The former Maersk Line chief information officer, Adam Banks says that the container shipping sector now has the technology to develop its online systems to meet the challenge from the online companies, says an article published in The Guardian.
Technology to meet challenges
Ship operators in the container shipping sector have a five-year window in which to develop their integrated systems that will allow them to compete with the online freight forwarders.
Adam Banks, The former Maersk Line chief information officer and current chief technology innovation officer for A.P. Møller-Maersk said, with the current technology to develop its online systems, the container shipping sector can now meet the challenges from the online companies that have progressed over the last decade.
Potential advantage for carriers
Banks said that the three elements that will allow the type of integration necessary for the carriers are the development of reliable sensors that have a battery life of six to 12 months with the global connectivity that will permit the carriers to procure a competitive advantage.
“Being an asset owner gives the carriers a potential advantage over competitors, in the past that wasn’t the case, but now technology has caught up and that makes joined up integrated systems operating in real time a possibility.”
Services offered
Essentially, as the lines own the assets on which the cargo is transported, the ships, ports/terminals, and trucks and trains to a lesser extent, they will be able to offer services that non-vessel operating companies will not be capable of.
An example is that the carriers can now offer an express service where the carrier can say to a car manufacturer that it will not allow its plant in Mexico to run out of gearboxes.
Guaranteed delivery
“Such a deal is worth much more than the cost of carriage to the shipper, because delays on the production line would cost far more, around US$100,000/hour, so if you can guarantee the delivery this becomes a premium product to sell to customers,” said Banks.
According to Banks, shipping lines will be able to make these offers because the connectivity offers the carrier an unprecedented visibility of the supply chain. And with the control it has on transportation, any problem on the way can be solved.
Premium and express services
Premium and express services would be just one or two of the many possible differentiated services offered to customers whose cargo will most likely be on the same ship.
“It’s a bit like having first class, business class, economy and premium economy on an aircraft,” Banks explained.
He estimated that the lines had around five years to make their advantage pay, after that the tech giants will catch up, “Virtual freight forwarders are already renting planes,” he said.
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Source: The Guardian
