Mark Holford, director of e-business, Thomas Miller

Mark Holford, director of e-business for mutuals manager Thomas Miller, represents a company which has one foot firmly rooted in the old economy and the other proudly planted in the new.

In 1990, Thomas Miller participated in the development of the electronic documentation system Bolero; last year, the company took a significant stake in e-procurement company ShipServ. And now, said Holford, Thomas Miller is in the process of "turning its business inside out". The company now offers several online services, including access to a database of ships entered in the UK P&I Club and UK Defence Club during the last two years; ClaimsTrac, a private database of members' claims; and a full, searchable listing of the UK P&I Club's appointed correspondents worldwide. According to Holford, one-third of the UK P&I Club's members are currently using the online services offered.

"Creating trust" is paramount for successful e-commerce, said Holford.

Mikal Bøe, managing director, Telemarine Ltd

Mikal Bøe, managing director of Telemarine Ltd, the company which hosts Bunkerworld, Bunkerstem and Tankerworld, told the cautionary tale of the Concorde. The amount of money spent to develop the product: over £2bn; the uptake expected: 500 planes; the actual uptake: 9.

Don't, he pleaded with the audience, make maritime e-commerce another Concorde. Bøe estimates that "e-commerce for the shipping industry so far has had around £1bn injected into it". Now, after all the hype, he said, it is time for these companies to "make their move".

From Boe's point of view, the keys to success for any service provider are focus, clout and global reach. But, he said, one winner need not take all. "The good niche players and the big-company-backed players will win," he predicted.

What buyers want

The first panel discussion of the morning dealt with how e-procurement could best serve the buyer. Nick Brown, business development manager of procurement site OneSea, made a distinction between the needs of small to medium-sized companies and big companies. For small-medium companies with no need for integration, OneSea produces a 'lite' application, he said; for larger companies that do need the integration services, OneSea offers a more comprehensive package, called OneSea Connect.

The revelation of this panel, however, was a small Danish shipping company called Thor Chartering. Per Nykjaer Jensen, managing director, said that he believed the internet is a great tool for small companies because it does away with the need to spend time and money developing in-house tools. Moreover, he said, upgrades follow as a matter of course, so the company can always stay on the leading edge of technology. These are both key points made time and time again by maritime software companies.

Thor Chartering has actively tried procurement online with a specific company and continues to do so. According to Jensen, the staff at Thor Chartering were open-minded about the prospect of doing business online and were able to participate in the process. The company went in, he says, expecting to gain access to a larger range of suppliers and to reduce the amount of paper used in the transaction. On both these counts, Jensen said that expectations have been fulfilled.

Now, Thor Chartering is looking towards payment online as well.
Frank van der Plas, manager, sourcing and logistics for P&O Nedlloyd, on the other hand, said that the benefit of e-procurement for a big buyer is not having to build a separate interface for each supplier. "We may go with one or two procurement portals, but it also depends on who our suppliers have chosen," he said.

This sentiment was echoed by several delegates from the audience. One man from Shell Shipping said that his company would be interested in a "single entry point" into the e-marketplace.

What suppliers want

Martin Lucas, sales and marketing manager for Kittiwake Developments and moderator of the supplier's panel, asked each of the dot.coms what they thought the suppliers wanted. Terry Kearney, business development manager of PrimeSupplier.net, said that suppliers wanted common platforms, document management and credit ratings of buyers. According to Dina Matta, managing director of Seavantage.com, suppliers want to use the internet to plan inventory, reduce costs and get information. Matta also believes that the internet will drive out poor quality suppliers.

Big suppliers, said Kearney, want to lock onto customers for the longer term, so they need automated purchasing in order to make sure the transaction is as efficient as possible, while small suppliers look for increased revenue share and reach.
One supplier pursuing its own e-commerce initiative is propulsions systems manufacturer Wärtsilä. Andreas Wiesmann, marketing and e-business programme manager, said that Wärtsilä sees e-commerce not as a separate business line, but as a part of the core business. The company needs to have detailed, installation-specific information about each product it has sold in order to service the systems effectively. This information exchange, said Wiesmann, is best facilitated by the internet.

Wärtsilä is currently in the process of testing several new online services, to be launched in the first quarter of this year. These include an online spares directory; ELDocs, an interactive electronic technical manual; and ENSEL, an interactive product catalogue.

Chartering online

"Does the industry actually want a chartering platform?" asked Mike Elsom, business development manager of the Baltic Exchange. Elsom believes the answer is no. He thinks what the industry does want, though, is an information exchange, which is precisely what the Baltic Exchange is offering, he says.

Mark Stennett, product director of Shipbrokerexchange, agrees. "The right system will give people access to information when and where they want it, with the online connection of databases around the world." Shipbrokerexchange, Network Chartering's joint venture with shipbroking software company Dataworks, will try to support the market rather than supplant it, he said.

Strategic Software, with its newly launched information exchange StrategicIMX, is seeking to do the same thing. IMX, said David Marais, founder and managing director, is inclusive of all parties - owners, charterers and brokers - and is subject to subscription rather than transaction fees. According to Marais, Strategic did look at developing online negotiation, but decided to shelve it when it became clear that the market would not accept a trading platform that charged transaction fees. However, he admitted that the inclusion of online negotiation makes sense in the context of information exchange. "If you want data on the pre-fixture side to appear on the post-fixture side, online negotiation makes sense," he said.

Even though someone in the audience suggested that the LevelSeas model was dead, the panellists weren't so sure. "Parts of the LevelSeas is dead," said Elsom, "but some of it will still be useful."

"I think it's extremely smug for us to sit back and say 'There goes another dot.com,'" said Marais. "I feel that LevelSeas is absolutely not dead. I don't endorse all aspects of the product, but it will happen."

Demobeach.com

Ravenscroft Shipping, a shipmanagement company based in Florida, USA, is on the verge of launching a new specialist demolotion ship S&P site called DemoBeach.com.

According to Andrew Finn of Ravenscroft, demolition and ship sale purchase are a suitable market for internet-based tracking. Vessels are sold on the basis of weight, they're sold to shipbreakers via cash intermediary buyers, and there are probably not more than 20- cash intermediary buyers. Moreover, the marketplace is very liquid and deals can be negotiated swiftly, he said.

On DemoBeach, registered buyers can launch bids electronically. Contracts are flexible and DemoBeach guarantees that the price agreed in the contract is the price paid at delivery.

Ravenscroft envisions DemoBeach as a "halfway house between the traditional and the virtual".

For owners and charterers

During the final panel of the day, we attempted to answer the questions: What does the web have to offer the charterers and owners? According to Henning Oldendorff, chairman of Oldendorff Carriers, the benefit for owners would be the reduction of the number of LTPMs, or Less Than Perfect Matches between ships and cargoes. He also believes the internet will expedite the negotiation of charterparties and help users to sift through vast amounts of information effectively.
Oldendorff sees three factions when it comes to chartering online. A, the sceptics, who look upon e-commerce as a "flu that will go away"; B, the moderates, who say that "the skills of the broker have to be in the forefront"; and C, the radicals, who say that there will be an e-marketplace. Oldendorff considers himself a radical. The internet, he says, will free creative brokers to "do the really interesting stuff" in the future.

He also predicted that only one portal would succeed per business - one for tankers, one for dry cargo, procurement, bunkers - because users want to see all the information in one place.

Once online chartering catches on, he said, there will be a stampede. But he thinks it will take at least 5-10 years before this happens.

The chartering platforms are now in the process of modifying their original projections, so it may take that long before they come to market with a working product. LevelSeas, for instance, is now touting itself as "a provider of software solutions, some hosted and some client-server based". In addition, LevelSeas has abandoned the idea of automated matching, giving control to the user to set filter, sort and search mechanisms instead.

Robert Lorenz-Meyer, chairman of chartering platform Cargobiz, said that his company still plans to offer online trading and to charge transaction fees. He expressed scepticism that others, who are planning to charge subscription fees only, would be able to survive.

One gentleman from the audience summed it up pithily: "The maritime industry and chartering is a little underage sex: everybody is talking about it, hardly anyone has tried it and of the people who have tried it, hardly any have succeeded."