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Shipping still waiting for its blastoff moment

Bart van Steveninck has been lapping up a new Netflix series, Countdown: Inspiration4 Mission to Space, while lamenting how far behind shipping is when it comes to blue sky thinking.

The space industry has always been an industry of excellence, with astronauts embodying a human being in optima forma, engineers excelling with their ingenuity, and the supportive departments undertsanding they are of similar importance, all high tech almost where man and machine becomes one.

Watching Netflix’s series about SpaceX’s Inspiration4 I see motivated people making use of all the knowledge which mankind gained over thousands of years and combining it into one purpose, sending an X amount of weight, over X amount of distance in X amount of time considering external factors such as gravity, remoteness, pressure and many more. Their mission: the road to making humanity multi-planetary.

We can see many similarities with shipping. Factors such as distance, time and weight are the main parameters with external factors like wind, currents, waves and remoteness also playing their part.

But let’s pause here. What we see and have seen in shipping is not anywhere close to space industry companies like SpaceX and RocketLab. Take the factor weight as an example, we see hundreds or even thousands of tons to be shipped from one side to the other side of the world. The word ballast says it all. Is there no other possibility to keep your GM negative or preventing your ship to turn turtle? Aside from ballast, weight is represented in so many other things onboard.

Let’s ship 23,000 containers in one go. Getting from point A to point B as fast as we can makes sense, right? Perfect for lean managers, keeping their inventories low. But what if a part of the containers contain commodities needed for intermediate products, required in a few months or years from now? They go with the same speed as the containers required yesterday and unfortunately you can’t beat physics.

Let’s dump thousands of containers in one hub or vice versa. Let’s bring in 230,000 gt in to offload a couple of hundreds of containers and have it shifted hundreds of miles by truck further in the supply chain. All for the economies of scale, right?

Nothing wrong with the economics but aren’t we heading towards a disadvantage of scale when taking into account the last big invention years ago which changed shipping – the container.

Shipowners have become financial institutions with operational personnel. A team already under pressure to keep the fleet running get thrown some cash to buy a new ship. “It’s chartering who require a new ship and our task is to get it under budget,” say the operations team. Life can be so complex and simple at the same time. It’s not to blame chartering or operational teams but both are acting in a bad marriage. The fact Ikea, Walmart, Amazon and many other charterers are stepping into the actual shipping business whether this is for environmental reasons or to overcome current congestions must be a sign on the wall. Why continue being a shipowner if you are just stuck in the middle leading a dull, grey experience?

The current situation in shipping can be compared to the time when Virgin Air was founded. They changed many airlines’ business models. Another quick comparison can be made with the current position of Volkswagen. Now these are cycles we have always seen in industries, and the positive side is that every day we’re getting closer and closer to a new era where a one-eyed man will stand up in the land of the blind.

Comments

  1. Shipping will remain the aquatic version of Africa, a developing Continent, never to be more than that.

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