Governing Logistics Information Platforms

The Extended Single Window (ESW) project aims to support goods flows by Information and Communication Technology (ICT). Specifically, the project takes the concept of Single Windows (often used in the sense that governments offer a single portal or interface to which businesses can submit information, supporting re-ruse by multiple agencies and coordination of government activities) and includes the business side; creating an Extended Single Window. An Extended Single Window includes business information systems and platforms and supports the re-use of business data, both for supporting new business applications and for making it easier to connect to government single windows. The project is not alone in this ambition. For example, in the FP7 project CASSANDRA, funded by the European Commission, the concept of a data pipeline was developed and put to practice in various international trade lanes comprising four continents in total. Within the Netherlands, the national initiative to support innovations in logistics (Topsector Logistics) yielded the development of a Neutral Logistics Information Platform (NLIP, see www.nlip.org). This platform aimed to support information exchange in international supply chains. Similar to ESW, the starting point in the NLIP were the Port Community Systems (PCSs) in main ports in the Netherlands, and build from there. Given the similarities, ESW has been heavily impacted by the development of NLIP and much of the material in this report is in the context of the NLIP concept and programme. However, be it a data pipeline, an Extended single window, or a logistics information platform, one of the pressing issues of these ICTs for information exchange in the international supply chain is the issue of governance. Governance primarily concerns what kind of decision structures are needed, for example on the process of agreeing on data ownership, the selection of standards, and the funding structures. What incentives can be created to have parties adopt it, and who should provide these incentives? Is value added functionality an option? If so, what kind of functionality; only for parties that agree to it and have a role in it, or can it actually be part of the funding structure? That makes the question for data ownership, and cost- and benefit distribution even greater. There are several configuration options for global information sharing ’system-of-systems’. For example, commercial platform providers could each offer commercial solutions, the adoption of which would benefit the supply chains using it because all of the platforms adhere to a similar standard for supporting compliance (Bharosa, Klievink, Janssen, & Tan, n.d.). Apart from the commercial platforms of global IT solution providers, one of the most realistic developments paths is to have national platforms as main hubs, or ‘landing places’, connecting the complex logistical processes and stakeholder setting of port environments to the international trade flows, information-wise that is. In this report, we analyse the route towards a national information platform. To ensure our analysis is rooted in empirical material, as a case study we picked a specific Port Community System (PCS) as one of the building blocks of the national information platform. The case study comprises three parts, of which the key findings are:  As the NLIP/ESW is all about value-added functionalities for the sector as a whole by making smart combinations of data, we study three value-added services of the PCS. These three services (cargo information, inland manifest and discrepancy list) illustrate the role of a community system in bringing together a multitude of parties that are all independent but come together in specific trade lanes where the actions and information of one affect those of others.  We analyse the role of the system in an export process. We find that this is largely community functionality that is needed for (the parties in) a port to efficiently operate in a competitive international environment. Our analysis shows how this kind of core functionality generates a steady stream of key data, both public and private, that is necessary to make the above-mentioned value-added service possible. These are often public-private combinations, with often one of more stakeholders that (more) directly benefit from these functionalities, but do require others to contribute (that benefit less or not). A major area for decision making that follows from this analysis is that for a NLIP/ESW, decisions need to be made on which functionalities are permissible and which data may be used for them (i.e. can data that have been provided for community functionality be re-used for value-added services? ). This is also related to the issue of data ownership and any rights or permissions a custodian of data may have.  Third, we analyse the role of the system in an import process. Again, this is core functionality, needed by parties involved in importing goods, whether they are involved in the logistics (handling in the port and hinterland transport), the trade lane (e.g. as a buyer or re-seller of the goods), or as an inspection agency (e.g. Customs, food and product safety). In this situation, the ‘cargo information’ service (described as part of step one) offers functionality for various parties involved. However, our analysis shows that this also yields a debate on the pricing of such a service, as well as the cost distribution. A major area for decision making that follows from this, is that of decisions on the finance structure of the system as a whole (e.g. which services are considered community functionality and how to fund that) and of individual services that need to be decided on at the community-level (e.g. how are costs and/or benefits distributed among parties that are involved in the service). From the interviews we learn that stakeholders have multiple perspectives regarding the decisions at the community system level. Though NLIP/ESW is basically a federated system, the abovementioned aspects and areas for decision making transcend the level that individual actors can make decisions on. As NLIP/ESW brings multiple communities (e.g. the community in a specific port or in a specific sector) together, these areas also transcend the level of communities that have existing collaborations at the community level. Dealing with these aspects requires processes or structures for collaboration among stakeholders for agenda setting and decision-making. We argue that this situation can be dealt with by developing a structure (e.g. an institutionalised process, potentially with stakeholder participation) for deciding on these issues in a way that makes the decisions and the process transparent to the stakeholders. Also, the structure needs to accommodate that stakeholders can raise issues, are heard, and committed to the outcomes. This actor-related complexity is the area of governance of NLIP/ESW, the topic of work package 3 in the ESW project, of which this is the final report. When assessing the current governance related to NLIP/ESW, it becomes clear that currently much of the actor-complexity is funnelled on the technical complexity. In other words; the technical arrangement have to accommodate not only the technical complexity but also the positions and interests of the stakeholders that were involved in the development phase. Further adding to the complexity is that the types of operations and information exchanges that the NLIP/ESW should support are highly diverse, if it were to act as a national platform and pipeline ‘landing place’. This complexity cannot only be dealt with by technical solutions, further emphasising the need for solutions in the area of governance. Currently, many governance-related issues are discussed and decided on in a temporary collaboration structure (ESW is a project and NLIP could also be considered a project, or a programme covering multiple projects). Some issues that stakeholders encounter may seem operational or technical problems, but at the core these revolve around deciding what NLIP/ESW may do, aims to do, how it does that, and who pays for what. Our study finds that for the next step in the development of NLIP/ESW, a long-term basis for proper decision-making needs to be developed, also internationally. This basis entails that there be a structure and decision making processes that are able to ensure effective and efficient decision making regarding those aspects that transcend the level of individual actors (Veeneman, Ten Heuvelhof, De Bruijn, & Saanen, 2011). Parts of this structure are already in place in the existing NLIP/ESW programme, but its temporary ‘project’ basis is likely to be too permissive to be able to make decisions without risking a long, dragging process of strategic behaviour and negotiations. Also, the governance structures of the existing NLIP/ESW components (i.e. the PCSs) do work with representation of various stakeholder communities, but our research suggests that parties that are not involved directly (including parties that have representation) do not have a clear understanding of how decisions were made.