Are your digital initiatives providing the returns you expected?

If you work in the container shipping industry, the chances are pretty high that your company, or at least one of your business partners or competitors, is undergoing a digital transformation. It was inevitable, right? Countless other industries have gone digital over the past few decades, including payments processing, retail, financial exchanges, travel, hospitality, and real estate. In fact, if you can think of an aspect of your life that has been unaffected by computers and the internet, let me know and we can co-found a new company to digitize it.

All joking aside, this relatively recent shift towards digital within the industry is excellent news for all participants in container shipping, which includes everyone in the world using a product that was moved by container. However, there are bound to be difficulties along the road to digitization in container shipping, and we at NYSHEX have already encountered many of them.

There are two potential pitfalls you may encounter in your journey toward digitization: efficiency bottlenecks and low value tasks

Efficiency bottlenecks are probably the most common issue and are inevitable as new solutions get rolled out—especially when using agile development methods. A good example of an efficiency bottleneck in container shipping is transferring data via spreadsheets. It is common practice for the system of one company to dump data into a spreadsheet and email it to a business partner at another company, where it is either uploaded or manually entered into another system. In this example, it doesn't matter how advanced or efficient the source and destination systems are, business will still be limited to the restrictions imposed by spreadsheets and email attachments.

Identifying and automating these bottlenecks via system-to-system communication is critical in capturing the full efficiency gains of the digital transformation process. When these bottlenecks occur between different organizations, it adds the complexity of differing technical standards that must be accommodated. Fortunately, there are multiple initiatives within the industry to address this lack of standards, such as OpenShipping.org and the Digital Container Shipping Association.

Automation of low value tasks is another common challenge encountered while bringing legacy business practices into the digital age. This is a much trickier challenge to address, as it often relates more to the business strategy and processes than to the actual technological solution. A prime example of this type of situation is the digitization of quoting and booking tools.

A slick online quoting tool will facilitate wide distribution of quotes and give shippers greater insight to a carrier’s rates. But without an easy way to compare the terms of multiple quotes or a guarantee that a given quote will not change, increasing the speed of acquisition does not add meaningful value to a shipper’s business. Similarly, a user-friendly online booking portal does not increase the chance that a shipper will show up. In fact, it may make it even easier for shippers to request more bookings than they need, leading to downstream headaches for capacity planning and customer service teams as they scramble to deal with no-shows and cancelled bookings. In cases such as this, automating a low value task is akin to pouring gasoline on a fire.

As your organization continues on its digital journey, I encourage you to carefully consider the value of and the interaction between the business processes you are transforming with technology. When it comes to bringing your contracting process into the digital age, the NYSHEX team is here to help you navigate the transition. NYSHEX has been at the forefront of enforceable digital contracting since the beginning, and our team has years of experience developing the technology, legal processes, and operational procedures for reliable, digital contracting for ocean freight.