Monday’s Maritime CEO interview sees a Ukrainian maritime magnate lay claim to having developed the Uber of shipping, the Holy Grail for many in maritime IT development.
Alexander Varvarenko, the founder of Odessa-based shipping company Varamar Group, officially unveils ShipNEXT today, a global freight platform linking ships with cargoes around the world in what his company claimed in a release “marks the beginning of a new chapter in the history of shipping”.
In its first phase being launched today, ShipNEXT’s software will ‘read’ an emailed cargo request or ship position and automatically match cargoes with ships using over 70 various databases and algorithms.
“It will minimize human error and increase efficiency by automating multiple routine checks and calculations relating to ship and port data, distances, restrictions, risk zones and rules of carriage by sea, among many others,” the company claimed in a release.
In the next phases, to be gradually rolled out over the next 18 months, ShipNEXT will integrate various aspects and sectors of the market. It is designed to be a one-stop online platform for fixing all types of cargo, tendering and negotiations, contract management, reporting, post fixing and operations, and even ratings of its users. ShipNEXT will also facilitate the increased transparency in ship finance by providing banks with real-time charter rates, statistics and analysis.
One of the largest banks in eastern Europe, Dragon Capital, has just bought a minority stake in the platform.
“Despite the global maritime shipping industry servicing $11.2trn worth of cargo and earning estimated $380bn of fees, there is no single effective marketplace dealing with all types of cargoes as the industry still lives in the era of email exchange. We believe that great sector knowledge and operational background backed by a strong team of industry practitioners, scientists and IT professionals will help ShipNEXT to set a new standard, making shipping faster, more transparent and cost-efficient,” commented Brian Best, managing director and head of investment banking at Dragon Capital.
Speaking with Maritime CEO, ShipNEXT’s founder Varvarenko explains the platform is essentially a fusion of his life’s experiences. Twenty years ago, Varvarenko, who is also the founder of the Ukrainian Shipbrokers Club, was obsessed with programming but his whole family was involved within the shipping industry so he went down that path, working in many sectors of the industry including in agency, shipbrokering and as a chartering manager. In 2009, he took the plunge and founded Varamar, a multipurpose shipping line which acts as a time charter operator and now has five offices around the globe. Its 15-strong fleet is a mix of MPPs and bulkers.
IT remained a fascination for Varvarenko. He looked at other industries and their platforms – Uber and cars; Amadeus and tourism – and plotted how to create a platform to link ships with cargoes. The Ukrainian national harked back to Soviet days, and a mathematical programming system that the USSR had developed for land transportation, something he claims is now “a science in high demand by Maersk among others”.
This unique science calculates the most efficient transport for individual cargoes and could make even established platforms like Uber more efficient. As Varvarenko explains, it is not just the nearest car, but the most suitable car/driver combination for the specific journey. The last time this transport ‘science’ was used was back in the USSR in the 1980s when there were no computer systems capable of tracking transport worldwide.
Today he unleashes this updated system in a bid to change how shipping goes about its daily business, what many might view as a LevelSeas for 2017. LevelSeas was one of the most high profile chartering tools during the dotcom boom around the turn of the century.
“Shipping needs transparency. Ships must be a commodity being operated every time in the most efficient way,” Varvarenko insists, adding: “Shipping is so international. Until ships are managed in one marketplace – matched when they are available with the most suitable cargo – they are not being handled efficiently.”
There is no need to even go online or register with ShipNEXT. Users can simply send an email. Everyday the platform has up to 4,000 cargoes and 5,000 positions on its platform, figures Varvarenko is sure will multiply in the coming months.
How is this going to work unless every ship and every cargo is registered? If you are an owner, you want to know how many cargoes are available for your ship, so you can understand the market and know where to set your rate. Likewise with charterers.
Ships are absolutely NOT the same as taxis. The suggestion by Varvarenko that “it’s not the nearest car, but the most suitable car/driver combination for the specific journey” is just plain wrong. If I’m looking for a taxi, I can take any taxi; I don’t care who the driver is or what make the car is If I’m looking to charter a ship, it’s most definitely not any ship.
I guess this could possibly have a limited application for the movement of homogeneous part cargoes, when you just need space on a ship, but I don’t see it working for full cargoes, when there are many considerations to be looked at.
But I could be wrong!
So many of these new shipping tech startups offer little added value from the status quo. Most have a polished tech ‘front’ but in reality they just act as brokers, finding a new angle to market themselves and charge a fee. Scanning emails to get ship positions is in my opinion defunct with AIS – also in an ultra competitive market why would an owner or charterer necessarily want 100% transparency ? I’d probably be a bit more forgiving if he wasn’t making such grand proclamations …