Revolutionizing short sea shipping – the Uber of the Seas
Anastasia Tsvetkova, Senior Researcher
Current short sea logistics are inefficient, especially in the dry bulk and general cargo segments. Low utilization of vessels, significant idling times, lack of coordination between the multitude of actors involved, and low information transparency about cargo and vessel movements make it impossible to have an optimized and smoothly operating logistical system. As a result, many businesses suffer – a dry bulk vessel is barely a good investment for shipowners, ship operators are hardly profitable, and technology providers cannot capitalize on their latest technologies. A systemic renewal is the only way to break from the old, inefficient ways of working.
In the recent positioning report 'Revolutionizing short sea shipping' published within the REBUS project in collaboration with the Laboratory of Industrial Management at Åbo Akademi University, we lay out a set of innovations that together address these inefficiencies and enable an industry with a renewed structure and logic - the Uber of the Seas. These innovations include new technologies, business models, financing models, and governance models; they complement and reinforce each other:
· An electronic freight marketplace that would enable industrial cargo owners to transact directly with ship operators, bring visibility to the freight market, and enable both parties to adapt their operations to the supply and demand in the market.
· Real-time integrated production and logistic planning to ensure optimized just-in-time freight throughout the logistic chain.
· A new cargo handling concept developed by MacGregor that reduces turnaround time in ports, maximizes cargo space utilization, and secures cargo handling quality.
· A performance-driven shipbuilding and operation business model that ensures a highly competitive ship by keeping world-leading technology providers engaged throughout the lifecycle of vessels.
· New financing models that integrate institutional investors with a long-term investment perspective in order to reduce the cost of capital and put the focus on competitiveness.
These innovations would create significant added value throughout the system by increasing asset utilization and making sea logistics strategically more relevant. The benefits include, among others, the reduction of transportation costs by 25-35% and emissions by 30-35%.
The introduction of Uber of the Seas will have an effect on many actors: industrial customers who use sea transportation services, freight forwarders, port actors, local decision makers, financiers, marine technology providers, and policymakers. In the report, we outline clear implications for these actors regarding the actions needed to benefit from the concept.
Anastasia Tsvetkova (PhD) is a Senior Researcher at PBI. Her research interests lie within the field of sustainable business models and business ecosystems. She has been working in a number of strategic consulting and development projects devoted to biofuel production and consumption systems, sustainable logistics and renewable energy industry.