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Startups, corporates, and technologies poised
to have the greatest impact on maritime
shipping in 2018 and beyond
Digitizing the First Mile:
Technology & Shipping
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@Natan_Reddy
#shippingtech
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I N D U S T R Y - S C A L E S U M M I T S
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Natan Reddy
Natan Reddy is an intelligence analyst at CB Insights. He currently produces data-
driven analysis and reports on the areas of retail, supply chain & logistics, and e-
commerce, among others. His research has been cited in TechCrunch, CNN, Forbes,
the Los Angeles Times, and more.
Before CB Insights, Natan worked as a business valuation senior associate at
Andersen Tax in San Francisco, where he valued dozens of startups and public
companies. Natan is a graduate of the University of California, Berkeley with a major in
economics and a focus in French.
Most popular analyses by Natan:
Amazon And Alibaba Have Already Conquered Online Retail. Now They're Coming For Offline.
Major Links In The Global Trade Supply Chain That Blockchain Could Transform
@natan_reddy | nreddy@cbinsights.com
Intelligence Analyst
A B O U T T H E A N A L Y S T
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Contents
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18
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Introduction
Innovation across the shipping journey
Booking & management
Transportation
The port
Who does this affect?
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Over 90% of the world's trade is carried
by sea, the most cost-effective way to
move goods en masse around the
globe.
Source: The United Nations
T H E O C E A N S C O N T I N U E T O D O M I N A T E
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The global trade supply chain is complex
The global trade supply chain contains a large number of disparate players, many of whom must
coordinate to transport goods across the globe successfully. Maritime shipping sits squarely at the
center of this chain.
Source: Transporteca
T H E F I R S T M I L E I S C O M P L E X
freight forwarder
customs broker
shipper
manufacturer
port
carrier
warehouse
trucker
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How one cargo ship delay sends ripples
through Alaska's food supply chain
February 12, 2018 |
Unfortunately, operations do not always go as planned
Sources: JOC, Ship Technology, CNBC, KTOO, WSJ
12
Coverage of supply chain innovation is rising
Sources : VentureBeat, Supply Chain Dive, Forbes, Supply Chain Dive
Technology is permeating
the supply chain
specifically maritime
shipping
After decades of disparate phone
calls, faxes, and paper trails, many
players along the global trade supply
chain are digitizing.
Simultaneously, many shippers
(including retailers and CPG
companies) are demanding higher
visibility in an effort to combat
against delays, fraud, and lost
shipments.
Startups and corporates specifically
bringing technology to maritime
shipping are gaining traction in the
media.
Shipping carrier Hanjin
collapses, late 2016
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Maritime shipping tech funding significantly increased
Annual global disclosed funding 2014 2018
Funding to maritime
shipping startups
increases
While we have seen a slight pull
back in 2018, overall funding to
startups catering to the maritime
shipping industry has
significantly increased over the
past several years.
This is due in part to large deals
to startups like Flexport, which
most recently raised $100M as
part of a Series D round of
funding from First Round Capital,
among others.
$84
$163
$286
$511
$217
$411
2014
2015
2016
2017
2018
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Tech innovation is spreading across the shipping journey
The port
Transportation
Booking &
management
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The port
Transportation
Booking &
management
Tech innovation is spreading across the shipping journey
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The port
Transportation
Booking &
management
Tech innovation is spreading across the shipping journey
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What are the key trends we are seeing in shipping innovation?
Visibility
Automation
Connectivity
Startups and corporates are leveraging
data, IoT, and blockchain-related technology
to gain greater oversight and control of
supply chains.
Online freight rate and shipping contract
exchanges are enhancing communication between
global supply chain participants. Newly developed
maritime supply chain focused-incubators are
bringing together rising industry players.
From autonomous ships to port robotics,
maritime supply chain players are looking
to automate their operations on and
offshore.
Key Players
Key Players
Key Players
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F R E I G H T F O R W A R D I N G G O E S D I G I T A L
Booking &
management
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While some freight booking startups are leveraging
technology to connect existing supply chain players
Israel-based startup Freightos, which has
raised over $50M in funding, has created a
centralized freight booking marketplace
where customers can receive a quote and
book a shipment in minutes.
Centralized
marketplaces
Startup CoLoadX helps freight
forwarders find shipment rates, while
helping to also match them with
NVOCCs looking to fill available
container space.
Freight
contracting
Matching containers with
available space
New York Shipping Exchange (NYSHEX)
offers a freight contract platform to help
make agreements between shippers and
carriers more reliable, reducing contract
cancellation by requiring both parties to offer
upfront collateral.
Connectivity
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Digital freight forwarding startups are
looking to displace existing players.
What is freight forwarding?
BUT . . .
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Total Funding: $23M
Select Investor: Rocket Internet
FreightHub acts as a full service freight forwarder
that leverages data analytics and software to help
minimize disruptions along the freight supply chain.
The startup's platform also provides live location
date on various shipments.
Total Funding: $14M
Select Investors: UPS, Lufthansa
Fleet recently pivoted from acting as freight rate
marketplace to becoming a digital freight forwarder.
It will now offer freight booking, shipment tracking,
and customs clearance services, among other
services.
Startups bring freight forwarding online
Visibility
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San Francisco-based Flexport is
the most well-funded startup in
the digital freight forwarding
space.
The company provides real-time
freight and logistics
capabilities to hundreds of
clients, including many small-
to-medium e-commerce firms,
giving them an opportunity to
compete against giants like
Amazon.
D I G I T I Z I N G F R E I G H T F O R W A R D I N G
Funding
$301M
Visibility
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The Flexport model directly serves retailers and brands
Many of its clients are e-commerce
and consumer startups
Flexport has partnered with Wells Fargo
to provide speedier trade financing, an
advantage for SMEs
Flexport positions itself as an
alternative to using Amazon for
freight forwarding
A C C O R D I N G T O C N B C :
"Amazon has pushed further into its own
private label clothing, groceries, advertising
and devices, among other businesses
daunting for up-and-coming brands thinking
about handing over sensitive data to Amazon in
the international shipping process."
Trade financing rejection rate:
50%
7%
Multinational
businesses
SMEs
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The Flexport model directly serves retailers and brands
Many of its clients are e-commerce
and consumer startups
Flexport has partnered with Wells Fargo
to provide speedier trade financing, an
advantage for SMEs
Flexport positions itself as an
alternative to using Amazon for
freight forwarding
A C C O R D I N G T O C N B C :
"Amazon has pushed further into its own
private label clothing, groceries, advertising
and devices, among other businesses
daunting for up-and-coming brands thinking
about handing over sensitive data to Amazon in
the international shipping process."
Trade financing rejection rate:
50%
7%
Multinational
businesses
SMEs
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The Flexport model directly serves retailers and brands
Many of its clients are e-commerce
and consumer startups
Flexport has partnered with Wells Fargo
to provide speedier trade financing, an
advantage for SMEs
Flexport positions itself as an
alternative to using Amazon for
freight forwarding
A C C O R D I N G T O C N B C :
"Amazon has pushed further into its own
private label clothing, groceries, advertising
and devices, among other businesses
daunting for up-and-coming brands thinking
about handing over sensitive data to Amazon in
the international shipping process."
Trade financing rejection rate:
50%
7%
Multinational
businesses
SMEs
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Incumbents grab ahold of technology
In response to a rising trend in technology, incumbent supply chain players are developing in-house
technology to enhance supply chain visibility to compete against the rise of freight forwarding startups.
Maersk's freight-forwarding arm Damco developed a digital freight
forwarding platform dubbed "Twill" in April 2017. The platform
provides shippers with instant quotes, shipment tracking, and
digital document management. It has since expanded to trade
operations in China, the UK, India, and France, among others.
Freight forwarder DHL released its newest digital supply chain
visibility technology "MySupplyChain" in May 2018. MySupplyChain
offers unified end-to-end supply chain management software that
provides shipment visibility and data analytics to help streamline
supply chain operations.
Visibility
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Freight forwarding incumbents battle digitally native startups
W H O W I L L W I N O U T ?
Incumbents
Startups
(+) Scale
(+) Established relationships
(-) Tech innovation
(-) Scale
(-) Established relationships
(+) Tech innovation
Freight Forwarding
Freight Forwarding
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Amazon enters ocean freight forwarding
A threat to all?
Amazon entered the freight space
in 2017, offering services to
help organize ocean freight
shipments between China and the
US for its merchants.
The e-commerce giant remains a
threat to startups and incumbents
alike given its vast sums of
money, physical resources (such
as existing warehouses), and
digital infrastructure.
Amazon's entrance into ocean
freight coincides with its greater
entrance into the third-party
logistics (3PL) space.
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B L O C K C H A I N , A U T O N O M O U S
S H I P P I N G , A N D M O R E
Transportation
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ClearMetal provides AI-powered
insights into the shipment
transportation process for
retailers and logistics providers,
such as Panalpina.
ClearMetal helps clients predict
which carriers will provide the
most reliable service and
estimates the risks of delays.
Funding
$12M
Select Investors
NEA, PSA unboXed
Select Clients
Panalpina, Nile Dutch
Leveraging AI for transportation management
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IMO to ban many vessels carrying high
sulphur fuel from 2020 official
2/22/2018 |
Fuel efficiency startups gain extra relevance
Nautilus Labs offers a software platform that leverages AI
to measure vessel operation, specifically helping users
manage fuel efficiency.
Select Investors: Trail Mix Ventures, Homebrew
We4Sea is a SaaS platform designed to help cargo ships
increase fuel efficiency and reduce emissions. The
company's platform uses big data analytics and considers
factors such as wind, currents, and waves when measuring
the operational efficiency of a ship or fleet.
Select Investor: Mainport Innovation Fund
Sources: WSJ, Reuters, YaleEnvironment360
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Public health experts estimate that once the 2020
sulphur cap takes effect, it will prevent roughly
150,000 premature deaths and 7.6 million
childhood asthma cases globally each year.
I M O I N S T I T U T E S S U L P H U R F U E L C A P S
Source: Yale School of Forestry and Environmental Studies
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Blockchain shipping initiatives explode in number
Date
Summary
Select Players
Consortium that tested a blockchain solution on 12
separate shipments to eliminate the need for printed
shipping documents.
Mar'18
Jan'18
After previous collaboration, Maersk and IBM formed
a new blockchain company to commercialize
blockchain use. So far, dozens of companies have
been onboarded.
Sep'17
Partnership to launch a blockchain platform that
helps to simplify marine insurance, an area commonly
plagued by excessive paperwork. The platform,
dubbed "Insurwave," went live in May 2018.
Aug'17
Official partnership to improve shipping security and
efficiency through blockchain. Completed successful
blockchain trial tracing cargo from Chongqing to
Singapore in February 2018.
Sep'17
Carrier HMM (Hyundai Merchant Marine) completed
its first blockchain pilot voyage, as part of a larger
consortium, tracking cargo with blockchain and IoT
technology from booking through delivery.
Select blockchain shipping initiatives (2017 2018)
Visibility
34
"The way I see it, there are two ways this could evolve. The first
way is one of these blockchain initiatives will gather a lot of
momentum and become the standard for the industry that
everyone must follow The alternative way might be that different
blockchain initiatives become interoperable "
B L O C K C H A I N ' S V I A B I L I T Y I N S H I P P I N G R E S T S O N S T A N D A R D I Z A T I O N
Gordon Downes, CEO New York Shipping Exchange
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Blockchain's successful implementation and standardization
could mean
Recent blockchain initiatives have
focused on improving cybersecurity
and marine insurance for maritime
supply chain players.
Increased trade
efficiency
Higher security
Improved
transparency
The World Economic forum estimates
that improving communications via
blockchain could generate an
additional $1T in global trade.
A standardized blockchain for all supply
chain players would enable better
visibility and flexibility on shipments.
Problems or delays can be more quickly
avoided, modified, or resolved.
36
Rolls-Royce sells marine division to Kongsberg
Autonomous shipping
corporates consolidate
Rolls-Royce sold its autonomous
marine division to maritime
equipment supplier Kongsberg for
$664M in June 2018.
Rolls-Royce Commerce Marine has
been a powerhouse in developing
autonomous marine technology.
The acquisition will be a welcome
addition for Kongsberg, as it also
seeks to become a leader in
autonomous shipping. The company
partnered with Wilhelmson to start a
new autonomous shipping venture
dubbed Massterly in Spring 2018.
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San Francisco-based Shone
seeks to retrofit existing
ships with autonomous
technologies to aid existing
on-board crews.
The company's technology
uses AI and existing ship
sensors to help detect and
predict the movement of
other vessels nearby 24/7.
Funding
$4M
Select Investor
Alven Capital
Partners with:
Autonomous, but not unmanned
Automation
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I N C R E A S E I N O P E R A T I O N A L S A F E T Y O F S H I P S
R E D U C T I O N I N C R E W S I Z E A N D S A L A R Y C O S T S
I N C R E A S E I N E N E R G Y E F F I C I E N C Y
R E D U C T I O N I N S P A C E N E E D E D F O R C R E W , I N C R E A S E I N C A R G O C A P A C I T Y
The greater impact of autonomous shipping
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P O R T - D R I V E N I N N O V A T I O N
The port
40
Ports turn to automation to handle larger ships and
increasing cargo
Ports demonstrating the
future of automation
today
Over the past several years, the Port
of Rotterdam has become a flag-
bearer for port automation from
installing automated electric cranes
to using self-driving trucks.
Most recently, the port partnered
with IBM to incorporate AI and IoT
technology into its operations to
help increase efficiency.
Both partners estimate the project
will help save shippers one hour of
berthing time, which runs up to
$80,000 per hour.
Other ports embracing
automation:
Antwerp
Singapore
Shanghai
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Ports support maritime and supply chain startup innovation
The Ports of Singapore, Rotterdam, and Hamburg have all helped start or support port-, supply chain-,
and maritime-related incubators and accelerators.
Connectivity
42
E X T E N D E D E F F E C T S
Who does this
affect?
43
EXISTING SUPPLY CHAIN PLAYERS AFFECTEDP O R T
A U T O M A T I O N
F U E L E F F I C I E N C Y
T E C H N O L O G Y
B L O C K C H A I N
S H I P P I N G
INNOVATORS TO WATCHF R E I G H T B O O K I N G
D I G I T I Z A T I O N
A U T O N O M O U S
S H I P P I N G
Carriers: Gives carriers
flexibility in scheduling as
terminals operate 24/7. Will
stay on schedule more often
due to less port congestion.
Retail/CPG: Can save money
from less time at terminal;
goods are more likely to get to
customers on time.
Truckers: Port efficiency helps
cut down on delays for truckers.
Effects of maritime shipping and supply chain innovation
N E A R - T E R M
M I D - T E R M
L O N G - T E R M
Incumbent freight forwarders:
While incumbents benefit from
freight booking startups that
connect existing supply chain
players, they are threatened by
digital freight forwarders
seeking to displace them.
Retail/CPG: Freight booking
visibility allows greater supply
chain flexibility, an important
factor when navigating new
global tariffs.
Carriers / ship owners:
Carriers and other ship owners
will directly benefit from fuel
efficiency savings as they will
be able to comply with the
International Maritime
Organization's (IMO) impending
2020 sulphur fuel cap.
Entire supply chain: If
blockchain standardization
among the global supply chain
is achieved, all players involved
in shipping goods will save
money on paperwork, decrease
shipment delays, and avoid
fraud.
Retail/CPG: Will allow
retailers/CPGs to more easily
track product history in the
case of contamination.
Carriers: Carriers may save
money on future ship
operations due to decreased
crew size, increased
operational safety, and
increased cargo space onboard
ships that the crew used to
occupy.
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Questions?
Twitter: @Natan_Reddy
nreddy@cbinsights.com
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