All Hands

All_Hands_WebMany hands make light work, and shipping has big problems to solve, but for collaboration to thrive companies must stop overestimating the benefits of walking the road alone, says Sofia Fürstenberg

The maritime industry has been locked in a commodity game for decades now. Survival mode has been the default state of mind for many, and operational stream-lining, efficiency measures and down-sizing have prevailed.

The biggest operators brace themselves with “cost leadership” and promises of offering cheaper services year on year. At the same time, never before has the industry seen so many exciting technology opportunities arriving on the horizon; 3D-printing, smart sensors and novel materials are opening up a whole new technology space for a very slow-moving and conservative industry.

How can it unlock these opportunities, and at the same time step out of the commodity deadlock? Well, many have realised that doing it alone will be a very hard approach. Thus the key word here, is collaboration.

The whole idea of industry collaboration is about understanding the core of a problem or opportunity, and identifying mutual value drivers for the collaborating partners to solve that problem and/or seize the opportunity together. It is about bringing all available competencies together, to solve the problem in the very best way possible.

In some other industries it’s termed crowdsourcing, but in the maritime space, an appreciation of the opportunities arising from collaboration or crowdsourcing—however you care to describe it—seems to be lacking.

What reasons might lie behind this lack of appetite or appreciation for the kind of collaborative efforts other industries are increasingly embracing? One explanation is that the ship operator has a tendency to revert to a buyer-supplier relationship.

With a very ambitious cost-cutting agenda, spending money on development where the outcome is uncertain is understandably both financially and politically difficult. However, the challenging market conditions should be acting as a catalyst and an incentive for collaboration.

Collaboration is a way of solving the problem, whilst sharing the risk to some degree. Interestingly enough, this is often not what happens. Instead, the collaboration turns into a not very constructive procurement exercise, with the objective of the ship operator to get the maximum out for the minimum cost possible. The risk inside this exploratory space then becomes unbearable for the maker, and the collaboration stalls.

All_Hands_002Other ship operators overestimate the benefit of walking the road alone. When the commodity game is the extent of the vision, scale and operational efficiency are essential for survival, and being economic is alpha omega. Following this, any investments in new and unproven technologies are perceived as uncomfortable risks; especially if these technologies will not improve the bottom line.

Many new technologies out there will not actually create any tangible competitive advantage however, but instead add more intangible value, such as reducing operational risks.
Surely that’s an opportunity for horizontal collaboration between competitors? Imagine how differently the industry could have approached the issue of preparing for the Ballast Water Convention.

Ship operators could have collaborated; shared information with the competition about how well the systems were performing, and isolated the top 3 at less cost and with more confidence. Instead they have been keeping the data for themselves while undertaking costly and complex trials alone.

Interestingly in this case there would have been no financial disadvantage attached to such a collaboration with competing companies, instead all parties would have made considerable savings on the validation process. A salutary lesson that being protective about knowledge can actually be very expensive!

Finally, and no doubt familiar to many, is where the collaboration opportunity is downgraded to a marketing opportunity. The objective for any collaboration should be to either solve a problem or grasp an opportunity, which all partners, in one way or the other, would benefit from.

In well-functioning collaboration networks, this is a fundamental premise. So I guess it is in the poorer-functioning networks that the objectives relegate into that single opportunity of positive exposure and profiling.

All too often, in my work as a collaboration facilitator in the industry, I have discovered how one party is joining a collaboration opportunity in order to not “miss out”, but at the same time has no intentions of any (larger) investments into the initiative.

If everybody is joining a collaboration project on these terms, one has to question how great the value of the project will be, and indeed whether any value will be created at all?

Sofia_circle

Sofia Fürstenberg

I think the maritime space will open up in the coming years, not least with regard to potential market disruption, and the level of excellence in industry collaboration will play a big role here.
In a few years, we will see digitalisation of the fleet and the advent of true smart ships. We should see the entry of new types of commercial platforms for facilitating trade, the elongation of the transport chain with the help of drones and the redundancy of freight forwarders. Synergies will be grasped between shipping, transport and ocean industries alongside the discovery of opportunities within the circular economy.

The opportunities are many, but the question the ship operators need to ask themselves is how fit they are to seize these prospects for market differentiation and finally break out of the commodity game.

Or if the only way forward, for ever and ever, is to just push down cost and get cheaper.

 

Images courtesy © Getty Images

This article appeared in the Q1 2017 issue of Futurenautics.
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free of charge as a PDF

 

 

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