The maritime industry is one of the most dynamic and complex industries in the world. Making it smooth is a challenging task in hand. Covid-19 has hit the world across all industries and disrupted the whole supply chain. In maritime there are various challenges which are pre-existed, that become more complex and accelerate the other challenges. The maritime industry plays a crucial role in the overall global economy and balances the demand and supply of the market.
In this article, we will understand the biggest challenges of the maritime industry through the lens of professional experts of the industry.*
Existing challenges are yet to be solved!
Beyond the other rising challenges, the existing challenges are yet to be solved. Most of the companies are facing the same problem when it comes to the maritime industry. Here, we have listed the biggest challenges of this industry.
1. Containers shipping costs
Container shipping costs are increasing: limited industry capacity, increasing penalties, more demands for data insights, and technology investments increase dramatically the container shipping costs. Higher detention and demurrage rates are also one of the major issues for shippers: over 40% of logistics professionals find demurrage & detention penalties as challenging for their daily work.
2. Huge manual entries
Logistics professionals still feel overwhelmed by the burden of paperwork and piece-together processes: over 50% of them define daily manual entries as “challenging” for ordinary import/export operations.
3. Accuracy of data
ETA reliability is a significant challenge for the industry. Since the arrival of digitalization, carriers and third service providers have been able to provide additional data regarding ETA or revised date of arrival. But this data is often corrupted by the lack of standardized data between carriers and even within the same carrier.
4. High uncertainty
Shippers are experiencing a high level of uncertainty driven by: higher rates, schedule reliability and issues in finding available space on vessels. This uncertainty has been intensified by the ongoing pandemic crisis during the last year. Over 40% of logistics professionals interviewed find that schedule reliability, finding available containers and securing space on vessels as “very challenging”.
5. Coordination issue
Coordination with trade partners is an issue too. On average, large shippers have multiple freight forwarders, all using different software and data. According to the Maritime Logistics Challenges Survey conducted by BuyCo in 2021, 52% of the respondents are partnering with more than 2 freight forwarders. On top of that, carriers also use different systems. Fragmented systems cause silos of information, which means that trade partners aren’t able to share information in real-time. This lack of congruity magnifies shocks and the structural uncertainty of ocean freight causing additional costs and difficulties in managing day-to-day operations.
6. Lack of real-time tracking
Logistic professionals have difficulties in tracking and tracing their containers: more than 60% of the logistics professionals label tracking containers as “challenging”. This is also due to the different standards that carriers employ for defining events for container shipping.
The way forward to beat the challenges!
Considering the existing challenges and looking forward for the future scenario of the industry, the way forward to combat these challenges is to embrace digitization in the process which will help the companies to have closer insight of the partners with greater collaboration, real time tracking of logistics, better planning to save the cost, minimizing the error through automotive documentation and data management. Digitization will help the companies to be more empowered by having transparency and visibility on the system which will eventually help to improve customer satisfaction.
To know the in-depth analysis of challenges faced by the industry in the maritime logistics, download our exclusive report:
*Exclusive online survey was conducted by BuyCo in Q2 2021, over 75 logistics professionals around the globe.