Updates — Industry Study: Ocean Freight Shipping (#Startups)

What is the relative size of the Bulk Shipping market?

For underlying data see; The Tramp Shipping Market, March 2015, Clarkson Research Services
For underlying data see; The Tramp Shipping Market, March 2015, Clarkson Research Services

What are the biggest opportunities for startups?

  1. Many startups are building platforms to connect people who need shipping services with parties that can provide the service, or to enable various counterparties in the industry to collaborate with one another on some issue. So far many of those have operated in the containership segment of the market. However, a couple have started to build platforms, often marketplaces, specifically for the bulk shipping market. Shipamax and VesselBot are two examples of startups that are building specifically for the bulk shipping market.4
  2. Other startups are building software platforms for gathering, analyzing, and interpreting data for the shipping industry and industries that depend on data related to shipping. Startups in this category which sell primarily to ship operators generally build products that bundle a hardware device with software — no different from the sorts of products that vendors at the CMA’s Shipping2017 Conference were publicizing. In fact a couple of the vendors at the conference were hyping new cloud-enabled versions of their products. I left the conference with concerns about how a startup would differentiate itself from these incumbents. In my opinion Windward seems to be the startup best placed to displace existing incumbents, however it does not appear that Windward is focused on bulk shipping only. Nautilus Labs solves the same problem problem, but is much younger than Windward.5
  3. One product that it appears the industry would gravitate towards is a system of record that connects all participants in the supply-chain, from end-to-end. This would be a platform into which various shipping industry data could be input, and other data can be obtained as outputs . . . Probably most input data would come from other platforms and data repositories, while output data would be fed to different counterparties based on their access rights and information requirements. It seems to me to be a problem suited for a cryptographically-secure, lightweight, multi-tenant, cloud-based ledger or database of some sort that can also provide anonymity for market participants who wish to maintain some level of secrecy from other counterparties with whom they interact through the platform. One can imagine that governments around the world, for example, would want special access rights in order to keep tabs on the movement of goods and people from one place to another.6

What threats does a technology startup face in selling its products to customers in the bulk shipping industry?

But, all is not lost. There is hope; Demographics.

  • Jenna Brown at Shipamax, Mark Halsell, and Constantine Komodromos at VesselBot think the answer is “no”. They argue that rather than being eliminated completely, as software platforms become more reliable and sophisticated, human intervention will shift from routine but time-consuming tasks to complex issues that require more nuanced judgement and to which there is no straight-forward answer because of the associated trade-offs that have to be made.10
  • Know the industry and its segments,
  • Be known to, and gain the trust of industry insiders, and
  • Understand the nuances of the industry’s relationship to technology and software.

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Brian Laung Aoaeh, CFA

Brian Laung Aoaeh, CFA

Early-stage VC — Supply Chain Tech. REFASHIOND. #TWSCF. NYUTandon. FreightWaves. | I’m not afraid to be different. Blog @ www.innovationfootprints.com.