Ship agents will have to embrace digitalisation if they are to retain business for the long term, believes Mikael Lind, associate professor and senior strategic research advisor at Research Institutes of Sweden (RISE) and researcher in maritime informatics at Chalmers University of Technology.
Asked whether, in future, ship operators will favour agents that have embraced digitalisation, he told ShipInsight that “most ship operators will not only ‘favour’ agencies that are digitally enabled, they will only work with those which can support their needs for digital data.”
He was responding in an email discussion with ShipInsight prompted by an article published last week (16 March) by UNCTAD that explores how digitalisation is affecting ship agency work. It was written by Mr Lind and Juan Carlos Croston, who is among other things, president of the Caribbean Shipping Association.
Their article reflects on how information is at the heart of the service that ship agents provide to ports and ship operators and says that “digital data sharing and collaboration could challenge the power of the ship agent … and may be interpreted as a force reducing the value proposition in the ship agent’s business concept.”
On that basis, “shipping agents who want to continue to participate profitably in the ecosystem will need to … match the digital connectivity and standardised digital data exchange that will dominate the execution of the future port visit,” their article says.
In the long run, then, there is no future for traditional ship agency practices, Mr Lind said, although he was optimistic about the fate of ship agents themselves. He drew a parallel with the travel industry, saying that while travel booking is now highly digitalised, travel agents still attract a lot of business.
In the same way, “as data sharing rapidly gains importance in maritime logistics, the value proposition of the work of ship agents will need to change,” he said. Their business model will evolve to be centred around “bringing data streams together for their clients” and consolidating information from various sources. In this way, they will be able to offer their customers “innovative and user-friendly services that were unimaginable 20 years ago.”
Underlying his predictions is the view that ship agents’ central purpose of connecting their clients to services, people and information will not change but the means of delivering that service “are continually changing because of technology.”
Among those changes has been the development of ‘single window reporting’ and automated ship reporting, which will “mandate digital data streams to be used for the requests and the reports that agents historically were submitting on behalf of ships.”
“Digitalisation is here to stay,” he said, and cited the Port Collaborative Decision Making (PortCDM) concept as one approach that is based on digital collaboration and standardised data sharing. Mr Lind and others published a paper in March last year about trials of PortCDM in four Mediterranean and five Nordic ports and reported that the trials “are positive [and] there is a considerable potential benefit to be achieved by a global implementation of PortCDM in all ports, irrespective of the current port administration system.”
Now, a year later, he told ShipInsight that this validation work showed potential opportunities for ship agents to have a “a vital part in global supply chains” in an environment of “enhanced situational awareness, planning capabilities, fleet and infrastructure utilisation, just-in-time operations, bunker savings and reduced carbon footprint.”
With this potential to use digitalisation to develop their role, “agency services should be seen in the much broader context of digitalisation in shipping as a vital part of global supply chains, not as an isolated phenomenon,” he said.