In a previous post I described a conversation I had with a shipping executive about the state of maritime intelligence and analytics. In our conversation, we discussed the dream of an "Uber for maritime." That conversation provided the context for a presentation I delivered to students at NYU’s Stern School of Business entitled “Aligning Profitability and Sustainability in the Shipping Industry.” The video appears below.
During that presentation I compared the market dynamics of ride sharing to the market dynamics of the crude oil trade. The dynamics share several similarities.
- Both are tramp services and feature different vehicle and tanker types (Uber X/Uber XL/Uber Lux vs. VLCC/Suezmax/Aframax)
- In both, the revenue for each trip depends on multiple factors and can vary significantly from day to day
- Both markets are extremely competitive and profit margins are thin
There are differences, too. To name a few:
- Ride sharing operates in discrete local markets; the crude oil trade operates globally
- Ride sharing is nearly un-regulated; the crude oil trade is heavily regulated
- Ride sharing has no intermediaries between supply and demand; the crude oil trade relies heavily on brokers and third parties.
Most significantly, ride sharing is facilitated by a technology platform. In fact, several including Zipcar, Lyft and Uber. The crude oil trade has no equivalents.
At least not yet. And that's why the dream of an "Uber for maritime" persists.
If you are interested in learning more about the concept of “ROSI” or “Return on Sustainability Investment,” please check out the Center for Sustainable Business. They are doing some ground-breaking work.
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