Talking ‘Bout A Devolution
What are the next decades set to hold for shipping? Technology, digitalisation, the promise of maritime informatics, there are many exciting things to come. Shaping change will be key, as will exploiting it — but there are many noses at the trough. What will Shipping 2050 need to consider?
There is one thing shipowners love more than the past, and that is the future. The present is the sticky bit, and most companies just look to get through as best they can. History is always a golden age. A time of either terrible problems triumphantly overcome, or the halcyon days of high rates and low costs.
All is wonderful in the past, as the victor sets the course. The future is a bit more complicated, but for many companies, it is the time to shine and now more than ever shipping is looking forward with eager and hungry eyes.
Some see it as the time where autonomy will remove risks, others where data will streamline every decision, and clean fuels will polish every tonne-mile. What though, will 2050 really look like? It is not only the shipping industry, there are other eyes on the prizes too.
So, we enter the realm of Futurist, eagerly rubbing our crystal balls, slewing our tea leaves and aligning our shipping chakras. The first thing to say about 2050 is that it will likely be remarkably similar to today — remember the 1990’s? Who could forget?
THE NINETIES
The Nineties. What a time to be alive. Friends constantly on the TV, baggy jeans, overgrown sneakers, bum bags and sweatshirts. Instability in the Middle East, Democrats in the White House, debate and disagreement over Climate Change.
Well upon reflection, it would seem that in 30 years, remarkably little can change. Yes, back then we did kind of the same things, pretty much in the same way — so we often see industries change through small tweaks, big bangs are rare. Though of course the Sextant, transit satellites and telexes are used rather less than they were.
The future is not always about leaps, it is about a series of baby steps. The heating of the frog, as it were. Bathed in the cold water of certainty, we don’t notice the temperature rising until its too late. Shipping needs to be aware that the heat is most definitely rising.
That is where the past 30 years has got us and the relative status quo would remain for another 30 if it weren’t for some massive force set to destabilise and derails us. That force is likely to be Amazon, and we are seeing the dawn of devolution in shipping. Which will mean that risks and rewards will all ramp up, and the industry needs to be ready, willing and very able indeed.
YOUR AMAZON HAS ARRIVED
Rather conveniently to be shoehorned into this article, it was back in 1994 that the behemoth of consumer delivery Amazon was born. On the 5th of July 1994 — presumably, the paperwork was stuck on someone’s desk for Independence Day, the company was legally born.
Jeff Bezos (who looked older in 1994 than he does today, showing the health benefits of billions in the bank!), began selling over dial-up. The vision was sound, as the internet had been seeing growth of thousand percentile usage points in the early 90s, and every day more and more people were coming online.
He figured they presumably could read, so books it was to be as the product to be sold. As with most American dreams, it was run out of a suburban garage. Within its first month, Amazon.com had sales in all fifty states and forty-five countries. Once a customer placed an order, the staff would immediately request the title from one of their book suppliers. The cunning amongst you will already have just spotted the business alchemy, that our Jeff was creating.
This was the internet being used seamlessly with logistics to get consumers what they want, but with a nice cut for an online broker sat in the middle. However, that would not be enough for Amazon. Why take a slice when you can have the whole pie? Why indeed…
WHAT HAVE YOU STARTED?
So, it was around 30 years ago that this garage brand began shaping up and shaping the world around it, and it seems that the future will be even more retail power drive. As the companies who control more of the mechanism distort the market. The companies become a black hole into which customers are pulled, and never escape.
This means other retailers are also attracted, and finally, we see the means of delivery inextricably drawn in too. Indeed, with Amazon turning its eyes to the whole supply chain, the other big beasts of commerce, the likes of Target, Walmart, Nike, Unilever, et al, they have all seen the lure of being more linked to the marine adventure, as they explore how standards can be raised, costs cut, profits boosted and a sense of control exerted.
For giant retailers, plans for world domination cannot comfortably ignore 70% of the planet. There is an inconvenient truth that water, water is truly everywhere. So, the power to shape and shake markets depends on how you span the oceans. The bigger the company, the more tempting it becomes to be involved in the process.
How though will consumer brands look to make their power grab? Well, by looking at those who have gone before. The commodities giants and oil majors have long pushed a quiet evolution, with a power transfer through vetting, standards, demands and the power of the wallet to bring shipping to heel.
THE POWER TO COMPEL YOU
Black gloop, pieces of rock, or piles of grain, are invisible to your average consumer. They move the planet, often without moving the emotions…until something goes wrong, of course. For now, what we have seen is that there has been gentle almost invisible power transfer to the shippers, and everyone has simply gone about their business pretty much as before.
That works fine until you get to boxes full of stuff. Especially boxes with big logos, containing further boxes full of big names. Then, suddenly the cold light of day is shone and there becomes a greater need, but also a bigger opportunity in wrestling control, in disrupting the market. That mantra again, why pay for a slice, when you grab the pie.
The next 30 years for shipping, as we go full speed ahead to 2050, will be how the shipping element is controlled, managed and embraced by the power of its users. The transparency of data emerging as a driver, as the old model of making marginal gains in saving fuels costs evaporates.
A clean revolution also delivers a cost transformation too. This will see a future with fulfilment, consolidation and unification at the fore. Which will likely also see a transfer of power, a digital devolution, as shippers change the way in which they see the sea.
WELCOME TO 2050?
Perhaps what the Futurists seldom focus on is how much will remain the same. Indeed, how we will all love, laugh, play, eat and drink will resist much change, it will just see more of us doing it. While we will be even better connected, and perhaps with Artificial Intelligence making some buying decisions for us. Which begs the question of whether an algorithm will be harder to pitch to than a household?
Anyway, by 2050, the global population is projected to rise to 9.7 billion, which is more than two billion more people to feed than today. Life will be as digital, in a fully networked world. Though it will unlikely that we have learned to teleport crops, or to 3D print iron ore, so there will still be ships. Ditto the need to manufacture somewhere, which is unlikely to physically be in the market of consumption. Unless wages rise of course…but that’s another issue, and let’s be honest…
Whatever society looks like, the devolution of power to the cargo interests is set to be magnified. They who control the things, hold the purse strings! This will see shipping having to scramble to comply, but compliance with what? That is the big question. Will visibility, transparency and accessible data mean that the demands of the International Maritime Organization (IMO) will only ever be the absolute minimum? Will there be a stigma in always doing the absolute least allowable?
Regardless of who is on a ship, whether Robbie the Second Mate, or Robot the Master, so much will be about de-risking the shipping process, so the market can be brought to the consumer, and the retailer can get richer in the process.
That is devolution, the handing over of power, and ultimately profit to the poker player which holds all the Aces. Now how can we best shuffle shipping’s digital hand?
