By Jon Brooks, NZ Country Manager, TradeWindow

Before the maiden voyage of the humble shipping container in 1956, cargo was largely loaded and unloaded at random by longshoremen working on the docks. The process was without much forethought – it was time consuming, bulky, and not designed to optimise the available space. It also cost a bundle, amounting to more than 36 times the cost per ton of using containers.

Containerisation took off on a rapid growth trajectory during the 1960s and soon the world needed containers to hold cargo in standardised sizes to ensure they fit on ships, rail, and trucks. In the 1970s the International Maritime Organization (IMO) published a set of shipping container standards. This was closely followed by the International Organization for Standardization’s (ISO) container standards. Today, approximately 90% of the world’s shipping containers are 20 feet or 40 feet long, making intermodal transport a relative breeze.

Interestingly, shipping container standards started out being adopted by incentive only, with ships built to carry standard sizes being eligible for subsidies. This changed when the ISO later standardised container corner fittings, leading to the standardisation of equipment used to move containers.

Why data standardisation?

Beyond the shipping container, standardisation is everywhere. You need not look far to see it in practice across all parts of life. From generally accepted accounting principles (GAAP) to the internet’s HTTP standard for information exchange and the rules of the English language, standardisation informs and equips us with the means to understand and interpret the information we send and receive.

And it’s no different for data; we’re in dire need of a universal information language for global trade. Seamless cross-border trade facilitation across digital platforms requires globally accepted standards.

Standardisation serves to turn the physical realm into a searchable and accessible domain, allowing everybody from end-consumers to logistics managers to ports, to connect to a real-time, single source of truth.

Existing key inter-governmental standardisation initiatives include the development of supply chain data standards by the United Nations Centre for Trade Facilitation and Electronic Business, and model laws by the United Nations Commission on International Trade Law, however New Zealand is dragging the chain on adopting the model law for Electronic Signatures and Electronic Transferable Records.

Global data standards can also bring scale and predictability to supply chains, which in turn supports resilience and mitigates shocks. It is both time and resource intensive to share data without a common standardisation in place. Without a logistics standard in place to dictate which data is sent and received; how; and when, suppliers, ports, warehouses, and buyers all must take a piecemeal approach to the movement of goods. There is little room for transparency and traceability in a supply chain where information is at best cobbled together and often mismatched.

The standardisation of data can enable proper benchmarking to take place, to lift the performance of the logistics sector as a whole.  It’s difficult to compare against industry standards when data is either not available, incomplete or incomparable – because the units and reported data differ to those made available elsewhere. Standards can also be readily updated to incorporate changes and upgrades in the industry. For example, the International Organization for Standardization recently released a set of standards in the last five years that includes considerations for ships over 18,000 TEU (twenty-foot equivalent units).

Increasing transparency can remove opportunities for players to game the system, level the playing field and reduce barriers to entry. Transparency forces players to perfect their craft and strive for excellence – without a standard to ensure this, information not only gets lost in transit (think physical paper) and translation (think differing data protocols), but it also slows the entire system down for everybody.

Parting thoughts

We couldn’t discuss shipping and data standards in 2022 without mention of Covid-19.

The global supply and shipping challenges the world experienced during the pandemic, and is still in large parts experiencing today, could likely have been mitigated if we had standardised data protocols in place, propelling the world into the 21^st Century of shipping and trade – instead of relying on jumbled data and prehistoric, paper-based solutions that have survived post-internet.

An information language for global trade is not just a nice-to-have, it’s essential to setting the industry up for success well into the future.