“Ideal model to develop Sri Lankan Shipping and has the potential to convert the country as a shipping hub of Asia...”
As world progress into new millennium, the ongoing rapid advances information technology have transformed global trading pattern and humans lifestyle into a different dimension. This new dimension has emerged since from 1980 and today everyone knows it as e-commerce.
Jaya and Unity container terminal (SLPA)
The e-commerce is in forefront of world rapid advances, it smaller the world day by day and year by year continuously. Today e-commerce has affected as cannot be separated in arena of global trade including service sectors. If someone said, I did some product purchase from USA market or did some banking facilities or had a live conference with foreign clients without moving from my seat, is not an anymore wonder on today.
As shipping is one of an oldest industry, many years of practices the shippers, consignees and carriers were reluctant or scared in re-engineering in processing of a shipment due to risk involvement in value of cargoes. However, as a result of global competition, world economic and environment challenges, the maritime shipping has to give its focus on improving process efficiencies, cost reduction, safety and security aspects and manymore. Hence, as a largest, competent and booming industry, which carries more than 80% of world tonnage of cargo as more than 8 billions of tonnes per yearly by sea, the technology is the forefront of sphere in maritime shipping.
According to maritime professionals, researches, moving tends and practices one of the best available tool to achieve the management and operational excellencies of maritime industry, is e-commerce; the exchange of information, fund transfers, electronic processing and wide range of activities are done over a electronic system among clients, carriers and other related bodies via internet and other computer networks.
The US and some EU countries have started the adaptation of e-commerce,to their businesses since from 1980. As a result of this adaptation the carriers, suppliers, traders and other related bodies have been able to overcome most of challenges of arising trends of the global economy with maximized profits and customer satisfaction. According to statistics in 2010, USA stands as the world leader in e-commerce as the market share of USD 177 billion and the Europe as the world largest e-commerce market. According to professional estimates, global e-commerce market gross at around 19% and in 2013 it's expected USD 1.25 trillion as the revenue of global e-commerce.
The reasons for this growth and revenue are the benefits behind in e-commerce. A recent research has found out that 51 of the largest container carriers in the world, serves their clients across 4 different channels; web sites, EDI (Electronic Data Interchange), portals and mobiles.
Mostly, the carriers use their own websites and systems for their business processes and purposes. But, for the benefit of the whole industry,the world leading and alliance carriers shared a vision of a common industry portal. Hence, customers would not have to connect to the different e-commerce systems of the individual carrier, but could use one global standard for doing e-business. For example, by facilitating e-commerce through a multi-carrier portal, customers can streamline the whole shipment documentation process through a single platform. Generally, the both websites and portal mostly use EDI for document transactions in variety industries. In fact over 160,000 companies have made the switch to EDI to improve their efficiency and accuracy of document transactions. Computer-to-computer exchange of information is much less expensive and faster than handling paper documents. Studies have shown that processing a paper-based order can cost USD 70 or more, while processing an EDI order costs a dollar or less.
Indeed, by facilitating e-commerce, customers can streamline the documentation process with improve data quality, and faster response times to things like booking requests and reduces errors in documentation that can add costly delays to shipments, transferring of sailing schedules, shipping instructions, track and trace are done in efficient and cost-effective manner than conventional methods with minimum labour time.
A Vessel Traffic Management System (VTMS)
Hence, e-commerce is fast spreading all over the world. According to various studies, the global e-commerce market will dominate in next few years by the Eastern countries including China and South-East region. And reports show the China e-commerce market grows 130% annually.
However, as a country which faces in rapid globalization and amidst challenges in competitions between regional and international ports, Sri Lanka has lot more to do with e-commerce. The existing e-commerce position of the country is weak with comparison to the global level. As we all know the country has a great position to consolidate as a maritime hub, the government and private firms who're engage in maritime industry should have a vision to adapt and exploit the advantages of e-commerce to strength the country's economy. Today, the successful adopters of e-commerce gain the most competitive advantages when they do not see e-commerce as just a technology issue but as a business issue.
Hence, all interested parties should identify the incorporation of E-commerce are beneficiary to almost all the commercial and legal bodies who are dealing with maritime shipping, especially port authorities, customs, shipping lines and its customers. E-procurement, E-operations, E-marketing and E-selling enhance the use of E-commerce in the industry. E-procurement functions of a shipping line can be ranged from buying spare parts, bunker, provision, empty containers etc. via the internet. For an example Electronic Invoice Presentment (EPI) is a tool used to receive invoices online quickly, easily and accurately. And, it allows the user to receive accurate billing information via emails. Plus he can sign up to receive email notifications when invoices are sent, whether they are electronic or paper.
But still in Sri Lanka, most of shipping instructions, bills of lading and bookings other document related to imports, exports are still made and transfer in inefficient and time-consuming conventional way, via fax and phone. The adopting, e-commerce to industry encourages exporters and forwarders to be more efficient, keeping costs down, increasing customer satisfaction and improve the operating efficiency of their supply chain. Thus, they could achieve greater visibility to the data and can more easily share information with all their shipping partners in a very cost-effective and a standard way.
To smoother the operational activities and ensure a better co-ordination inside and outside the port and among shipping communities, e-operation is widely used in world by numerous port authorities, customs, shipping lines and its agents as a part of e-commerce. For example, online berth bookings, e-orderings make it easy for the particular port to give maximum satisfaction for customers by pre arranges berth, equipment and workforce before the arrival of the ship. Considering the Asian region, Singapore Port Authority (SPA), Port Klang Authority (Malaysia) applies this as a tool to enhance its operational efficiency, flexibility, safety and the competency among regional ports. A fully automated system like Vessel Traffic Management System (VTMS) performs a valuable contribution to safer navigation, more efficient traffic flow and protection of the environment.
When it comes to customs operations, the concept or the tool, E-customs plays a remarkable role with increased control of the customs office, less entry errors, electronic notice of VAT assessment, data and communication standards, declaration possible 24 hours a day and more transparent, faster import and export processes and the flexibility, encourages small and medium enterprises to engage in international trade.
As you can see the world leading and most competitive maritime service providing countries and institutes do not see e-commerce as something that is produced by their IT department. But, still the majority of Sri Lankan government institute and private firms sees e-commerce as something produced by their IT department. Instead that, the leading service providers organize themselves around the business processes so their whole business can benefit from access to better data that's all in one place.
As the world moves, we all are compelled to move for our existence, especially the businesses. But, every great thing has started from a simple thing. That's the concept behind the success of many developed countries. After 30 years of conflict as the Sri Lanka economy in a recovery path, there's a small heading towards adapting of e-commerce into local context. The Sri Lanka Port Authority (SLPA) has clearly discerned that there is strong congruence between Information and communications technology (ICT) and the maritime Industry. Hence, SLPA has initiated computer facilities for its operational activities and EDI service for container management. In 2004, the e-bill act was passed from the Parliament and legally accepted the e-signature for the first time in Sri Lanka. And Sri Lanka Customs has initiated a data system for import and export and e-banking, e-manifest facilities. But, still the SLPA, Customs required hard copies so as other related parties.
Indeed, implementating an e-commerce facility in any industry is not an easy task. It's a long-term investment and needs a large capital to invest on computer facilities, IT infrastructures and resources. But, considering the huge potential for the industry, the government, government institutes and private firms should open their eyes towards new technology. The intervention of government, to encourage of Sri Lankan maritime merchant shipping industry would be crucial at this moment to make realize the vision of maritime hub of South Asia. New rules and regulations should be implemented in arena of e-commerce. The educating of benefits and correct usage of such system would be vital for the shipping practitioners, shippers, consignees, forwarders and other related parties to encourage the usage of such modern system.
In nutshell, e-commerce is a flexible solution for maritime industry to be more efficient, keeping costs down and increasing customer satisfaction. The global e-commerce market grows at 19% annually and thousands of institutes and customers around the world adopting e-commerce to gain competitive advantages. E-commerce can be taken as a good business tool to emerge the potentials of Sri Lanka maritime shipping industry.
Hence, the role of the e-commerce is massive towards the development of maritime shipping as it has given the industry an opportunity to be more accurate, efficient and profitable.