Barbara Babati 17.01.2018 6 min read

Who will lead the digitalization of ocean shipping?

It’s only been a few years since Hanjin filed for bankruptcy that has shaken the global ocean shipping market. Today, the competition for a market leader position is more intense than ever before. Shipping lines are relentlessly trying to overcome major challenges. These challenges have been slow economic growth, unprofitability, and inefficiencies caused by aging technology infrastructure and business processes.

According to McKinsey, there is a USD 17 billions of waste in port and carrier business processes alone. This proves that aging technology infrastructure and legacy, inefficient processes are affecting the global ocean shipping industry negatively.

The shipping line that wants to be the leader in the market needs to overcome these challenges. Digital transformation strategy in the ocean shipping industry is inevitable, however, it must put emphasis on a few key factors that we are discussing in this post.

Overcoming legacy IT systems for efficiency

Almost all shipping lines have developed proprietary systems and messaging formats already decades ago. One can only imagine how difficult it is to share information with all the different parties within the industry that has serious effects on efficiency. Replacing legacy IT systems and processes is definitely not the answer, however, it is a challenge that needs to be overcome. Modernizing and digitalizing IT systems and processes must be on the top of the digital transformation strategy. The easiest way to achieve modernization is a cloud-based data integration solution capable to connect on-premise and cloud-based systems and applications.

This is just one of the issues. Another factor that makes collaboration difficult is the industry’s heavy reliance on ocean shipping EDI. EDI systems are inflexible: they do not support real-time data sharing that is necessary for better cooperation, supply chain visibility and optimization.

The more complex an ecosystem is, the bigger the burden of the inability of real-time data sharing across partners will be.

Digitalization of ocean shipping

Legacy system modernization with a layer of cloud-based integrations will fuel innovation. The connectivity across systems and the ability to automatically share real-time data will simplify the coordination between terminals and carriers, support improved terminal operations by increasing supply chain visibility and allows for better predictability of events.

As an integration provider, we do believe that connecting legacy systems in the cloud and automating processes with an iPaaS will have a huge impact on how carriers will be able to polish existing processes and introduce new, innovative ones that will benefit all industry stakeholders.

Additionally, the utilization of big data will help the industry to further fine-tune its operations for more efficiency. To feed the industry with more reliable and accurate big data, adapting to industrial IoT can be a game changer.

Digitalization is the biggest opportunity for ocean shipping

It is safe to claim that digitalization is the biggest opportunity for ocean shipping. We can say with confidence that the winner will be the one who will recognize early enough that digitalization is unavoidable in the traditional world of shipping.

The winner will create an excellent digital transformation strategy that strongly focuses on the adoption of new technology-driven models and processes is a must.

This will enhance the way shipping lines will be able to deliver strategic initiatives to achieve operational efficiency. One part of achieving better operational efficiency is improved cooperation between shipping lines, ports, terminals, and other stakeholders of the value chain.

High-quality digital service will make a difference for all stakeholders and shipping by the sea can be an even more attractive shipping method for manufacturers and retailers, not only because of its low costs but because improved supply chain visibility that allows for more predictability and accurate forecasting.

And let's not forget that either that the ocean logistics digitalization will have a huge impact on the global economy too - resulting in more trade and more opportunity for shipping lines.


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