Across industries, efforts to improve efficiency have often centered on standardization practices. The commercial shipping industry is no exception. With so many moving parts in the commercial shipping supply chain, collaboration between stakeholders have driven the implementation of standardized processes, technology, and equipment. Standardization holds the potential to improve efficiencies and economies of scale for shipping interests, ultimately leading to a stronger, more robust, and more valuable industry. In this guide, we will explore how the commercial shipping industry is adopting standardization practices within diverse aspects of this dynamic global operation.
Why is Standardization so Important to Commercial Shipping?
To begin, it is valuable to gain an understanding of what standardization is and why it is so important. In practical terms, it is the process of developing and implementing industry-wide technical standards based on the input and needs of stakeholders. In the commercial shipping industry, stakeholders include vessel owners, fleet managers, ports, transportation companies, and governments. Ultimately, the goal of standardization is to foster uniformity within operations and to ensure interoperability among key components of any given industry.
For commercial shipping operations, standardization is of the utmost importance because it offers several significant advantages, including:
- Cost optimization
- Enhancement of shipping processes and practices
- Improved communication between stakeholders
- Creation and maintenance of strategic alliances
- Improved cargo handling and cargo management
- Better service to end users
Global shipping analysts sometimes refer to standardization as a “networked society”, where each player in shipping develops common communication and information-sharing practices to streamline operations.
How Are Commercial Shipping Operations Adopting Standardization?
There are three main areas where commercial shipping is spearheading efforts to standardize practices. These are:
- Vessel sharing and management
- Container standardization
- Technology solutions for information sharing and cargo management
On major trade routes, several shipping line alliances have partnered together to allow for vessel sharing and management. 2M and Ocean Alliance are some of the key groups in this initiative, and have followed similar cooperative agreement models as adopted by global airlines. Vessel sharing and vessel management agreements allow shippers to better utilize their resources and capacities, which helps to drive down overhead expenses.
Container standardization has long been a part of the global shipping industry. Standardized sizes and shapes of cargo containers allow for efficient handling on ships and in port facilities. The newest iteration of container standardization, however, employs technology. A number of shipping lines, including big names like MSC, Maersk, and Hapag-Lloyd have taken several initiatives to improve technology standardization. These shippers have made investments in a French company called TRAXENS to facilitate the deployment of “smart” shipping containers across fleets.
Technology solutions form a key component of this practice in commercial shipping. Several lines have also formed a technology working group to develop standardization best practices, focusing primarily on digitization and information sharing systems. By being able to better track cargo and vessels, economies of scale can be boosted while delivering superior service to all stakeholders. Collaboration remains the driving force of standardization in the shipping industry.
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