Shipping at the Tipping Point

A new BPI Network Study Report finds the shipping industry is ready to address the lack of collaboration that is a road block on the path to digitalization, but which road will it take towards change?

Navis and XVELA, both part of Cargotec, funded the study by the Business Performance Innovation (BPI) Network. Entitled “Competitive Gain in the Ocean Supply Chain: Innovation That’s Driving Maritime Operational Transformation,” the report is based on a global survey of more than 200 executives and professionals from terminal operators, carriers, logistics providers, vessel owners, port authorities, shippers, consignees and other members of the global ocean supply chain.

Unsurprisingly, the study supports the view that parties right across the supply chain suffer from poor visibility and predictability around shipments, and are losing money due to “a lack of partner synchronization and insufficient data insight”. 

The problem is certainly not new. “However, there is recognition, particularly among industry leaders interviewed, that digitization and mindset shifts are afoot, and will be a boon to all players in the industry,” Navis noted in a press release. “Everyone benefits from collaboration and data sharing,” Andreas Mrozek, Global Head Marine & Terminal Operations for Hamburg Sud Group, was quoted as saying. “It starts with the customers and moves to the carriers, then the terminal operators, vendors, freight systems, truck companies, and keeps going down the line. Closer collaboration is a compelling value proposition for each supply chain partner.”

Included in the study findings are that 90% of survey participants said real-time data access and information sharing was important to increasing the efficiency and performance of the shipping industry, with 82% agreeing the industry needs to improve supply chain visibility.

Again, this is nothing new, and the challenge is how to get the fragmented and conservative industry to embrace new thinking. “The push for improvements” Navis stated, “will likely come from a combination of forces, according to industry executives. Shippers will push for better operational visibility; alliances will demand better ways for their carrier members to share information to improve efficiencies and customer service; and terminals and port authorities under pressure to increase utilization and optimize existing infrastructures”.

According to respondents, the areas most in need of improvement are: 1) carrier to terminal coordination, 2) supply chain visibility and information sharing, 3) terminal operations, 4) cargo flow visibility and predictability, and 5) coordination across carrier alliances.

"The findings of the study are consistent with what we are hearing in the field from some of the biggest carriers and terminals in the world. As we have already seen in other industries, the visibility, coordination and collaboration across business networks provided by cloud platforms drive higher efficiencies and customer value," commented Guy Rey-Herme, XVELA President. "It is much easier for everyone in the network to achieve performance and service goals when operations are synchronized." 

XVELA has laid out its path to achieving that “synchronization" with its “many-to-many” platform for collecting information from the different vessel and stowage planning applications in use today on a cloud-based platform. Cargotec is backing XVELA, and has supported its strategy with the acquisition of Interschalt Marine and the broadening of Navis’ product offering to cover “carrier solutions”.

At the same time Navis is not alone in looking to move on the opportunity to grow its business on the vessel planning side of the industry. Total Soft Bank (TSB) and Cyberlogtiec, which also supply software for vessel and stowage planning, have launched their own cloud-based platforms, called Cloud CASP and CARA respectively. TSB’s CASP is used by MSC, Maersk’s partner in the 2M Alliance, and it is understood Maersk is currently evaluating its options.

The BPI report found industry executives are ready to collaborate, but a big question for the market is how this will be achieved. Is the industry is ready to collaborate on a common platform, or will there be multiple platforms, perhaps supporting different alliances?