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The maritime transport industry has lost its focus

21/06/2018

A day may come when a ship is not allowed to enter a port, if it is not utilising its total cargo carrying capacity. Half-full ships are wasting energy and money, and they are a risk to the environment. We need to go back to our core business - transporting cargo efficiently.

AUTHOR: MARCUS EJDERSTEN

Maritime transport has for years been the backbone of global trade, and is expected to hold that position in the future as well. Thousands of vessels connect demand and supply throughout the world every day, boosting international and regional trade, creating jobs along the value chain and, ultimately, spreading prosperity.

The leading position is no reason to relax. In the race for a bigger amount of larger and lower initial cost vessels, the industry has lost focus on its reason to exist. Consequence: now we struggle with huge challenges and inefficiencies within our operations.

A few years back in a marine conference, one of the presenters said: “Very few outside the industry care about the way cargo is being transported, just as long as it is being delivered safely, cost-efficiently and in time. Why is our industry then so obsessed with ships and technology, instead of talking about the service we provide?”

Well said. It is not the task of maritime transport industry to operate ships - we exist to transport cargo efficiently. We must put the cargo back in the centre.

But, with the ever-increasing pace of regulations on e.g. emissions, the industry focus is again in assets - ships and technology. We build new ships, but do not take out the old ones. This means that the overall transport capacity of the global marine industry actually increases, as older and less efficient ships/tonnage still remain in operation.

Performance bottlenecks are pushed to the hinterlands, in ports, or to the infrastructure around the port community.

Still, these challenges can be solved - and are being partially solved - by forerunners in the industry today. Solutions include, for example, upgrading old ships to enhance their cargo carrying ability; differentiating processes with differing ship operating; or utilising algorithms to optimise cargo planning.

When these solutions are being commonly spread, a huge capacity will be unleashed through a more efficient global fleet - but into a market that is already oversupplied with marine transportation capacity.

Those who do not enhance their fleets will be left behind, when leaders operate with higher cargo density and lower cost per cargo unit. These winners can potentially also speed up ships again, delivering a fast service at lower inventory cost to their customers and end consumers.

So let’s forget ship owning for awhile and put cargo first in this industry. Solutions and technology are already here.

What are your thoughts?

Having a higher cargo density than your competitors means you will be more competitive than them day after day. Can you afford not to? Write your thoughts on the comments section below, or join the conversation at Twitter with #SmarterBetterTogether

 

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