Hong Kong needs industry process standards to drive e-logistics
by Leo Yeung, Consulting Services Director, Asia Pacific, Global eXchange Services

e-Logistics is becoming the new buzzword after the burst of the dot-com bubble as Hong Kong is looking upon the logistics industry as one of the strategic pillars. While we all hope that e-Logistics, together with other complementary initiatives like CEPA and the cross-boundary infrastructure projects, will expedite the growth of the logistics industry and re-start the economic growth dynamic, there are hurdles to be overcome before e-logistics to take off in Hong Kong. e-Logistics, as its name suggested, is the adoption of electronic means in facilitating logistics activities. Apparently it is something not too difficult to accomplish with today's information technology. Hence, the characteristics of Hong Kong being a small city overwhelmed by SMEs is a challenge for wide adoption of e-Logistics. Availability of affordable technologies to SMEs is perceived as critical to the adoption of e-Logistics in Hong Kong. Apparently this issue can be addressed by encouraging more competition in the technology marketplace or by leveraging on government sponsorships. Nevertheless, these measures can only tackling the issue in the surface. Today, sizable logistics players like ocean carriers, ports, or service providers have established different kinds of e-logistics platform. These platforms are facing a big cost challenge in integrating with the SMEs which probably only account for small share of the transaction volume but majority share of the total number of trading partners. A fundamental issue is the lack of industry process standards for logistics companies to transact with their trading partners especially the SMEs. Industry process standards not only refer to standards for electronic document level transactions like EDI but standards including the inter-company business process flows of these electronic transactions. Despite the internal processes in many logistics companies and their e-logistics platform, there is not much effort being devoted in industry process standards. In fact, industry process standards will enable the implementation of industry-wide e- Logistics more cost effectively. It is because when logistics companies deploy e-Logistics solutions comply with the industry process standards, they will be assured that these solutions are interoperable with their trading partners' solution in business processes prior agreed. Two process standard frameworks are listed here for reference purpose. None of them can be applied straightly to the logistics industry. After all, the public sector and the industry participants have to take lead on driving the development of industry process standards to expedite industry-wide adoption of e-Logistics. RosettaNet is a non-profit consortium formed by players in the hi-tech industry with an objective to create, implement and promote open e-business process standards. RosettaNet is more robust than EDI not only in adopting the XML technologies versus EDI's cryptic message syntax but also in defining the inter-company collaborative processes called PIPs (Partner Interface Processes). PIPs describe the activities, decisions and partner role interactions in electronic transactions between two trading partners. RosettaNet has a segment of PIPs for transportation and distribution. However, the shortcoming of RosettaNet is the limited application outside the hi-tech industry. ebXML (e-Business XML) is an open XML-based messaging infrastructure sponsored by UN/CEFACT and OASIS. The ebXML architecture consists of Messaging Services; Registry & Repository; Business Process Specification Schema and Collaboration Protocol Agreement. ebXML is more robust than EDI in a number of ways including the specification of business processes. In addition, the Registry & Repository service enables the storage & easy retrieval of trading partners' information and specification. Unlike RosettaNet, ebXML is not bounded by any particular industry. However, ebXML is still at introductory stage. Most efforts are devoted on the messaging service whereas not too many have been done on the business process specification. Hence, it can be seen as an opportunity for the logistics community to get together in developing and defining some of the collaborative industry process standards using the ebXML framework. Hong Kong has the busiest seaport and airport in the world. With the large amount of logistics transactions being undertaken on a day-to-day basis, there is huge opportunity for the Hong Kong logistics industry to derive a set of industry best practices and translate into industry process standards. These inter-company process standards will enable logistics players to transact more effectively and efficiently and the creation of a collaborative e-Logistics environment.