The oldest known boat, a dugout canoe circa 8000 BCE, can be seen at the Drents Museum in the Netherlands. The fossil record tells us that kayaks were used in Northern Europe as early as 9500 BCE and Azerbaijanis created reed boats prior to that. Evidence of earlier sea worthy boats has been found across the globe from Mesopotamia to Kuwait, Egypt, the Indus valley and Oceania.
Go back further. About 800,000 years ago, an adventurous group of our homo erectus ancestors on the island of Bali strapped together a raft made of bamboo and set off east towards Timor. Their descendants, the Austronesians, built the catamaran and other ocean-going vessels 5000 years ago. The age of maritime trade had begun.
Shipping has been around a long time.
A really, really long time.
The latest wave of digital transformation
These days, we read about the “digital transformation” of shipping and the global maritime industry. The story goes something like this:
“The ubiquity of bandwidth, improvements in communications hardware, the proliferation of innovative technologies such as blockchain, software that can be purchased as a service (SaaS), big data/machine learning/artificial intelligence and the advent of crewless autonomous vessels will forever change the traditional world that ship owners, traders and brokers have known. It’s time to transform your business NOW or suffer the consequences.”
These digital forces will blow their way across the shipping industry—much in the way they have blown across other industries—and leave behind a completely new thing.
Furthermore, digital technologies have accomplices in that transformation. The shipping industry is being battered from stem to stern by several other forces including,
New Technologies (e.g. Internet of Things)
Regulation (e.g. The impact of IMO 2020)
Geopolitical volatility (e.g. North Korea, the South China sea, Iran)
Trade policy (e.g. US/China tariff conflict, the future of the EU)
The changing nature of work. (e.g 24/7 connectivity, automation and AI)
Indeed, these forces in combination--not to mention myriad other factors--will transform global shipping as we know it.
But wait a minute.
Haven’t we seen this before?
Hasn’t shipping gone through similar changes?
Turn the time clock back a couple of decades and you’ll see these same forces at work. Consider,
New technologies (e.g. Containers, chemical tankers, GPS)
In fact, the very nature of shipping, just like the vessels that comprise it, is dynamic. It is ever changing, ever transforming, subject to the forces that impact a massive global industry that moves 90% of the world’s cargo.
Trillions of pent up value
̌We should not be cavalier about the forces at work in 2020; they are serious. But neither should we approach the shipping industry as if it were a helpless damsel in distress that needs rescuing from the white knights of the digerati. You might say the shipping industry knows a thing or two because it has seen a thing or two.
As we’ve noted the shipping industry has been around a really, really long time.
Moving forward, the future of shipping will be less about secrets and ownership and more about openness and transparency. It will be less about cut throat competition and more about collaboration. It will less about a go-it-alone mentality and more about interdependence.
And what will that future bring? The estimates from McKinsey and the WTO vary but the future will unleash pent up value measured not in millions but in trillions.
Big data solutions driven by AI
Players in the shipping industry will need help in managing this latest wave of digital transformation. They will need cloud-based solutions such as maritime data and predictive analytics, market intelligence for global trade, vessel and fleet performance management platforms, all driven by artificial intelligence (AI). No one firm will have all the answers and with a market opportunity measured in twelve-figure sums there will be enough for multiple technologies, innovations and business models.
As long as we approach the future with the appropriate level of humility, and we think about things in terms of what’s possible—TRILLIONS--we’ll all prosper.
Remember shipping has been around for a really, really long time.
It's going to be around for a really, really long time.