The shipping companies are forced to change the traditional way of receiving their orders and selling their products, as technology has already become a crucial and almost necessary tool for the communication between the customers and the companies.
The vast majority of the shipping lines were following the same methodology regarding its sales and communication tactics and practices. Most shipping companies’ conventional practice in selling their space for cargo is by appointing a lot of agents, named “shipping agents”, according to David Trisno Hadijanto, Chief Commercial Officer of the Indonesian logistics provider, PT Logol Jakarta Mitraindo.
“This is to tap the number of containers of small-medium shippers (cargo owners). While large shippers/manufacturers from a dominant corporation normally have a direct contract with shipping lines,” he explains.
Through the shipping digitalisation and the increasing number of technology systems installed and used in the industry, shipping lines are able to encourage the small and medium size customers to book their cargo directly from a digital platform that has listed details such as schedule and price with less time spent, according to Trisno, who pointed out that “for the large scale shippers, it actually provides better service in terms of transparencies and monitoring.”
Online booking platforms are becoming increasingly popular and, especially during the Covid-19 lockdown period, have gained and continue to gain even more users. “While digital transformation of the shipping and container logistics industry is beneficial for the industry to operate effectively and achieve competitive edges, one of the biggest motivations now to use digital for container logistics industry is to solve the biggest problem that the world faces with the outbreak of pandemic – the shortage of containers,” argued a representative from Container xChange, a provider of an online neutral platform for container owners and users.
Commenting on the benefits that a digital booking platform offers, David Trisno said, “Having a digital booking platform would mean reducing the amount of time to handle a big number of agents, number of employees, time-saving, paperless document handling and repeated copies of the same document is avoided.”
Trisno went on to point out that the most important advantage that online platforms provide is the increased transparency to the shipper, while the ability to understand the buying trend from each shipper eventually improves the scheduling.
The operational orchestration for shipping business is complex, according to Container xChange.
“To order a pair of Reebok shoes from Amazon might seem like a simple transaction to many of us, but the process of getting that product from the production location to your doorstep is a complex series of steps,” noted Container xChange’s representative and went on to add, “Neutral online marketplaces like xChange orchestrate these operational tasks to take the hassle out of owning and transporting container equipment.”
The Covid-19 pandemic has certainly accelerated the online booking trend, as it caused the need for remote and digital tools.
Additionally, the lockdowns caused many ports and terminals worldwide to complete or partial shutdowns, and as a result container availability has been largely imbalanced. The consequences are visible until today with the global port congestion constituting one of the biggest challenges of the container shipping industry.
Digital platforms can assist in this situation, according to Container xChange, with the use of big data and Artificial Intelligence/Machine Learning to facilitate smart matching of container owners with individual or corporate container users.
“This empowers the users and sellers to operate more efficiently bringing opportunities to reduce operational costs, and thereby benefit from the business,” the company’s representative said.
The container shipping companies will be able to provide better scheduling based on the data and trend, according to David Trisno, who said, “with all the efficiencies, shipping lines are able to reduce price and improve profit.”
Furthermore, Trisno believes that the shift to e-commerce activities will give the shipping lines the ability to broaden their logistics business across inland services. “This will promote ‘single-margin’ rather than multiple margin (with agent’s fee and others) to shipper (Cargo Owner) and increase overall revenue and profit of the shipping companies,” he said.
Regarding the post-Covid period, shipping professionals mainly believe that the online booking platforms and the digital transition of the sale processes will remain.
The shipper would enjoy the benefit of transparency for payment, privilege in choosing schedule, monitoring cargo movement and employ a smaller number of people to submit all the supporting document and monitoring, while all activities are at minimum human contact, according to Trisno, who claims that “with the ease of using the platform, and the benefits the shippers enjoy over efficiencies, it will become a standard business behaviour in the industry.”
The container liner operators seem to have understood that they need to move to the online booking era and this is the reason why we see many actions in that direction.
The largest container line in the world, Maersk has recently announced recent acquisitions of e-commerce logistics companies in Europe and United States. Additionally, Ocean Network Express (ONE) and Hapag-Lloyd joined the blockchain platform TradeLens in June, while in the same month the Singaporean carrier introduced its updated mobile application.
All these are only a small number of examples that show the ongoing and continuing effort of the container shipping industry to follow the digital trend and offer new solutions, based on new generation technology.
Another step towards the full transition in the digital era of shipping.
Source : Container News