Thursday, April 18, 2019

From Vessel Sharing to Digital Partnerships as the Ocean Container Freight Carriers Collaborate

Top Box Shipping Companies Establish Digital Association
Shipping News Feature
WORLDWIDE – After gaining regulatory approval from the Federal Maritime Commission (FMC) last month, four container shipping companies, Mediterranean Shipping Company (MSC), Maersk, Hapag-Lloyd and Ocean Network Express (ONE), have officially established the Digital Container Shipping Association (DCSA) last week in Amsterdam, the Netherlands. The aim is to create common information technology standards to make the ocean freight transport industry more efficient for both customers and shipping lines.

The plan to create a neutral, non-profit association for ocean carriers was first announced in November 2018. The association, focusing on driving standardisation, digitalisation and interoperability in container shipping, is now starting operations with a leadership team made up of senior industry figures, with Maersk's Thomas Bagge appointed CEO and Statutory Director of the DCSA, and MSC's Chief Information Officer André Simha, named Chairman of the Supervisory Board of DCSA. Commenting on the launch, Simha said:

“For the first time in twenty years, the container shipping industry has come together with a common goal to move the industry into the digital era. With the regulatory approval in place, we look forward for the association to take up work and to begin to collaborate with multiple stakeholders from the entire value chain.”

To create value quickly and to overcome some of the biggest pain-points in the industry, one of the first projects is focusing on standards to overcome the lack of a common foundation for technical interfaces and data. Looking ahead, the association also plans on creating an industry blueprint for processes, which will be another significant part of the future of shipping.

It is expected that the work undertaken will be for the benefit of the entire industry, as all standards will be openly published and available free of charge to interested external parties. The location of the association’s headquarters in Amsterdam is said to not favour any of the large shipping companies. At the same time, it provides proximity to shipping infrastructure and ease of access, as well as an attractive location for talented employees. Simha continued:

“DCSA is working for the benefit of the entire container shipping industry, so it was important for us that the headquarters is located on neutral grounds, with no specific stakeholders or companies being favoured.”

DCSA is in discussions with multiple other container shipping lines around the globe who are interested in joining. Preparations for two more companies to join are already in process.

Although the quartet say they have obtained regulatory approval, older heads will cast their minds back to the container conferences of yesteryear, when it was adjudged the ocean carriers had effectively formed a cartel, leading to the mandatory break-up of the organisations. Although this latest announcement has no relation to those arrangements, the carriers will be aware that international regulators have a nasty habit of changing their minds when it suits, and will doubtless be scrupulous in how they evolve the situation.