What shipping can learn from Uber

Uber app on phone display

New technologies enable new business models to emerge, and companies like Uber and Airbnb have given a face to the “sharing economy”. At Klaveness we believe this will also apply for shipping.

Today, ships are increasingly joining the “internet of things” and with all vessels carrying AIS transponder, everyone can see their position, direction and speed in real time. The trading history of all ships can be stored and analyzed. In other words, nothing is secret, and we need to rethink our approach to seaborne logistics.

In shipping, we need to expect the unexpected. A range of unexpected events like congestion, breakdown of port equipment, technical break down on the ship and rough weather can happen, resulting in need of high safety stocks adding significant cost.

If we share, we win

Managing such costs require increased flexibility and transparency and this is where shipping can be inspired by Uber and the sharing economy. In areas where companies are importing the same raw material their costs connected with uncertainty could be reduced significantly by sharing supply chain. Klaveness’ case study shows significant financial benefits. Out of a total annual freight cost in the range of 100 MUSD, cost could be reduced by 10-20 MUSD by increasing shipment sizes, 30-60 MUSD in liquidity can be freed up from inventory and demurrage costs can be reduced by 3-4 MUSD.

We believe this can be done without compromising confidentiality or supply strategies. It requires some standardization of terms and changes to custom clearance procedures and last, but not least, a digital sharing platform.

Increasing transparancy through new applications

Klaveness is developing a platform enabling each player to treat the complete cargo flow as one common and shared flow, allowing swapping of shipments and clearing the value of cargo and freight based on pre-agreed formulas. We are committed to being a shaper of “Shipping 2.0”, using digital technology to make the life of our customers easier, more cost effective and better informed.