Benefiting from digital standards
In October 2021, DACHSER has joined forces with other companies in the logistics industry to establish the non-profit Open Logistics Foundation. In this interview, DACHSER CEO Burkhard Eling and CDO Stefan Hohm talk about the background and objective behind this initiative, which aims to increase digitalization and standardization, as well as its limits.
Mr. Eling, Mr. Hohm: A nonprofit foundation to establish an open-source community—what’s that all about?
Burkhard Eling: All the parties along the logistics chain are working very hard to digitalize their processes. Since there’s no such thing as a self-sufficient logistics company, we work with many different actors, including customers and service partners. We can make this collaboration even more efficient by putting more and more common standards and building blocks in place. Together with the founding members of the Open Logistics Foundation, we have taken the first step. Now it is a matter of convincing the other market participants that those standards are useful. After all, the more companies that follow suit, join the initiative, and get involved, the greater the chance of instituting industry-wide accepted standards.
Stefan Hohm: DACHSER has long been committed to common standards, an approach that has always paid off in the long run—for us and everyone in the supply chain. Take the EAN 128 barcode, for example, or the SSCC serial shipping container code: we committed ourselves to using these early on and, as a member of the GS1 standards body (formerly known as the CCG), really campaigned hard for rules applying them to make sure they spread across industries. Our commitment to the Open Logistics Foundation follows the same logic as our work in GS1—which itself is actively involved in Open Logistics e.V., the support association for the foundation, as well. Like GS1, the Open Logistics Foundation is a way to turn certain hardware and software components into de facto standards and—and here’s the special part—provide users not only with recommendations but also with lines of code. This all builds on open source.
What do you mean by that?
S. Hohm: Open source is software whose source code can be seen and used by others. Web browsers such as Firefox and Chrome, or Linux, the world’s most widely used operating system, work according to this principle. DACHSER, too, has been using open-source software and components for more than 15 years. We currently do so in over 70 programs and applications. The open-source community relies on the collective intelligence of many, in a few cases on altruistic motives, and very often on the common goal of simplifying processes, sharing development costs, and gaining additional market share.
What does this approach mean for the Open Logistics Foundation?
S. Hohm: There’s a technical platform called the Open Logistics Repository, where software and hardware components, interfaces, and reference implementations are openly and freely available. We—and the other members—can access the platform free of charge, call up the code for any standard application, and use it as a basis for, say, expanding our own applications or setting up new products and business models more quickly. It’s entirely up to us which codes, concepts, or projects we import. And we’re definitely not going to share anything that gives us an actual competitive advantage.
B. Eling: We care about standardization in particular because, when it comes to certain “all-purpose applications,” standardization reduces overhead—ours and that of the industry as a whole. Today, what often happens is that mutually incompatible, insular solutions prevent pragmatic networking between partners and customers. We also don’t want to waste limited and valuable development resources on programming every single line of code for a standard application. It makes much more sense for us to build on a standard and then create our unmistakable DACHSER USP with our own data and approaches. This enables us to add real value for our customers.
S. Hohm: Intelligent logistics depends on capable IT systems. DACHSER has adhered to this principle for many decades. We’re known for our excellent in-house IT development, and that won’t change. We will continue to orchestrate the architecture of our core systems ourselves, and we will, of course, continue to program our own applications—but we will also incorporate solutions that are available on the market into our portfolio. And what’s equally important to me is that using open-source software reduces our dependency on commercial providers—open source doesn’t get discontinued.
Burkhard Eling is Chief Executive Officer (CEO) from DACHSER. Stefan Hohm is Chief Development Officer (CDO) from DACHSER.
Mr. Eling, are there any examples of industry-wide standard applications associated with the Open Logistics Foundation?
B. Eling: There is one application that the Open Logistics Foundation is actively developing, and for which some initial lines of code have already been published: the eCMR digital consignment note for cross-border traffic. On top of that, we’ve also submitted suggestions for standard applications, like a driver app. Logistics providers tend to have an isolated solution of their own for more or less the same functions, namely order information, routing, and rest time management. Standard applications like the one already mentioned don’t give anyone in the industry a real competitive advantage. A common open-source standard, on the other hand, reduces DACHSER’s and everyone else’s overhead, fosters cooperation, and frees up much needed development resources.
Doesn’t this open-source community entail certain risks? After all, your competitors are also in the room.
B. Eling: I don’t see it that way. Antitrust legislation explicitly supports the development of open-source programs that serve the common good. And again: we do not share any information, processes, programs, or applications that give DACHSER a competitive advantage. Nor do we disclose any prices or sensitive customer data. In addition, compliance processes have been set up to enable cooperation between companies and prevent malpractice.
S. Hohm: We will continue to develop sustainable software and smart processes that will be available only to us and our customers. We will, however, share basic applications and lines of code in the future to reap the long-term benefits of industry standards established among customers and competitors. Transparency, accessibility, and compliance are top priorities in our day-to-day business.
What are the implications of the open-source approach for the logistics industry? And what does that mean for DACHSER?
S. Hohm: Open source facilitates digitalization, making it a key success factor for the entire logistics industry. Digitalization means connectivity—and the only way to achieve that is through joint action. What does it take for open source to be successful in logistics? A creative approach, complete transparency, common applications, maximum usability, and an understanding of how to get all companies on board to set up the right business case as a beacon.
B. Eling: Digitalization provides us with an opportunity to reconsider the way we operate our processes, organize our work environment, and work with our customers and partners along the supply chain. If we manage to think and act in more digital terms across the board, we’ll be taking a big step toward accomplishing our mission of making DACHSER the most integrated logistics provider there is. Open source and our commitment to the Open Logistics Foundation are an important part of that journey, as they let us deploy our valuable human resources in software development in a way that adds more value. By doing that, we not only enhance their work, but also secure our economic success. These are very good reasons to support the Open Logistics Foundation from the outset and commit to establishing industry standards.
Thank you both for the interesting conversation.