The Boston Consulting Group (BCG) has released a report encouraging carrier companies to adopt digital solutions across their operations, particularly as new competitors enter the market using digital solutions that provide complete end-to-end services. This competitive advantage has the potential to reduce traditional carrier roles to commoditized ocean freight services.
BCG identifies 7 digital trends which can improve carrier operations. They are: e-platforms, advanced analytics, internet of things (IoT), artificial intelligence (AI), autonomous vessels, blockchain, and cybersecurity. Additionally, BCG identified five areas where carrier groups can adopt digital solutions and derive immediate benefits. These areas are in: network optimization, empty-container repositioning, cargo routing, forecasting, and pricing. Many carrier groups continue to utilize traditional methods in these areas when digital solutions currently exist that can optimize and reduce costs, and increase competitivity of carrier groups.
However, there are cultural and structural barriers that prevent carriers from fully adopting and implementing digital solutions. One common issue, according to BCG, is the misperception that digital transformation requires the development of a state-of-the-art information technology (IT) infrastructure. Instead, carriers should develop a digital transformation initiative and layout the foundation for the adoption of these technologies in a structured and piecemeal fashion. This strategy must: define the digital vision, begin with the implementation of digital solutions across core business practices, extend to the implementation of solutions across commercial activities, and be structured such that new digital solutions are adopted rapidly.
The BCG report comes out a time when other stakeholders in the shipping industry are adopting digital solutions. Recently, the Port of Rotterdam, Europe’s 3rd largest, and IBM have partnered as part of a multi-year digitization initiative. As part of the initiative, the Port of Rotterdam aims to implement the infrastructure necessary to host autonomous ships. Additionally, they plan to leverage advanced analytics capabilities to analyze in real-time weather, water, sensor and communications data. The Port plans to leverage this data to determine optimal times for ships to dock, load and unload, and enable more ships into available space. Ultimately, the port aims to reduce wait times. It is called by 59 liner services worldwide. Similarly, the logistics company Agility has joined the Maersk-IBM blockchain pilot to share and transmit data securely across carriers and ports.
Finally, U.S. Customs and Border Protection (CBP) is similarly looking at blockchain and other digital solutions for improving operations. 14 use cases, including capturing and keeping track of partnering government agencies licenses, permits, certificate of origin reporting and free trade agreement product qualifications, carnets and bonded movement tracking, were identified in a recent report by the Global Supply Chain Subcommittee of the Commercial Operations Advisory Committee (COAC). COAC is continuing to review these use cases and will issue recommendations on which areas where its implementation will result in the greatest benefit.
As other stakeholders begin implementing digital solutions, it becomes imperative for carrier groups to similarly adopt them and stay competitive by reducing costs. Maersk Line has heavily invested in digitizing its operations, such as its Remote Container Management system being implemented in September 2017.