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Can a government-brokered supply chain exchange succeed?

Mitigating future supply chain disruptions is the goal of projects spearheaded by FMC, DOT

The Biden administration is attacking supply chain data gaps from both land and sea: One campaign is being led by the Federal Maritime Commission, the other by the U.S. Department of Transportation.

But given the amount of confidential information that currently flows throughout freight markets, can a supply chain data portal succeed if the federal government is involved?

“Certainly the government has a strong role in providing some sort of push in making sure a supply chain data exchange works, and to incentivize better sharing of data,” Ellen Sun, chief marketing officer for the Digital Container Shipping Association (DCSA), told FreightWaves.

“But the industry also does not want to be regulated to be required to share data. I know there’s also a lot of angst about who owns the data and who’s going to monetize it. So the next step is figuring out how exactly it will work.”

William Fox, chief product officer for Data Gumbo, which specializes in “smart contracts” using blockchain technology, said that a framework of open standards put together by government and industry “could absolutely help to set a least-common denominator.” He pointed to TradeLens, the blockchain-enabled shipping platform developed by Maersk and IBM, as an example.

However, a portal or exchange that is actually hosted or operated by the government “will not work due to government IT systems sclerosis,” Fox added.

The FMC in December began hosting weekly meetings with shippers, ocean carriers, marine terminals, labor and others to identify data communication gaps within container supply chains with the goal of improving cargo flow and mitigating future supply chain disruptions.

FMC Commissioner Carl Bentzel, who has been leading the meetings, has sought out data “wish lists” that industry wants to be able to access quickly from a single platform so that the same container location information is available to all participants in real time.

For example, FedEx — in its role as an ocean freight forwarder — told the FMC in one meeting that data such as container stow plans, docking and berthing times, and longshore crew scheduling all should be coordinated and made available from a single data exchange.

Bentzel plans to use information gathered from the meetings as the basis for recommendations for common data standards, policies and protocols to streamline information sharing across the international ocean supply chain — and potentially recommending what role, if any, the agency will have in a possible clearinghouse for such information.

Last week DOT unveiled its own data-sharing initiative, the Freight Logistics Optimization Works, or FLOW, which will be focused on the domestic supply chain. It will start with a pilot project of 18 participants including shippers, trucking, warehousing, logistics companies and ports, with a “proof of concept freight information exchange” expected by the end of the summer.

As is the case with the FMC, what role DOT will play in a shared freight data portal is undetermined.

DCSA, a nonprofit funded by nine of the 10 largest container ship operators, has been involved in discussions with both the FMC and DOT in helping to establish the groundwork that can be leveraged for use in a future freight portal, such as developing digital standards and definitions.

“I think DOT’s mandate is broader than maritime — they’re trying to look at the end-to-end supply chain, and in the U.S. there’s a lot of inland connections,” Sun said. “But these initiatives are not competing with each other. I think ultimately they will be complementary.”

And while it may not be necessary that the government be involved in getting a freight data exchange off the ground, “it comes down to a matter of speed,” she asserted.

“This is such a fragmented industry that the amount of time it takes to convince a critical mass of stakeholders to sign on is difficult. We are able to work with our members to adopt a particular standard, but that’s only nine ocean carriers. If you consider the number of ports, shippers, trucks, rail — it’s a huge undertaking. So the government can play a role in speeding this up, by letting everyone know that this should be the gold standard.”

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The FREIGHTWAVES TOP 500 For-Hire Carriers list includes FedEx (No. 1).

John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.