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'Disrupters' see doom for middling forwarders who reject automation
LEADERS in "disruptive technologies" told a Shenzhen shipping conference this week that forwarders with their century-old methods will perish within a decade.
His software firm and others at the TPM Asia conference panel this week are booking freight online the way air travel is booked - disrupting the way shipping does business.
"If you arbitrage freight, arbitrage labour that you do not own, you're done," San Francisco-based Haven CEO Matt Tillman told an audience of 550 the TPM Asia conference.
"In the next 10 years there is no purpose having you in this industry," he said, adding that forwarders in this position should be "terrified".
Fellow start-up disrupter Zvi Schreiber, CEO of Tel Aviv-based Freightos, agreed.
"I agree, and they should stay terrified," said Mr Schreiber.
"But I think there is an opportunity for them and if they automate fast, and those who can automate, and get online, will have a bright future," he said as part of a panel discussion.
"But a lot of them will go. Not all of them will survive, there's just no way," said Mr Schreiber.
Said Mr Tillman: "People want faster, cheaper better, and the question is do these solutions deliver."
Earlier in the conference, there was a reference to disruptive technologies, after Maersk Line's top saleman Michael Hansen, said that no topic takes up more time at his company than digitisation.
"If you have shitty service you deserve to be disrupted," he said, after doing a mea culpa for the industry with Maersk admitting to roll overs and broken commitments to shippers.
Mr Hansen was quick to remind his audience that it was a two-way street - shippers promised cargo that never turned up and carrier over-committed the ship in anticipation of no-shows. "The result is a mess."
Kicking off the conference on its first day was Wan Min, the newly minted president of the newly minted China Cosco Shipping Corp, the result of a merger with China Shipping Container Line.
The merger made the new company the fourth biggest container carrier, displacing Germany's Hapag-Lloyd, and now just behind Denmark's Maersk, the Swiss-Italian MSC and the Marseilles-based CMA CGM.
Mr Wan said he sought radical changes in the fragmented international supply chain, urging more co-operation between shipping, trucking and intermodal elements.
He said Cosco was prepared to do something about it, even offering bridging finance to smooth over rough patches.
What's more, he said, this was already happening on a limited scale that some financing has been provided as a start.
Mr Wan's keynote address also dealt with over capacity, financial losses, a major corporate collapse and falling western consumer demand that was detailed by other speakers at the conference that drew more than 500 delegates.
Arcadis top transport consultant Jonathan Beard said that while China's shrinking growth was eye-catching, its economy was still so enormous that its impact would dominate trade for years to come.
"Even if India fully liberalises, he said, it will not have nearly have the impact China will have," he said.
China's productivity, much of it related to superior infrastructure, will outclass rivals to the extent of offsetting their low wage advantage, he said.
Wages have increased greatly in Shenzhen he noted as its residents have moved up the value chain.
Unfortunately, high-value electronics did not fill nearly as many 40-foot boxes as footwear so the Shenzhen's prosperity was not necessarily good news for container shipping.
Benjamin Lai, managing director of Da Chan Bay, made the point that mega ships were getting to be the rule rather than the exception and there was much infrastructure expense in heightening cranes and extending their reach.
"The major impact of handling 18,000-TEU vessels is making the seawall a lot stronger to accommodate the larger crane and make the channel depth deeper.
"The fact that the vessel is longer means that we cannot handle the same number of vessels that we used to. As terminal operators our key asset is out quay length," Mr Lai said.
"With larger vessels it means fewer vessels and because the vessels are so long we cannot handle the number of barges we could before. So have to operate out quay cranes faster and from 18 across to 24 across," he said.
His software firm and others at the TPM Asia conference panel this week are booking freight online the way air travel is booked - disrupting the way shipping does business.
"If you arbitrage freight, arbitrage labour that you do not own, you're done," San Francisco-based Haven CEO Matt Tillman told an audience of 550 the TPM Asia conference.
"In the next 10 years there is no purpose having you in this industry," he said, adding that forwarders in this position should be "terrified".
Fellow start-up disrupter Zvi Schreiber, CEO of Tel Aviv-based Freightos, agreed.
"I agree, and they should stay terrified," said Mr Schreiber.
"But I think there is an opportunity for them and if they automate fast, and those who can automate, and get online, will have a bright future," he said as part of a panel discussion.
"But a lot of them will go. Not all of them will survive, there's just no way," said Mr Schreiber.
Said Mr Tillman: "People want faster, cheaper better, and the question is do these solutions deliver."
Earlier in the conference, there was a reference to disruptive technologies, after Maersk Line's top saleman Michael Hansen, said that no topic takes up more time at his company than digitisation.
"If you have shitty service you deserve to be disrupted," he said, after doing a mea culpa for the industry with Maersk admitting to roll overs and broken commitments to shippers.
Mr Hansen was quick to remind his audience that it was a two-way street - shippers promised cargo that never turned up and carrier over-committed the ship in anticipation of no-shows. "The result is a mess."
Kicking off the conference on its first day was Wan Min, the newly minted president of the newly minted China Cosco Shipping Corp, the result of a merger with China Shipping Container Line.
The merger made the new company the fourth biggest container carrier, displacing Germany's Hapag-Lloyd, and now just behind Denmark's Maersk, the Swiss-Italian MSC and the Marseilles-based CMA CGM.
Mr Wan said he sought radical changes in the fragmented international supply chain, urging more co-operation between shipping, trucking and intermodal elements.
He said Cosco was prepared to do something about it, even offering bridging finance to smooth over rough patches.
What's more, he said, this was already happening on a limited scale that some financing has been provided as a start.
Mr Wan's keynote address also dealt with over capacity, financial losses, a major corporate collapse and falling western consumer demand that was detailed by other speakers at the conference that drew more than 500 delegates.
Arcadis top transport consultant Jonathan Beard said that while China's shrinking growth was eye-catching, its economy was still so enormous that its impact would dominate trade for years to come.
"Even if India fully liberalises, he said, it will not have nearly have the impact China will have," he said.
China's productivity, much of it related to superior infrastructure, will outclass rivals to the extent of offsetting their low wage advantage, he said.
Wages have increased greatly in Shenzhen he noted as its residents have moved up the value chain.
Unfortunately, high-value electronics did not fill nearly as many 40-foot boxes as footwear so the Shenzhen's prosperity was not necessarily good news for container shipping.
Benjamin Lai, managing director of Da Chan Bay, made the point that mega ships were getting to be the rule rather than the exception and there was much infrastructure expense in heightening cranes and extending their reach.
"The major impact of handling 18,000-TEU vessels is making the seawall a lot stronger to accommodate the larger crane and make the channel depth deeper.
"The fact that the vessel is longer means that we cannot handle the same number of vessels that we used to. As terminal operators our key asset is out quay length," Mr Lai said.
"With larger vessels it means fewer vessels and because the vessels are so long we cannot handle the number of barges we could before. So have to operate out quay cranes faster and from 18 across to 24 across," he said.
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