Maersk separates IT and digital divisions to speed up digitalisation

This story originally published on Fairplay.IHS.com.

Maersk Line is setting up separate internal IT and digital divisions as part of a range of measures to speed up the digitalisation of shipping processes and the products and services offered to customers.

The action is to address a core problem that underpins the industry's slow pace in digitalising processes. It will facilitate collaboration between product managers and staff focused on digitalisation and formally embed a distinction between work on backbone IT systems and the deployment of technologies that digitalise customer-related processes and simplify the business.

"There is currently a lot of technological innovation in customer value chains. The opportunity is there for us to play a much bigger part in the value chain and to support our customers in enhancing it," said Robert Van Trooijen, CEO Asia Pacific at Maersk Line.

Maersk set up a 'design centre' and introduced training and scrum methodology to support improved agility in working on digitalised solutions. It is also hiring more staff qualified in fields such a machine learning, applied mathematics and operational research to work with its shipping staff, Van Trooijen told delegates at the ToC Asia conference in Singapore.

Digitalisation presents opportunities to deal with major industry pain points such as unpredictable and high-levels of no-shows; a flawed pricing system; low levels of trust between beneficial cargo owners (BCOs) and lines; high transaction costs and poor customer experience, Van Trooijen said.

"There is a strong case for change in terms of addressing industry pain points and customer expectation, which includes increased use of digital services."

Maersk is currently piloting a web-only product on two of its China-Europe and one of its China-India services that offer customers a direct shipping option through Chinese e-commerce platform Alibaba, which provides C2C, B2C and B2B sales services.

Reducing the number of no-shows is one aim of the premium product. The customer makes a down-payment to secure the booking and equipment and receives a locked-in price. A charge is levied when bookings are not honored.

Digitalisation of processes to handle shipping documentation is another focus of the Danish shipping giant. Maersk has tied up with IBM to apply blockchain technology to simplify the management of trade documents including goods permits and licenses, customs declarations, waybills, and so on, in tamper-proof, shared digital database.

Although a new and relatively untested technology, blockchain is considered potentially very suitable for management of trade documentation because it can embed documents in digital code and store them in transparent, shared databases protected from deletion and tampering.

At TPM in Long Beach in March, Maersk COO Vincent Cleric said the line had succesfully tested blockchain technology to manage documents on a trial shipment between North Europe and the east coast of North America. Cleric said the trial demonstrated the potential of digitalisation to simplify shipping and potentially "take a humongous cost out of the supply chain".