Drive to cut costs may push shipping into the clouds
Profitability will elude most carriers this year, but that could force the lines start to thinking outside their boxes.
Maersk Line recently signed a US$150 million cloud computing deal with HP. In the five-year agreement, the Danish carrier will use HP’s cloud-enabled data centers and HP Workplace Services in what is known as an “instant-on enterprise”.
Yes, that made no sense to me, either. But like any great journalist would I went the extra mile to decipher this mysterious IT code and clicked on Wikipedia.
It turns out HP sells something it calls instant-on enterprise, which runs on applications and services that are always available and can easily adapt to new opportunities. Technology is embedded across the system to allow customers, employees and partners’ instant access to information around the world. For a global shipping line such as Maersk, this is obviously important.
Taking it further, I figured that if Maersk was spending so much money moving into a cloud-based network, surely the rest of the shipping industry could not be far behind. Armed with a few intelligent-sounding buzzwords, I set off to find out.
It wasn’t a long journey. When asked whether they were employing cloud based strategies, the response from several container lines and a host of logistics service providers – and even one giant trading company – was a resounding: “Nuh-uh.”
It turns out that few companies are interested in moving their highly sensitive operations data to something they perceive as having the security of a public toilet.
That isn’t true, of course, as any one of a host of frustrated companies trying to sell cloud strategies to skeptical customers will tell you. They point out that because security is critical to the success of their clouds, it is far more stringent and un-hack able that that which can be found protecting an Earth-bound company.
So how can it help the ocean freight business? So far the most prevalent uses for cloud computing is in track and trace and improving the visibility of cargo in the supply chain. The problem is that broadband networks for ships at sea are hugely expensive and a long way from being reliable, so the solutions are still office based. Effective cloud networks being employed in the shipping business revolve around improving visibility of cargo in the pipeline without the costs of having to build a global IT infrastructure.
Everyone agreed that cloud computing was definitely the future. The problem is that no one really knows what it is. Most people think cloud computing is Steve Jobs sitting on a fluffy white cloud and charging for Apple's new map app that gives directions to the wrong place.
With most of their energies going in to returning their lines to profitability, the drive by CEOs to cut costs could well be the accelerant that drags the innovation-challenged shipping industry into the 21 Century.