How digitalisation can create a more agile, secure and cost-effective maritime industry

As technology touches more and more aspects of daily life and work, digitalising systems and streamlining processes have become a necessity for ensuring that shipping keeps pace with fast-changing times. MSC Mediterranean Shipping Company (MSC), the world's leading container shipping line with a fleet of 650 vessels and business presence in 155 countries, has been a force driving the sector towards digital transformation.

Mr André Simha, global chief digital and innovation officer of MSC, discusses the many opportunities even as the maritime industry continues to face headwinds from global supply chain disruptions.

Question: Why is digitalisation key for the future of shipping?

Answer: Traditionally, the maritime industry has followed a very conservative approach towards sharing information and adopting new technologies to streamline operations and processes. At MSC, we strongly believe that digitalisation is the way forward, enabling not only greater operational efficiencies, reliability, transparency, speed, security and sustainability, but also greater collaboration and customer satisfaction. Unfortunately, there is still too much paper and too many manual processes in the shipping and logistics industry. Digitalisation may sound complicated to some people, but it's all about simplifying things.

Question: What are the greatest challenges in this endeavour and why is the shipping industry slow to adapt?

Answer: Like in any transformational journey, digitalisation needs buy-in from the people it affects as it can't happen in isolation - especially in our shipping industry, which is highly interconnected. Carriers, agencies, ports, terminals and customs - these are all part of global and integrated supply chains - so any advancements must work at an industry level, not just within the organisation.

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As the saying goes, we are only as strong as the weakest link. We need to collaborate to move the digital agenda forward as an industry. So, the key idea is to ensure we work towards the same goals and have interoperability throughout the industry. Interoperability refers to the ability to operate something across technology systems used by multiple stakeholders in the supply chain. This largely depends on our capability to speak the same language collectively and use the same industry standards.

Another key challenge is that the shipping industry has traditionally relied heavily on manual and paper-based processes. Take, for example, the bill of lading (B/L). It is the single most important document in international shipping and has changed little since the 1700s. ​Every year, 11 billion metric tons of cargo are shipped globally and approximately 50 per cent of these transactions require an original B/L.

These antiquated, paper-based documents require a physical hand-off between participants - we're looking at billions of pages and that's a lot of paper. So sending paper documents around the globe is not only slow and expensive, it is also unsustainable.

Question: Did the global pandemic have a role to play in MSC's decision to introduce the MSC electronic Bill of Lading?

Answer: The limit of the traditional printed B/Ls became really apparent at the start of the Covid-19 pandemic, when cargo in ports couldn't be released because these paper documents were stuck elsewhere because of closed borders and air freight delays.

This is largely why MSC launched our MSC electronic Bill of Lading (eBL) last year. This user-friendly solution is offered via an independent blockchain platform called Wave BL, ensuring that all the parties involved in a cargo shipment booking can issue, transfer, endorse and manage B/Ls in a few clicks and within minutes.

Additionally, the eBL is accessible from any device or location, 24/7, and since the solution mirrors the traditional paper-based workflow, customers can sign up and start using the service, without any change or disruption to day-to-day business operations.

At MSC, we genuinely believe that introducing an eBL solution is a critical step in the industry's overall move towards digitalisation and e-documentation.

Question: What has MSC been focusing on in terms of driving digitalisation forward?

Answer: Practically some of the solutions we are investing in at MSC consist of transforming offline activities that tend to be tedious, costly and time-consuming and turn them into seamless and more effective ways of doing business with our customers. While doing this, we are keeping to our MSC Group Values of putting people first and maintaining our personal touch.

Besides the MSC eBL I mentioned above, we have also been investing in developing our eBusiness platform, myMSC, adding new features and tools to provide enhanced visibility and ease of doing business for our customers. They can access the platform anytime, anywhere, to enjoy the convenience and efficiency of getting an instant quote, placing and managing bookings, tracking shipments, having a real-time overview of their shipments and lots more.

MSC has also been an early investor and leading advocate for the smart containerisation of our industry. Smart containers offer more visibility over what's happening to specific cargo, so we would receive an alert if a container door opens unexpectedly, or if there are variations in temperature and humidity within the container, or sudden shocks and vibrations to it. These measures can be critical for shippers of sensitive and perishable cargo.

Question: Has the global pandemic affected the progress of digitalisation efforts for MSC in Asia?

Answer: The Covid-19 pandemic impeded the progress, affecting momentum around advancing the standardisation of the container shipping industry. But it also accelerated our clients' recognition of the need for digitalisation and to rethink the heavy reliance on their paper-based practices.

We see that our clients prioritise digitalisation in their budgets and show a greater willingness to adapt and adopt. We have received highly positive take-up of our MSC eBL, and currently China and India are ranked as the top two markets which have adopted this digital solution.

The strength of the solution is coupled with a lot of on-the-ground efforts by my colleagues in the region for us to see results. This includes creating local language user guides, customised webinars and training, a clear understanding of customers' pain points and active follow-up to get clients to trial the solution.

Besides the successful up-take of our MSC eBL, I am also pleased to share that the use of our eBusiness platform, myMSC, has skyrocketed in Thailand, where e-bookings jumped from a single digit to almost 50 per cent by the end of last year.

Question: MSC is also a co-founder of the Digital Container Shipping Association (DCSA), which aims to further digitalisation efforts in the industry. How has the progress been so far?

Answer: The DCSA is a neutral and non-profit group established in 2019 by MSC and several of the largest container shipping companies. Its mission is to be the de facto standards body for the industry, setting the technological foundation for interoperable IT solutions.

In the past few years, despite the pandemic, DCSA has pushed ahead and published a variety of significant standards for the industry. These standards aim to streamline international shipping and trade in three key areas:

Together these will help solve the medium- to long-term logistical challenges around the world. It is also important to note that, so far, DCSA has the commitment of nine of the top 10 carriers (representing 70 per cent of global container trade) on standards adoption.

Another milestone is the establishment of the Future International Trade Alliance, co-founded on Feb 15 this year. It brings together five leading industry associations - the world's largest international shipping association BIMCO (Baltic and International Maritime Council), DCSA, FIATA International Federation of Freight Forwarders Associations, ICC (International Chamber of Commerce) and the world's leading provider of financial messaging services SWIFT (Society for Worldwide Interbank Financial Telecommunication), in a commitment to standardise digital trade and to operate on developing relevant standards.

Question: MSC has been operating in Singapore since 1996. As the largest container shipping company in the world, what are your thoughts on Singapore's digitalisation efforts and its role in helping to transform the global maritime industry?

Answer: Given its status as one of the world's top international maritime centres, Singapore is definitely an important stakeholder we want to engage on this journey.

Collaboration by all parties in the ecosystem is needed to reap the true benefits of digitalisation. Thus, governments have a crucial role to play; for example, ensuring that digitalisation is part of bilateral trade agreements. It is fantastic to note that the Singapore government is already looking into the use of eBLs, APIs and a host of other key solutions and technologies. Ports are undoubtedly a significant stakeholder group, and I'm keenly looking forward to the results of a Just-in-Time Proof of Concept trial that the Singapore port is working together with the DCSA on.

The annual Singapore Maritime Week (SMW) taking place from Apr 4 to 8 is also an excellent platform for the industry to get together to exchange ideas and explore opportunities for collaboration. I am excited to be joining other industry experts on two panels at the Marinetech Conference during SMW this year, sharing my views on the future of supply chains, and overcoming challenges in data sharing and Just-in-Time initiatives.

Click here to find out more about how MSC's digital tools and solutions can bring about clear benefits for your organisation.