Be part of disruption or be disrupted

Even though digital disruption is something we have all most probably heard too many times and on too many occasions, it is something that cannot be avoided even in an industry as old-fashioned as shipping.

Many opponents say that maritime and shipping is an industry that is far too asset heavy and multifaceted to be disrupted — a claim that has a good deal of truth in it. I do agree that it may be impossible to disrupt the whole industry with a ‘big bang’, but disruption of smaller parts of the maritime logistics chain is already happening and this will expand into other parts as well.

Freight forwarding is a good example of a part of the industry where disruption has already happened; Flexport has already become a synonym for digital disruption of freight forwarding. Aside from Flexport there are many other digital startups and young growth companies disrupting the scene in one way or another, good examples being Kontainers and FAST Applications. The reason for this disruption is that highly-manual and analogue operations can reduce or even eliminate inefficiencies with smart digital service layers, just as the aforementioned players are doing.

The same applies for many other parts of global shipping. There are many scattered players with manual and uncoordinated operations causing tens of billions worth of waste, some examples being the unnecessary need to wait at anchorage, delays for departure due to a missing service, cargo placed in the wrong place at the yard, or just poor predictability of cargo arrival due to co-ordination issues. These all are something that call for smart digital service layers — and disruption of traditional business processes.

Startup selection

I have been in the corporate startup collaboration scene within shipping for quite some years, and have recently been exposed to pretty intensive global scouting through Rainmaking’s Trade & Transport Impact programme. Based on what I have seen, it is evident that there are many players who have recognised and are also acting on the above disruption potential.

As an example, in addition to freight forwarding and booking platforms, port call related optimisation is also becoming a crowded field. Whether that covers berthing management and co-ordinating port call-related services (as Teqplay and Portchain are tackling), providing visibility to terminal operations and enabling faster turnarounds (as Intelligent Cargo Systems is addressing) or creating enablers for cargo flow visibility and predictability through, for example, connected container fleets (as Loginno is doing), there is no doubt that there are plenty of innovative young companies setting up different types of digital service layers within different parts of the global shipping industry.

So, no matter what your role is in shipping, whether you are a terminal operator, an agent, a broker or something else, you should not overlook these signals of digital disruption.

One big question concerning disruption is how one can be part of it instead of being disrupted. My thoughts are that even if you do so in a very simplistic form, get out there and scout what is happening to gain insights into microtrends. Set up concrete win-win collaboration activities with agile innovative companies to gain hands-on experience on what can be done (and how) to challenge the status quo. And, once there, do not hesitate to jump into the unknown just because it is more comfortable to do things “as they have always been done”. Otherwise, you might find that others have the last laugh.

Dr Tero Hottinen is director of emerging digital business at Cargotec and is focused on strategy development within Cargotec’s central digital team.