Fragmentation of data, low visibility, and low levels of collaboration between partners had taken their toll on the shipping industry as it battled with sharp shifts in consumer demand last year, Vincent Clerc, A.P. Moller - Maersk’s CEO of ocean & logistics, told delegates at the recent JOC Transpacific Maritime Conference - North America’s largest (virtual) customer and industry event.
The industry was behind the digitisation curve, he added, and in order to deal with the challenges, companies across the globe had fast-tracked the adoption of new technology to simplify and connect their supply chains.
“The combination of big data application and AI algorithms makes all aspects of the supply more accurate and efficient. And the digital platforms which have completely changed consumer behaviour in recent years will do the same for our industry, which will be for the better.”
Digitisation is however not enough – the industry needs to tune into the power of integrated solutions.
He said many supply chains had, over time, been increasingly fragmented into a complex network of suppliers segmented across products to preserve procurement power. “The cycle of consolidation, shipment, deconsolidation and distribution - if split between different vendors - is not optimal for connectivity due to the inherent changes that occur. The total outcome amounting to less value than the sum of the parts. This was the case even before Covid-19, and it was certainly the case in 2020.”
Clerc said that as resilience and flexibility had become key, these fragmented set-ups had proven to be increasingly clumsy in their ability to orchestrate, and equally ineffective and costly to cope with demand shifts.
“The pandemic has tested every supply chain and the test is still ongoing,” Clerc added.