Ineffective data sharing and poor cross-industry collaboration is costing the maritime industry, according to a new report released by the Business Performance Innovation (BPI) Network in coordination with Navis and XVELA, both part of Cargotec.
The study, entitled " Competitive Gain the Ocean Supply Chain: Innovation That's Driving Maritime Operational Transformation," indicates that importers, exporters, container carriers, terminal operators, vessel owners and other stakeholders suffer from poor visibility and predictability around shipments and are losing money due to a lack of partner synchronization and insufficient data insight.
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. “Everyone benefits from collaboration and data sharing,” says Andreas Mrozek, Global Head Marine & Terminal Operations for the Hamburg Sud Group, one of the world’s largest container shipping lines. “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.”
Ninety percent of survey participants said real-time data access and information sharing was important to increasing the efficiency and performance of the shipping industry. Some 82% said the industry needs to improve supply chain visibility.
The push for improvements will likely come from a combination of forces. 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.
On average, surveyed executives estimated that each of a wide range of ocean supply chain processes could be improved by as much as 66% and no less than 55% if the industry updated its IT systems and improved its ability to share data with other members of the supply chain.
“Our study underscores the critical need for the shipping industry to improve collaboration and visibility through the adoption of new technology-driven models and processes,” said Dave Murray, head of thought leadership for the BPI Network. “Perhaps partly because the industry has been preoccupied and constrained by its economic challenges—but also because many of its members are just plain resistant to change—the industry has been far too slow to enter the digital age.”
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 report indicates that industry resistance to change, coupled with the industry’s aging and inflexible IT systems, are key impediments to improving visibility and collaboration. Some 54% of respondents said the industry being “slow to change” was one the biggest roadblocks to improving collaboration, while 49% cited the cost and complexity of legacy systems.
At the same time, many in the industry believe that change is coming. Some 46% of respondents said their companies were either investing significantly in new technologies or significantly increasing those investments.
Other key findings include:
- Some 90% of shippers and consignees say there’s a need to improve visibility in the ocean supply chain.
- Eighty-five percent of shippers and consignees rate the industry as either “slow to change” (70%) or “far behind the curve” (15%) when it comes to innovation and next generation technology adoption.
- Just 12% of respondents said their partners were “very effective” at collaborating and sharing data, although 38% said their partners were improving and 32% said they were “somewhat effective.”
- Respondents said the top five most promising technologies for the maritime industry are: data analytics, automation, the Internet of Things, new software management solutions and cloud solutions.
Despite the global cargo shipping industry’s major economic challenges, many survey respondents anticipated a turnaround in the next two years. 27% expected “some improvement” or “significant improvement” in profitability, while 35% expected “stabilization, but lack of profitability” over that period.