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Friday, September 30, 2022

Maritime Logistics Professional

August 17, 2022

The Changing Role of Ship Agents and Shipbrokers in a Digital World

© henjon / Adobe Stock

© henjon / Adobe Stock

In recent years, the shipping and logistics industry has experienced massive technological changes. These developments have transformed a traditional industry into a dynamic maritime network, which increasingly relies on the digital footprint.

It's also true that the shipping industry is somewhat slow in adopting the technology. For instance, the commercial shipping industry still uses a humanistic approach to negotiate freight rates.

If you're a shipping agent or a shipbroker, chances are that you are already aware of the transformation taking place. Therefore, it's a good time to adapt to digitization as almost 69% of shipping companies have already started their digital journey.

The new business environment is all about moving away from the traditional norms and offering greater value to the customer. Delaying the process can hamper your progress because digitization is stimulating many other non-traditional players to join the party.

The transformation of roles
Throughout history, the main focus of shipbrokers and ship agents is the ship itself. In this role, shipbrokers are mainly concerned with vessel routes, scheduling, and hiring, whereas ship agents focus on cargo, passengers, and port calls - tasks related to shipping management.

By no means has digitization changed these roles. Instead, it has transformed how shipbrokers and ship agents use the enormous advancement in technology to improve efficiency and facilitate their customers.

As a driver for change, you can ask yourself what services you can provide to your customers that are different from traditional services. It also calls for a rethinking of business strategies to gain a competitive advantage by improving connectivity with other stakeholders.

Before looking into such opportunities, try to understand why adopting digitization is the way forward. Accordingly, here is a brief overview of some of the key advantages of digitizing your workload.

Benefits of digitization
Looking from an operational perspective, shipping companies and agents can save plenty by going digital. Here is how digital disruption can help you:

  • You can experience a 15% improvement in fuel and energy management using digital solutions for route planning, trim optimization, and performance insight.
  • Digital solutions used for port documentation management and intelligence vessel traffic management can help reduce port charges by almost 20%.
  • Ship agents and brokers can reduce insurance costs by 15% using digital document handling, automated reporting, and new procurement solutions.
  • Repair costs can drop by 20% using high-tech condition monitoring and repair management apps.
  • Digital transformation can lead to a 10% decrease in costs related to crew training and crew management.

Of course, these are not the only cost savings, but they should give you some idea of what digitization can do for your business.

Drivers of digital transformation
Digitization is quickly changing the traditional role of shipping agents by helping them exchange information in greater detail and in real-time. Likewise, shipbrokers are receiving more up-to-date information related to the position, status, and conditions of ships available for charter or sale.

As evident from the benefits outlined in the previous section, cost reduction is the primary driver of change. The cost is reduced by implementing new technologies that simplify collaboration between organizations. As a result, shipping companies can enjoy quick transactions, automated processing, and error-free billing.

Digitization also helps streamline operations through improved resource planning and enhanced information flow through the transport route. This leads to shorter time delays for ships and faster processing at the terminal.

Business strategies and models
Research suggests that the modern shipping and logistics industry is mainly utilizing three digital strategies to improve efficiency and revenues. These business models can be divided into customer-facing digitization, internal-facing digitization, and collaboration with other stakeholders. Here is a brief look at each of them.

Customer-facing digitization
Customer-facing digitization can transform the customer experience by providing additional value to clients. For instance, mobile applications, Internet-based platforms, and informative websites help customers get pertinent information without engaging shipping agents and brokers.

Internal-facing digitization
Internal-facing digitization is yet another model that automates internal business processes. In this instance, automation of work tasks helps eliminate manual interaction and redundancy. It assists employees and workers in collaborating more effectively using machine learning, AI, and algorithms. In addition, the system can support operational, strategic, and tactical decision-making.

Collaboration with other stakeholders
Digitization can also enhance collaboration with other stakeholders and hubs that include agents, ports, terminals, and depots. Existing technology can easily connect these stakeholders digitally. In fact, some companies are already experimenting with creating communication layers to support the inter-entity business processes.

Key to success
The emerging digital landscape calls for situational awareness where shipping agents and shipbrokers can use quality information for better decision-making and improved customer service.

If you're a small or medium-sized business, try to get technical expertise, funding, and advice from local, national, and international maritime organizations. These organizations can also assist in labor training and hiring tech-savvy staff. It will ensure that you're able to provide quality services delivered through high-quality staff.

This is necessary because studies suggest that the shipping and maritime sector will continue to deliver opportunities in the future but only to those who are ready to transform. As the competition intensifies and technologies mature in other sectors, survival will increasingly depend on technology. In addition to digitization, another key to success is using/having surety bonds for freight brokers.

In the future, market forces and technology will continue to push the shipping and maritime sector. As ship agents and shipbrokers are hubs for the exchange of data across the network, the only way to survive is by adapting to digitization.