Industry predicted to drive digital evolution in shipping

Community and efficiency are key as sector transforms itself without fanfare, says BRS chairman

Shipping's digital transformation is developing from within the industry and will not be the product of “other people’s money”, says Barry Rogliano Salles (BRS)'s chairman Tim Jones.

Maritime “Uberising” should be seen in the context of a sector that has evolved in numerous small steps, he says.

Today, the industry comprises a complex web of interactions for which “community” and the sharing of tools are key.

Each new technology — cable, telex, email and mobile phone — has required users to adopt it to create the “community that international shipping requires”, says Jones, who recently stepped down as chief executive of BRS, the Paris-based shipbroker.

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There have been many false starts, such as LevelSeas and, often “forgotten for having lacked the critical mass to be part of electronic history”.

The internet bubble of the late-1990s caught most of the industry flatfooted, he says, but shipping recognised that the internet was “a first step towards connecting industry players faster and more cheaply".

“Our business has been transforming and it is being done without fanfare and by people who understand it and know what its parameters are," Jones said.

"More business has to be done by fewer people — at least in higher cost countries — in order for our business to survive.

"Owners, traders, steel mills, miners and brokers are all wrestling with producing/fixing more at lower costs.

"Unlike Uber, the industry [not a tech firm] is driving the change,” added Jones, whose exit from the BRS chief executive post will allow him to devote more time to digital innovation.

He says BRS created its part-owned maritime data system provider, AXSMarine, as a means of sharing the cost of “evolving our industry” with other players. He adds that it offers a “level playing field, where we all pay for tools that make doing our jobs more efficient”.

Among its tools, AXSMarine facilitates the analysis of ship and cargo movements. AXSReader is claimed to scan more than 500,000 emails each day for 120 companies, updating positions and cargoes to the AXSDry system, with 99% accuracy.

Reflecting on an earlier BRS investment in an internal system that developers failed to deliver in a workable manner, Jones says AXSMarine’s brief was to build a system to meet most of the company’s needs while being general enough to satisfy the industry. A system that sought to create a “community” and was designed for add-ons as it evolved.

The system’s verticals include AXSTanker, which is claimed to have signed up more than 90% of tanker brokers.

14348c2356febf1f078734e4d9200d65 Tim Jones, chairman of Barry Rogliano Salles  Photo: Geoff Garfield

Alphaliner provides data for the containership markets and is claimed to have more than 1,000 companies subscribing. AXSDry was originally developed with other brokers, including Fearnleys.

Some firms such as Clarksons use their own software, while others have turned to AXSMarine's competitors. Q88, for example, was originally created by Fritz Heidenreich for in-house use by pool player Heidmar and now claims more than 1,500 clients.

Q88’s stated mission is also to “connect the global shipping industry and to facilitate the sharing of information in an efficient and productive way”.

Jones said: "There is so much talk about disruptive technology, whereas there is so much need for complementary technology. The principle remains: build something that caters to as many people as possible.”

In the early days of AXSMarine, UK brokers showed little interest. Today, most use it in one form or another, he says.

BRS has even proposed that the Baltic Exchange should take over AXSMarine, in place of its own Baltex trading platform, on the condition it remains a broker tool.

Jones said: "The recent announcement of the final shuttering of Baltex, and the reasons it gives, confirms our understanding that people will only use tools, websites and apps if they make what they are doing easier and cheaper.”

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Marc Lecoanet, chief executive of Geneva-based brokerage and marine services Riverlake Group, one of AXSMarine’s first clients, says such tools are a “key element in the digitalisation of the shipping industry”.

Shipping remains conservative, still working through personal relationships, phone and email, so any such support tools strongly help brokers’ daily work, he says.

“Such tools show that working as a community and with coordination makes us stronger and far more efficient,” said Lecoanet.

“It is what has happened with OCIMF's [Oil Companies International Marine Forum] goal to have cleaner oceans, along with protecting the environment through the SIRE [Ship Inspection Report Programme] database, IACS' [International Association of Classification Societies] grouping of classification societies, and the IMO [International Maritime Organization] setting up conventions.”

Lecoanet said: "AXS, whether we use the system or not, has paved the way for a more sophisticated way of interacting.”

Jones says the crux of the issue is the need for efficiency.

Shipping had made great strides, he says, developing shorthand communication, documentation and research channels, among other advances.

But as the boom years took hold, they triggered a spiralling of salaries that was “egged on by other people’s money". He says the value of what was produced, "whether you were a forward freight agreement broker, a trader, or an owner’s man, got inflated".

When reality set in, companies were faced with the choice of firing people, reducing their packages, concentrating on more lucrative business or doing more business with less.

“The industry doesn’t need a revolution. It needs efficiency,” Jones said.

But it also needs to maintain community, he adds.

"I seriously doubt that someone with a large wad of other people's money is going to understand the distinctiveness and inter-relatedness of the shipping sectors,” he said.

Jones concluded: "Our industry cannot rest on its laurels. There are still huge efficiencies to find in electronic documentation, blockchain payment systems, tradeflow predictions, post-fixing integration, algorithmic fleet management and weather integration, not to mention robot ships, brokers and services.

“Fixing online is coming. But it will be industry insiders who evolve to make their business more efficient that will drive it, not other people's money disrupting a very complicated equilibrium.”