Smart Shipping #3: Shaping the future with Shipping Company 4.0
Welcome to the final chapter of our Smart Shipping series. After establishing the role of data as a competitive advantage and exploring its use in the aviation sector, we are now focusing on the holistic implementation of digitalisation in the maritime industry. This chapter explores the strategic approach necessary for a successful transformation, showcasing how a well-planned digitalisation strategy can lead to innovative business models, operational excellence, and sustainable practices in shipping.
III. Shipping Company 4.0: How the transformation succeeds
1. Thinking digitalization strategy holistically
The starting point of the transformation is a well thought-out and consistent digitalisation strategy that reflects the shipping company’s business strategy. The development of this digital strategy begins with an inventory check, followed by the outlining of a target image that builds on the insights gained and the goals of Shipping Company 4.0. Subsequently, targeted initiatives are developed to enable implementation.
The outcome extends beyond merely establishing the target architecture for an application landscape that supports the relevant business processes on the IT front. Instead, it reveals a comprehensive vision that incorporates sustainable and innovative business models. Standardization and effective data management play pivotal roles in this context. A successful strategy can only thrive when it prioritizes employees and sustainability.
2. Mastering complexity with standardization
The introduction of the electronic bill of lading eBL clearly demonstrates the complexities that the industry has to deal with in the process. In the aviation world, it took roughly two years between the announcement by IATA in 2020 and the implementation of all eAWBs as the standard transport contract for all airfreight shipments. The maritime industry expects eBL to take even longer; seven years. This is due to the high level of complexity caused by many players and a wide variety of national regulatory requirements. In addition, the current level of digitalization, which is influenced by the state of standardization, plays a decisive role.
Standards in the industry can impact the speed of transformation. This also applies internally within the shipping company, where a future-oriented (digital) business strategy, in the sense of Shipping Company 4.0, requires the use of interconnected and scalable systems. The requirements for such IT systems are demanding, as they are required to offer maximum flexibility and the best possible data security to ensure consistent data quality and transparency.
This requires standardized processes and products within the organization. This can be resolved with an intelligent architecture that is organized in a highly modular way and enables a customer-specific interaction of standardized components.
This means that standardization is not a contradiction to individualized products and offers, but rather a prerequisite in times of greatest complexity. Looking into the automotive world, one thing remains clear: the individualization of vehicles is the norm and is made possible by a multitude of standardized (digital) processes, procedures, and components.
3. Smart and innovative business models through data
Shipping companies do more than transporting goods from A to B. They also manage a multitude of processes, which are based on data. A shipping company that masters its data masters its processes — and can use them for greater efficiency and competitive strength. The amount of data available to a shipping company is constantly increasing, which is due to digitalization projects that have already taken place.
In simpler terms, data is the fuel of digitalization but not yet a value in itself. To unleash its potential, an organized data strategy is needed, which should be a fundamental part of any modern business strategy.
The data strategy should cover the origin, sovereignty, flows, dependency, quality, and protection of the data and subsequently contribute to a target architecture that ensures consistent data quality with high transparency, enabling informed decisions and new business ideas.
By building data-driven business models, shipping companies see their own data as a commodity that can be monetized by sharing it with other actors from partner companies or their own customers. By establishing new (data-driven) business models and using digital platforms, shipping companies are also able to advance their own sustainability efforts.
With the emergence of digital platforms, there is a transformative shift in the operations of shipping companies. These platforms serve as hubs for data, services, and applications. For instance, leveraging digital platforms enables shipping companies to digitally map the complete supply and value chain, integrate partners and customers, and facilitate seamless data sharing among them. Rather than relying on a variety of individual systems utilized separately by different departments, the platform offers a centralized focal point, fostering company-wide transparency.
4. People and the environment
When it comes to the topic of automation and the use of autonomous systems, what role do humans play in the context of Shipping Company 4.0? People already play an important role in Industry 4.0 through the aspect of decentralization. This aspect enables local decisions and situational management and establishes lean processes and structures. Both factors have a positive effect on the behavior and motivation of employees, as they are given more freedom to make decisions and take action.
With Shipping Company 4.0, this idea goes even further. The implementation of the digital strategy is always accompanied by the need to establish a new culture, focusing on the entire organization on sustainability and environmental protection. Active change management is essential to retain and motivate key personnel in the implementation of the digital business strategy.
Digitalization can therefore significantly contribute to making work more attractive and efficient. This ranges from the possibility of mobile working in administration to smart assistants for employees on board the ship or in the port facilities.
As well, job profiles are evolving in the face of digitalization. The importance of IT skills is increasing, where digital competences are becoming an increasingly necessary qualification for all employees. This means that shipping companies are faced with the task of further qualifying their existing staff. They need to establish tools and processes to re-skill and lead various training sessions within the business. The digital strategy, data competence and the corresponding technologies create the basis for this.
Reflecting on our Smart Shipping Journey: Key Lessons Learned
As we conclude the “Smart Shipping” section of our series, we reflect on the valuable insights gained across three pivotal chapters.
Data as Fuel for Competitive Advantage: In the realm of Shipping Company 4.0, we’ve learned that data is much more than a mere collection of information. It is the cornerstone of innovation, driving efficiency, sustainability, and the creation of new business models. The integration of advanced technologies like AI, machine learning, and IoT is transforming the maritime industry by enhancing real-time decision-making and operational agility.
Learning from Aviation: How Shipping Can Adapt and Thrive: The second chapter provided a unique perspective by drawing parallels with the aviation industry. We explored how the shipping industry can adopt similar digital strategies to address challenges in cost management, staff efficiency, and environmental sustainability. The adoption of digital technologies and automation in aviation serves as a blueprint for the maritime sector to enhance its operational efficiency and customer experiences.
The Road to Shipping Company 4.0: Envisioning a Digital Future: In our final chapter, we outlined the steps necessary for a successful digital transformation in shipping. We emphasized the importance of a holistic digital strategy that focuses on standardization, smart business models, and a human-centric approach. The integration of digital platforms, coupled with a focus on sustainability and environmental protection, indicates a promising future for the maritime industry.
Overall, the “Smart Shipping” series underscores the critical role of digitalization in shaping the future of the maritime industry. It highlights how a strategic, data-driven approach, coupled with lessons from other industries, can lead to transformative changes, setting the stage for a more efficient, sustainable, and competitive maritime sector.
With the insights gained from our journey, we now have a clearer vision of the future of the maritime industry. Stay tuned as we continue to explore new frontiers and opportunities in the world of shipping, and how Lufthansa Industry Solutions is driving these transformative changes forward.
