Shipnext: transforming a $2 trillion market with technology

Shipnext is a digital shipping marketplace and transportation platform.

The access to real-time data, and the use of big data analysis and mathematical modelling have been largely complicated by the lack of modern technology. Since the 1990s, with the shift of business communication and chartering towards email, the shipping market has comprised little else but endless emails and messages sent across the industry. These contain freight requests, cargo data, open ship positions, shipping data and freight information.

The widespread introduction of Natural Language processing and Machine learning in the mid-2010s involved using nightly paid and skilled shipping managers and brokers to manually process emails and conduct searches for shipping data — a highly inefficient process. In some companies, which employ dozens of brokers in their international offices, processing emails and messages costs up to 85% of the valuable work-time, and leads to huge losses.

Shipping needed a platform to help process emails and messages, and to facilitate chartering, freight search and datamanagement.

INTRODUCING SHIPNEXT Shipnext patented the process of combining email and data processing with the concept of using a shipping platform for instant cargo-to-ship and ship-to-cargo matching, dynamic freight search, data analytics, chartering and trading, digitalization of workflows.

To date, Shipnext is the only platform that offers a full A-to-Z process and covers all types of trades regardless of the size, type, form and destination of cargo. This includes including dry bulk, breakbulk, liquid bulk, containerized shipments, and heavy and oversized cargo.

Shipnext also patented the process of optimization of freight search, delivery planning and optimization of transportation, by using algorithms and Artificial Intelligence for data processing and shipping email processing, dataprocessing on cargo, fleet, ports, shipping routes, in realtime with the help of a digital shipping platform.

DIGITIZATION, DATA SECURITY AND FLEXIBILITY UNDERPIN SHIPNEXT’S SUCCESS In a recent interview with Ship2Shore, Alexander Varvarenko, founder of the Shipnext shipping platform, praised the Alexander Varvarenko, founder of Shipnext.

blockchain “with which Maersk would not have lost $300,000,000” and hopes that “wars and international affairs will not compromise modernization of the shipping industry.”

He explained how digitization is revolutionizing many industries, with the shipping industry no exception.

The 42-year-old Belgian shipping and digital technology entrepreneur was born in Ventspils (Latvia) in 1980. Varvarenko spent most of his life living between Belgium and Ukraine, where he studied and worked. Now Varvarenko lives permanently in Belgium. Over the years, he expanded his activities and interests, starting with the Varamar maritime group and eventually in 2015 founding Shipnext, a company that offers a blockchain-based digital shipping marketplace and transport ation platform, providing instant data and email processing, instant cargo-to-ship matching, contract management, digital documentation flow, transportation financing and supply chain management solutions.

The great changes taking place, according to Varvarenko, “have also affected the shipping sector and international transport in general over the last five to seven years.” However, it remains extremely difficult to innovate because changes depend on the choices made by all countries which use maritime transport on a daily basis. He says, “introducing new fleets or different fuels requires many years of legislative debates, research, studies and synchronization work before implement ation. .... Wars, geopolitics and other international affairs make [this] even more complicated. Not only that, there would also be the risk that ‘any innovation made by a single actor, implemented without an international connection, would lead to a further step towards fragmentation and localization.” He further notes that “it would be “those operators who have clearly understood that greater efficiency can only be achieved through digital technology” that would drive this sector, which struggles more than others to modernize, towards innovation.

Varvarenko emphasizes, “companies have finally realized that the container only represents the packaging of a cargo, not the cargo itself, and that all goods can still be shipped unpacked. This ... has enabled some operators to become leaders in the industry and to expand internationally.”

The enormous progress in communication, which is now almost instantaneous, have also fostered greater efficiency and modernization of the shipping industry. In this sense, Shipnext is, says Varvarenko, an innovative shipping platform, which “has patented the process of processing email and shipping data, to standardize and structure the data using a platform for instant matching of goods.”

Digitization could also enable smaller players to survive in a market, such as the logistics and shipping market, where the phenomenon of concentration is constantly expanding. According to Varvarenko, “digitization has helped smaller players in creating a revolutionary concept that attracts the interest of investors and helps them raise enough capital to withstand competition from larger players.”

Varvarenko is convinced that the key to success for a broker is determined by “realtime data, market visibility and daily communication. The more brokers work in the team, the more data has to be processed and the mail is the main part. Personal contact and communication with the client is also important.

“Once the first artificial intelligence technology became available, we created the right team ... “We have created the algorithm, which allows for the instant processing of e-mails and the use of data for the instant search of goods (cargoshipment matching). This is regardless of the complexity, size, packaging and destination of the shipment.

“And this speed with which you can find the most suitable fleet to meet your shipping needs is truly unique. The algorithm continues to create the best matches and becomes more advanced every day, every hour, every minute and every second.”

For Varvarenko, moreover, the biggest

challenge to overcome was “to overcome the fear of brokers of being replaced by algorithms, however.”

The use of blockchain is undoubtedly one of the reasons why Shipnext is a secure company from a cybersecurity point of view. He explains, “Let’s imagine that all company data is stored on a computer or server. There is always the risk of piracy, external attacks and break-ins. Regardless of the financial strength of the organization, because it couldn’t spend as much on security as Microsoft, Google or Amazon do anyway. Cloud services exist, but even they are not as secure as everyone would have hoped.

“Now imagine, instead, that the data you collect is stored on 20, 30, 100 or 1,000 other sources. The only way to hack, steal or delete them would be to compromise the security of 60% of them simultaneously. This is unimaginable. This is why blockchain is so important. With it, situations such as the one that happened with Maersk in 2017, which cost a loss of $300,000,000”.

In a market that would therefore seem to be rewarding those who go down the digital route, it is fair to ask what is the reason behind the failure of Flexport’s attempt to present itself as a digital freight forwarder. Varvarenko’s opinion is that “for a digital freight forwarder, we would expect to see a platform that offers you an instant freight quote regardless of the size, shape, packaging, complexity or destination of the shipment. This, however, is only possible with comprehensive global coverage or indepth market knowledge.

Imagine a digital platform that is sophisticated enough to give you a solution for any shipment and any destination — Shipnext’s founder continues in his reasoning — with GoogleMaps it is easy, because the cargo is represented by a human being. But with cargo that comes in different shapes and quantities, it is not. To build this knowledge, such a platform would have to be based on an algorithm, which has access to a large enough share of global shipping data and communications. It would then connect you to the best shipping solution, similar to how Booking.com connects you with flights and hotels, or show you the best route and times like Google Maps.”

It is not yet clear whether competition between shipping platforms will lead to one of them imposing itself on all the others or whether a coexistence will still be possible.

In this regard, Varvarenko considers it unlikely that “there will be one platform that fits all, especially since each company involved in international transport has its own requirements, specificities and demands.

So far, most shipping platforms, such as Flexport, Freightos and SeaRates, are specialized, for some reason, on containers. Some others, such as Marine Traffic, Project 44, Maeco, VesselValue, focus on container or fleet tracking. Others, such asNetpas, Shipfix, AXS, BalticSpot, prioritize email processing and dry bulk and liquid bulk data. They all say they plan to build the missing functionality and offer services they do not yet offer.”

Until this happens “Shipnext will remain the leader because it does not create restrictions or red lines and offers a complete set of functionalities regardless of size, shape, type of cargo,” says Varvarenko in conclusion.

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SOME THINK SHIP LOADING CANNOT BE CUSTOMISED. WE THINK DIFFERENT.

Singapore and Rotterdam to establish world’s longest Green and Digital Corridor for efficient and sustainable shipping

The Maritime and Port Authority of Singapore (MPA) and the Port of Rotterdam have signed a memorandum of understanding (MoU) to establish the world’s longest Green and Digital Corridor to enable low and zero carbon shipping.

Signed by Quah Ley Hoon, Chief Executive of MPA, and Allard Castelein, the MoU will bring together stakeholders across the supply chain to realize the first sustainable vessels sailing on the route by 2027.

Singapore and Rotterdam are among the largest bunkering ports in the world, making them vital links on the AsianEuropean shipping lanes. While international shipping currently uses largely marine gas oil (MGO) and low-sulphur fuel oil, sustainable alternatives such as biofuels, including biogases, are increasingly being made available. Other alternatives such as synthetic methane, hydrogen, and hydrogen-based fuels including ammonia and methanol are in various stages of R&D for future trials and deployment.

Each alternative fuel has its own challenges relating to costs, availability, safety, and restrictions in range due to lower energy density compared to fossil fuels. To tackle these challenges, the two port authorities agreed to bring together a broad coalition of shippers, fuel suppliers and other companies to collectively work on potential solutions.

Beyond alternative fuels, the MoU also aims to optimize maritime efficiency, safety, and the transparent flow of goods by creating a digital trade lane where relevant data, electronic documentation and standards are shared. This will facilitate the seamless movement of vessels and cargo, and optimize just-in-time arrival of vessels from port to port.

The port authorities will work with the Global Centre for Maritime Decarboniz ation and the Mærsk Mc-Kinney Møller Center for Zero-Carbon Shipping as action partners, as well as other industry partners across the supply chain, including bp, CMA CGM, Digital Container Shipping Association, Maersk, MSC, Ocean Network Express, PSA International, and Shell for a start. This will enable the Green and Digital Corridor project to raise investment confidence, attract green financing, and kickstart joint bunkering pilots and trials for digitalization and the use of low- and zero-carbon fuels along the route.

S Iswaran, Minister for Transport and Minister-in-Charge of Trade Relations, Singapore, said, “Decarbonizing shipping is an urgent climate action priority, which requires the collective efforts of the entire maritime sector... Singapore contributes actively to IMO’s efforts to make international shipping more sustainable, and global supply chains more resilient. This MoU with the Port of Rotterdam demonstrates how like-minded partners can work together to complement the efforts of the IMO. It will serve as a valuable platform to pilot ideas that can be scaled up for more sustainable international shipping.”

Allard Castelein said, “Shipping is among the most important industries to decarbonize, owing to its large international reach and volume, which continues to grow. By bringing together parties across the supply chain along one of the world’s biggest trade lanes, we can enable carriers to switch to zero-carbon fuels and speed up the transition to more sustainable shipping.”

Quah Ley Hoon said, “This MoU further strengthens the strong partnership between Singapore and Rotterdam. It reaffirms Singapore’s commitment towards facilitating a multi-fuel bunkering transition as part of the Maritime Singapore Decarbonisation Blueprint 2050, and accelerates our digitalization efforts to optimize maritime efficiency and improve supply chain resilience. The pilot will complement efforts undertaken by the shipping industry, including partners such as Google Cloud, and the IMO to support decarbonization and digitalization transition for international shipping, as we work towards developing and scaling up green and digital solutions for wider adoption.”

Bo Cerup-Simonsen, CEO of the Mærsk Mc-Kinney Møller Center for Zero-Carbon Shipping, said: “The Singapore-Rotterdam Green Corridor is fully in line with our strategy to accelerate the decarbonization of the maritime industry by supporting first movers. We need bold projects like this to leverage the learnings and further develop green partnerships across the value chain. Connecting globally leading partners around one of the major trade-lanes will allow us to demonstrate concrete, scalable decarbonization solutions that can inform and inspire industry as well as policy makers around the world.”

Professor Lynn Loo, Chief Executive Officer of Global Centre for Maritime Decarbonisation (GCMD), said, “Inter national shipping will have to deploy at least 5% zero-emission fuels in its fuel mix by 2030 for the sector to meet a Paris-aligned net-zero target. To this end, green corridors provide a framework to harmonize standards and regulations, increase green fuels availability and strengthen their supply chains, and attract green financing for bunkering infrastructure buildout at ports involved. GCMD is excited to be an action partner in the development of the world’s first green and digital corridor. We will operationalize meaningful route-base, port-to-port pilots along this green corridor to help international shipping navigate and accelerate its transition towards a zerocarbon future.”

ABOUT THE MARITIME AND PORT AUTHORITY OF SINGAPORE (MPA) MPA was established on 2 February 1996, with the mission to develop Singapore as a premier global hub port and international maritime centre, and to advance and safeguard Singapore’s strategic maritime interests. MPA is the driving force behind Singapore’s port and maritime development, taking on the roles of Port Authority, Port Regulator, Port Planner, IMC Champion, and National Maritime Representative.

MPA partners the industry and other agencies to enhance safety, security and environmental protection in our port waters, facilitate port operations and growth, expand the cluster of maritime ancillary services, and promote maritime R&D and manpower development.

ABOUT THE PORT OF ROTTERDAM AUTHORITY The aim of the Port of Rotterdam Authority is to strengthen the competitive position of the port as a logistics hub and a world-class industrial complex in terms of both size and quality. The Port Authority is able and willing to make an impact and so it is focusing on accelerating sustainability in the port and it is a partner in the digitalization of the port and logistics chains. The Port Authority's core tasks are the sustainable development, management and operation of the port, the maintenance of the smooth and safe handling of shipping and supporting the future-resilience of the port of Rotterdam.