Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Innovative shipping - remaining relevant in a rapidly changing world

Four maritime professionals speak to us about how the maritime sector is innovating and remaining relevant in a rapidly changing world and changing the way the industry works in the future.

In a recent article we explored relevance of Start-ups and innovation in a time of uncertainty. Considering the current challenges in the sector, we wanted to further explore the topic of innovation.

Lars Jensen, Founder and CEO at SeaIntelligence Consulting, Jocelyn Hansen from leading ocean and air freight price benchmarking & market analytics platform, Xeneta, Emma Mark, Head of Operations at Intelligent Cargo Systems, and Matthew Wittemeier from INFORM's Logistics Division, spoke to us about how the maritime sector is innovating and remaining relevant in a rapidly changing world and changing the way the industry works in the future.

Read the Q&A below

Question: How are companies trying to remain relevant in a rapidly changing world?

 Jocelyn Hansen: The first step in remaining relevant is to understand what is changing and how quickly. It's imperative for companies to stay alert and informed on everything that may impact their business.

Whether it be a global pandemic, trade wars, or new IMO regulations, companies not only need to understand how it may impact them and act accordingly but must have the ability to see and implement the opportunities that these challenges bring.

Gaining as much transparency as possible to movements in the industry as well as the opportunities that technological advancements can provide, can help a company to remain relevant.

However, without the ability to quickly test and implement new innovative advancements, then many companies get left behind.

Matthew Wittemeier: The pace of change has never been faster than it is today, and perhaps more foreboding is that it is only going to get quicker.

At INFORM, we are constantly looking forward to exploring what the future might hold. Through creative activities like our 2038: A Smart Port Story initiative in 2019 to more immediately applicable activities like our machine learning assessment, we always are considering what the future might hold.

Lars Jensen: I sense the premise for the question is that the world is changing faster than ever, and I'm not quite sure I would agree with that. My core expertise is on the container shipping part and in the broader context of shipping, and that is still a fairly young part of the global shipping industry.

This sector that has seen significant changes throughout its lifetime. If we look back to the 1980s and 1990s, this was an industry that was faced with demand that grows 9 percent a year. How do you even finance this kind of phenomenal growth? I don’t believe this is a matter of whether you can stay relevant, but more of how you stay in the game and how you expand fast enough.

In the wake of the dot-com bubble in the 2000s, where everything else apparently seemed to go online, how would this industry then remain relevant? As it turned out, that was not a great deal of rush because the customers of the industry. We weren’t ready to transform into a digital world anyway as you don't necessarily want to get out ahead of the customers that are not willing to change.

If you then look over the past five years or so, there is a second wave of digitalization that's really gathering pace in the shipping industry. In order to stay relevant, you go back to the simple premise of how you provide tools or a service that makes sense and adds value to your customers.

For example, Amazon was started way back to in dot-com bubble and people started buying good online. Why didn't the shipping lines do this? There were attempts to do this back in the mid-2000s that allowed customers to do this, but it didn't take off because the customers were not ready to do that. This was then being rekindled 5 or 6 years ago where there were new online portals allowing for online freight booking – which also had extremely slow starts. We have only really seen a rapid uptake on this within the last 18 to 24 months.

I don’t believe there was an issue of the industry not providing those tools but were just not relevant at that point in time.

Q: How are maritime professionals and companies striving to keep pace with innovation?

 Jocelyn Hansen: In the past, many companies have prided themselves on the innovation that has come from within - building software internally, taking in as much data as possible, etc.

I believe that many companies are now looking externally to the FreightTech companies around the globe that can help them implement innovation at a much faster pace. Almost all of these FreightTech companies comprise of maritime professionals that have come from within the industry.

There is a movement towards network and collaboration now that is helping to drive innovation forward.

Matthew Wittemeier: When a company has its ear to the ground, it leads to new products and new service offerings, for sure. Some of those ideas pan out, like our machine learning assessment.

We recently launched a very similar product at HHLA CTB in Hamburg. Some, however, don’t pan out, like our 2018 Chatbot service. The trick to innovating, as they say, is to fail quickly and try not to invest too much time and resources in something that isn’t going to work out.

Lars Jensen: The greatest challenge shipping companies are facing here is not actually in the technical innovation itself. That's the easy part of it. The challenge is how do you make this work within your own administrative confines, and that of the industry. You can’t change everything overnight.

How do you make this work with your existing legacy systems, and how do you make these technologies work in a world where you also have to abide by customs regulations, veterinary authorities, banks, insurance companies, all of whom have different requirements, different standards, and different business processes.

So, the challenge oftentimes is not coming up with the technology itself, but it is making it work within the context it has to work in.

Q: Do you believe there has been a hit on confidence of maritime innovation?

 Jocelyn Hansen: The global pandemic has definitely changed the environment for investment for maritime innovation and adoption.

I do not expect to see new ideas in maritime innovation to grow at the same pace in the coming years. However, I do believe that those companies that see the opportunities to implement maritime innovation will step ahead of the pack.

Matthew Wittemeier: I was recently on a call where we discussed what the last innovation in maritime was. The answer depends on your definition of “innovation,” of course.

Die-hard proponents that claim innovation equals a significant step promoting change argue that the first automated terminal in the early 90s was the last time we innovated. Before that, there was McLean’s concept of the container. Others on the call argued that even small steps are innovative, like using blockchain for documentation or AI for improving terminal performance.

Our industry is structured in a way that prohibits true innovation. The barriers to entry are high, the cost of failing is perceived to be high, and the margins are already narrow. Combine this with an aged working population who are inherently less likely to take risks that might compromise their retirements, and you have a recipe for lack of innovation.

Emma Mark: No, quite the opposite. There are more start-ups in the maritime sector than ever before, each offering unique and innovate ideas and solutions to help the industry improve its green credentials and become more efficient.

Whilst not all of the products and services will make it into the mainstream, the sheer volume of new ideas coming into the market is an incredibly positive step forward for shipping.

Lars Jensen: Certainly not. Over the past five to seven years we've been coming out of a period of speculation of what technology can do in this industry. We are now much more firmly entrenched in a period where we are focusing on the tools that work and that can really be delivered?

We are starting to hear less about autonomous ships that are only piloted by robots and how blockchain will revolutionize the entire world and nobody will ever touch any information ever again. In looking back over impact of the pandemic over the last six months, it has helped to sharpen the focus on more practical realities such as how can we more efficiently handle bills of lading, contracts, and how do we make sure shipping lines have the correct equipment and space available.

This is part of an old discussion in the industry and there is a significant take off in various solutions. This makes perfect sense in a world where suddenly you have a huge proportion of departures that are outright cancelled, and networks are in turmoil.

I do not see the focus on these more practical solutions as a loss of confidence, but I see this as a transition away from an aspirational phase - which are always good for inspiration - to a practical phase.

That is not to say the more high-flying aspirational innovations will be completely dead, but some of them clearly have a much longer delivery time.

Q: Digitization is a chance for your business to come out stronger and more relevant in the future. Who are the winners, and who are the losers, in the current climate?

Jocelyn Hansen: The winners - the leaders who implement maritime innovation and are open to collaborating with others to make the network stronger. The losers - the followers who focus on reacting to movements in the industry.

Matthew Wittemeier: I recently co-authored a paper title Screwed: The Real Value of Data, where we outlined a solid argument for why digital is the future. That said, it is important to note that digitization does not necessarily equal innovation.

Implementing a Terms of Service (TOS) isn’t innovative. It is simply a course of business these days. Those who aren’t implementing “status quo” digitalization like a TOS and increasing optimization are falling behind.

Those ports and terminals that are making data from their various digital systems via a robust digital strategy available for insight generation are the ones positioning themselves to be competitive over the coming decade.

There’s a saying about knowing that you don’t know everything. Data can teach us a lot about things we know we don’t know, but as well, it can reveal things we didn’t even know we didn’t know.

Emma Mark: Any company that is prepared to embrace change wholeheartedly will come out a winner, but the key is not just to implement new technology-based solutions.

To truly benefit from the plethora of products and services that are at our fingertips, it’s the mindset of the company and the users that really has to change, without buy-in from crews and port teams alike, any solution is destined to fail.

During the development stages of CargoMate we worked directly with mariners and Fleet Managers which not only gave us valuable insight into where the real pain points were but also helped to create an embedded loyalty which makes company-wide implementation much easier.

Lars Jensen: We’re still in very early stages and it is very difficult to say but the challenges or battlefields will be who has the direct client relationship with the actual cargo owners. This is less an internal fight between the container lines, and more a battle between the container lines and the logistics providers. Today, the logistics providers have the direct client relationship with a large proportion of the market, especially in the small to medium sized segment of cargo owners.

This is the flank that is opening up, so this is not only a battle internally between the container liners, it’s much wider than that, and from that perspective I think it will be more interesting to see how this will play out within the space of the freight forwarders, logistics providers, and NVOs, rather than how will this play out with the carriers.

Q: What are your thoughts on collaborations to provide essential access to markets and growth?

 Jocelyn Hansen: The global pandemic and IMO regulations have put pressure on the industry, and I believe that many companies have been enlightened to the fact that no company can solve the entire issue on their own.

Through agreements on standards, pacts for greener transportation, and gaining greater transparency through sharing of data, companies are collaborating to ensure the industry moves forward and is no longer known for being 20 years behind every other industry.

Matthew Wittemeier: I’m a huge proponent of collaboration.

We keep hearing the buzzword “eco-systems” on the software side of our industry. The perceived importance of an eco-system is typically built out of the notion that a single vendor will provide system coverage for a port and terminal’s broader network of logistics connections.

However, this notion fails to acknowledge that an eco-system gains its strength through its diversity. Plants or animals specialize and rely on others to compensate for their weaknesses while benefiting from their strengths.

Collaboration is what makes natural eco-systems flourish, so it only stands to reason that collaboration is also the best way to enable a digital one to flourish as well.

Emma Mark: We firmly believe that it’s only by extensive collaboration from all sides that our industry can achieve any growth.

Data sharing to achieve port call optimisation is a prime example. Unless ports and shipping companies are willing to share more key information between themselves, true optimisation can never be achieved.

No single company should view their solution as a one size fits all product, which is why we’ve actively promoted other solutions providers because we feel that by sharing information to those that need it is vital to the survival of the shipping community.

Lars Jensen: I would more say it is a necessity. If you do want to take a few steps further into the to the digital world it will be paramount that you get more standards in place that you become interoperable between the stakeholders. Let's not forget, moving cargo from point A to point B requires the involvement of quite several very different stakeholders.

If you want that to work in a digital context, they need to be singing off the same hymn sheet in terms of how you exchange information. Those collaborations are essential to create those standards.

It is too early to say what will the standards de facto be right now, but that will likely be based upon what commercially ends up winning the day. Just like you see in any other industry where standards were not necessarily present to start with- it happens in parallel.

If you think about the container shipping industry itself launched in 1956, but it was more than 10 years until we settled on the 20- and 40-foot standards we know today. There were several different size standards in the first decade until it was smoothed out commercially, and ships, terminals, trucks, and everything else, was aligned to the same standard.

I think this is similar to the period we're going through now, and it is more of a process than a quick decision.

Q: What are the most important trends you are seeing in the maritime innovation currently?

Jocelyn Hansen: Automation. Customer experience. Sustainability.

Automation requires gathering data and implementing new software. Companies will continue to struggle with change management but those that can do so will gain huge efficiencies and savings.

The industry has always struggled to adopt technology that is so common in everyday life. The global pandemic has forced an increased focus towards e-commerce and online procurement as a consumer to ensure social distancing. Customers expect the same digital experience in shipping as they get as an individual consumer - but companies are finally catching up to the expectation and in some cases exceeding it.

Sustainability has gone from being one of those things that had to be done to check a box, to becoming a common human concern and an opportunity for growth.

Emma Mark: Decarbonisation has to be at the very forefront. Not only do we have an obligation to reduce emissions as part of the legislation from the IMO, but for the good of our planet, we must strive to do better.

Many of the solutions for port call optimisation in the market today are very much focused on delivering reductions in fuel, as well as helping vessels remain on schedule and increasing communications between ship and shore.

Lars Jensen: One trend which is gathering momentum is the equipping of all containers with trackers.

It is still early days on the dry cargo ships, but that is going to come, and it will raise transparency significantly. It's perhaps more a matter of how long it will take to reach critical saturation.

Another thing to watch will be the gradual change in contract adherence from both sides.

It has been an issue in the industry for decades and it tends to be a fruitless discussion and a blame game. I'm beginning to see a slow shift and I think we're going get a more structured contractual framework going forward. I also think we're going to see a market that gradually evolves to where contracts are adhered to by a significantly higher degree by both sides, or you go into a spot market which will again work on a much more transparent an enforceable basis. Commercially that is going to also change the game significantly.

We’re also going see the greater emergence of true electronic documentation. The bill of lading is one of the critical elements out there, but that can also relate to any types of forms, documentation, or permits.

Will everyone be quick to adopt this process? There will be slow adopters for various reasons, but most countries where cargo is moving will rapidly become the early adopters.

TAGS: Technology