In case you missed it: Octopi, the first true Software-as-a-Service (SaaS) TOS, was recently featured in Port Technology International where we explained the benefits of what real SaaS infrastructure means for port terminals. Read on to learn more about the benefits to your terminal as well as all of the other shipping headlines you might have missed from the past month.
Partnerships & Acquisitions
The time is ripe for the shipping industry to prepare for a digital future. This month, maritime authorities in Denmark, Singapore, and Norway took a giant step towards global ship digitization by signing a Memorandum of Understanding (MoU). The MoU represents an electronic certification which will drastically reduce the time spent (or wasted, depending on who you ask) by officers checking documents onboard ships in ports. This is the first move between maritime authorities of European and Asian countries that aims to promote digital documents over the hard copies. Who needs to waste that much paper anyways?
Another MoU was signed this month by Keuhne + Nagel and the world’s largest e-commerce platform, Alibaba, to cover B2B volumes. The MoU is further evidence that Alibaba has its eyes set on partnering with as many logistics service providers and freight carriers as possible. Contrary to this relationship based strategy, Amazon continues to bank on controlling its own supply chain. Goliath vs. Goliath.
This month, A.P. Moller-Maersk agreed to sell off its Mercosul Line, a Brazilian carrier subsidiary. The divestment will ensure customers in Brazil benefit from a comprehensive choice of carriers in the country, while allowing Maersk to keep its 59% share of trade to Brazil.
Signs of Shipping Growth
While weak import volumes in countries like Brazil have left exporters without the necessary empty containers to fulfill export potential. It is a ‘Catch-22’ situation that will likely hinder long-term economic growth for the country. The industry as a whole is faring better as prices for shipping containers continue to rise, reaching their highest price since October 2015. This is a clear indicator that trade is increasing and should grow further this year. A rising rate floats all ships.
We’re also seeing signs of shipping growth as the secondhand market for smaller containerships heats up. Investors are increasingly picking up smaller vessels as they prove to be an excellent investment opportunity during a general glut in ship production.
Plans to expand storage space at the Port of Palm Beach’s Tropical Shipping company are underway. The $4 million plan will dedicate an additional three acres to refrigerated cargo storage needs for the port’s largest tenant. Now, if only they were using Octopi, they would be all set!
Finally, shippers may have been scarred by the recent Hanjin bankruptcy and high levels of scrapping last year. But less than a year later, executives are optimistic that the impact on the market was not as detrimental as expected. Tan Hua-Joo, executive consultant at Alphaliner, shared his thoughts and market predictions during his TOC Asia keynote address. Our friend Mr. Robbert van Trooijen, CEO at Maersk-Line Asia, disagrees. Time will tell.
Shipping News & Trends
Ports appear to be entering an era where the largest must experiment with disruptive technologies to stay competitive. At this month’s PTI terminal automation conference, Nick Earle of Hyperloop One described how he believes Hyperloop could revolutionize the port industry by allowing ships to deliver to ports on platforms - 10 miles offshore. Will this resolve the key inefficiencies in moving cargo on land? The jury is still out but a Hyperloop future appears almost certainly in the cards - and relatively soon.
In other disruptive shipping news, Amazon has begun exploring what role autonomous-vehicle technology could have in making its delivery and logistics chain as efficient as possible. A lab at the Rotterdam Port too revealed a small model of a ship propeller built entirely with a new 3D-printing technique. This innovation could drastically decrease ship repair times by providing parts, such as ship propellers, “on demand.” You can’t really blame them when their current shipping costs equate to operating 92 post-panamax containerships - per hour!
It’s a buyer’s market, and Maersk continues to shop like it’s the grand opening sale. It is using its market dominance to drive digitalization with the announcement of a new Silicon Valley-based accelerator. It is aimed at connecting startup companies with corporations in the transport and logistics industry. In other Maersk-related news, the record for the world’s largest containership has been broken yet again with the delivery of the Madrid Maersk which has a capacity of a whopping 20,568 TEUs. And that’s great, but with terminal productivity remaining largely the same, we don’t expect to see too many larger vessels on the horizon.
Despite growing confidence in a container market recovery, some experts are predicting overcapacity yet again. We believe that investing in terminal technology and innovation is the only way we’re breaking out of the cycle. Case in point, the average delays for container ships calling at Shanghai’s Yangshan deepwater port have increased a shocking 40% this month.
Forwarders are predicting the congestion to last through mid-May. We’re proposing a new slogan to complement “Made in China”- Wait in China.
Higher operating costs ($60 billion to be exact) may also be on the horizon for cash-strapped ship owners. As the date for new emissions rules requiring vessels to use high-quality fuel approaches, Bloomberg breaks down the impact, and potential chaos, the regulations will have on the global shipping industry.
Speaking of chaos, a recent survey revealed that 1/7 terminal employees and 1/10 truck drivers have been approached by criminals requesting they engage in smuggling activities in containers. Perhaps someone could come up with an innovative way to disrupt this trend?
Software may be eating the world, but the shipping industry has been off the menu – until now. The time has come to say goodbye to spreadsheets, emails, and phone calls and say hello to innovative technologies that are paving the way for a new reality in global shipping. In our latest post, we gathered the 10 most innovative companies disrupting the shipping industry. You will hear about these companies in the future as they gain market share - might as well pay attention now and capitalize on the technology curve.
And don’t forget to send us any interesting stories you would like to share in our next newsletter. We’ll be back in a month with another round of all the shipping news you don’t want to miss!
About Author: Luc Castera
Luc is the founder of Octopi. He has more than 10 years of experience developing software and he enjoys helping container terminals improve their operations using quality tools. He also loves soccer.