{"id":21397,"date":"2017-11-13T16:46:24","date_gmt":"2017-11-13T21:46:24","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/a-p-moller-maersk-and-the-future-of-shipping-in-the-digital-age\/"},"modified":"2017-11-26T18:04:13","modified_gmt":"2017-11-26T23:04:13","slug":"a-p-moller-maersk-and-the-future-of-shipping-in-the-digital-age","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/a-p-moller-maersk-and-the-future-of-shipping-in-the-digital-age\/","title":{"rendered":"A.P. Moller \u2013 Maersk and the Future of Shipping in the Digital Age"},"content":{"rendered":"

The digital revolution of the past several decades first affected consumer products such as software and electronics, then manufacturing, and is now poised to transform the logistics industry. One subset of this business is maritime shipping, which moves approximately 90% of all goods traded globally.[1]<\/a> A.P. Moller \u2013 Maersk, a massive shipping company headquartered in Denmark, is one organization that is taking affirmative steps to cope with the coming revolution.[2]<\/a><\/p>\n

The Future of Seaborne Trade<\/strong><\/p>\n

Providers of seaborne freight must take maximum advantage of the efficiency benefits of digitization in order to remain competitive. A study by McKinsey & Company suggests that \u201cSupply Chain 4.0\u201d technologies \u2013 including digitization \u2013 can reduce costs by up to 30%.[3]<\/a> The economic benefits of such savings, especially in an industry estimated by some to approach $400 billion in value, would be massive.[4]<\/a> Streamlining underway resupply operations and pioneering the use of unmanned ships are just some of the steps that Maersk is taking towards this end. Avoiding safety mishaps, dealing with the associated regulatory issues, and mollifying popular concerns will similarly require the company\u2019s full attention over the coming decade.<\/p>\n

How Maersk is Adapting to Digitization<\/strong><\/p>\n

In early 2016, Maersk used an unmanned aerial vehicle (UAV) to deliver a box of cookies to one of its underway ships. Although this was only a proof-of-concept experiment, Maersk eventually expects to use UAVs to deliver critical cargo such as spare parts or medicine to its vessels afloat. The company estimates that doing so will save $3,000 to $9,000 per vessel each year, obviating the need for manned boats to conduct similar supply runs.[5]<\/a> Later in 2016, the transportation company Rolls-Royce unveiled detailed plans for a completely unmanned cargo ship.[6]<\/a> A senior Rolls-Royce employee estimated that the shipping industry\u2019s transition to remotely-piloted \u2013 and eventually autonomous \u2013 ships could cut transportation expenses by 22%, a result of lower staffing costs and fuel efficiencies gained by removing life support equipment from vessels.[7]<\/a><\/p>\n