No Such Thing as Too Many Players
Last year, container shipping heavyweights including MSC, Maersk, CMA CGM and others, joined forces on digitalization, standardization and interoperability in the container shipping industry.
The move indicates a greater commitment to digitalization, and standardization thereof, at a time when there are growing pressures from consumers and the public in general on the supply chain to be more reliable, environmentally-friendly and sustainable.
Speaking to World Maritime News Florian Frese, Director of Marketing at xChange, a Germany-based startup focusing on repositioning of containers, welcomed the developments, saying that “every step towards a digitized, standardized and environmentally-friendly future in container logistics and container shipping would bring benefits to every market participant.”
Commenting on the market sentiment that these developments are heralding a greater uptake of IT and blockchain in the container shipping industry, Frese believes that transparency and efficiency are needed, and will drastically save costs for everyone, including shipping lines, non-vessel owning common carriers (NVOCC) and freight forwarders.
Container logistics has no other chance than becoming more digital with an increased user experience and usage of technology, he added.
“It will not be ‘go digital or go home’ and we think existing players have a fair chance to stay ahead of the competition, but companies that don’t adapt to that change will lose over time – there will probably be a coexistence between traditional players and new tech companies entering the space,”Frese continued.
“We don’t believe that a ‘carrier-led platform’ will be a successful approach, or become the industry standard anytime in the future, because companies don’t want to give their data to a potential competitor,” he said.
“Being neutral is one of the biggest assets we have and our customers really appreciate that we are ‘only a technology provider’ with no own interest in container logistics. That increases trust and enables us to make container logistics more efficient with top-nodge technology.”
xChange recently launched a new feature on the platform called Smart Booking. Smart contracts are agreements with fixed terms between two companies, which have been working together for a longer period of time. They are displayed in the new smart contracts page where they can be created and booked.
“On some stretches, companies work always with the same partner. With this feature we allow companies to easily set up a predefined request that can simply be booked without negotiation. The goal is to shorten the time it takes to get a request through,” Frese said.
“Smart contracts have led to a faster release time on xChange. More than 90% of smart contracts on xChange have been released within 2 hours.”
What could be the main challenges in an industry that aims to become smart across the board: from smart containers to smart contracts? Too many players and platforms?
“First of all we think there is no such thing like too many players and platforms. The global shipping, freight, and container logistics market right now is fragmented. Even if there are five great platforms ‘in the end’ it would still be a huge improvement for the industry itself,” Frese said.
“We think that the market/customer will decide on what standards and platforms ‘will win’ – the more options the better in terms of competition and education.”
As explained, there are three ways for companies to remain competitive in a world set to experience a disruption across the supply chain.
Understand and monitor:
Dedicate resources to understanding your specific market segment and how “eco-systemification” will affect it
Establish robust monitoring as the landscape is evolving quickly and constantly
Focus on strengths:
Decide what makes your company unique and where you have competitive advantages
Exit marginal business and strengthen the core
Adjust your architecture:
Create “plug-and-play” architectures and processes, both technical and non-technical (e.g., in how you contract with others)
Potentially re-align your operating model into discrete internal services (similar to “micro-services” in IT) to allow inter-operability with the market
The customer and a seamless customer experience have become a “holy grail” for the industry. Based on your experience, what are the key factors in attaining that and what is the next step in that respect for your platform and the industry as a whole?
“One company can not be the best at everything. The key to a seamless customer experience is to be open for third party services such as Container xChange. Every player should focus on their core strengths and let experts help them with things where they could improve,” Frese said.
Commenting on the company’s development and plans for 2019, Frese said that for xChange, everything would remain focused on the container and facilitating collaboration between market participants along the entire transportation and logistics value chain.
“Going forward that will mean increased system integration with our clients through e.g. API/EDI etc. but also extending our service offering to e.g. container resale,” he added.
Could smart containers become part of your business approach?
“Smart containers indeed would be great for everyone! Doesn’t matter if it’s a RFID chip or something else, it would improve everyone’s tracking tremendously. That would lead to a better communication and would help equipment managers and sales persons to plan better and increase customer experience through more transparency.
“Currently, we see that human interaction is still the biggest problem in container logistics. Smart containers would definitely be great for everyone,” he concluded.