who were trained to think ‘process’ and to know ‘in their gut’ what could go wrong and make provisions to avoid delays, damages, thefts, and incidents.

The initial supply chain included a singular chain with complete reliance on the data sourced from manual input, which is prone to error, increasing the chances of slowing down the entire process. Due to its huge reliability on human input for each and every level, it grew obsolete paving the way for an assisted way of managing the process. Standard Operating Procedures (SOPs) became imperative and Global Maritime and Logistics policies were drawn to regulate, standardise and monitor how business was done across the globe.  This still entailed multiple points of manual data entry as over 20 different companies/ individuals played a role in one shipment. Slowly but surely we moved towards technology and Radio Frequency Identification (RFID) tags. ‘Sensors’ were used, where possible, for the accurate and timely input of location, condition and other operational information, thus reducing the need for manual inputs. Today we see RFID, GPS, OCR and Barcode technology already pervasive in the management of supply chains. To improve upon the scenario, along with collecting information via sensors and a basic understanding of a business process – automation of processes took place. E-commerce entered the Supply Chain Management (SCM) industry with service providers moving away from manual paper-related transactions to e-Booking, e-Bill of Lading, e-Delivery Order, e-Payments etc.

Now, along with collecting information, Internet of Things (IoT) can manage repetitive time-consuming processes like vessel pre-planning, gate manning, parcel sorting, product packaging and container scanning to name a few.

This results in doubling the efficiency, minimalizing the error percentage, saving time and extra costs, and changes the entire dynamics of the functioning supply chain. Subsequently, tools in place to automate the process, capture information, the businesses took a holistic leap into the future by optimizing the process further leading to organizational optimization. Challenges can now be taken head-on with the use of technology more simply than ever before.

The data is no more just recorded or executed by following standardized processes that were thought to be the first measure of success. On the contrary, the penetration of digitization in the supply chain processes leads to complete end-to-end visibility and no data duplication, while still retaining the liability parameters, ensuring data and cargo safety globally.

The term ‘efficiency’ re-defined itself with persistent innovation by re-thinking, re-inventing and re-engineering the existing supply chain systems. In fact, technology has arrived at a point where instead of humans, machines have started interacting with other machines for collating and analysing data for human decision making and there on executing planned events for them. Machine Learning, Artificial Intelligence and IoT are terms not only used at Masters of Science in Robotics but by shipping line and port operators, Third Party Logistics (3PL) global operators, and Governments and Logistics Associations worldwide.

Gadgets like Google Glasses and Virtual Assistants like Alexa and Amazon Echo are taking over the homes of people every passing day. All these new formulas are leading to a rise in the quality of human-age technology.  New age finances like Bitcoin and its base technology concept of block-chain are looked at by dabblers in trading, global e-commerce sites and major financial institutions are replacing money as we know it. The SCM industry looks to leverage each new invention to further improve its delivered value to trade and commerce.

As the current scenario unveils, shipping companies, including giants in the industry have started relentlessly driving digitalization through their multi-national organisations with the mandate that ‘we are not a Shipping company but a Technology company’.

Coming closer to home – India is going through its own glorious evolution to ‘Thought Leadership’.  We are one of the fastest growing economies of the world. We have recently made giant strides in easing our internal tax-structures with the GST, Government of India is working relentlessly to change the image of doing business with India by projects like ‘Ease of Doing Business’, ‘Make in India’, e-Sanchit, e-Waybill, e-Seals, Dynamic Parcel Distribution (DPD), etc.

One of the recent initiatives in India has been to roll-out a new Port Community System (PCS) for all major ports in India via the Indian Port Association. PORTALL Infosystems Private Limited, a J M BAXI Group company has been awarded the tender and the product will be rolled out by December 2018.  Many private port operators have shown interest in the PCS which has renowned PCS provider DBH Germany, and renowned technology provider IBM as knowledge partners.  The IPA-PCS will radically change the way all stakeholders communicate with Indian ports and provide a single platform for all to transact-pay-communicate digitally with the Port Authorities.

Driven with the vision of changing the way SCM is handled on Indian shores (not unlike many developing nations) PORTALL is also ready to launch CLEAR, a unique platform delivering all clearance related services with last-mile delivery and complete visibility.  CLEAR dares to go where few have gone before with a wholly digital customs service inbuilt in the platform. Transportation, CFS /ICD, Line bookings and e-Delivery Order, e-Verified Gross Mass and e-Seal, tracking last-mile via GPS, and a full-fledged payment gateway with the ability to club your bills for payment or even to avail micro-finance to speed clearance, CLEAR aims to disrupt the traditional mode of landside logistics services in India.

The J M BAXI Group bearing its proud heritage as ‘custodian of cargo’ and a leader in the Indian Trade and Logistics Industry since 1916, has embraced digitization and the technology revolution with the inception of PORTALL Infosystems.

Like any sincere technology enthusiast, PORTALL stepped out not in the traditional field of Enterprise Resource Planning (ERP) software systems for in-house companies or resale.

We are re-thinking and reverse-engineering with global thought leaders to create unique offerings that can transform the way logistics is done in India and its neighbouring countries.

The change has started by aggressively driving block-chain based projects with world partners like IBM. The company is piloting some of the global industry initiatives like the Maersk Global Trade Digitization along with working with the best-in-class peers in every sphere.

As IPA-PCS and Portall CLEAR, two wonderful offerings powered by PORTALL hit the ground, more are in the workshop, a blockchain offering for Customs Authorities, a truly robotic cargo screening solution, a Power Digital Kit for Customs Officers and other Regulatory Authorities.

PORTALL is devoted to its cause of digitalisation and has full visibility in the areas of Customs Clearance, Rail and Road Transportation, International Cargo Terminals, Container Freight Stations, and Domestic Warehouses. We will continue our proud heritage as ‘custodian of cargo’, while also simplifying trade, creating a transparent environment and minimising the cost of doing business by facilitating stakeholders with digitalised solutions.

Who better to disrupt supply chains than they who have been managing and delivering supply chains for the last 100 years? We were successful in the pre-technology age and we will be more successful as we embrace what the future holds with digitisation and technology innovations.

Opinions expressed in the article are the author’s own.

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