Here’s The One Chart You Need to Understand the Future of Ocean Freight
Reprinted with permission from JOC.com
Getting your head around the intersection of container shipping and technology is understandably challenging. It seems like every day a new company pops up on the radar with a new approach, a new service, or a new round of funding. How are we supposed to adopt new technology if we don’t know who’s who -- and who does what?
Luckily, this week saw the publication of the Journal of Commerce’s definitive “Container Shipping Technology Matrix” compiled by Mark Szakonyi and written on by Hugh Morley (subscription required for both but highly recommended). This invaluable chart lays out more than 100 companies in our space and, perhaps more importantly, breaks them down into easily understandable categories. Of course, we at CoLoadX are thrilled to be included in the Marketplace category. But self-promotion aside, we think the real takeaway is that technological innovation works in three phases.
- First up, the pioneer phase. These are the companies that have a brand new idea and build rudimentary products and services, even though there are very few companies ready to use them. They rely on a few courageous clients to learn about what the market needs. Unfortunately, many of these companies don’t succeed. They fall victim to the “first mover disadvantage”...that is, they use their resources to build new products which competitors then replicate (and often improve upon).
- Then comes the proliferation phase. As the chart shows, that’s pretty much where we are now. The need for technology solutions are now established, and there are dozens of companies trying to solve many different pain points. They differentiate in whom they are trying to serve, in what products they offer, and in how they’re priced. Lots of them get funded by venture capitalists because investors see potential in the industry. Many of these companies never make it past the starting gate, but some start to see some traction. And a select few begin to catch on and hit it big.
- Finally, there's the consolidation phase. This is when the winners start to declare victory. The companies that fail to get traction either go out of business or pivot to other models. The bigger companies begin to buy the companies that manage to survive, but aren’t an outright success. And sometimes the winners in our particular space in turn get bought out by bigger conglomerates like logistics companies.
We think the current phase (proliferation) is the most exciting one, and we’re thrilled to be participating in it. Everyone agrees technology solutions are needed, so you’re not reliant on super-early-adopters. There are plenty of users out there -- they just need to learn about your product and get a nudge to give it a try. And we haven’t yet jumped the shark to the consolidation phase. There’s still plenty of room -- and time -- to compete and grow.
One thing that’s clear is that there’s plenty growth to go around. Whether you’re a buyer or seller of capacity, or an enabling technology like those on the chart, technology is good for business. And now, there are more choices than ever.
Download the free CoLoadX whitepaper, "Logistics as a Service: How it Will Transform Your Ocean Freight Business" and see how LaaS will help your company grow.
By: CoLoadX on Sept. 19, 2017, 3:32 p.m.