Digitization of the shipping industry is here to stay. Are you going to be part of it?

Published Jan 9, 2022 , 4 min , digital , shipping , technology

Shipping companies are creating digital ecosystems; ecosystems that rely on blockchain technology and offer many advantages that previously were not possible. For example, the transparency and the cost-saving in many areas or the fact that it allows them to know the location of their good immediately. 

This shift toward digitization, nevertheless, leaves freight forwarders in a sticky situation. Many of them are wondering if they are going to be part of the industry. If they don’t want to lose their place in the maritime industry, they have to adapt to the new digital tools or risk everything. The good news is that most shipping companies are also planning to work with freight forwards for the foreseeable future. So why waste time? Join us now and be part of the future.

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The digital ecosystem of shipping companies is growing at a rate that no one expected. The reason for this fast growth is the commitment of these companies to the process of digital transformation. And this commitment put them at the forefront of maritime industry digitization. This process gave birth to an ecosystem based on blockchain technology. This ecosystem lets all the players of the global supply chain industry take part in it. But what are the benefits for the members of this ecosystem?

 

There are many digital ecosystems related to the shipping companies out there. But the ones that use blockchain technologies are without the doubt the most successful ones. 

 

Platforms that use this technology rely on other companies of the industry from all over the world and the important ports along the seas. But on top of them, they need the cooperating and help of the world's financial institutions, private companies, governments, and terminals.

 

But carriers are not the only ones who have created ecosystems based on blockchain technology. Many ports around the world and also many other maritime industry players have also joined them to use this new tool. And not just private companies, many governments are begging to use this new tech in their maritime apparatus.

 

You might ask, why? Why suddenly everyone is using the blockchain? And the reason for it is the capabilities that this new tech shows. The most important one, of course, is the security it offers to an industry that moves millions of dollars around the world daily. 

 

But it’s not just the security (although it’s a big part of it) that is driving the rush for blockchain platforms, it’s also the total transparency and the possibility of real-time exchange of data. But there’s more. On top of all that, blockchain can save time and resources and operating costs. And it allows those who use it to immediately know the location of the goods, the condition they are in, handling of them, customer procedure, etc. all of this is possible because everything is digitized, automated, and protected through encrypted contracts with immutability guaranteed.

 

A blockchain foundation, openness, and the ability to exchange data in real-time are the reasons that provide confidence in a shipping company's digital ecosystem. It also saves time, resources, and money in the long run. And also, because everything is digitized, automated, and protected through encrypted contracts that guarantee immutability, decentralization, and safety in the international logistics process, there is an immediate response to questions about locations, content conditions, cargo handling, customs procedures, and so on.

 

How do freight forwarders fit into this digital ecosystem of shipping companies?

 

There has been widespread concern that by adopting blockchain technology in their operations, digital shipping lines would drive digital freight forwarders out of business. Nothing could be further from the truth. It is critical to state unequivocally that, while shipping firms have made the first step toward digital standardization of the marine sector, they would not have been able to do so on their own. They could achieve the degree of modernity that the business has now because of the knowledge they gained from technical enterprises, startups, and digital freight forwarders themselves.

 

Many shipping companies (among them the biggest and most recognizable ones) have already stated that they plan to work with freight forwards for many years to come. 

 

We can also look at other companies that are using digital ecosystems to see even those who do not currently have any plans for freight forwards and are mainly concerned with carriers and ports, emphasizing that they have plans for other players in the supply chain industry, which includes freight forwards.

 

Having said all that, freight forward cannot afford to stand by, or not take part in the fast transformation of the industry. They have to transform themselves and start using digital tools if they want to be part of a shipping companies’ digital ecosystem.

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