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The four challenges for Agencies

by Sander Jellema

‘’Those who bury their heads in the sand today will have to grit their teeth tomorrow’’

In our role of service provider, we have the luxury of meeting great people and companies all over the world. Besides local differences, we see the role of the agent being of equal importance between Singapore, the USA, Scandinavia and the ARA region. Personally I always make the comparison between the agent and the conductor of an orchestra. Yes, all the musicians know how to play their part, but you need the conductor to guide and keep the beat.

We do see a clear change in the requirements that shipping companies express to the agency. Of course, there is always the desire for more, better and faster, but digitalisation is also playing an increasingly important role. What insights can an agent provide? Can data be shared directly from the agency to the principal’s systems?

On the base of these requirements, we also receive the question quite often: “How do you see the role of the agent?’’. We identify four challenges for agencies.

1. Adopting new ways

A questionnaire in the 50’s of the previous century asked people how the world would look like in the 2000’s. Flying cars, robots, space and time travelling were mentioned. Without wishing to undermine all developments in those fields, most of these predictions are not yet common practice.

The major development is to be found in internet and mobile communications. And here we notice a struggle between old ways and new technology. With the introduction of AIS, high availability of mobile network(s) and internet, the connectivity and visibility increased at a rapid pace. This introduced a high level of transparency and forced the actors to adapt and adopt new technologies.

Once, onboard a tanker, I noticed an agent making a photo with his smartphone of a few documents, then email it to the office, only to open the picture again and scroll and zoom to finally enter the details in another system. To me it feels like draping fresh chocolate sauce over an old cake. Yes, it looks better, but how about the taste…?

This example illustrates one of the challenges for the current agencies.
Especially the employees with 20, 30 and 40 years of experience are extremely valuable but not always open to adapt to new ways. A transition needs to be made and new ways need to be adopted. Funny enough, the same group bought a smartphone, downloaded the uber app and does most of their banking and travel bookings online…

2. Hiring and training new staff

With a lot of experienced employees close(r) to retirement age it is very important to hire and train new staff. Here we see a clear split between agencies all over the world.

Group A opts for employees with a focus on digitization, partially because the industry and the clients are requiring that focus more than ever before. But also because systems become more intelligent in assisting day-to-day operations. Personal knowledge and experience is supported (sometimes replaced) by advising data from monitoring systems – which are capable of making the most difficult calculations within seconds.

Group B opts for a knowledge transfer, maintaining core values that have proven their success for 10/20/30 years. Digitization within these companies is mainly introduced by the fact that new generations grew up with access to a computer or tablet from an early age. On its own this isn’t a bad approach but we do see the risk that new technology is tweaked to fit in the old way of working.

3. Swiss knife approach

This is a tricky subject, almost worth a blog post on its own. I like to compare general agencies in the bigger ports with a Swiss knife. Yes, all the options are there; nail clipper, knife, saw, scissors. But as most owners of a swiss knife will recognize; although available there is still a scissor and multiple knives in the kitchen drawer as well. We recognize the “swiss-knife behaviour” amongst agents as well. Doing a bit of everything with a small team makes me wonder if focusing on one group of clients, one speciality or one cargo type wouldn’t be better.

We notice that the agencies who focus on being a financial hub, cargo or region specialist tend to establish growth and/or long lasting client relationships.

4. Agency fee

We notice a race to the bottom when we talk about agency fees and that’s concerning. With margins getting thinner, one is forced to cut corners. In our opinion it’s a race to the bottom. Something with peanuts and monkeys.

An agency director once mentioned his doubts that a poor performing agency is charging around the same level of agency fee as a top performer. This brings the question to the table if the industry should reward bonuses or better rates to agents that reduce the portstay, provide better insights or advise the shipping line on performance improvements.

Let’s be clear on one thing: I’m convinced that the agent will always stay part of the industry, hence my example of the conductor and orchestra. The four points about challenges in new ways, hiring, specializing and revenue are considered the top of the iceberg, with multiple layers and sub challenges.  It fascinates me and keeps me wondering what will happen if we don’t change old ways.

I guess that parts of the answers can be found in old ways as well. I’m not faxing anymore, our floppy disks are replaced by data clouds and my current smartphone has a stronger processor than the average (expensive) laptop of five years ago.

So whatever the shipping industry and you will do, don’t bury your head in the sand for changes…

p.s. If you want to talk about change; we are introducing new technologies since 2015. Therefore our company’s promise is Better Insights, Less Waste.

Teqplay – connecting the dots


Swiss Army Knife on black by Edgar Pierce on Flickr, is licensed under CC BY 2.0

Conductor by on Flickr, is licensed under CC BY 2.0

The terrafugia Flying Car @ the 2012 New York Internatioanl Auto Show by LotPro Cars on Flickr, is licensed under CC BY-SA 2.0

Conductor on Stage by Gabriel Santos Fotografia on Pexels, is free for use