Decision-Making Strategies to Future-Proof Your Business
Three key elements of smarter freight decisions and how to apply them to real-life maritime scenarios
More so than ever, maritime stakeholders must approach each freight transaction with an arsenal of insights, processes, and collaborative efforts to arrive at an optimal outcome.
Monumental initiatives like decarbonization have made decision making dynamics even more complex, contributing to the emerging call for heightened visibility into the trade. Achieving this level of visibility in a standardized and scalable way requires industry participants to take a bold step forward into the future of smarter freight decisions.
Digitalization has taken hold within the industry, paving the way for a new era of possibility for maritime. It is now possible to bring relevant data together at the point of decision making with unprecedented accuracy and context. But to do so, organizations require a strong foundation of strategy and digital technology that can bring together the key elements of informed decision making into one, comprehensive ecosystem.
We do a deep dive into this topic in our new The Fundamentals of Making Smarter Freight Decisions Guide, which you can access for free.
Touching on some important concepts covered in the guide, here’s how to apply three key decision support elements to navigate some of the most significant challenges facing the entire maritime industry.
What Makes Smarter Decision Making Possible?
For maritime shipping organizations in today’s digital age, informed decisions lie at the intersection of different kinds of pertinent data—market insights, business requirements, and current contractual positions. Understanding and utilizing these diverse data points to improve decision making requires three key elements to be present.
The Three Elements of Smarter Decision Making:
- Right Data, Right Place, Right Time: Bring context to decisions through a connected workflow that meets stakeholders with relevant information right where they are. It is important to note that not all workflows are the same, and it is important to ensure that the connected workflow that underpins your business is tightly aligned with your unique degree of scale and complexity.
- Standardized Connectivity: Enable scalable analysis within and between systems, partners, and counterparties by defining standards and built-for-purpose data exchange protocol. Some of the core tenets of success for standardized connectivity include flexible integrations, the ability to capture the full spectrum of required data, scalability, and the emergence of industry-wide standards that work for all.
- Actionable Market Intelligence: Cut through the noise and incorporate differentiated market intelligence that will allow your organization to consider and adapt to the changing world around you. There are four critical success factors for market intelligence, which include high integrity data, access to a broad and deep range of insights, access to data in real-time, and data delivery that is utility driven and user friendly.
Now let’s look at how to apply these tenets to some of the most crucial decisions facing maritime shipping.
Decision 1: Differentiating pre-fixture decisions against competitors.
Between 2020 and 2021, the global commercial shipping fleet grew by just 5%, resulting in a delta between global freight supply and global freight demand. For commercial maritime shipping organizations, this delta between supply and demand presents enormous opportunity for those who are strategic and data-driven in their approach to identifying the most profitable deals. Mapping a smarter way to optimal decisions requires a heavy amount of data-driven pre-fixture insights from within the organization, supported by external market intelligence and then married with a concise view of available options for the trade.
Decision 2: Minimizing emissions throughout the voyage lifecycle.
From the vessel to the intended route, port congestion, weather patterns, and more, there are numerous factors that impact emissions. Pressure to decarbonize maritime trade from regulatory bodies and industry consortiums across the supply chain continues to build, leading to a transformative uptick in decarbonization-focused innovation within the maritime shipping ecosystem. Making smarter decisions for a decarbonized future requires data-driven decision support and sharing of emissions data, backed by market intelligence to standardize insights.
Decision 3: Maximizing operational efficiency while ensuring compliance.
Operational efficiency is top of mind for successful maritime shipping businesses. The definition of efficiency will vary as workflows and business needs change. Decisions made day to day can have a large impact on the business, especially as rates or costs across the business increase. Global shortage and other factors have prompted a rise in voyage-related costs – maritime bunker costs have risen 679% since 2016, maritime operating costs rose 773% in the wake of the COVID-19 pandemic, seafarer wage rates are expected to increase 2.5% each year through 2027, and more. High costs result in outsized supply chain expenses for those who are purchasing marine freight.
All of this increases the financial significance of every operational decision, as well as the potential negative impact of any existing inefficiencies. Ensuring operational efficiency means not letting anything slip through the cracks, which is why it’s so important to have checks and balances set up throughout the commercial workflow and allow for process controls that are tailored to your business’s unique requirements. Ensuring all required checks occur in the most expeditious manner is an evolving pursuit within the industry as new data sources that provide perspective on ownership and vessel status from a safety and sanctions vantage point emerge.
Decision 4: Sharpening strategies to outperform the market.
The maritime shipping ecosystem generates a massive amount of data, which has been estimated at some 120 million data points per day. But data does not equal insight, and insight does not equal understanding. To translate this data into competitive advantage, maritime shipping organizations must bring together all three decision making elements in a data flow that is contextual, standardized, and market aware. Securing competitive advantage at a macro level requires holistic historical data that is continuously captured and integrated, an open approach to integration, and a strong support of real-time market intelligence.
The right commercial platform must enable powerful decision support, drive standardization within an organization, and provide differentiated market intelligence with high levels of integrity, security, and context.
At Veson, our vision is to be the standard platform that propels maritime commerce by bringing the three elements of smarter decision making to life in the workflows of real maritime shipping organizations on all sides of the marine contract.
If you enjoyed this overview and would like to read more, download this free guide: The Fundamentals of Making Smarter Freight Decisions.
Eric Christofferson is Chief Product Officer at Veson. Eric’s vision and leadership are integral to shaping the ever-evolving Veson IMOS Platform (VIP). As the maritime shipping ecosystem continues to be transformed by a wave of digitalization, Eric works collaboratively with our team to ensure that Veson remains at the forefront by continually delivering new and innovative capabilities that drive real value for our clients.
This article is sponsored by Veson.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.