McKinsey Says Container Shipping Should Digitize

Analyst McKinsey & Company have imagined the future of container shipping 50 years from now and advised companies to digitize their operations to take advantage of digital technologies, big data, the Internet of Things.

The company predictes:

Autonomous 50,000-TEU ships will plow the seas, perhaps alongside modular, drone-like floating containers, and the volume of container trade will be two to five times what it is today.

Short-haul intra-regional traffic will increase as converging global incomes, automation and robotics disperse manufacturing footprints. 

Container flows within the Far East will remain huge, and the second-most significant trade lane may link the region to Africa, with a stopover in South Asia.

After multiple value-destroying overcapacity and consolidation cycles, three or four major container-shipping companies might emerge. 

Freight forwarding as a stand-alone business will be virtually extinct, since digital interactions will reduce the need for intermediaries. 

All winners, closely connected through data ecosystems, will have fully digitized customer interactions and operating systems.

A fully autonomous transport chain will extend from loading, stowage, and sailing to unloading directly onto autonomous trains and trucks, with last-mile deliveries by drones.

Some customers, prepared to pay a premium, will want container-logistics providers fully integrated into their supply chains. Others will continue to demand the cheapest sea freight. Both will expect transparency and reliability to be the norm, not the exception.

Capturing Value

McKinsey advises shipping companies to invest in digital technologies to differentiate their products, dis-intermediate value chains, improve customer service, raise productivity and cut costs. The risk is that tech giants and digital disruptors will capture most of the value from customer relationships by moving faster than incumbents.

Second, says McKinsey, integrate. Next-generation innovations will have to be orchestrated across the entire value chain. Carriers and terminal operators share an especially rich agenda: bigger vessels paired with infrastructure investments for terminals, transparent ship arrivals and berthing and larger containers. Integrated logistics providers could make freight forwarders irrelevant by mastering the complexity and the customer interface.

Extracted from: “How container shipping could reinvent itself for the digital age” by Steve Saxon and Matt Stone