Humans still have the edge in shipping when it comes to complex deals

A couple of weeks back in this regular Friday column I weighed up how digitisation in freight transport could threaten the traditional role of many a middleman. The article came on the back of various developments we’ve been reporting this year such as BHP Billiton’s move to create an online bidding platform for owners, Maersk tying up with Alibaba and Amazon’s first few months as a fully fledged ocean freight forwarder.

Since then we cast around to get as many opinions as possible on the subject and all this week we’ve been running contributions from across the world that have offered very different, interesting points of view on how humans and technology will interact in our sector.

You, the reader, have made your feelings perfectly clear on the future of shipbroking. Around three fifths of you reckon computers cannot replace the humble broker in a recent poll we carried on this site. That sentiment was shared this week by both Panos Patsadas, the MD of Target Maritime Transport, and Simon Francis, the founder of online laytime startup Falmor, who both felt that while brokers might indeed lose out to technology for plain vanilla deals, the intricacies and nuances of most other transactions would continue to need the human touch. In short, if you’re a broker and you’re reading this, so long as capes aren’t the only string to your bow, you should be fine. Readers seemed to concur, one leaving the following neat comment on our site: “Optimisation algorithms are repetitive but they cannot capture the strategic part of the process which is negotiation.”

Lead Splash Opinion writer Andrew Craig-Bennett weighed in, observing, “The ultimate demonstration of the value of the shipbroker is surely in sale and purchase – I would estimate that in the majority of S&P deals the transaction would not occur at all without the broker.”

Another reader said the online platforms today were too restrictive, shipping is all about the art of bargaining, something a computer can’t handle.

“Naturally there will be no bargaining. I can imagine the end user getting messages like: no solution found,” the reader observed, which neatly brings me onto Monday’s contribution from Kate McCauley who went in to bat for the freight forwarder amid all the headlines predicting the end of the profession. McCauley recounted how “quaking in her boots as she pondered her potential redundancy pay-out”, she recently entered a 40ft container from Shanghai to Felixstowe enquiry into three of the most talked about online freight marketplaces only to get messages along the lines of: “Your route cannot be found, no rates found, no results found”. Once again readers applauded the article, with it generating much comment on our site and via social media – the general feeling I observed was that like the brokers, many of you feel where a market has significant complexity a machine cannot necessarily take over all the processes that a human currently carries out. My admission that I occasionally still use a travel agent came in for some stick!

Coming from a different angle on Wednesday was Dr Zvi Schreiber, the CEO of online marketplace Freightos, who observed: “Taxi dispatchers fought Uber. Hotels fought Airbnb. Airlines fought Priceline. But freight digitalisation is a whole other ballgame. It’s not even necessarily a zero-sum game.”

Acknowledging forwarders and brokers will still play an important role in supporting freight processes, Schreiber was at pains to stress technology isn’t the enemy. “It’s a lifeboat,” he argued. “And the alternative for providers,” he neatly concluded, “is ctrl-alt-delete.”

Once again this point of view was questioned by readers when it came to complexity. One reader said that while this new technology may work for containers, airfreight and smaller parcels of cargo, movements of heavy lift, oversized, charter type cargoes, and other things such as strict US export regulations require consistent monitoring with hands on expertise by quality freight forwarders.

“Amazon, Priceline and others alike are successful with selling their products up to a point,” the reader conceded, before adding: “Try calling a company like Priceline when errors arise with your booking or when one has damage with an item bought online.”

All well and good, said John Taxgaard from Ericsson, in a contribution from yesterday, but really there is just so much shipping has to learn from other industries, not least aviation.

Shipping is an industry of highly specialised information flow, middlemen arbitrage and asset play, but so much of what happens is either needless duplication or simply inefficient, Taxgaard claimed.

“The airline industry learnt a long time ago how to become more efficient by taking low value processes out of system. Elements such as invoicing and processing had to be consolidated offshore and where such processes are not a competitive advantage, there is room for collaboration,” he wrote in an article entitled ‘Collaboration and disruption: the next frontiers for shipping?’.

Summing up the week’s debate rather neatly on Twitter, Splash Opinion writer Graeme Somerville-Ryan opined: “Disruption doesn’t knock. It kicks down the door and pockets the family silver…and if you could predict it…”

With that I will leave you to ponder how to profit from all this change and urge you to head to our Contributions section where all the digitisation debate has raged all week.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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