According to the World Trade Organization, a cross-border transaction involves multiple actors and requires, on average, the exchange of 36 documents and 240 copies. Today, fewer than one percent of trade documents are fully digitized. While the COVID-19 pandemic has accelerated businesses’ adoption of digital technologies, significant barriers remain that prevent the complete digitalization of trade-related processes.
In a naturally evolving technological uptake scenario, businesses in the moving industry have first focused on improving internal processes, such as quoting, surveying, and preparing the packing list, which is what they can control and change. This internal optimization adds tremendous value, reducing operational costs and improving service quality.
However, in supply chains in general and the moving industry in particular, a shipping service crosses organizations’ boundaries and Countries’ frontiers, so this internal optimization doesn’t necessarily improve the performance of the entire chain. Partners need to collaborate and coordinate to move goods from origin to destination, and those interactions remain mostly paper-based, human-intensive, fragmented, and volatile.
The lack of systems integration is one of the most significant barriers preventing more efficient supply chains today. It’s not enough for one company to connect its systems with its partners; the network structure of global supply chains implies that every participant and moving company would need to connect its systems with everyone else. In a network with n participants, each using its own system, the number of integrations required would be n(n-1)/2. This number can grow quickly.
For the sake of simplicity, let’s say there are just 50 disparate systems in the moving industry (including RMCs, auditors, moving companies, software vendors, van lines, and numerous in-house legacy systems). Using the formula, this will require 1,225 one-to-one integrations! Building one integration is expensive and burdensome; building 1,225 is not realistic. We must find a different approach.
One of the most time-consuming stages of an integration project is reaching a consensus about the data to be shared, its format, and means of exchange. So, it is natural and necessary to create industry-wide digital standards that everyone can adopt. The challenge of sharing data and achieving interoperability exists in the broader supply chain, and standardization bodies and projects have popped up everywhere. The advent of blockchain technology to tackle collaborative efforts has only fueled the trend. Each project defines its specific scope but inevitably overlaps with many others.
The standards landscape has been growing, getting turbulent, and increasingly challenging to navigate. The moving industry is no exception. A milestone was achieved in 2019 with the formation of the Moving and Mobility Standards Alliance (MMSA), with the participation of FIDI Global Alliance, IAM, Overseas Moving Network International Ltd., and WERC. I participated in forming the Alliance and am a member of its first steering committee.
Understanding the need for a unified global effort, the World Trade Organization and the International Chamber of Commerce released the Standards Toolkit for Cross-border Paperless Trade in February this year. This toolkit provides an overview of existing standards to help drive adoption, identify potential gaps, and promote interoperability. It covers basic date/time ISO standards to more complex ones like the Electronic Bill of Lading Standard released in late 2020 by the Digital Container Shipping Association (DCSA).
The world is moving at lightning speed towards complete digitization. The moving industry will be left behind very quickly if we don’t react and collaborate now. We don’t need to reinvent the wheel – others have already hammered many solutions. We just need to collaborate and get the whole thing rolling in the same direction.