The Unexpected Impact of COVID on Shipping

By Chokniti Khongchum via Shutterstock

There’s no denying it — the world has changed.

In the past year, the global pandemic has disrupted industries, economies, and ways of working. Every industry has encountered challenges adapting to these changes — the shipping industry included.

Disruptions expose issues; the lack of global supply chain visibility, the limitations of physical documentation, and the need to be flexible and agile.

These challenges aren’t new, but now they’ve become a priority.

The pandemic has shown us why they need to be solved (and left little alternative).

Lockdowns forced flexible, remote-working arrangements.
Travel restrictions replaced overseas trips with video calls.
Disruptions increased demand for digital documentation.

Simply put, the pandemic has accelerated the digital transformation of the shipping industry by 10–15 years. And truth be told, as Lars Jensen, CEO of Sea Intelligence pointed out, it has shown how much further along the digital path we were than we thought.

Times of change spark greater collaboration, and this article wouldn’t be possible without the inputs of my industry colleagues. While I couldn’t include every insight, all the inputs shared on my LinkedIn post have been truly valuable.

Digital transformation is less about tech, and more about adoption. There’s little point in great tech if people don’t use it.

As Steven Jan Van Hengel, Senior Business Manager at Routescanner, points out, “adoption has been the delaying factor” in the digital transformation of our industry.

We humans avoid pain more than we seek gain. So, when the pain of change appears greater than the pain of inaction (“it’s too hard, and too complex, and not necessary”) then we stay still.

But the pandemic has turned that on its head.

“There is a much greater willingness (not just willingness — but even a ‘push’) to adapt and adopt than I have ever seen before” Cathy Hodge, Cofounder/COO of Smart Maritime Network

When we feel the pain, we see the need for change.

The pandemic “highlighted how predictable container shipping was pre-COVID” (Sam Greenhalgh, Business Development Director at Zencargo). When that predictability is turned upside down, we begin to change — fast.

As it turns out, there’s no better way to speed up adoption than necessity.

Change happens fastest when it has to.

The pandemic forced many issues to the top of the list.

Just a year ago, working from home was the exception. Now, it’s the (new) norm.
Global travel was essential, until it wasn’t.
All those meetings that simply had to be face to face, didn’t.

And now we’ve seen the benefits, how could we go back? We’ve opened our eyes to new ways, we’ve seen the upsides, how will the old ways seem in comparison?

Jan Hoffman, Chief, Trade Logistics Branch, DTL at UNCTAD explains that now “there is clearly more interest in e-solutions (automation, electronic payments, information portals, pre-arrival processing, e-signatures etc) than before the pandemic”, a view echoed by Jacob Bejoy, VP, Group Head — CoE Blockchain at DeutschePost DHL — “documentation management took a new turn, as electronic-share took prevalence.”

This is welcome news. As many know, digitalising documentation is an enormous opportunity for the industry, but transformation has been slow going.

Electronic documents, real-time tracking, data sharing and standardisation — all of them are now receiving more focus than ever.

The wheels of change are clearly in motion, but are they spinning in the same direction?

As we rush to change, we can’t lose sight of the bigger picture.

Every change has second order effects. Supply chains are chains after all. Changes here, have impacts there. The better we coordinate and consider those impacts ahead of time, the easier we avoid issues in the future.

So as we develop electronic bill of lading, real-time tracking, and data sharing solutions we must coordinate, and collaborate. Solutions-in-silos become problems later.

On 3rd March, I’ll be sitting down with Eric Johnson, Senior Editor, Technology, of JOC, as part of TPM21 (the premier conference for the trans-Pacific and global container shipping and logistics community) to discuss how COVID-19 has accelerated digital development in our industry.

These opportunities to collaborate help us work together as an industry to ensure solutions we develop work at an industry level, not just in our own little bubbles.

By zooming out we’re reminded of the importance of standards and interoperability. Digital solutions must be able to talk to one another.

And so do we.

Ultimately, technology should enhance our lives. As humans.

The drastic changes over the past year, to our lifestyle, society, ways of working, and industries have brought perspective.

Yes, digital transformation is important, and these leaps forward represent a great opportunity. But we must always remember the importance of real, meaningful, human connection.

Video calls are efficient but can’t replace face to face entirely. Remote work is convenient but lacks team spirit and camaraderie. Work is as much about the relationships we form, and the experiences we have, as it is about the work itself.

So as we happily push forward into global digital transformation, never lose sight of our human side.

Husband, father, bass player, shoeaholic. CDIO at @MSCCargo and chairman of DCSA. I mostly tweet about the digitalisation of container shipping!