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EDI as a tool for change for the shipping and port industries

05/10/2018

Logistics Maritime

Maritime transport carries over 90% of world trade. Ports are growth drivers for economies and port communities strive to become benchmarks for leading shipping lines. Some external factors, such as geographic location, shape them as potential hubs in their sphere of influence for global traffic.

This is the case of Panama, which has cleverly leveraged the country’s geographic position. A number of its ports at entrances to the Panama Canal in the Atlantic and Pacific have specialized in handling freight containers, becoming an international reception and transfer center. According to the Panama Maritime Authority (AMP), the country is on its way to becoming the leading container transfer center in LAC.

However, other internal factors such as infrastructure development and freight management efficiency can make the difference between ports as a leading cargo entry and exit point. Electronic Data Exchange (EDI) is a valuable tool for optimizing import and export operations at ports. The information flows produced around cargo movement at ports and the engagement of different public and private stakeholders is driving the use of technology for the secure exchange of sea shipping paperwork. EDI permits the efficient management of information, and the more logistic chain players implementing this communication system, the greater the benefits.

By using EDI technology you can:

  • Automate the generation, sending, reception and recording of exchanged documents
  • Cut response times
  • Enhance management accuracy
  • Optimize processes to reduce costs
  • Improve customer service

EDI benefits for the shipping industry

Applied to maritime transport, the benefits of EDI include that it:

  • Cuts freight waiting times (ship, terminals, customs)
  • Reduces ship stopover times
  • Powers freight storage-area performance (terminals, depots, etc.)
  • Streamlines and boosts administrative procedure security
  • Reduces errors by generating information automatically
  • Enhances control of information and therefore freight
  • Brings added visibility, tracking and traceability
  • Integrates the entire intermodal operation: sea-port-land in a single communication flow
  • Makes it possible to adapt the structure of sent messages to new sector laws, technical requirements, etc.

Maritime transport stakeholders and messages

Different agents engage in maritime transport, each with a specific function: shippers (importers/exporters), shipping lines, consignees, terminals, inland carriers, Port Authority and Customs, and more.

Different messages and documents specific to the shipping industry are exchanged over the course of an operation. The use of standards like EDIFACT, X12, SML, etc., lets all the parties involved exchange transactions through secure message transmission designed for automatic integration in management systems.

These are structured messages, each with a specific objective. For example:

  • Booking and boarding instructions. Through message exchanges between the freight forwarder/customs agent and consignee. Allows forwarders and shippers to seek a space booking from shipping lines for the content to board and to receive the pertinent answers.

A booking flow based on an exchange of EDIFACT messages would be:

  • The freight forwarder or customs agent asks the consignee or shipping line to book space using an IFTMBF (International Forwarding and Transport Message Firm Booking) message with its booking function.
  • The consignee confirms the booking with the forwarder/customs agent using an IFTMBC (International Forwarding and Transport Message Booking Confirmation) message.
  • The forwarder sends the booking instructions with an IFTMIN (International Forwarding and Transport Message - Instructions) message to the consignee.
  • After boarding the freight, the consignee issues a draft bill of lading to the forwarder using an IFTMCS (International Forwarding and Transport Message Contract Status)

What other logistic chain operations can benefit from the use of EDI?

  • Ship stopover management. The exchange of messages between shipping line and port authority and other competent bodies (Harbourmaster’s Office, etc.) makes it possible to seek a stopover and mooring permit and send the paperwork needed to make a port of call and receive the permits concerned. This involves the use of BERMAN (Berth Management) messages.
  • Sending freight handling lists. Via messages between consignee and cargo terminal. Enables consignees to send freight handling lists from ship to terminal with the corresponding acknowledgements of receipt. This is done using COPRAR (Container discharge/loading order) messages.

When the terminal has finished the loading or unloading operation a message is sent to the consignee with the details of the work performed. This is done using COARRI (Container discharge/loading report) messages.

  • Cargo manifests. This is a requirement to control the issue of export or trans-shipment goods by sea. This document details the list of goods that comprise the cargo and sets out their commercial data.

The consignee must submit this declaration to the Port Authority. This is done using IFCSUM (International forwarding and consolidation summary) and CUSCAR (Customs Cargo) messages. The response from the Customs Office is transmitted via a CUSRES (Customs Response) message.

  • Customs declaration. This is a form submitted to the Customs Office. The forwarder or customs agent must submit the Single Administrative Document (SAD). This is done using a CUSDEC (Customs Declaration) message.
  • The Customs Office issues and sends the release form if the declared goods do not have to undergo a documentary or physical check. This is done using a CUSRES
  • Clearance notifications. Customs also notifies the Port Authority of cleared customs declarations and the contents to which they refer. This is done using a CUSRES

In short, the logistics ecosystem and the maritime transport one in particular requires an exhaustive control of information transmitted in various directions and to different stakeholders for their actions to deliver on the purpose of ensuring the cargo reaches its destination in time and at no added cost. EDI solutions simplify this information exchange, powering the integration of information systems across all the companies engaging in the logistics chain, optimizing operation and management process times.

EDICOM, the logistics specialists

As a specialized EDI solution provider, EDICOM works with logistics sector firms to deliver on the specific needs of their activity. In such a complex environment it is crucial to have efficient systems that automate communication processes and freight movement declarations. Many companies have harnessed EDI to optimize logistics operation communications with their customer base.

With the EDICOM cloud solution you can seamlessly integrate all transactions from your ERP. The app ensures the integration of all e-documents with ERP, automating record import and export processes from messages exchanged with stakeholders. This powers the generation of ERP records at the reception of transactions and their construction when they are issued without any human intervention. The records are seamlessly stored in your internal IT system in accordance with your management procedures.

Plus, the EDICOMNet private network facilitates connections with any stakeholder to exchange e-transactions in B2B environments and includes connectivity services with public administrations (public organizations, city councils, customs offices, etc.).

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