Maritime transport is arguably the single largest logistic operation when it comes to the transportation of goods. According to HSBC’s Trade Flow Report (2017), the global value of goods transported is expected to grow to a total value of US$68.5 trillion by 2050. With increasing demand for goods from an expanding population, the industry is under immense pressure to enhance efficiencies and effectiveness in the delivery of transportation services. However, the somewhat traditional industry has failed to evolve and innovate with 55% of innovation programmes in large companies failing due to lack of internal alignment and politics [Harvard Business Review, July 2018].
With increasing global uncertainty and rapid changes in technologies, what does this mean for maritime and logistics companies’ when it comes to innovation? And what does it take to ensure key decision makers and strategic stakeholders are aligned and work together?
Nest recently partnered with the Captain’s Table Project to host a roundtable discussion with key industry players and thought leaders across the maritime and logistics industry, to deep dive into issues surrounding innovation and the potential solutions to empower these individuals to create change.
What became apparent during the discussions is that this industry has been purely B2B focused. With downward pressure on rates, companies have been so fixated on delivering their services as quickly and as cheaply as they could, that questions about the need for innovation were not a priority. What we’ve learnt at Nest is that a long history is no longer synonymous with success. What we encouraged these individuals to consider were the benefits innovation could have on their business. At Nest, we’ve supported over 35 corporates, governments and international development agencies across Asia, Middle East and Africa on their innovation journeys, through both internal innovation and collaboration with startups to bypass lengthy internal R&D cycles and tap into agile solutions. We shared real business problems, and used practical tools to help them identify the areas of focus and supported them in changing their mindset towards innovation.
One major barrier that came to light was pricing. As prices, along with revenue, continue to decrease year on year, shipowners have little incentive to experiment or implement new technologies. Due to technological advancement volatility across the industry, tech innovation is taking much longer to implement and rollout, often resulting in the solution being no longer applicable. They also highlighted the challenge to align key players in the industry to work collaboratively with their direct competitors.
The roundtable concluded that the longevity of the maritime and logistics industries depends on its ability to embrace innovation. By experimenting with innovative cost effective technology the implementation process could speed up and allow the industry to move at a much quicker pace. There was a common consensus that key industry players need to actively push innovation and change across the industry and engage with all relevant stakeholders along the way.
What was apparent was the need for a third party, like Nest and the Captain’s Table Project, to help initiate conversations and identify opportunities for growth and progress. The roundtable succeeded in empowering industry leaders to acknowledge innovation strategy agenda and sourcing for emerging solutions.