ShipCrunch

Shipping's Domino's Pizza Moment

Service innovation à la "30 minutes or your pizza is free" may be coming to commercial shipping

By Ryan Skinner (email)

A US restaurant chain called Domino's Pizza once made a bold promise: It would get your pizza home to you in less than 30 minutes, or you'd get it for free. The offer depended on Domino's vast network of pizzerias, a streamlined ordering system, timing mechanisms and a large courier fleet. Even if its hell bent for leather drivers killed people (forcing the company to water down the guarantee), Domino's Pizza made its name and fortune on this unique promise.

Talking to CEO David Plumer of Pole Star got me to thinking that shipping's headed for the kinds of innovations that made Domino's Pizza great. That is, ship monitoring companies like Pole Star may cut away enough of the grey areas around a charter party agreement to allow transoceanic carriers to make unheard-of promises to shippers.

Think about it. Domino's Pizza's offer stopped people ordering pizzas based on fuzzy ideas about how much pepperoni should be on a pizza, how hot is hot or whether a crust is soggy or not. They let customers ask a simple question: Do I want to make sure I'm eating OK pizza in less than 30 minutes? It turns out that's what people really wanted.

A similar kind of thing affects ship chartering contracts. Today both shippers and carriers waste too many resources quibbling over a voyage; the tone of many charter party relationships is basically adversarial. Shippers throw in claims (like arguing that the ship steamed too slowly based on the weather) just to keep carriers honest. And carriers battle even the most reasonable claims.

With voyage monitoring (and particularly post-voyage analysis). a lot of those disputes look set to dry up. "Both sides [charterers and operators] use our systems to manage vessel performance, each with their own viewpoint. For example, you can now replay any voyage with the observed weather. That could kill a lot of arbitrary disputes over ship operations," said Plumer.

Now everyone can see why a ship did what it did. In fact, the scope for measurement and reporting is huge. Plumer says he and Pole Star have a queue of companies waiting to create and track data from specific ships, components and voyages. Whether a monitoring project goes ahead depends on what makes economic sense to monitor. "We had plans to study ship scheduling, but now it's all bunkering analyses, for example," he says.

The point here is that areas of uncertainty and debate, post-voyage, shrink. Instead of fighting shippers over the bill after the voyage, carriers can focus on the nature of the agreement before the voyage. And this is what innovators in this realm (Plumer cites AP Moller-Maersk and Kristian Gerhard Jebsen, specifically) are able to do.

Don't expect to see carriers promise 30 minutes or less any time soon. But do expect to see an operating scenario with fewer question marks lead to innovation in terms of service agreements.

Offshore drillers, your underpants are showing

All the technological sophistication in the world is starting to look a lot like Mousetrap.

By Ryan Skinner (email)

Maybe you wondered once how oil companies get to the oil and gas under the ocean. You asked someone who worked in the business and you got "the explanation".

"The Explanation" begins in soft tones. Thousands of feet of water depth are mentioned. Then the story goes far down into the ocean floor. There are pipes within pipes within pipes, diamond-encrusted drill-bits, special fluids, lateral drilling, 4D ocean floor mapping, seismic studies, reservoir management, the works.

Generally, the person giving "the explanation" implicitly takes credit for all or it, as if he or she had personally invented the Internet, Velcro, post-it notes and everything in between. You are expected to gape in awe.

Then, things go lop-sided, as with Deepwater Horizon. Instead of shattering the mystique around deep-ocean drilling, an accident reinforces it. Now you can appreciate the tremendous forces that are at play. Now all the fancy technology makes sense.

But wait a minute. Something doesn`t fit. As the drillers struggle to redress the gushing problem they`ve created 10,000 leagues under the sea, you become aware of something new, their general cluelessness.

One minute they`re trying to pour cement into a geyser. The next they`re playing with mousetrap-like contraptions. The last attempt failed because "a wire saw being used to slice through the riser pipe got stuck." Got stuck? What happened to diamond drill-bits?

How does so smart get so dumb so quickly?

The image of the rocket scientists has been replaced by that of your cousin Verne from Little Rock. The next time we hear from the accident site they will be twisting together a thousand wire coat-hangers so they can try to jimmy the wellhead. Or maybe someone`s cousin`s sister from outside Nashville will pop over to Rock City and throw a coin into the waterfall.

This has all happened before, of course. I was recently at the Norwegian museum for oil exploration in Stavanger, which celebrates all the roughnecking around the North Sea. There I learned of the precedent to Deepwater Horizon - the Bravo blowout of 1977.

It was the famous Texas oilman Red Adair and his team that managed to stop that subsea gusher. According to legend, he simply squinted at the well, touched his belt-buckle and the oil stopped flowing of its own accord. His pure texiness stopped up the well.

Sadly, Red died in 2004. Perhaps the people who failed with a wire saw should shelve their thoughts of the nuke and consider getting a medium to summon Red`s spirit.

In any event, the mystique that turns a roughneck or toolpusher into a reservoir analyst or ROV operator somewhere between the rig's deck and the ocean floor is forever blown away.

What would Google do - if it was in shipping: Part 4

Markets are conversations. Some talk. Some listen. A few converse. AMVER's one of the latter.

By Ryan Skinner (email)

This "What Would Google Do" series of posts is quickly becoming a list of best practices in the shipping industry. There was John Watton sharing how ShipServ helps people find each other. Then, Franck Kayser of The Containership Company demonstrated how listening to market demands can and should drive business. Now, it's Ben Strong and AMVER.

This fourth installment of the series attacks the fourth of Jeff Jarvis' What Would Google Do precepts: "Markets are conversations". Maybe a price is an opening remark. A negotiation, a dialogue. A sale, a bon mot. More aptly, the conversation takes place as buyers and suppliers to and fro about needs and ideas. The size of the final transaction may just be an indicator of the value of the conversation.

That's putting a sharp point on conversations, but it is in fact the end result. The quantity and, more importantly, the quality of your talk will appear on or near the bottom line.

Now consider AMVER. Their marketing manager Ben Strong is everywhere on the maritime scene. Yes, he's at Marintec China (where I met him), and at Posidonia (where you'll meet him next week) and most trade shows in between. But he's also a prolific blogger, twitterer and facebook user. To those who meet AMVER in these contexts, the quality of the communications are spot on.

Strong understands that the same network forces that make the AMVER search and rescue system effective (the more vessels, the better the service) apply to AMVER's marketing voice. That is, the more often you hear AMVER saying interesting things, the more likely you'll think about AMVER in different contexts.

Most marketers would envy Strong the value of the AMVER service that he markets, and the price at which he can market it - effectively, free. Not only that, they've got backing from the American government, and support from the increasingly tech-savvy US Coast Guard.

But the kind of services AMVER provides don't market themselves. No one needs them. So AMVER and Strong start up and follow multiple conversations, about safety, about ship monitoring, about rescues, about the issues that apply to them and potential users. These conversations then build the market.

Ironically, AMVER didn't embark on this conversational path because of a surplus of time and money - rather, the opposite. With a need to focus its budget and meet people where it could afford to reach them, Strong and AMVER chose slim online channels. They had little experience of things like twitter and facebook (as Strong says, "I'm a generation late") but they pooled experience and...just started.

I talked with Strong at length over Skype. In order to follow that chat in video, just look below. The full conversation lasts about 17 minutes.