Is This the End of Technology in Shipping?


The fragmented nature of the shipping industry with many intermediaries in between from shipping lines to freight forwarders and truckers always created the need for visibility.

As was the case in many industries, venture capitalists saw the need and invested billions to be part of the solution. It is estimated that more than $1.4 billion was invested over the past decade in the shipping industry, where Flexport alone raised more than $1 billion and in distant second, Freight Hub raised $53 million.

The pandemic also accelerated this process since many workers had to work remotely. With the availability of funding, many small to medium-sized companies formed and exhibited at the TPMTech conference so that they could also grab the piece of the pie.

However with all these big investments and promises, are end-users in shipping happy with the outcome?

I believe the recent investments made some difference where even small companies had to adjust their systems so that they go beyond updating their customers via weekly or daily spreadsheets. Some importers even started to ask if a new company has any kind of technology platform so that they can have access to it.

With the cash infusion from VCs, some technology companies made progress by creating a way to feed forwarders with data in terms of where the container is at a certain point on the ocean. Forwarders either purchased systems or are creating their own platforms so that they can show cargo movements to their customers and provide this as a value-added benefit. This became more of a necessity recently since shipping prices have become extremely competitive where the only way to differentiate is via online visibility platforms.  Also, depending on the level of sophistication, some forwarders charge a premium for access to their systems.

It is hard to provide shippers with one solution that will satisfy all end-users.

Where one importer may just be interested in an ETA to the port, others might be looking for every single movement starting from pick-up in the origin until delivery to their warehouse. For people who are looking for live data starting with the booking process until delivery, things get more complicated since many trucking companies in the U.S. are small and do not have the infrastructure to feed forwarders with constant data about every container movement.

Some do provide their own tracking system, but this becomes problematic for end-users since the importer now has to use multiple tracking systems and websites to learn one piece of information. Since using multiple systems is a nuisance, some shippers go back to the traditional method of emailing their operations contact to learn about the latest cargo movement.

Part of the problem is that the startups are too small and fragmented, so they lack the scale and only have fragmented answers where the expectation in general is a more uniformed data flow. Since the data is not 100% available & updated, the companies that have the resources try to fill the information gaps by hiring cheaper labor overseas. They try to provide a more cohesive approach. However, since a human element is involved, it is not foolproof and after couple of mistakes some importers also start to double-check the data by emailing or even calling their contacts which creates another hurdle.

How can companies improve technology offerings for shippers?

Perhaps with the merging of small companies or larger ones acquiring the smaller ones, they might be able to integrate each other’s efficiencies with larger companies having the scale needed to do larger investments, we might see better solutions to data availability. AI is also at this point is in its infancy, and with the addition of AI, we might be able to see more reliable and better systems with visibility & tracking.

How MTS Logistics tackles technology and service

At MTS Logistics, we understand that each customer has unique needs and expectations, and we tailor individualized solutions to every customer by providing both our technology platform where we also have our own app, My MTS, available but also support our customers with the personalized service. So, no matter what a customer’s expectations are from the industry, we go beyond it with our unique offerings.