Efficiency vs. Size: How Shipping Software Impacts Competition in the Maritime Supply Chain Industry

Oversupply of ships, slumping demand, declining freight rates, and skyrocketing fuel costs in recent years have made it difficult for carriers to make profit. These problems underlined the need for shipping companies to improve the efficiency of their operations – cut costs and increase revenue in order to survive the competition. To achieve this goal, modern shipping companies invest in technology, particularly in multi-carrier marine software solutions.

Aside from automation using various types of shipping agency software, shipping companies initiate mergers with other industry players to reduce competition and capture bigger a market share. Earlier this year, A.P. Miller-Maersk, the world’s largest container ship operator, entered into an alliance with its two biggest rival companies in order to contend better against their smaller, less efficient rivals. These three container shipping giants have one common goal: to dominate the shipping market by deploying larger, more efficient vessels and increase profitability through economies of scale.

Size does matter in the maritime supply chain industry, but it does not always guarantee victory. By simple logic, bigger ships are more profitable than smaller ones because they can carry larger tonnage in a single voyage and are therefore more competitive on the biggest trade lanes. Smaller vessels on the other hand can manage to remain competitive despite their size disadvantage by making sure that their systems are designed to deliver improved operational efficiency.

Integrated shipping software solutions offer several tools that are designed to streamline the entire shipping process for both large and small vessels by automating time-consuming and labor-intensive tasks such as data encoding, invoicing, documentation, accounting, and inventory. Fully-functional shipping solutions software gives operators more power to manage and enhance their operations and eliminate costly damages caused by human errors. The result is a streamlined shipping process that runs like clockwork.

In general, size is definitely an advantage in shipping. However, more than just playing big, shipping companies must play smart by investing in shipping software solutions that have already tested been and proven to reduce costs and increase profit.