In today’s high-tech world, supply chains still struggle with data interoperability issues. The main offender? Shipment data. Because of its scattered nature, spanning across multiple locations and originating from many obscure sources, it turns supply chains into a tangled mess. This lack of interoperability obstructs supply chain transparency, hampers smooth operations, and slows down the adoption of data-centric technologies like artificial intelligence (AI) and internet of things (IoT), among others. Moreover, this absence of data interoperability restricts the government’s ability to secure supply chains, maintain robust transport networks and regulate trade to safeguard national interests.

In this article, I’ll first highlight the data interoperability mess faced by both logistics and government agencies in overseeing supply chains. I’ll also identify key supply chain interoperability issues that US government institutions are addressing today. These agencies include the Department of Transportation (DOT), Customs and Border Protection (CBP), and Federal Maritime Commission (FMC) to name a few. Furthermore, I’ll share with you examples of how these agencies are currently working to secure supply chains, prevent bottlenecks, and assist commercial logistics companies in enhancing their efficiency. Lastly, I’ll suggest potential next steps for advancing supply chain data interoperability that benefits both the public and private sectors.

1. Both Supply Chains And Government Agencies Are Challenged By Shipment Data Interoperability.

Poor Shipping Data Analytics – Here Are The 4 Reasons Impeding High Tech Visibility And Optimization

In terms of supply chain data interoperability, shipment data is the most vexing issue. Because of its fragmented nature, this poor state of shipment data impedes the true benefits of digital supply chains. Further, for most logistics organizations, shipment data yields few data analytics insights. Worse, it actually stymies the adoption of data-driven technologies such as AI, IoT, and blockchain. This poor state of shipment data is not only an impediment to supply chain operations, but also U.S. Government agencies such as the DOT, CBP, and FMC to name a few.

At its core, shipment data encompasses a diverse range of systems, various data formats, and numerous communication protocols within supply chains. Complicating matters further, this data is often fragmented, duplicated, and riddled with inaccuracies.

To sum it up, shipment data is fragmented, generated by many systems across large geographical areas. Further, shipment data is not unified like other supply chain data. For instance, data in warehouse or order fulfillment systems for the most part is unified, timely, and complete. To highlight the biggest challenges with shipment data, here are the 4 main issues:

Shipment Data Interoperability Challenges

• Data Is Siloed Within Disjointed Organizations, Restricting Shipment Visibility.
• Massive Amounts Of Fragmented Shipping Data, But Few Insights.
• Supply Chain Orchestration And Automation Limited Due To Complicated Shipping Data Structures.
• Shipping Data Split In Two Parts, Financial And Operational, Impeding FinTech Solutions.

For more details about the poor state of shipment data, see my article, Poor Shipping Data Analytics – Here Are The 4 Reasons Impeding High Tech Visibility And Optimization.

2. How Can The Government Help Fix Data Interoperability Within Supply Chains?

Government agencies like DOT, CBP, and FMC may not be able to help supply chains in the short-term. However,  long-term they can help immensely with many of these data interoperability issues. In fact, if you look at the missions of these individual agencies involved with supply chains, they are charged with improving supply chains. Specifically, it is their job to minimize supply chain choke points, promote economic activity, help businesses to grow, and increase efficiencies. Further, part of their mission is to help fix data interoperability to secure America’s supply chains. Below are some areas where the Government can help with supply chain data interoperability:

a. Legislation and Regulation.

Governments can pass laws and regulations that establish and encourage standardized data formats. Additionally, the Government can help to reduce trade barriers through the promotion of data sharing. Further, they can promote the production of registries for Know Your Customer (KYC) and Know Your Vendor (KYV). These types of actions will help improve supply chain efficiencies, competition, and lower prices for the general public.

b. Provide Incentives.

Governments can provide financial incentives, such as tax breaks or grants, to companies that adopt interoperable systems. Also, incentives can be used to encourage adherence to data format standards, transparency and information sharing.

c. Establish Public-Private Partnerships. 

Governments can partner with private sector companies to develop and promote the use of interoperable data systems. For example, see OMB Revised Circular A-119. Also, these partnerships can involve joint research and development projects, co-funding initiatives, or other forms of collaboration. Further, government agencies can jointly fund proof-of-concepts to enable the quick adoption of emerging technologies and methodologies.

d. Infrastructure Development.

Governments can invest in the necessary infrastructure to support data interoperability. This could include high-speed internet connections and smart infrastructure such as internet of things (IoT) networks. Further, this can include funding of government agencies that interface with supply chains to improve data interoperability. Moreover, the Government can provide incentives for companies to modernize data infrastructure that supports supply chains such as ports and rail. For example, the Government can use authorized funds to provide incentives for shipping exchanges to modernize data infrastructure that supports supply chains such as ports and rails. See OSRA 2022 (PL 117-146), Section 4.

e. International Cooperation. 

Given the global nature of many supply chains, governments can work with their international counterparts to develop and implement global standards for data interoperability. In particular, this would include international standards development organizations such as ASTM International.

f. Security Standards, Transparency And Traceability.

Digital Identity In Logistics And What To Know – The Best Security, Scary Risks

Further, to help secure supply chains, the Government can continue to promote data security standards as is done through the National Institute of Standards and Technology (NIST). In particular, data security standards not only promote privacy, but also assist with preventing data breaches that can paralyze parts of supply chains. For more info on security standards and digital identity, see my article, Digital Identity In Logistics And What To Know – The Best Security, Scary Risks.

Also, the Government can promote end-to-end supply chain traceability for select products and functions to protect national interests. For example, this can include traceability of imports and selected products that are hazardous or are prone to counterfeiting.

Lastly, the Government can set guidelines to regulate legal entities, data ownership and data access rights to better secure the supply chain as well as increase transparency across the supply chain. 

3. So, What Are U.S. Government Agencies Doing Today To Enable Better Supply Chain Interoperability?

Let’s Breakthrough The Data Interoperability Nightmare: It Is The Best Way To Unlock Supply Chain Innovation

Currently, there are several U.S. government agencies working on improving supply chain interoperability. This was highlighted in a recent seminar hosted by the ASTM F49 Committee in November 2023. The ASTM International conducts international standards development, and its Committee F49 on Digital Information in the Supply Chain. At this conference, there were several government agency speakers to include Surface and Transportation Board (STB), Federal Maritime Commission (FMC), and U.S. Department of Transportation (DOT).

For more details on the ASTM F49 seminar, click here. Also, here is the slide presentation from the seminar, Bridging the Gaps. In particular, a lot of good information from former Commissioner Bentzel from FMC, and Andrew Petrisin from DOT about their current private-public initiatives within their agencies. 

There are some Government agencies making real progress on supply chain data sharing. Specifically, the Department of Transportation (DoT), Federal Maritime Commission (FMC), and Customs and Border Protection (CBP) have launched promising initiatives to tackle one of the industry’s biggest headaches. Namely, getting different systems to talk to each other. Below, I’ll walk you through what these agencies are doing to help private companies move goods more efficiently.

a. DOT: Working To Improve Data Interoperability For The Nation’s Transportation Systems.

The key objective of the Department Of Transportation (DOT) is to serve the American people and economy by delivering the world’s leading transportation system. In regard to data interoperability, in 2022 DOT started the FLOW (Freight Logistics Optimization Works) initiative. This is a public-private effort to develop a digital tool that gives logistics companies information to better move goods more quickly and cheaply, ultimately bringing down costs for families. Below is a summary of what DOT’s FLOW initiative is doing to improve interoperability and increase the resilience of supply chains.

1) DOT Data Interoperability Challenges To Improve America’s Transportation System.

Supply Chain Resilience: It’s Important and You Need to Know Why

In the realm of DOT, their data interoperability focus is on helping to reduce bottlenecks in the supply chain. Key challenges include:

• Lack Of Visibility Of Logistics Flows To Detect Chokepoints. Due to poor supply chain visibility across transportation networks, chokepoints go undetected. As a result, supply chain stakeholders, both public and private, do not have the opportunity to react and avoid chokepoints. Thus, there is a pile-on effect that makes matters even worse.
• ETAs Are Not Trustworthy Enough For Logistics Planning. Especially, for ports of entries and major terminals, estimated time of arrival (ETA) for shipping and supply chain events cannot be relied on. Further, this results in a lot of extra effort to confirm ETAs and develop contingency plans.
• Lack Of Interoperability Makes Supply Chain Operations Inefficient. Due to this lack of visibility within transportation networks, logistics operations cannot optimize inventory levels, carriers can not optimize asset utilization, and drayage wait time increases.

2) DOT’s FLOW (Freight Logistics Optimization Works) initiative To Achieve Data Interoperability.

DOT’s FLOW initiative that started in 2022 is focused on capturing future logistics demand and increasing transparency across the supply chain. The current focus of this initiative is on inbound logistics into the U.S. based on purchase orders (PO) from domestic retailers and manufacturers.

In particular, this system is focused on U.S. port operations. The intention of this system is not a track & trace system, but a system that provides aggregate information to identify availability of assets related to port operations. For example, authorized users can get access to this trend data such as the availability of import container slots, truck & chassis, and warehouse slots associated with a port. For more details on the status of DOT’s FLOW initiative, see ASTM F49 Seminar slide packet, Bridging the Gaps. 

b. CBP: Securing Better Data Interoperability For More Efficient Customs Processing And To Protect American Economic Interests.

When it comes to supply chains, the key objectives of the CBP are as follows:

• Enforce the laws related to customs and trade.
• Protect American economic interests.
• Assist American business to grow through lawful international trade and commerce.

In regard to data interoperability, CBP has several efforts on-going as part of their modernization effort with their Automated Commercial Environment (ACE) 2.0 system. The ACE system is the key CBP system at ports to regulate customs and trade. Included in the ACE 2.0 modernization initiatives are data interoperability standards tests to improve supply chain transparency, efficiency, and leverage new technology such as distributed ledger technology.

1) CBP Data Interoperability Challenges To Improve Its Operations And Commercial Trade.

In the realm of CBP, their data interoperability focus is on improving efficiency, increasing end-to-end visibility, and improving the identification of legal entities within the supply chain. Key challenges include:

• Requirements For Paper-Based Documents, Hampering Digitization Efforts. CBP continues to digitize operations through their ACE system, but specific types of cargo may still require paper documentation. Regulations and requirements can change, and they can also vary depending on the specific nature of the goods being imported or exported, the country of origin, and other factors.
• Challenge Gaining End-To-End Supply Chain Visibility. In particular, CBP seeks cargo visibility for the country of origin and manufacturer of origin. This is to enhance security, enforce trade laws, apply anti-dumping and countervailing duties, protect consumers, and ensure supply chain integrity. 
• Cargo Data Is Fragmented, Making It Challenging To Establish Identity Of All Stakeholders. Collecting quality data about the cargo is challenging. This is particularly challenging with the emergence of ecommerce. Also, it is challenging to validate the identity of all organizations related to cargo movement and events. 

2) CBP’s initiatives To Achieve Data Interoperability.

CBP is working on several initiatives to promote global interoperability to enable different software systems to work with each other. For these current interoperability initiatives, CBP is working with the Department of Homeland Security’s Science and Technology Directorate under the Silicon Valley Innovation Program. Their recent tests focused on pipeline oil and steel supply chains. The goal of these tests was to remove the need for paper, thus, allowing for the real-time exchange of data.  

As part of CBP’s data interoperability work, the agency continues to invest in global interoperability with upcoming international and domestic testing in 2024. Specifically, they will be focusing on e-commerce, natural gas, and food safety. These tests will include collaboration with several partner government agencies. CBP looks to further promote transparency and global interoperability standards with these tests. These 2023 tests and future 2024 initiatives can be best summed up by the following quote from CBP’s Business Transformation and Innovation Division Director, Vincent Annunziato.

“Our 2023 test created the possibility for more advancements. With bipartisan support, CBP will extend its commitment to global standards by testing its ability to verify the origin of transactions and issue credentials. The 2024 tests are a prelude to limited production for the five Silicon Valley Innovation Program projects (pipeline oil, steel, natural gas, e-commerce, and food safety) and the larger CBP modernization effort, the Automated Commercial Environment (ACE) 2.0,” 

Vincent Annunziato, CBP’s Business Transformation and Innovation Division Director

For more information on this CBP initiative, click here.

c. FMC: Facilitating Better Data Interoperability To Improve Maritime Commerce.

The Federal Maritime Commission (FMC) regulates the U.S. international ocean transportation system. In regard to data interoperability, the FMC is using the Maritime Transportation Data Initiative (MTDI) to develop recommendations for common data standards and access policies.  This MTDI initiative is helping the FMC to fulfill its mission of fair and efficient maritime commerce. Additionally, this initiative will enable FMC to better protect against unlawful and unfair shipping practices. Lastly, improving data interoperability will enable FMC to better fulfill its mission to review and assess agreements among ocean common carriers and marine terminal operators.

1) FMC Data Interoperability Challenges To Ensure Fair And Efficient Maritime Commerce.

In regard to U.S. maritime commerce, the key data interoperability challenges center on port operations. Port operations challenges include:

• Scheduling Of Ocean Carrier Activities. There is a lack of both frequency and accuracy in the scheduling of ocean carrier activities. This then has a cascading effect on both government and commercial operations in terms of efficiency and timeliness.
• Port Operations Event Visibility. There is a lack of cargo status visibility, data accuracy, and timeliness of status changes. This results in delays and poor asset utilization for all organizations involved in port operations.

2) FMC’s Maritime Transportation Data Initiative (MTDI) To Achieve Data Interoperability.

A Refocus on Supply Chain Glossaries: The Best Way To Unlock Data Interoperability, Strengthen Collaboration And Leverage Tech

In 2021, FMC established the Maritime Transportation Data Initiative (MTDI) to develop recommendations for common data standards and access policies. This initiative has worked extensively with ocean carriers, marine terminal operations, port operations, drayage trucking services, warehouse operations, and intermodal rail to identify data interoperability solutions to improve port operations. As of 2023, FMC’s initiative is recommending a Maritime Transportation Data System (MTDS). Specifically, to achieve port operations transparency, ease of access, and coordination of information requirements, the MTDI report made this key recommendation:

“… the MTDS recommendation would recognize the role of the port authority in providing public access to ensure that they provide information from ocean carriers servicing the port, MTO’s operating at the port, and intermodal rail carriers servicing ocean carrier intermodal shipments through the port, as well as other general port-wide information such as that related to scheduling berthing/pilotage, and other port-wide operating conditions. Additionally, the recommendation for the MTDS proposes that the FMC issue voluntary guidelines on potential activities surrounding intermodal services activities impacting intermodal ports.”

So, FMC is leaning toward providing port authorities a MTDS system and operational capabilities to achieve data interoperability. Specifically, they will do this by having port authorities provide port operations visibility to both actual and scheduled events to authorized commercial and government organizations. For more details on the status of FMC’s Maritime Transportation Data Initiative, see ASTM Committee F49 Seminar slide presentation Nov 2023, Bridging the Gaps. 

4. Next Steps To Improve Supply Chain Data Interoperability.

So, a lot of good work is getting done where government agencies are helping to improve data interoperability and secure the supply chain. However, there are still major problems to solve. The top issue is that this data interoperability work is slow both for logistics organizations and government agencies. Below are three ideas on how we can accelerate this work on improving supply chain data interoperability.

a. Identify And Develop Solutions That Unify Shipment Data.

Better Shipping Data Analytics Results: Use Of Load IDs To Achieve The Best Efficiency, Visibility, And Financials

Shipment data is fragmented making it difficult to achieve supply chain visibility. As a result of this low-quality data, it is challenging to trust it in making decisions, Furthermore, the lack of unified supply chain data makes it difficult to implement new technologies such as AI, IoT, and blockchain. This needs to change. Here is one way to solve this, see my article, Better Shipping Data Analytics Results: Use Of Load IDs To Achieve The Best Efficiency, Visibility, And Financials.

b. Build Consensus Among Stakeholders To Improve Data Interoperability.

There are many operators and entities involved in global supply chains. This includes logistics organizations, governments, government agencies, and data standards organizations. What is needed is consensus to improve data interoperability. For example, consensus building can include educating stakeholders on the issues. Also, more stakeholders can start aligning with current international data standards efforts. This would preclude the creation of more proprietary data formats and data silos within supply chains.

c. Establish Incentives To Move Rapidly On Achieving Data Interoperability.

There is a lack of incentives and authority to rapidly develop solutions to unify shipment data to achieve supply chain data interoperability. More incentives are needed as well as more funding of public-private partnerships. Also, we need to eliminate archaic policies that impede data interoperability. Absolutely, the many government-sponsored technology pilot projects discussed above are helping, but more needs to be done.

I want to thank Michael Darden of DFM Data Corp, and the Transport Unit Identifier (TUID) Working Group for keeping me abreast of these data interoperability initiatives going on within government agencies and within the various data standardization development groups such as ASTM International.

The Data Interoperability Challenge: It’s The Need For Tech Standards, Compliance, Security, Massive Resources, And Be Understandable

For more form SC Tech Insights, see latest articles on Data, Interoperability, and Supply Chains.