Shipping reviews
HangYunPingLun
In the past two days, two heavy news have occurred in the shipping circle. First, on February 15, the Digital Container Shipping Alliance (hereinafter referred to as "DCSA") announced that it has signed a memorandum of understanding with the Baltic International Shipping Association (hereinafter referred to as "BIMCO"), the International Federation of Freight Forwarders Associations (hereinafter referred to as "FIATA"), the International Chamber of Commerce (hereinafter referred to as "ICC") and the Association of Global Banking Financial Telecommunications (hereinafter referred to as "SWIFT") to establish the Future International Alliance Trade Alliance, hereinafter referred to as "FIT Alliance"). Second, on February 16, COSCO SHIPPING Group signed a strategic cooperation framework agreement with Yiwu City and GLP at the headquarters of COSCO SHIPPING Group, and the three parties will cooperate in capital, digitalization, logistics infrastructure and logistics supply chain.
These two news seem to be unrelated, but in fact, they are hidden mysteries, reflecting the two different strategic paths of Chinese and foreign liner companies in the field of international supply chain logistics digitalization.
First, how to play foreign shipping companies
In April 2019, in addition to COSCO SHIPPING, the remaining nine of the world's top ten liner companies (namely Maersk, Mediterranean, Hapag-Lloyd, Ocean Network, CMA CGM, Evergreen, Hyundai Merchant Marine, Yangming, Yixing) jointly established DCSA, which accounts for 70% of the container capacity market. The purpose of its external disclosure is to formulate a general information technology standard for the container industry, standardize the development of digitalization, and pave the way for the digitization, information technology standardization and interoperability of the container shipping industry. The author believes that its essence is to start from the formulation of standards, pave the way for the development of digital applications, including blockchain applications, and connect with international trade and supply chain digital solutions.
Figure 1 Standards published by the DCSA (only available through public channels)
The dominance of the shipping digital standard system seems to indicate the competitiveness of supply chain logistics in the future. The "Global Port and Shipping Informatization Development Report" released by the Shanghai International Shipping Research Center pointed out that from 2020, the battle for the right to speak in global shipping standards has begun. DCSA's continued efforts in container shipping digital standards will directly affect the flow of information in the global container shipping market. While improving the synergy efficiency of the container business, a new set of ecological rules will be established internationally, and other players must play according to the rules, and the head players in the DCSA can use this to strengthen their competitive advantage.
The ecological layout of DCSA also confirms the author's conjecture. While grasping the standard layout, DCSA has cooperated with well-known organizations such as the United Nations Trade Facilitation and E-Commerce Center (UN/CEFACT) and the International Container Bureau (BIC), and has carried out standard cooperation and compatibility with organizations or enterprises such as the National Institute of Standards and Technology (NIST) and the well-known ship satellite data service provider ORBCOMM, showing that its core is not limited to standards, but the business scenarios, solutions for the digitization of container supply chains. Application cases have a systematic ecological strategic layout.
In this way, DCSA's entry into the field of trade digitalization has also been smoothly completed. At present, the supply chain logistics industry is accelerating mergers and integrations, and the core is to seize market share through logistics resource aggregation, service integration and digital empowerment. The key to the success or failure of this competition is who can truly and effectively connect with the trade and supply chain needs of cargo owners. After the shipping companies behind DCSA form a synergy, they can cooperate with international authoritative organizations in the logistics and financial fields such as BIMCO, FIATA, ICC and SWIFT, and thus enter the trade field and fully integrate logistics, capital flow, business flow and information flow.
Second, the national team accelerated the layout of the digital supply chain field
Unlike foreign shipowners, mainland liner companies have adopted a strategic path of providing digital supply chain logistics services to the market. Because, in addition to online digital standards, the real operation and demand of supply chain logistics is offline, which is oriented to the manufacturing and consumer markets. COSCO SHIPPING Group's cooperation with Yiwu City and GLP is an important step for COSCO SHIPPING in logistics and supply chain management. Based on the logistics and transportation resources of COSCO SHIPPING and the guarantee of GLP's offline resources and management experience, we will fully mobilize and give full play to the enthusiasm of Yiwu small commodity trade, help the transformation and upgrading of the supply side, so as to gradually extend the impact of digital transformation to the whole of Zhejiang and even China, and establish a digital service ecology of the entire trade supply chain with deep integration of online and offline. On the one hand, this implements the "six stability" and "six guarantees", on the other hand, it is also a way for COSCO SHIPPING to consolidate its own strength and expand into the supply chain.
Figure 2 Schematic diagram of COSCO SHIPPING, Yiwu City and GLP cooperation
For COSCO SHIPPING, the direction of logistics has always been placed in a higher position, with the group at the helm rather than the secondary company. Its layout in supply chain logistics has also begun. At the end of last year, COSCO SHIPPING, China Eastern Airlines, China Merchants, etc. became strategic investors in the new central enterprise, China Logistics Group, and joined hands with a number of enterprises to promote the development of the large logistics ecology.
In addition to the traditional shipping sector, COSCO SHIPPING has gradually carried out business penetration in the fields of digitalization, supply chain and even trade.
Third, the standard PK market, which wins or loses
In the journey of digitalization of supply chain logistics, DCSA and COSCO SHIPPING have chosen two different paths. In the STANDARDIZATION strategy led by the DCSA, China seems to be isolated by the world. But this is only from the perspective of capacity, China's chips are our de facto cargo country, large consumer market and the status of the largest manufacturing country: the mainland has built the Shanghai international shipping center and Dalian, Tianjin, Qingdao, Guangzhou and other regional shipping centers, the world's top ten ports occupy seven seats, with the world's top three container fleet capacity scale, is the world's first trade exporter and second trade importer, and in the smart ship, smart port, intelligent shipping and other aspects of the world's leading level. Therefore, can the formulation of international standards for the digitalization of supply chain logistics really lack China's participation? Or whether the lack of Chinese standards can still be defined as international standards is still debatable.
With the transformation and high-quality development of China's economy, the scale advantage of China's manufacturing will gradually be transformed into China's advantages in brand, design and supply chain in the future. In this process, liner companies, ports and logistics enterprises in the mainland should more actively improve the cross-border supply chain logistics service capabilities and use digital empowerment to dock the industrial Internet of the manufacturing industry. Firmly grasping this historical opportunity and market demand is an urgent task at present. COSCO SHIPPING clearly has a deep grasp of this historical pattern in its strategic choices, and has not chosen to compete with the DCSA in terms of standard setting.
It is undeniable that China may indeed be isolated from the scope of the global container shipping digital standard system composed of other adversaries, but this threat we have realized, neither despised nor actively responded to. The author believes that the promotion layout of mainland port and shipping logistics enterprises in the fields of the Ministry of Communications' smooth project, global shipping business network (GSBN), logistics big data platform, and Silk Road cloud chain platform will also see practical results in the near future.
Fourth, how China responds to the challenge of shipping standards
The digital standards of mainland shipping should have a larger pattern. Standard-setting should not only revolve around maritime transport, but only a small alliance of shipowners and ports, but should coordinate more participants in multimodal transport. It is necessary to integrate "big logistics", that is, from the cargo category including containers, dry bulk cargo, liquid bulk, etc., from the mode of transportation including water transportation, air transportation, railway, port, depot and other aspects, to solve the multimodal transport of the whole business coordination, transparency, refinement as the goal, to the international logistics trunk line transportation as the goal, to the intelligent resource allocation optimization as the goal, the formation of a comprehensive, three-dimensional, in-depth standard system.
Accelerate innovation trial and error and model implementation through "internal circulation" and RCEP. The mainland has a huge internal circulation market, and at a time when the epidemic has led to more manufacturing enterprises facing "export to domestic sales", many shipping-related digital standards and technical solutions can first be practiced in the domestic market, such as using domestic legislation to break through the pilot of multimodal bills of lading property rights. With the blessing of RCEP, digital standards, technologies and models that have been tested in the domestic market can also be promoted on a wider scale in the Asia-Pacific region, so as to obtain substantive control over regional market standards and rules, and then promote them to the relevant regions of the "Belt and Road" initiative.
Make full use of financial services and port services to escort the digitalization of shipping. Shipping companies, financial institutions, port units, etc. will unite to use the "dividends" of cross-border financial payments (especially RMB digital currency cross-border payments), supply chain finance and port business customs clearance convenience to attract cargo owners to cooperate in promoting this digital transformation. The fundamental problem to be solved by the digitalization of shipping is not the digitization of shipping itself, but the integration of shipping into the entire system of international trade and logistics digitization. Making full use of financial and port services, starting with the import business, is a shortcut to promoting digital standards for shipping.
This article was originally published by Shipping Review
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