Home » Breaking News, Maritime, Ports/Terminals » Shipping sees improved profits or reduced losses, higher tech spending in next 12 months

Contained optimism about growth currently prevails in the global maritime industry even as stakeholders showed concerned about the potential impact of trade tensions, cyber security, fuel costs, and other headwinds to industry recovery, according to a new report.

Some 82% of survey participants anticipate either improved profitability over the next 12 months or continued stabilization and reduced losses as they expressed cautious optimism about the global business environment for world trade, according to a benchmark survey and study developed by the Business Performance Innovation Network in partnership with Navis.

The Navis Business Bellwether report said growth is expected to come from all regions of the world, with particularly robust activity in Asia and the Middle East/Africa.

The report is intended to be an ongoing benchmark survey of the shipping industry to monitor sentiment and priorities across a variety of economic, business, and operational issues. The inaugural survey was conducted in September and October of 2018 and includes responses from more than 175 industry professionals and executives.

“A return to industry growth and improvements in shipping supply and demand have resulted in increased optimism among maritime industry executives and professionals,” said Dave Murray, head of thought leadership for the BPI Network.

“At same time, the industry appears to be very focused on raising operational performance and profitability through improvements in process quality and efficiency and increased investments in technology.”

While just 12% of respondents are “very optimistic” about the global business environment, another 46% express cautious optimism. Some 41% say they are either somewhat or very concerned.

Underscoring this tempered optimism, Brian Hibbert, CIO of International Container Terminal Services, said he does not expect rapid improvement in the industry’s business performance.

“I would not expect a significant change in profitability in the next 12 months. I expect more activity when it comes to mergers and acquisitions in the terminal operating space as companies try to optimize their portfolios to achieve a profitable position,” Hibbert said.

Topping the list of industry concerns is the rise in trade protectionism and new tariffs. One third of all survey respondents said they were “extremely concerned” about trade tensions, with another 36% saying they were concerned. Cyber security was also high on the list, with 29% indicating extreme concern and another 37% expressing concern.

Only 11% of respondents were extremely concerned about an economic slowdown. However, when assessing potential risks to the industry, economic growth ranked high and just below trade protectionism. Other top risks include rising fuel costs, a lack of process efficiency, continued industry consolidation, and labor disruption.

Technology investments will increase over the next 12 months, according to the survey. Some 90% of respondents said their organizations would raise technology spending, including 56% who said the increase would be 6% or greater.

Adoption of new technologies was also cited as one of the top three priorities of companies for improving performance, only behind improving process efficiency and quality and bettering customer service and satisfaction.

The top areas for increased technology spending, in descending order, include automation, business intelligence, planning and management systems, big data analytics, and SaaS applications and cloud services.

Much discussed technologies like blockchain and IoT sensors were significantly lower on the priority list.

At an industry level, respondents point to the need for improved collaboration and operational planning across the supply chain as the most important priority, followed by supply chain visibility.

Most see the industry’s capacity to share data as needing dramatic improvement. Respondents were virtually unanimous about the need for standardization of data interfaces to improve data sharing and collaboration.

“The study indicates that their seems to be a dichotomy between the high priority to improve performance and industry health by leveraging new technology, and slow progress to date towards achieving digital transformation,” said Andy Barrons, chief strategy officer and head of portfolio product management at Navis.

“We are also seeing that data standardization is needed, and the industry culture and the capacity to share data needs more improvement.”

Photo: Buonasera

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