Pockets of optimism for 2019

The ocean shipping landscape is constantly evolving; from changing political climates to the need to transform and digitise, the industry consistently faces business, economic and operational challenges. While fears and uncertainty surround a number of issues that could sidetrack the industry’s recovery, respondents from a cross section of the global maritime industry anticipate making new investments to increase operational intelligence and efficiency over the next year. This is one of the conclusions drawn from an inaugural Business Bellwether Survey that Navis released in co-operation with the Business Performance Innovation Network. The survey explored business sentiment and priorities across the maritime industry and found, despite some dark clouds hovering over the industry, a strong belief that using technology to achieve greater collaboration and data sharing will be critical to better performance in 2019 and beyond.

According to the survey, a third of all respondents indicated they are “extremely concerned” about trade tensions, and although the effects of increased tariffs and restrictions on trade between the US and China have already begun to be felt, the concerns about trade protectionism do not outweigh the industry’s confidence in business improvement.

In addition to trade wars, as with many other industries, cyber security threats are also a prevailing concern. As ship- and shore-based operations continue to become more connected, the potential threat to preserving maritime cyber security will also heighten in both frequency and in the extent of repercussions. Other global industry concerns include fuel costs, continued industry consolidation, labour disruption, and a lack of process efficiency throughout the ocean supply chain.

Despite these concerns, 82% of the study’s participants predicted either an increase in profitability over the next year or stabilisation and a reduction in losses compared with 2018. The opportunity for industry growth in the coming years appears to be significant, and the changes in shipping supply and demand over the past year have bolstered the appetite of industry executives to leverage the rapid pace of innovation in the technology space to their advantage. The challenge will be in focusing on advancing efforts aimed at improving the critical information links of the ocean supply chain to maximise performance and execution.

Looking for opportunities

To capitalise on opportunities in the upcoming year, industry leaders are looking to a variety of sources for improving performance within their own organisations. Improvements to process quality and efficiency will prove to be critical and approximately 90% of respondents expect their companies to increase technology spending in the coming year. This industry wide investment in new technology signals their confidence that digital transformation will be key to their competitiveness and the long-term health of their businesses as well as the industry as a whole.

The study also indicates the organisational and cultural challenges the industry faces. There is a dichotomy between the high priority given to improving performance and industry health by leveraging new technology, and the slow progress to date in achieving digital transformation. We are also seeing that data standardisation is needed as a pre-requisite for digital transformation and is subject to the industry culture and the capacity to share data.

Tougher mid-term trends, a more uncertain global economy and other political concerns have not stamped out a relatively positive outlook for industry participants serving at the heart of global supply chains. At least in sentiment, many see opportunities to improve collaboration and operational planning across the supply chain and have a strong point of view on how to achieve a more efficient and effective global supply chain.

Andy Barrons is chief strategy officer at Navis, responsible for corporate strategy and portfolio product management.