Future-proofing logistics through digital technology
The shipping and logistics industries are speeding up their transition towards digitalization. The need to digitize was further highlighted with the Covid-19 pandemic, which exposed the vulnerabilities of the traditional way of doing business.
Digital solutions and technologies are used to future-proof the maritime sector because it increases the company’s competitiveness by enhancing its operational efficiency.
“It’s digitize or die,” Shiptek Solutions, founder and CEO Eugenio “Jun” Ynion always say to anybody who would listen. He enjoys educating them about the critical role digital technology plays in decision-making and enhancing monitoring, quality assurance, control, and verification in supply chain management.
Shiptek, which develops the XLOG – a homegrown, fully integrated blockchain-based end-to-end shipping and logistics platform – believes the maritime players need to revisit their current strategies and adapt technology to secure a sustainable, efficient and strengthen their short and long-term competitiveness.
For his part, Eric John Vitug, sales and marketing head at Shiptek, underscored how the Covid-19 pandemic laid bare the critical vulnerabilities of the industry, particularly the need to digitize its operations and shift from the traditional way of doing business to ensure the sector’s continuity and improve the supply lines’ reliability.
After all, Vitug said the maritime sector is the backbone of the global economy, carrying over 90 percent of the worldwide merchandise trade and hauling an estimated 11 billion tons of cargo each year.
“The current or traditional way of doing logistics, especially in the mid-mile, is inefficient and disorderly, riddled with a lot of manual processes which are prone to mistakes and delays,” stated Eric John Vitug, sales and marketing head at Shiptek.
Shiptek takes an institutionalist view, believing the emergence and adoption of digitalization is a socially constructed phenomenon.
“Technology is not the issue. If you look at it, it’s more of adoption. A lot of companies are still embracing the traditional way of doing things. So it’s more of adoption rather than technology,” he added.
Joey Ynion, chief of operations at XLOG, explained how the maritime sector could address the critical challenges by harnessing the power of digital technology. Data from the World Bank IAPH report showed that better-coordinated and broader use of digital technology could significantly improve the efficiency gains of the industry while improving results in supply chains and lowering emissions.
“The adoption of an efficient digital ecosystem will streamline the operations of the shipping and logistics industries while facilitating the exchange of information among key players, including port services, shipping lines, clearing agencies, cargo handling operations, as well as other transport networks,” Ynion said.
More importantly, digital technology provides a unique advantage in minimizing human interaction, preventing the spread of the Covid-19 virus, protecting the industry against future pandemics, he added.
According to Ynion, digitizing the shipping industry will profoundly impact both the domestic and global economies. The maritime sector plays a strategic role in the overall supply chain. It can provide wide-ranging economic benefits that could help sustain the economic recoveries in low- and middle-income countries.
Traditional companies are faced with different challenges, more so with the acceleration of the digital technology adoption pushed mainly by the pandemic, Vitug added. He added that accepting this reality and the advantage of companies that had successfully transitioned to digital operations could be a powerful level to survive.
Understanding the differences between traditional business and digital operations would allow companies to build a more qualitative and effective business model.
“The logistics industry needs to take advantage of technological advancements to speed up their processes and reduce mistakes by minimizing the manual steps required for each transaction,” Vitug said. “This is where XLOG comes in!”
XLOG is a blockchain-enabled innovative approach to logistics that enables the industry to manage and monitor their transactions online and leverage the provenance of data that improves the processing of transactions between operations and finance. It directly connects shipping companies and truck owners to shippers, customs brokers, and freight forwarders.