Abstract
Drawing on a qualitative investigation, the authors identify the barriers to digital transformation in the maritime industry in Sri Lanka. Based on structured and semi-structured interviews, the data were obtained by contacting 18 respondents from the selected four container shipping companies who hold senior and middle-level management positions. The findings reveal that the barriers to collaboration resources are the most challenging factor. Challenges to collaborating with external stakeholders have been identified as the most significant barrier among collaboration resources. As a result of the non-application of digitalisation across the organisation, digital collaboration between inter-departments also has been a barrier. The digital non-compliance of customers and suppliers has been another obstacle. Barriers to technological resources have been identified as the second most significant factor, and weaknesses in available IT infrastructure, lack of knowledge in digital service integrations, and cyber security have been underlined.
TopIntroduction
Digitalisation comes with various benefits to the maritime shipping industry and other industries. Digital transformation is considered a source of competitive advantage and a facilitator for the net-zero targets in the maritime industry, and the industry is moving towards full automation in most operational functions. However, the developing regions still strive to apply digital tools in their business operations. Maritime shipping is the cornerstone of international trade and the global economy since more than 90% of the world`s trade is conveyed by sea and managed by ports worldwide (Gu & Liu, 2023; UNCTAD, 2021). According to UNCTAD (2021), the global trade executed by maritime shipping is expected to increase by more than 30% in 2022 and is assumed to double by 2033. This percentage is even higher for most developing countries (Statista, 2022; Kamasak & Yavuz, 2015).
In such a large industry with fierce competition, digitalisation has pressured the players to increase operational efficiency. Uninterrupted ongoing operations, performance improvements, less paperwork, cost, time savings, and increased overall efficiency in processes are some of the benefits provided by digitalisation (Yang, 2019). The report by Boston Consulting Group (BCG) (2018) highlights that the players in the maritime shipping industry have many opportunities to apply digital technologies to improve and grow their businesses and reach their net-zero targets in supporting sustainability efforts. The container shipping industry is among the most significant contributors to maritime emissions, responsible for nearly %30 of global maritime CO2 emissions (Lu et al., 2023; Czermański et al., 2021).
Indeed, digital transformation supports all stakeholders in the maritime trade in redesigning their traditional business models. Inmarsat (2021) states that digital transformation in shipping has been happening for 20-30 years in specific areas that needed greater efficiency and is not an entirely new concept for shipping. They elaborated that the recent pandemic has been a natural accelerator in digitalising business processes. Therefore, firms operating within the maritime shipping industry, which plays a pivotal role in global trade, must embrace digital transformation as an Industry 4.0 advancement to enhance their performance and competitiveness (Kamasak et al., 2023).
Scholars (Cataltepe et al., 2023; Kar et al., 2023; Kucukaltan et al., 2022; Queiroz et al., 2019) suggest that digitalisation brings unprecedented disruptions, particularly to the industries, i.e., manufacturing, shipping and logistics which rely on traditional business models rooted in physical activities and processes. Many digital technologies that could be applied to ports and terminal operations are mentioned by Heilig et al. (2017). Digitalisation can help firms attain significant cost advantages within their operational workflows, innovate unique port, shipping and logistics management models and enhance efficiency in their value chains, resulting in long-term sustained competitive advantages (Yang & Lirn, 2017; Tseng & Liao, 2015; Barney, 1991). Even though the shipping industry holds a crucial position in global and regional trade, it is not considered a forerunner in digitalisation due to several challenges preventing its progress (Raza et al., 2022). However, academic literature exploring the digital transformation challenges in the maritime shipping industry is limited and empirical research on this area is scant (Tijan et al., 2021; Parola et al., 2020; Munim et al., 2020).
Key Terms in this Chapter
Digitalisation: Converting analogue information and physical knowledge assets into digital form.
Qualitative Study: A research approach that utilises ethnography, case studies, grounded theory, phenomenology, and narrative analysis to provide a deeper understanding of social phenomena.
Net-Zero Emission: The balance between the amount of greenhouse gases produced and the amount removed from the atmosphere.
Digital Transformation: Integrating digital information and technologies into all aspects of an organisation.
Maritime Shipping: Transportation of goods and commodities by sea.
Sri Lanka: An island country located in South Asia.
Sustainability: Firms’ approach that ensures long-term well-being for current and future generations.
Container Shipping: The shipment of goods in rectangular steel boxes of different sizes in vessels and ships.
Competitive advantage: A distinctive edge where firms can outperform their rivals and achieve superior market performance.