14 July 2008
In this opening instalment, Paul Ostergaard, ShipServ CEO, discusses the latest developments from ShipServ’s range of e-commerce solutions for suppliers and buyers within the maritime industry.
Click the “Play” button above to hear the Podcast. Here’s a transcript of the interview…
Q: So, Paul, why don’t you start by giving some background to ShipServ and the issues you’re trying to solve?
A: I founded ShipServ in 1999 with a simple idea. It was clear to me that the Shipping industry just wasn’t harnessing the power of the Internet in the way that other industries had. And that we had a real opportunity to set information free to increase the competitiveness and sustainability of the global shipping industry
If you think of the “good old days” back in the 1960’s, there was simply no automation of business processes. Information was in a person’s head, or on a piece of paper. And everything was recorded in ink & pencil.
Then in the 1970’s, computers began to be introduced and various departments such as Accounting began to automate information. Other departments followed, but internal walls still remained.
The introduction of ERP systems in the 1980s and 1990s finally saw the streamlining of processes BETWEEN departments. Complete business processes were automated and lots of unnecessary work eliminated in interfacing between departments such as sales, marketing and purchasing. But the biggest inefficiencies were still there – collaboration was hard and company-to-company integration was almost non-existent.
That’s where eCommerce and ShipServ comes in. We offer shipping businesses the opportunity to take the next step – to drive out inefficiencies and improve accuracy by seamlessly integrating with their customers and suppliers.
In effect, it’s all about setting information free – moving it out of the siloed systems that don’t talk to each other and leveraging it in exciting new ways. Just as Google’s mission is to organize the world’s information and make it universally accessible and useful, our mission is to do something similar but for the shipping industry.
Q: So tell us about more about ShipServ today
A: As I mentioned earlier on the company was founded in 1999. Since that time our core offering has been something called ShipServ TradeNet. This is our e-marketplace for the global ship supplies market that allows buyers and suppliers to connect cost effectively and trade efficiently.
We estimate that the maritime industry spends in the region of $70bn per year on supplies with an average ship spending $565,000 per year. Keeping ships operational is hard. With complex schedules, thousands of suppliers to deal with and everything managed by paper & fax, shipping purchasing departments are quite literally swamped. TradeNet takes away all that pain. It automates the “ship-to-pay” process, reduces cycle times and leaves a fully auditable record of everything that goes on. Plus with over 5000 suppliers already on-board, we find most ship owners and managers can get up and running in days, not months.
Q: Ok, what else does ShipServ do?
A: About 18 months ago we added ShipServ Pages to our portfolio. Pages is an online directory of Suppliers that is provided free of charge to anyone who needs to locate a supplier anywhere in the world. It’s linked to TradeNet which means a Buyer can locate Suppliers who have a trading history of providing a product or service, rather than just finding someone who claims they do. It’s an exciting new development for us and really helps the “front end” of the sourcing process – i.e. where Suppliers want to attract new customers or where Buyers need to source new Suppliers.
Q: So that all sounds great, but what are the actual benefits of using ShipServ
A: Well there are the hard cash savings. With TradeNet we’ve seen ship owners save anywhere in the region of 20% per annum as a result of the process efficiencies, sourcing improvements and better quality management information delivered. And it goes without saying that a dollar saved goes right the bottom line. But don’t forget some of the other benefits. Some of our customers are significantly increasing their fleet and ShipServ helps them to absorb the increased workload. Others have noticed a significant reduction in order inaccuracies caused by re-keying errors. And some see the introduction of an eCommerce solution as a way to attract and retain high quality staff. These types of benefits are not to be underestimated as well.
Q: I understand ShipServ has gone through some pretty significant expansion recently. Tell us a bit about that.
A: Firstly, it’s important to stress that our expansion is completely in response to customer demand, so the maritime industry is clearly scoring well in the eCommerce stakes!
In the space of 10 months we’ve doubled in terms of people from just less than 50 to now nearly 100. Major investments have been in customer facing staff as well as product development. We’ve also invested in new offices in both London and Manila
Q: So finally, Paul. That sounds all very exciting but to many eCommerce probably seems daunting and, more importantly, quite expensive. So what are the options for companies wanting to get into eCommerce with ShipServ?
A: We’ve always provided a range of options dependent on what a company wants to do. In fact, for companies starting out on their eCommerce journey, we can even provide three NO-COST options.
Firstly, if you’re a Supplier, you can promote your company on Pages completely free of charge. And secondly you can receive electronic orders from your customers via TradeNet, again free of charge.
If you’re a Buyer you can use Pages, at no charge, to source out new suppliers – maybe where you’re looking for a more competitive price or where you’re looking for a suppler in a port you’ve never been to before.
Q: C’mon, you make it sound all too easy.
Well, actually, it is. But don’t take my word for it. My advice to anyone out there who’s new to all this, is to visit Pages and see how useful it can be. Have a look at it, have a play. And you’ll see how easy eCommerce really can be.
Q: Paul, that’s great advice. Thanks for you time and for joining us in this edition of ShipCast.