A couple of years ago, I circulated a survey to understand the maritime industry’s challenges and problems more closely. The survey was meant for marine experts and professionals who have spent a good amount of time in the field and gained valuable experience. The response I got was overwhelming.
Future of Maritime
The big question asked was “How would you like to see the future of maritime?”. The survey was designed so that everyone regardless of their area of expertise has something to say and it was really satisfying that mariners from a different area like crew members, operators, brokers, technical managers and supply chain directors put their thoughts.
Many experts believe that the maritime industry is struggling and not in very good shape right now. The result shows that 69.23% people admit that shipping industry is not using updated technology and more importantly 84.62% feel that shipping industry is change-averse and it is very unlikely to change their conservative ways of doing business in near future.
A large number of people blame obsolete technology, too much paperwork and less training to crew for this situation. Navigating through a different culture, a very large number of cargoes and complex operations are some other problems being mentioned. In totality, it shows that there is a huge gap between the problem and the solution to that problem.
In response to some very specific and crucial question about uncertainty in arrival time at ports – approximately 85% of people said that it makes their operation at port very challenging. Constant delays in ship arrival affect whole supply chain operations right from berth scheduling to vehicle allocations. Port authority faces this problem on a daily basis and this keeps them on their toe all the time.
When asked about how to solve the existing problem more than 35% of people said that by using disruptive technology in different stages of operations would be a great start. They believe technology will increase not only efficiency but also transparency in management, it would increase the accountability of people responsible for daily operations. They also suggest proper training of mariners to use these technologies is also very important. Simplifying the complexity, better connectivity to ships and better analysis of data would be advantageous for overall shipping they believe.
Post IMO 2020
Fast forward today, as we are one month in 2020 and IMO regulation is in effect.
We saw a sudden upsurge in bunker prices, also lots of confusion in shippers. On most lanes, the average increase was about $150 per 40ft container, but with big variations between lanes and between carriers. In a recent report, we can see the same emotion which is floating around. By the account of some anonymous forwarder suggest “It seems like each carrier has approached the situation a little differently, so it is very difficult to figure out until these negotiations are completed. To make matters more complicated, they all seem to have different names and abbreviations for the new fuel chargers so it gets very confusing. Further, some carriers are rolling these new costs into their rates while others have put them on top of their ocean rates. As a side note, all these costs vary from one carrier to another as there is no agreed fixed amount per TEU. Lastly, it appears that these costs will be adjusted on a monthly basis as the price for the fuel changes and marketing/competitive conditions come into play.”
But from last week, we saw the prices down and many negotiations have been done and also a recent incident in China also cause low bunker prices. So there are still many factors that make the shippers’ and charterers’ life tough.
Next Move For The Industry
Operational work in the maritime sector is very fragmented which requires several chains of people to finish one business requirement. Being one of the oldest industry might be the reason that shipping is considered traditional in its approach.
The maritime industry achieved tremendous advancement in its shipbuilding technology and mechanical performance, ensuring better security. We should also note that in the past few years, the use of IT increased many folds; be it TOS or automation in port handling etc. Still, the 500 Billion dollar industry requires more… much more.
Shipping has been the oldest and cheapest mode of transportation of goods and would be for the foreseeable future. But this report gives me a chance to share some of the pain areas in operations. This also gave me a chance to share some insight on how we should proceed to overcome these challenges. And the most agreeable solution is – use of technology effectively.
Big players have realized this scenario and started working towards it, they are investing time and money into innovation, digitalization, and automation. Leaders like Maersk, CMA CGM are promoting marine startups with their several venture investments and accelerator programs. These startups will definitely bring new ways of handling problems which will be fast, effective and pragmatic but even then the entry barrier for new players would be very high. The European Commission is partnering with the European Investment Fund, part of the European Investment Bank Group (EIB), to launch the BlueInvest Fund last week. (Full report)
Here at Aquaplot, we are working on this issue for the past few years. Now, we are pretty confident that our platform will open the door for all sorts of ideas related to the development of marine-based applications.
We are building a marketplace of marine applications where data providers/marine application providers can build a highly scalable product/service/app based on the end user’s business requirements. The core of this platform is a powerful routing engine which gives product developer/designer a sort of playground where they can build marine applications. On the other end, users will get the advantage of getting a curated list of different applications/services which can be subscribed. As there are endless use cases in shipping, so are the possibilities. To know more write to us at contact@aquaplot.com.
Sumit Singh for Marine Startup