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The digital transformation of the maritime freight market is growing at an impressive rate as the sector seeks to improve transparency and response time to customers’ needs, according to a new report by Transparency Market Research.

The “Digital Transformation of Maritime Freight Market 2019-2027” said the global digital transformation of the market is expected to register a CAGR of about 10% between 2019 and 2027 to reach about US$38.4 billion by 2027 from about $18.2 million in 2019.

“With the market for maritime freight witnessing incremental growth in the service industry, it is undergoing digital transformation to improve transparency and offer a quicker response to customers’ needs in this landscape,” the report said.

Spurring demand for digitization is its versatile usage in diverse fields such as booking, vessel scheduling, and delivery. “The impact of the high demand for digitization for bookings on the digital transformation of maritime freight market will remain high, globally,” said the report published August 2019.

It said cloud-based software solutions including booking software are poised to hold about 60% of the digital transformation of the maritime freight market share by 2027.

“Cloud-based solutions and cloud management tools are gaining popularity with their cost-saving benefits for stakeholders in the maritime supply space,” said Transparency Market Research, an analytics, research, and advisory service provider.

The strong financial position and technological innovations of key market players will also give impetus to the digital transformation.

“Technological breakthroughs such as AI, IoT, Blockchain, robotics, and sensor technology could provide timely succor as a cost-effective and time-saving strategy, thereby increasing the profit margins of market players,” it explained.

“Companies with research & development capabilities and technological prowess will gather momentum and profitability in the digital transformation of maritime freight market. Leading players who are leveraging technology will continue to grow exponentially and have a vast market revenue share.”

Enhanced carrier capacity management and robust operational efficiencies are also a major reason for maritime freight sectors looking at digital transformation.

Furthermore, the International Maritime Organization’s (IMO) guidelines capping ships’ sulfur emissions by at least 50% by the year 2050 will propel increased investments in technologies that allow stakeholders to track and analyze cargo vessels for operational viability and environmental sustainability.

From a regional perspective, North America remains the dominant leader in the global digital transformation of maritime freight market, with revenue in 2019 estimated to reach around $6.6 billion. The region is also expected to hold a 36% share of the global digital transformation of the market by 2027.

Meantime, the digital transformation of Asia-Pacific is anticipated to expand rapidly during the forecast period due to the exponential increase in exports and imports within the region, specifically in China and India.

“Asia Pacific is one of the fastest growing regions in digital transformation of maritime freight market, where countries such as India and China are dominating the digital transformation of maritime freight market with rapid advancements in technology, and integrating them with shipping companies,” the report remarked.

“Moreover, Asia holds the largest population in the word, which leads to the increased demand for products, and this has resulted in a rise in trade across the globe. The adoption rate of digitization in maritime freight, specifically in this region, is high in order to effectively and optimally manage such high volumes of data related to ships and vessels, quantity to be traded, and number of ports.”

On the other hand, Europe is also witnessing positive growth, with shipping companies aggressively pursuing digitization, as maximum trade activities are taking place at ports in France and Germany.

However, cyber security and trade restrictions could restrain the growth of the digital transformation of maritime freight market, noted the report. For instance, rising trade tensions between the United States and its trading partners may impact maritime freight digital transformation.

Further, the implementation of IMO 2020 could lead to a hike in freight rates which in turn could reduce the demand for digitized solutions in the maritime freight market.

Stringent rules of sea channels limiting the entry of big containerized ships can likewise hamper port growth, negatively impacting digital transformation over the forecast period.

Photo: Alex Furr

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