When it comes to the new normal, companies are pushing the boundaries of e-commerce.
Without a doubt, today, the e-commerce industry is emerging tremendously all over the world. With more and more people shopping daily from various e-commerce sites, online retail has become a booming yet complex business. To manage the growth in e-commerce and its moving parts, the logistics sector is having to keep up.
E-commerce logistics refers to the process of storing and shipping goods from an online store to the customer’s destination. Logistics in e-commerce platforms also entails the management of inventory during picking, packing and shipping of any orders made online.
Hongru (Judy) Zhu knows a thing or two about the importance of logistics at Alibaba. As Head of the Group’s Standardization Department, Zhu believes that logistics efficiency urgently needs support from standardization. “It’s an important way of sharing information among logistics partners,” she says. “Ultimately, the construction of global smart supply chains, and international logistics information sharing and cooperation, are only made possible through standards.”
Thanks to today’s globally intelligent logistics networks, users can purchase goods anywhere online, and track in real time where their package is located. Such systems make it easier for users to shop anywhere in the world and facilitate the flow of information among borders, which helps boost buyer confidence.
ISO standards enable real-time, end-to-end visibility over the entire supply chain.
So, to maintain the supply of goods globally, the logistics sector must be evermore streamlined and efficient. Not an easy task given all the complexities. Having a “bird’s eye view” will help optimize the management and reduce the costs of these complex and increasingly global supply chains. From logistics service providers to freight transporters and their customers, everyone needs to know exactly where their shipments are, at any moment. That’s where ISO standards can help. ISO standards enable real-time, end-to-end visibility over the entire supply chain. Companies and users can know exactly where things are at any point in time, where they have been before, and why.
The electronic platform provided by a Port Community System (PCS) for maritime transport, or a Cargo Community System (CCS) for airborne freight, is at the heart of the “spider’s web” of the logistics intelligence required for smooth trading, relaying messages and enabling the reuse of data wherever possible. This means that the many stakeholders involved in the business of moving goods around the globe need enter their data only once.
Currently, regional logistics information service systems (e.g. a PCS or CCS) can provide information about the main logistics chain such as airlines and ports, but the technology is yet to be utilized by smaller key players in logistical arenas. Additionally, there are still many problems in information sharing between such systems.
With such interconnected structures, cutting the complexities is only made possible with standards. For Alibaba’s Zhu, who was formerly the Chair of ISO/TC 154, the ISO technical committee dealing with standardized data exchange to foster trade facilitation, the benefits of using ISO standards in the field of logistics are clear: “ISO standards remove trade barriers, improve logistical processes, and create a common language for all market participants.”
ISO 23354, Business requirements for end-to-end visibility of logistics flow, aims to improve the data interchange efficiency. It is based on the semantic data model of the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), notably the Multimodal Transport Reference Data Model (MMT-RDM). Designed to reduce the cost of interconnection between logistics information service systems (LISS) and users who need such logistics information, the standard sets out three business requirements for the visibility of logistics traffic flow:
- LISS network architecture requirements
- Visibility data interchange requirements between LISSs
- Visibility data interface and process requirements for a LISS network
“What’s so great about this standard,” says Zhu, “is that users are able to obtain data provided by different Port Community Systems via the same standardized interface, subject to their access level for that data”. In practice, it is difficult to form “end-to-end” data flows because of diverse non-interoperable technical solutions and data formats provided by different regional logistics information service systems. For example, data users request container data, but the responses from two logistics information systems are not aligned in a uniform way.
Making Data Flow
Logistics visibility needs to be efficient and cost-effective. That’s why logistics information service systems are constantly pushing for more valuable and standardized event status data for different data users. Additionally, data users should be able to access different PCSs via unified interfaces.
This is where ISO 23355 comes in. The future standard will aim to establish data connections among LISS networks and satisfy different data providers’ and users’ requirements. This standard, also based on the UN/CEFACT MMT-RDM, is designed to be used by logistics information service providers such as PCSs, CCSs, freight forwarder systems, etc. Logistics authorities and logistics data users will also be able to use the standard to track the logistics flow and optimize their services.
“The access development cost should be reduced via standardized interfaces, and logistics information service systems should provide valuable data at lower cost to improve the user experience,” says Zhu. “That way, the misunderstanding of data information can be reduced.” A common solution is to deliver and share real-time information to stakeholders the world over in a controlled and safe way. This is why modern companies are turning to ISO standards for help.
According to Zhu, ISO 23354 and ISO 23355 are developed using industrial solutions. The foundation supporting these standards is based on industry best practices for visibility data interchange, developed jointly with UN/CEFACT with members from the Northeast Asia Logistics Information Service Network (NEAL-NET), the International Port Community Systems Association (IPCSA) and the National Public Information Platform for Transportation and Logistics (LOGINK) in China. In parallel, free flow of data is being helped by an IPCSA initiative – the Network of Trusted Networks project – aimed at simplifying cross-border agreements and fee negotiation.
Future of Logistics
No ripple effect echoing throughout the entire supply chain has been more important than the COVID-19 pandemic. This unique time in our history has highlighted the need for connection more than ever before, underlining our reliance and dependence on technology to keep the economy moving. The logistics industry has been able to respond quickly, making the necessary adjustments to minimize impact to customers.
Several months on, it seems that the e-commerce habits formed during the pandemic will likely stick forever. Retailers will continue to face multiple challenges, such as improving the efficiency of online marketing and sales practices, as well as offering new products that meet new customer demands. ISO standards will go a long way in helping companies scale up their business to meet customer needs and deliver value. It’s time to unlock the full potential of our digital supply chains. Keeping up with logistics has never been more crucial than now.
Disclaimer: PECB has obtained permission to publish the articles written by ISO.