Ship Broking : Tuesday 3rd October

15.00 - 15.30 John M Kulukundis, Charles R Weber Company Inc

The Internet and Broking

I understand that in yesterday’s debate a shipbroker basically declared war on Internet broking exchanges.

I don’t think we are facing war, revolution perhaps but probably more precisely we are witnessing evolution. Evolution at Internet speed.

It has been said that "truth is the first casualty of war" and I think perhaps in this high speed internet world our perception of what is true may be suffering the same fate as some peoples perception of what exactly the internet is capable of and what it is not.

In this high speed New Economy that seems daily to threaten the long established business practices of an equally long established industry it is very difficult to gain a perspective on what is true and from that form an opinion and make informed decisions.

New technology and revolutionary ways of conducting business are permeating every facet of the shipping industry, and what’s new today is replaced tomorrow with something newer. A constant barrage of new technological and philosophical ideas attack the very foundations on which our broking business is built. This is nothing new, the only thing that has changed is the increased speed at which these developments, which shift our perception of what is true occur.

Human history is littered with major changes in our perception of what is true:

The atom was indivisible until……..1858.

Everything that exists was made a Creation……….until 1779, when the date became 75,000 years ago; until 1846, when it became 100 million years ago; until last year, when the figure rose to 13 billion.

Light was particles until 1801, when it became waves, until 1905, when it became particles again; until 1924, when it became both Space and time were absolutes until 1886, when Ernst Mach introduced the concept of relativity and set the stage for Einstein.

Science and by extension technology has been changing our perception of truth for centuries. So why should technology not change our perception of the way that ship brokerage is conducted. Today, and I mean today, in order to charter a ship, you call a broker, he advises you of vessel availability on your dates and you ask him to solicit owners for offers. This is true. But to believe that tomorrow, or more exactly this Thursday when Sealogistics launch their chartering platform, that the truth I just stated may not change is a little foolhardy.

I believe the collision of the physical and virtual worlds present an enormous number of challenges and opportunities for the shipping industry as a whole and the "physical" shipbroker especially.

Both the physical and virtual worlds of shipping will go through many transformations and adaptations as changes in perception, developments in technology and Internet acceptability grow. But the fundamental cornerstones that form the foundations of the ship broking business; experience, in-depth market knowledge and fully bespoke client service are not going to disappear.

In the ideal world of "digital logic and clear cut commoditisation" everything may be simply true or false. In the real shipping arena we spend most of our time in the unmapped middle ground, amid endless shades of gray, trying to extract the truth through our understanding, credibility, reliability, reputation, trust and experience.

The nets challenges to truth are also challenges to trust. If you remove your traditional sources of information then whom do you trust to tell the truth in cyber space?

With an overload of net shipping information it is important to take bearings outside of this virtual world, to supplement and question online information delivered to your desktop or accessed through a website, with information extracted from real people, engaged in real shipping business.

The net doesn’t bring a world where the search for truth and trust can be handled automatically by technology, it hopefully brings a world where a lot of the drudgery is removed, enabling us as brokers to spend our time more productively in concluding shipping business.

The maritime industry is built and operates on a complex human network of interpersonal relationships, which are responsible for the majority of business development and conclusion. This will not disappear. I thin Bill Raduchel of Sun Microsystems summed it up best when he said: "The indispensable complementary technology to the Internet is the Boeing 747"

Embrace change, welcome new truths and

Develop new business models, don’t declare war on change. Because as history shows us, you will lose.