MSC Digital Talks Ep.2: Digitalization and Trade Logistics, the UN Perspective

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MSC Digital Talks Ep.2: Digitalization and Trade Logistics, the UN Perspective

14/06/2022

In the second episode of our #MSCDigitalTalks series, MSC’s CDIO Andre Simha spoke to Jan Hoffmann, Head of Trade Logistics at the United Nations Conference on Trade and Development (UNCTAD), about the impact of recent advances of digitalization on global trade.

The Trade Logistics department at UNCTAD lies at the very heart of international trade. The organization produces statistics, research and impact assessments for the International Maritime Organization (IMO); provides a forum for member states to debate new policies; and, helps them to implement global standards to make trade more efficient through capacity building, training and on-the-ground advisory services. Unsurprisingly, digitalization plays a vital role at each stage.

In this episode, Jan shares that the use of digital solutions advanced exponentially during the first two years of the COVID-19 pandemic. All of a sudden, UNCTAD found that a lot of the digital trade initiatives it was working on became not only more welcome but also much more in demand.

People in the past loved to touch paper and have all these complicated procedures, they now realize it's actually not such a bad thing to move towards electronic payment, single windows, pre-arrival processing automation, trade information portals.

Jan Hoffmann Head of Trade Logistics,
UNCTAD

Digital collaboration is key to digital success

UNCTAD believes in the importance of collaborating with international organizations to standardize digitalization initiatives across global trade and logistics. The private sector does a great job at innovating digital solutions, explains Jan, but for digitalization to be successful it also requires the implementation of public global standards, such as those of the International Organization for Standardization (ISO), United Nations Centre for Trade Facilitation and Electronic Business (CEFACT), World Trade Organization (WTO), World Customs Organization (WCO) and others. With the support of those international organizations, even small players, small companies and developing countries can benefit from digitalization equally. 

Process optimization is critical to this success, not least because it supports the goals of the energy transition, arguably the most important transition that the shipping industry is facing today. To reach the target of zero greenhouse gas emissions by 2050 from shipping, digitalization will be as important as alternative energy and new fuel technologies. Jan gives as examples, port call optimization, which can ensure that vessels travel at an optimal speed, as opposed to racing to dock only to wait in port, and pre-arrival processing, which can increase efficiency by making life easier for both shippers and customs authorities.

About MSC Digital Talks

In each episode, MSC’s CDIO André Simha speaks to a different leader or expert about the future of digitalisation, innovation and technology. The series is part of our efforts to highlight the benefits of digitalisation in container shipping and to promote collaboration and industry standards across the supply chain.

Follow #MSCDigitalTalks on LinkedIn to watch the latest episodes and join the conversation. 

Links to previous episodes

MSC Digital Talks Episode #1: Driving MSC's Digital Evolution in France and Beyond



Read Episode 2 Transcript

PART 1 – Intro (1, 20 minutes)

00:00:10
Speaker 1: Andre. Wonderful to see you again.

Speaker 2 JAn

Speaker 1 : With this beautiful sun we have today in Geneva. And so this is the way you work at the UNCTAD, at the United Nations.

00:00:13
Speaker 2: Yes, the logistics of international trade. Trade Logistics branch, looking at all types of technical issues from transport, trade facilitation.

And we like to say we THINK, DEBATE and DELIVER. So we THINK : we produce public goods statistics, we research impact assessments for the IMO this type of thing. We DEBATE: we provide a forum for the member states. And last but not least, we also help them DELIVER . We deliver capacity building, training on the ground advisory services to implement global standards to make trade more efficient. And a lot of this has to do with digitalisation.

00:04:54
Speaker 1: Digitalisation. So all this happens here. It's wonderful. Well, you know, we're filming for digital talks for this series we're doing. And I thought it was great to be able to meet with you and talk about this together. So shall we take a walk by the lake? Let's go to the lake.


PART 2 – Shipping & evolution of trade

00:05:13
Speaker 1: So and you mentioned to me several times that shipping was actually a family business, right?

00:05:20
Speaker 2: Yes. I grew up son of officer of Hamburg Süd. So that was the growing up. And then later on, my parents started their own shipping business. I think that combination of having worked with the real shipping company family business, studying economics made me with my company from my first job to the IMO, from Maritime in London, and from there to Chile, covering ports and shipping in Latin America, in the Caribbean, and now 20 years already in Geneva. over there, our offices with all these Internet organizations working on shipping in in this beautiful international Geneva. How did you end up anchoring here in Geneva?

00:09:21
Speaker 1: Jan, I was actually born in Geneva, and I spent most of my 40 years of professional career in trade and shipping. Geneva is an international city with many of international organizations being represented, and when we look at the world of shipping and logistics today, the importance of regulators and collaborating with international organizations is extremely important. It's only by working together and collaborating that we can improve efficiencies together.

From your perspective, what's your feeling of the status of the international trade and logistics?

00:13:28
Speaker 2: It's impressive what has happened over the last two years with this pandemic, we all thought trade would go down tremendously, but actually trade in goods has been going up. Because you and I, when we are in lockdown, we no longer go to the hairdresser, to the movies, to the restaurants, but we buy things and these come in containers. So what has been positive? We can acknowledge during the pandemic, a lot of digital solutions have been advancing more than in two years, more than in the five years before, because people in the past love to touch paper and like all these complicated procedures, they now realize it's actually not such a bad thing to move towards electronic payment, single windows, pre-arrival processing automation, trend information, trade information portals.

00:15:00
Speaker 1: Of course, there's more adoption.

00:15:02
Speaker 2: We have to LOCK IN the progress made during the lockdown. We were on LOCKDOWN. And now and let's keep that progress that we have made in digitalization.

00:15:18
Speaker 1: Oh, absolutely. You're spot on. And I like that mention of the of the lockdown, unfortunate lockdown, which is really, as you say, helped us to, to find new solutions, to find these efficiencies, to digitalize some of these complex processes.

00:15:35
Speaker 2: And if we link this now to the digitalization with the container shipping, I mean, we also do teaching and classes and sort of textbooks. The digitalization can learn from containerization because the container was invented by the private sector.

00:15:53
Speaker 1: Absolutely.

00:15:54
Speaker 2: But it only became the beautiful, great solution that promoted trade, thanks to public order global standards. So, the ISO, the CEFACT of the standards type of things, they also need to help digital solution, which are driven by the private sector. But they will only really have the positive global impact once the Internet Foundation's the ISO Safe Act, WTO, WTO make them global.  

PART 3 – Digitalization facilitating trade

00:16:56
Speaker 1: But how do you see digitalization, helping the evolution of trade?  Which, as we know, is growing exponentially. How do you see that moving in the next couple of years?

00:17:28
Speaker 2: Optimization of processes is necessary. It complements the one big transition that the industry is facing, which is the energy transition. We must have zero greenhouse gas emissions by 2050 from shipping. How do we get there? There are alternative fuels. There are new technologies. There are all types of supporting measures. Digitalisation is one of them. Like port optimization is one of my favorites. We don't go fast and then we wait in the port. No, we go with the optimal speed. 
00:19:03
Speaker 1: I think that's a that's a very obviously a very hot topic. I think that the as you mentioned, digitalisation is simplifying the documentation processes, getting rid of paper. When we talk about E-bills and all the other related documents, just in time, a lot of these efforts that, as you know, are being promoted by associations such as DCSA, the Digital Container Shipping Association. And I think that we're really in that on that path, which, as you said, was was really exacerbated during the pandemic.

00:19:48
Speaker 2: It's one industry that must be very unhappy about the bill of lading (??), the air cargo carriers. They have less papers to carry urgently from one port to another.
  
00:21:03
Speaker 2: Yeah. There's one message that we like to get across about all these digital solutions, trade and transport facilitation. I'm pretty sure you have also seen some PowerPoint, some presentation document with a balance. Somebody tells you either you facilitate trade and make it easy and digital, or you control. And for me, this is really the wrong picture or the specific solution we have talked about this afternoon. From risk management to automation to pre-arrival processing to more transparency to single windows and so on and so forth, they all help achieve both. They make life easier for the carriers, providers and the shippers clients, and they help the customs authorities, any customs and other border agencies.

00:22:28
Speaker 1: No, no, I completely agree with you. And I think that the sometimes unfortunately, sometimes to get adoption, you need to make it mandatory. But but as you say, it's not it's not a tradeoff. Right. I think I find that very interesting.  

Well Jan, thanks so much for this, the insights that you've given me, which I found extremely interesting. So I really thank you for that. And I hope we'll have the opportunity to continue this conversation.

00:25:33
Speaker 2: Thank you. Thank you. Pleasure's all mine. To be continued.

00:25:36
Speaker 1: Thank you. Thank you.