Abstract
As an emerging power in trade, India, after China, is poised to see large volumes of goods flow through its ports and container facilities. Many of the medium and large logistics companies working with ports have traditionally used paper intensive processes. Recently however, as ports mandate edi for some of the business transactions, there are attempts to create some facilities to handle such requirements. The creation of electronic business infrastructures for these companies will be very expensive if traditional methods that involve proprietary mechanisms are adopted. The intermodal shipping and logistics enterprises operate as communities, and they are also global in their reach. As more and more players in this industry around the world move towards using global standards for all aspects of electronic business, it is extremely beneficial to be part of this trend. Members of this industry can benefit not only from the use of efficient and low cost messaging solution that the ebXML initiative offers, but also in the registry and business process definition and execution capabilities.
The messaging and transaction handling aspects are only part of the challenge of deploying a suitable set of capabilities to participate in an electronic business scenario for land and sea container and logistics players. Many medium sized and some large companies in this part of the world do not even have a suitable enterprise system. As they move towards building their internal systems, the choice and implementation of the business to business capabilities should address two issues. Companies may not be in a position to allocate a large budget for electronic business because of these internal enterprise efforts. The other issue is that any business to business system should work effectively without a sophisticated internal enterprise system, and then integrate effectively, once it is available. The open nature of ebXML addresses these issues very well, and specific case studies with large players who are active in the South Indian port cities and inland locations illustrate the same. The Customs department and Ports Authority are fairly well equipped to handle electronic transactions, and this effort shows the appropriateness of ebXML framework to help small, medium and large participants to simplify and streamline the business processes that they perform with these agencies. As a logical next step these players will then be well equipped to conduct electronic business with other global players who are more advanced in their e-business capabilities.
This effort began with some work done at the electronic enterprises laboratory of the Indian Institute of Science and then executed from a pilot project onwards with commercial partners. The joint industry-institutio n implementation represented by this effort has acquired some key insights into issues involved in ebXML deployment in a fairly conservative industry. The independence from proprietary methods and the relative simplicity with which a business can establish a trading relationship with a partner who is on another part of the world, are great motivating factors. On the other hand, the perception that a new technology or framework can address a wide range of engineering issues has to be dealt with. The fact that ebXML has evolved from very mature standards that have been in place for quite some time, is shown to be a positive factor in encouraging adoption.
Table of Contents
- 1. Introduction
- 2. The e-business scenario in the shipping and logistics industry
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- 2.1. Cost
- 2.2. Customer preparedness
- 2.3. Interoperability
- 2.4. Legacy systems
- 3. The approach
- 4. Important business processes
- 5. Architecture and general implementation issues
- 6. Case studies of participating organizations in the ebXML effort
- 7. Conclusion
- 8. References
- Biography
The primary goal of the ebXML initiative is to provide a framework that enables organizations regardless of size and location to conduct electronic business. One of the necessary conditions for this is the preparedness and direction provided by the larger players in any domain. The second condition, of course is the availability of affordable yet reliable communication infrastructure. Only very recently, in India, the above two conditions have become reality. A large section of the container shipping and logistics industry, in this part of the world, continue to use paper intensive and manual processes. This is in spite of the fact that they constantly deal with several technologically advanced international partners. It can be safely said that ebXML is now a comprehensive platform for e-business while being relatively low cost in terms of required infrastructure. This has provided a great opportunity to electronically integrate many business processes of this industry among their partners.
Across the world, especially in developed countries, major companies and governmental organizations in the maritime industry are engaged in efforts to improve process efficiency. Cost reduction is usually the primary objective, followed by improved customer service and increase in volume handling capability. The factors that drive profitability may be slightly different in developing countries where labor cost is not that much of an issue, but most of the other strategic business goals still apply.
The conduct of container shipping and logistics business is very document intensive. They are required to comply with international regulations, customs, and different types of materials shipped. This makes it necessary to deal with fairly complex and large entities (namely, multiple Ports, Customs, etc.). Another factor that helps make a case for adoption of a flexible system to implement electronic business is the frequently changing nature of international legal requirements.
Access to shipment information forms the main benefit for the customers (shippers) from e-business efforts of the shipping industries. Eventually they will also realize the benefits of bringing the logistics industry partners into their supply chains.
This is a time when the industry players in India are poised for the type of transformation their counterparts from more advanced countries have gone through. The ebXML initiative provides an excellent platform to make this transition a practical and affordable one.
- 2.1. Cost
- 2.2. Customer preparedness
- 2.3. Interoperability
- 2.4. Legacy systems
The Customs and Port authorities have completed electronic business systems and electronic data interchange messages are being used for most of their transactions. This provides a good case for all small, medium and large organizations in the container shipping industry in India to participate in e-business.
The main factors that come into play when we consider the issue of adoption of electronic business practices (some of them may be true for all business domains) can be enumerated as follows. The use of ebXML as a platform to address the ebusiness integration problem addresses these factors very effectively.
The task of objectively determining the financial benefits of an e-business effort is not straightforward, at least in the very initial stages of operation. Therefore the relation of cost incurred to the benefits, the return on investment is difficult to document and report in simple terms. This issue must be kept in mind when dealing with medium sized container shipping players, and well defined incremental efforts instead of a large scale implementation must be undertaken.
It is quite common to find many in the user community who are feel more comfortable using traditional tools such as the phone and fax, than using the internet technology based systems. The enhanced functionality available to them by some training must be properly presented.
Because of the varied history of container shipping organizations, the systems and practices that are reflected in the business processes are quite dissimilar. This certainly introduces a major interoperablity problem that must be solved and forms one of the most important activity in any e-business integration effort.
One of the first steps towards creating any solution in the e-business domain is the understanding of the important tasks and business processes that are currently in practice. As part of this, the terminology and conventions being followed become more apparent and are utilized in the analysis process. For smaller and medium sized organizations, any e-business effort makes sense only if there is a mandate from larger partners, or if there is direct and immediate benefits. Thus one of the goals of the preliminary tasks is to identify such processes that bring out these advantages.
Since ebXML provides a comprehensive framework, while lending itself to implementation in parts, it serves as an appropriate platform to build solutions in a just-in-need fashion. For example, one of the tasks performed by many liner agents is the creation of an import general manifest. Currently many of them create this data and deliver ship them using floppy disks to the customs authorities. A simple mechanism to transport this data securely to Customs will provide an obvious and direct benefit. While this approach helps an easier introduction to the deployment of e-business practices, it should not be carried too far. At the earliest opportunity, a more complete business process oriented approach should be taken to truly drive home the advantages of e-business, and this calls for some coordination with the other larger players. Fortunately, many of the larger partners such as Ports of India, Customs and Port of Colombo (which serves a transportation hub for some large international liners) and large international liners, have well defined electronic transaction capabilities.
The long term opportunities that exist go beyond simple electronic transactions with these (necessary) business partners. Since the shippers, liners and the various agents constantly deal with newer and more diverse business domains, the capabilities represented by the ebXML registry and business process specification mechanisms offer many more strategic advantages to players in this industry. However, especially in the case of the small and medium Indian container shipping organizations, this will only be possible if initial infrastructure and system usage issues are handled properly. It may seem that many of these companies, which do not even have information systems for their internal operations, are not quite prepared for e-business. The contrary is actually true. Most of them have an excellent understanding of international business practices and by their very nature are adept in handling documents. This gives a good opportunity to deploy a system that is at a leading edge of an evolution, rather than starting from earlier conventional e-business systems.
From the point of view of a medium sized liner agent, the some of the most important business processes are those executed with the government agencies (ports, customs) on the one hand and those with customers and liners the agent represents. A typical high level activity flow of a liner agent can be broken down into the following list of operations (they are not necessarily strictly sequential).
Sales/Marketing customer inquiries --> Advice to Operations --> Equipment management --> Shipment Documentation
The business processes corresponding to the above categories of activities can be enumerated as follows:
- Customer and Sales oriented processes : Request for Quote and response, establishment of service contracts, Order handling and status reporting
- Customs: Import general manifest and Export general manifest document preparation and submission. Handling of inquiries and responses containing contents of shipments, duties, declarations, etc.
- Ports: Tracking, movement, equipment reports, loading
On analysis, we find that given secure messaging capabilities between the above mentioned business partners, some of the processes can be conducted using standard transactions (such as EDIFACT, etc.) and some of them may be simple web based requests/responses. Depending upon the size of customers, a combination of proprietary data formats and data interchange standards will be used. It is hoped that efforts underway at various regions of the world in this industry (such as, North American adoption of ebXML as the next generation edi, as outlined in the Panama Canal conference of 2002) will lead to a good core components specification.
The container shipping organizations that have participated in a pilot implementation do not have any form of existing electronic business capability. Currently, there are some enterprise information systems in one that performs business activities in both the shipping as well as other support activities. Two others do not have any significant internal systems. Given this situation, there is hardly any major enterprise integration to be addressed right away. A basic set of capabilities to enter data corresponding to some of the processes, provided a good starting point.
The prototype application contained a message service handler to support the ebXML messaging specification V2.0. The business process specifications were laid out to correspond to a schema, and at the time of writing this paper, were just stored as profiles in a local repository. Some data transformation functionality was added to cater to existing document formats, and will be migrated to using electronic data interchange documents soon, for some of the partners (customs being the first one). The basic functionality of an ebXML registry is available to the team and will be utilized to provide profile information as well as to store document templates and agreements, in the near future.
The deployment of the system is being made in phases, with some of the manual document delivery functions being transitioned. This will be followed by establishing some agreements with two ports that these organizations deal with on a regular basis as well as the liners they represent. Some web based functionality is being delivered to some larger customers so that they can do some request for quotes and setup service contracts.
A majority of implementation issues are related to proper specification of business processes and usage related tasks. The availability of the registry, process specification and messaging capabilities has enabled the team to focus more on the application and business related issues.
There are several major ports along the eastern and western corridors of peninsular India. All the ports come under the Posts Authority of India and monitored by the Customs of India. The organizations that participated in the effort outlined in this paper are located in the southern cities of Tuticorin and Chennai. Of course these organizations have operations on other ports of India as well. The pilot stage implementations for a liner agent and consolidation service, respectively, have given great insights into the operational styles and practices in the industry. Many large liners of the world that provide service to exporters and importers in this part of the world still come to Port of Colombo which receives shipments by common carriers from Indian ports. Quite obviously, this scenario may change, and the business transactions will also be oriented accordingly. The introduction of electronic data interchange in the port facilities has required all organizations without a comprehensive facility to use manual means of transporting data to comply. Thus it is an appropriate time for a solution that will make it easy to comply initially with larger entities, and eventually optimize their own operations and interactions with their own suppliers and partners.
The increasing presence of multinational corporations in the shipping and logistics business, introduces more exciting and complex service offerings. In addition to the fairly simple cases that are working through pilot implementations, initial analysis and planning activities for those businesses that offer value added inventory and distribution services are underway. The flexibility and power of the ebXML framework will be more useful in these cases where several polymorphic processes have to be deployed corresponding to the varied processes (distribution and vendor managed inventory) for different customers using common (warehouse) resources.
An important goal of the ebXML initiative is to provide a framework for implementation of e-business capabilities for organizations of all sizes. In the case of organizations that have long depended upon manual procedures this alone is not sufficient. The players of the container shipping industry in developing countries have just begun to look at e-business as a way to conduct their processes primarily because of the increase in the trade volume because of globalization and diversification of their activities. The appropriateness of ebXML and technologies that make it easy to implement it comes at a time when electronic commerce methods of the last decade is either too expensive or is not adequate. While technological and financial affordability is important, the people factors that cause delay in acceptance cannot be overlooked. A phased approach that makes the benefits at every step apparent to the users is critical to success. Large scale projects and proprietary vendor solutions are unlikely to happen in this industry, but it is expected that usage of technology will become widespread and commonplace in the next few years. Another important reason for creating capabilities to conduct electronic commerce is the changing nature of international regulations and consequent document requirements. The impact of the changes in the specifications of the business processes will be minimized from an organizational performance point of view and this is the intangible yet strategic benefit that a global participant such as the container industry player will enjoy.
1. ebXML messaging and registry specifications http://www.ebxml. org
2. Technical reports and white papers on electronic markets at the E-Enterprises Laboratory, Department of Computer Science and Automation, Indian Institute of Science, Bangalore 5600012, India
3. Book: ebXML: The new global standard for doing business over the internet. Alan Kotok and David Weber
4. Book: Professional ebXML Foundations, David A Chappel et al.
Visva K. Visvanathan works at the eEnterprises Laboratory of the Indian Institute of Science, Bangalore. His interests include electronic markets, online auctions and the use of standards in building e-business systems. He has had nearly two decades of experience in providing solutions in this area.
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