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Container Shipping slow in technology adoption : Alphaliner

Container Shipping slow in technology adoption : Alphaliner

LONDON: New venture capital investments continue to flow into startups looking to transform the container shipping and logistics industries even though the industry has yet to wholeheartedly embrace the innovations.

To date, the sector has proven slow to adopt the new technology and incorporate widely available new digital processes. About half of all bookings are still made manually, and “up to a third of shipping invoices are reported to contain errors,” industry analyst Alphaliner said in its weekly report.

“The container shipping market has not seen any transformative change in the way business is conducted,” Alphaliner said. “None of the startups have been able to provide an integrated shipping platform or transformative business model.” Although the products of more recent innovators are “better thought out” than their predecessors, “they retain a focus on piecemeal solutions.”

Yet a variety of industry analysts believe that players across the industry will soon have to embrace technology to survive, and changing employee demographics and technology means they are ready to do so.

New investments of $9 million last month into ClearMetal, which supplies predictive logistics, and the reported investment of an additional $110 million into Flexport — taking the total startup capital poured into the digital freight forwarder to $200 million — suggest that interest among backers in the sector is not waning.

In addition, CMA CGM recently announced a plan to create a startup incubator in Marseilles, France, that CEO Rodolphe Saadé said would complement the company’s “digital ecosystem to accelerate its transformation.”

The startups include booking marketplaces, container- and chassis-tracking equipment, transportation management systems, and digital systems for the document handling and communications work that is routine in the forwarding sector.

Flexport has attracted the most funding and attention among 95 startups and technology companies identified by that are offering the most innovative solutions to the container shipping industry. Together they have received more than $550 million in startup funding.

Of the startup contenders, only INTTRA, GT Nexus, and CargoSmart have made real inroads into the industry, and even then “provide only basic software service solutions to handle cargo bookings, shipping instructions, track [and] trace, and exception management and reporting,” according to Alphaliner.

A partnership struck by Chinese e-commerce site Alibaba with carriers including Maersk, CMA CGM, Zim Integrated Shipping Services and Evergreen Line to offer site users online freight booking have “generated very little volumes,” Alphaliner said. And more than a year after Amazon obtained a non-vessel-operating common carrier license to operate in US-China trade “its actual shipping volumes remain small,” the analyst said.


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