The Boston Consulting Group named seven areas where liner carriers need to focus their efforts and investment to meet challenges from non-asset-based digitally-focused companies and technology-first freight forwarders.
A new report from the Boston Consulting Group (BCG) urges ocean carriers to rapidly adopt process automation and optimization or be consigned to providing commoditized services.
The report, The Digital Imperative in Container Shipping, released by BCG over the weekend, named seven areas where liner carriers need to focus their efforts and investment to meet challenges from non-asset-based digitally-focused companies and technology-first freight forwarders.
“A variety of players – including both traditional logistics players and new entrants – are adopting digital technology to provide seamless, end-to-end services,” the report said. “If these companies’ business models succeed, carriers run the risk of losing direct contact with some of their most profitable customers – primarily small and midsize freight forwarders and beneficial cargo owners. In this scenario, the carrier’s role could be reduced to providing commoditized ocean freight services.”
The seven broad areas where advancement is specifically needed include e-platforms, advanced analytics, internet of things (IoT), artificial intelligence (AI), autonomous vessels and robotics, blockchain, and cybersecurity, the report said.
The authors said carriers’ ability to make sense of data by using these technologies will be a critical indicator of future relevance.
“Network optimization, empty container repositioning, cargo routing, forecasting, and pricing are among the core processes that can be digitalized,” the report said. “However, most carriers still handle them in the traditional way, without systemically leveraging the power of advanced analytics and artificial intelligence. For example, some carriers that have collected impressive volumes of data lack the skills or agile processes to generate insight and improvements.”
The report does not advocate carriers spending a fortune on an immediate technology overhaul. On the contrary, the authors suggest carriers would be wise to first better leverage existing technology and focus on data-cleansing initiatives.
“Imperfect data, a well-known challenge, should not be considered reason enough to postpone digitalization,” the report said.
The report also offers a roadmap for carriers, including what areas in vessel operations, customer service and sales activities need priority.
BCG tells carriers to keep up digitally or be commoditized
