One of the tougher decisions every shipping executive has to make has to do with replacing an outdated technology with more efficient shipping software. As it turns out, replacing an ageing IT platform is a lot more complicated than it sounds, particularly in such a fast-paced business environment as liner shipping. History has been a witness to countless cases where poor implementation of new technology has resulted in more harm than its supposed benefits.
Yet, despite this fact, more and more shipping operators, NVOCC’s, and logistics solution providers choose to make the difficult, and yet rewarding, decision of switching to more advanced liner shipping software for all the right reasons. Regardless of their desired outcomes, these shipping companies abandon their ageing legacy systems, not because doing so is the better alternative available, but because it is the only option that is left in order for them to remain competitive.
Around two or three decades ago, many large shipping companies chose to build bespoke IT platforms to automate their internal logistics processes. This was, without a doubt, a good decision back then because it helped operators to streamline their operations and make best use of their in-house resources. Transporting goods in containers became a lot easier and profitable using IT platforms specifically built for container shipping, such as container management software. Eventually, operational costs were significantly reduced, efficiency increased, and shipping companies gained competitive advantage over competitors who could not afford such investment.
However, the problem with using bespoke IT systems was that they generally required a huge capital of up to 50 times the cost of off-the-shelf shipping software in some cases. Aside from the hefty initial investment, maintaining those custom-built IT platforms was also very expensive. First of all, building a bespoke system required hiring a skilled in-house software programmer, and in most cases, a team of additional in-house IT staff to maintain and keep it running. And since those systems were mostly custom-tailored to exact specifications, technological developments quickly made them age in just a few years. Since software used (and still tend) to run in five-to-ten-year cycles, operators could only hope that they could, at least, make back the cost of their investment before their platform became obsolete.
To address these problems and make business more profitable, shipping software companies have developed ready-made solutions which can be purchased off-the-shelf. These types of shipping software are not only cheaper to implement than traditional bespoke systems, but are also proven to be a lot easier and less-expensive to maintain. To ensure wide-range and protracted usability, packaged software solutions incorporate a “switching” mechanism which allows each application to be customized to suit individual user or function, and other company peculiarities. This mechanism also allows operators to upgrade their existing IT platform to newer versions without the need for complicated and expensive re-programming.
Aside from a streamlined business process, shipping line software solutions are also instrumental in improving customer service and value. Unlike before, customers nowadays are more informed, and accordingly, more demanding. They want to be able to keep track of their shipments and have some degree of control over the shipping process. Container tracking software is designed to provide customers and vessel operators a complete and up-to-the-minute visibility over cargo movements. This not only enhances customer experience through value-added services, it also improves the shipping company’s reliability, which opens the door to more clients in the future.
Lastly, enterprise shipping software enables operators to reduce costs on fuel and other operational expenses. Fuel cost has always been a matter of great importance in shipping, and it truly deserves every liner vessel operator’s attention considering the fact that bunker accounts for more than half of a ship’s operating expenses. To reduce fuel consumption, shipping companies are implementing cost-saving measures such as finding more direct routes, installing more efficient propellers, and creating more hydrodynamic vessel designs. On top of these, many liner vessels now use bunker management software to monitor and manage their bunker expenses more efficiently.
Technology evolves very quickly, and shipping companies must evolve with it if they must continue to survive. By switching to modern platforms based on enterprise shipping software, liner vessel operators gain greater competitive advantage than what bespoke IT systems can provide.