THE HYPE IS OVER

The hype for e-business is well and truly over. That was the message we took from our London conference in April about making the shipping internet work. We heard all about how people are finding real value from the internet and it all made a lot more sense than what we've heard previously. 

We heard about real maritime suppliers (not dot coms) using the internet for customer relationship management, helping customers find out about products and place orders. We heard about shipbrokers and classification societies using electronic communications to streamline their businesses. We discussed how the internet can help improve safety and security. 

The whole dot com thing, now looks a little silly, except of course it generated an enormous amount of energy and ideas, and many people got a lot of fun out of it. But now its over. 

Using the internet to support your business is not grand, it rarely involves establishing new corporate intermediaries with their own brand, and there's not likely to be enough new money to fund an entirely new company.

Besides, nobody really wanted that anyway. There were always enough companies involved in the business of manufacturing, buying and selling that nobody really wanted any more. 

Maybe one of the biggest lessons we learned from the whole thing is just how complex and evolved most people's current working practises are. It takes a lot more than an MBA graduate with some money and a good idea to change them, no matter how good the idea. 

Shipbroking, for example, is not about fixing a ship between an owner and a charterer in the most efficient possible manner; its about dancing a complex dance that has evolved over centuries and takes many years to learn, of the process different parties use to come up with a deal they are all happy with, screwing each other as much as they can whilst staying on best of personal terms. 

Buying ship supplies is not about finding the right supplies for the cheapest price and issuing an order. Its also about playing a sophisticated dance where suppliers try to keep the price up and buyers try to push the price down, using practises which have evolved over centuries. 

In these complex trading arenas, a technology company can provide software, provide technology consultancy, integrate companies together, but it certainly can't have any involvement or control over the transaction itself, and that was the factor which justified some of the enormous valuations. 

This reminds me of the first ever contact I had with e-procurement company ShipServ, at Posidonia in 2000. Having spent the day interviewing 5 e-procurement dot coms, I couldn't see any prospects for a further one. 

The person from ShipServ I spoke to that day told me about how the company didn't see it as its role to interfere with the complex procurement process, merely make it easier. If the supplier wants to give the shipmaster a bottle of whisky, I was told, then its no-one else's business. ShipServ's humble role would be to facilitate the transaction, not to try to influence it. 

ShipServ was established in exactly the same way as thousands of dot com companies, originally based in San Francisco, with a CEO with a Harvard MBA, and originally funded by classic Silicon Valley venture capital, not by shipping companies. 

But from the outset, the company was very different to all of the other dot coms. It started  work to establish a common communications standard for the maritime industry (MTML) before it even built up a business, and this attitude is probably why the company is one of the few which survived. 

Now the dot com boom, crash and deep cynicsm is over, we can start using the internet in useful ways which serve the industry and help people, and open all kinds of new doors. It should be fun.

Karl Jeffery
Editor, Digital Ship