Trends & Takeaways from AntwerpXL 2022
Introduction
One of our core values at shark&minnow is “curiosity” – we’re always looking to deepen our knowledge and connections within industry sectors to be as effective as possible on behalf of our clients. In this vein, our team was recently in Belgium for the annual AntwerpXL – The Future of Breakbulk event - gathering with shipping, maritime, and supply chain experts and thought leaders to share insights to propel the European and global market. It was wonderful to have conversations around near term opportunities, both lending our thinking as well as learning from so many industry innovators who will no doubt put their stamp on 2023 and beyond.
The conference – the leading breakbulk conference in Europe – was held over three days at the Antwerp EXPO and featured a robust lineup of speakers. Some of the major trends and talking points discussed were:
1.????Sustainability and the accelerated shift to renewable energy
2.????Multimodal solutions in the supply chain
3.????Digital transformation & use of technology
4.????Aging resources within the industry
While these conversations have certainly been core to the industry for some time, certain nuances of the dialogue have emerged. Continue reading to learn shark&minnow’s key takeaways for the major topics discussed and debated at AntwerpXL 2022.
A Renewed Focus on Sustainability
Throughout the conference, one of the most frequent topics of conversation: activation around sustainability. Many leaders in the industry are intensely keying in on:
1.????How does the consumer’s shift to more sustainable living impact shipping and breakbulk cargo?
2.????How can the industry itself – despite many successes in the past decade – continue to become greener and more efficient?
With governmental bodies across the world pledging to reduce carbon output, investment in renewable energy sources is going to increase rapidly, putting more pressure on the breakbulk industry. A wide cross-section of global entities are looking to net carbon neutral by 2050, which, while ambitious, will be either a required benchmark - or at least a goal that must be pursued (for example, one informed by the U.S.’s Inflation Reduction Act). A major way in which governments plan to become carbon neutral is to reduce dependence on traditional fuel sources, such as oil and gas, and shift to green energy sources, such as solar, wind, and electric – which this industry is not yet ready to support en masses, but is making dedicated strides towards.
Due to this shift, the breakbulk industry, which handles non-containerized cargo, will most likely see an uptick in activity over the next few decades. In 2022, the market share for electric vehicles (EVs) hit 5% in the US. The batteries and components to make the batteries – and the finished vehicles themselves – need to be moved around to fulfill that growing demand. In fact, MSC, the largest container company in the world, noted that there is an expectation that by 2030, 20% of all cars will be EVs and that number will continue to increase rapidly to 40% by 2040.
Around the globe, but in the European Union (EU) in particular, there is a great realization that countries cannot rely on Russian energy sources for much longer. The War in Ukraine is directly influencing the quantity of fuel available to the rest of the world and it is dictating the price. Leaders at AntwerpXL made it very clear that, when combined with the carbon neutral by 2050 goals, betting on Russian energy in the long-run is a gamble and it could also be seen as ethically complicated (compromising consumer sentiment) – and a potentially detrimental political act.
The industry is also heavily invested in finding new fuel sources to effectively move goods around the globe. While maritime shipping is the most efficient way to move cargo when compared to air, truck, or train, it still accounts for 3% of global CO2 emissions. there is still opportunity to modernize the vessels themselves to create more fuel efficiency.
Companies are investing in new fuel sources, such as ammonia and hydrogen to move ships in the future. Ammonia could have significant benefits for the shipping industry, especially at economies of scale, but many challenges arise with how to use the fuel safely for both humans and marine-life ecosystems, as well as gaining wide-spread adoption. The technology and fuel source exist but will require expanded testing and proof-of-concept over the next few years.
Multimodal Solutions
The general consensus at AntwerpXL was that supply chains, in order to be efficient and effective, still need to rely on various modes of transportation. Overnight, and even in the long run, cargo will still need to be moved by a variety of modes, such as ship, barge, rail, and truck.
The European market is keen on increasing the utilization of barges, as making the most of water transportation via the river system, such as the Rhine and Amstel Rivers. Using barges throughout the rivers is more efficient than transporting the same cargo in similar European markets via truck, but, trucks will still play a critical role and may be used in different ways in the future, such as being more concentrated on last-mile movement.
The challenge with barges is that the effectiveness relies on water levels: if the water level is too low, then barges cannot be utilized. Additionally, the building of barges has decreased over the past two decades, with panelists indicating that there are 20% fewer barges today compared to the late-1990s and early 2000s. As the industry continues to move to the use mega-ships, fewer barge captains are available or are being actively trained to navigate the European river system. The industry will need to attract new captains and retain current talent in order to make barges a larger piece of the multimodal ecosystem.
领英推荐
?Digital Transformation & Technology in Supply Chain
As we approach 2023, the shipping industry is making strides towards becoming more efficient operationally, as well as to reducing carbon output. A critical cultural influence on this investment in developing digital tools, solutions and technology is the “Amazon effect” – the notion that everyone needs to know where their goods are at every step in the journey. Just like customers on Amazon want to know where their package is, so do cargo owners and end customers – on the ship, in a warehouse, on a truck heading to a distribution center, etc.
Transforming operations to incorporate technology isn’t easy, however. It takes time, significant investment, and buy-in from all employees and stakeholders, regardless of their role or rank.
Organizations must think about their business’ goals and processes, determining why they need to invest in digital transformation – and to what extent. Once that is determined, they need to review what data they have access to currently as well as the data they will need to collect in the future in order to make the investment worthwhile. From there, business processes and operations should be reinvented for digital-first use, and not used as an “add-on” to current operations.
This doesn’t just apply to the shipping industry – it’s for any organization looking to undertake a digital transformation.
When approached correctly, the transformation should improve the ease with which employees perform tasks and create more efficiencies, while allowing for better business-making decisions with added data and insights now available, ultimately driving profitability.
One practical example provided at AntwerpXL of how a port re-thought their process around its terminal operations systems. A third-party provider was contracted to implement a new check-in system for truck drivers during COVID-19 to make the process automated, faster, and rely less on human-to-human contact. An application was developed so that the truck driver could scan a QR code at the entry point to check in for the cargo they were due to collect. In the old system, the driver had to speak with someone at the front gate, who would check them in manually and cross-reference their truck and cargo, which would take a long time, result in the truck idling for quite some time, as well as result in human-error. With the application, there now is no need for physical paper to be used as no printing of documents was required and it made the process easier for both the port terminal and driver. Additionally, the implementation of this solution provided more transparency to the process for all stakeholders, including the end customer. A major take away: sometimes innovation happens in a closed environment – other times it is necessary to collaborate with partners who already possess the expertise in order to expedite the transformation you wish to see.
Challenges - and Opportunities - for the Industry
In one of the last sessions of AntwerpXL, challenges and opportunities for the industry were discussed. Below are a few that stood out to us:
CHALLENGES
One major concern and challenge for the industry is the age of the current fleet of ships transporting cargo globally. As ships age, will they be able to handle the cargos of today and tomorrow? Will those ships be efficient enough to hit the carbon net neutral goals of 2050? Another component to shipbuilding is that currently, the majority of ships are built in China, with not enough being built in Europe. According to the panel, only 26% of new builds are from Europe, while the rest are from China. The dependence on the Chinese economy could be problematic.
Another challenge that was identified was the mix of container cargo vs breakbulk cargo. Over the past few years, the cost of containers has increased, which resulted in an uptick of breakbulk cargo. This trend, although container prices are new falling, coupled with the overall lack of container availability, will most likely result in more breakbulk cargo being moved globally. While this is a sign of growth for breakbulk, it is a concern because there are only so many ships that are designed to handle this type of cargo, as well as limited space on the ships themselves.
Finally, the shipping industry, like many legacy industries, is looking to the next generation for employees and talent. Shipping skews a bit older, so making the industry an attractive, fruitful place to work in will be of the upmost importance in the near-term.
OPPORTUNITIES
The implementation of technology and reevaluating business processes to make operations digital-first is a big opportunity for organizations in the industry. To ensure digital transformations are successful, organizations must ensure that they are rethinking the entire process and prioritize the communication efforts for how the new systems will work with their employees and stakeholders. A digital transformation is only as good as the people using the system, so if it is not accepted and utilized by all employees at all levels, then the system will not be a worthwhile investment.
Continuing to diversify the modes in which cargo is moved is another opportunity to ensure that cargo is moved efficiently from Point A to Point B. Utilizing a multimodal mix will allow for the industry to better withstand abrupt changes to the economy, like we saw with the COVID-19 Pandemic.
Finding ways to make the industry attractive for new and younger employees is a great opportunity for the shipping industry. There are a variety of ways in which the industry and attract the next generation of talent:?
1.?Create a sense of community that new generations will want to join and actively be part of
2. Develop training programs and awareness education tactics in schools
3. Communicate values and mission for the greater good.
4. “Gamify” the industry to increase broad appeal.?