digital shipping: the greek experience

CHAPTER 12

DIGITAL SHIPPING: THE GREEK

EXPERIENCE

Nikitas Nikitakos and Maria A. Lambrou

ABSTRACT

While electronic business (e-business) is developing rapidly, the pace and

pattern of development of these technologies and related business

practices are quite variable across countries and industries. In the

shipping industry today, we observe various implementations and modes

of use of maritime electronic services, which target at the facilitation of

maritime business operations and tasks such as, chartering, procurement,

manning, planned maintenance, technical and operational monitoring of

the vessels, voyage planning and navigation as well as safety, security and

emergency operations. Additionally, great efforts are made in order to

integrate applications and provide value-added services. For some

scholars, the global economy is converging towards common, homo-

genized and integrated organizational models, whereas e-business

methods are seen as a set of practices congruent with the ‘‘modern’’

way of organizing economic activities. In our work, we review current

practices and emergent patterns regarding digital shipping, we cite

empirical evidence on e-readiness and maturity related with e-business

models, digital modes of operation and enabling technologies, as well as

perceptions of key barriers and incentives in the Greek-owned shipping

sector, as interlinked with overall firm characteristics and strategies.

Maritime Transport: The Greek Paradigm

Research in Transportation Economics, Volume 21, 383–417

Copyright r 2007 by Elsevier Ltd.

All rights of reproduction in any form reserved

ISSN: 0739-8859/doi:10.1016/S0739-8859(07)21012-1

383

dx.doi.org/10.1016/S0739-8859(07)21012-1.3d

NIKITAS NIKITAKOS AND MARIA A. LAMBROU384

Whereas in the Greek-owned financially robust shipping sector, we

observe a low level of use and very moderate technology evolution trends,

we seek a more thorough understanding of the digital mode of operation in

the international shipping industry context; we devise a combined frame

of analysis consisting of (a) a typology of digital shipping business

models and (b) an extended Technology Acceptance Model for digital

shipping. We consider postulations about emergent digital shipping modes

of operation and important determinants of an organizational decisional

context, as essential means in order to set digital shipping strategies,

design market policies, and design and implement business models and

technical options towards a future frictionless and networked shipping

environment.

12.1. INTRODUCTION

At present, information and communication technologies (ICTs) have gonefar beyond a mere means of electronic information and transactionhandling, becoming a foundation for efficient and innovative applicationslinked to the core business capabilities and systems.

Electronic business (e-business) refers to the exchange of information andelectronic transactions across organizational networks, at any stage in avalue/supply chain, whether within an organization, between businesses,between businesses and customers or between public and private sectors;these electronic transactions may refer to commodities, tangible goods orinformation goods and services (Castells, 2000; Filos & Ouzounis, 2003;Jelassi & Enders, 2005). E-business technologies and methods primarilyallow enterprises to effectively and directly connect with clients, suppliersand business partners.

Hence, a direct translation of this definition in the shipping environmentallows us to initially understand digital shipping, as any form of informationexchange and electronic transactions across electronic shipping organiza-tional networks, at any stage in an integrated and intermodal value/supplychain; These transactions can be realized within a shipping company, or ashipping actor such as a shipping broker or charterer, between shippingbusiness partners (i.e., shipping company–broker–charterer interactions),between businesses and customers (i.e., shipping company–cargo forwarder)or between public and private sectors (i.e., public port authorities–shippingagent interactions).

Digital Shipping: The Greek Experience 385

Electronic shipping transactions may refer to any particular shippingmarket, namely freight transportation, passenger shipping, the cruiseindustry, short-sea and ocean shipping, bulk or the container sector.

While e-business is developing at a rapid pace in most developed anddeveloping countries, the pace of development of these technologies andrelated business practices are quite variable across countries and industries.The pricing of ICTs and related services (in particular telecommunications),the dynamics of the ‘‘local’’ IT industry, the ‘‘globalization’’ and opennessof the economy, the existence of lead users and positive governmentalpolicies are all seen as strong drivers for the rapid adoption and intensive useof ICTs. Understanding the broad spectrum of determinants of thecontrasted pace and path of e-business development across countries andsectors is essential, because differences in rate and pace of adoption can beexplained either as being various stages along a common pattern oftechnological and innovation diffusion or as being the result of differ-entiated paths of development across countries and sectors. For someanalysts, e-business methods are a set of practices congruent with the‘‘modern’’ way of organizing economic activities, whereas the globaleconomy is converging towards a common and integrated organizationalmodel.

Today however, it is generally agreed that ICTs are quite flexible and donot ‘‘impose’’ any organizational model, rather their enactment isdetermined by broader political, cultural or socio-technical factors. Givencontrasted initial conditions and differentiated processes of adoption anduse, the type of technology that is implemented and used, and the relatedlearning processes, lead to much contrasted paths of change acrossorganizational settings. Understanding the change process, drivers, barriersand dominant perceptions are essential in order to make decisions about thedesign and implementation of various technical options and the articulationof strategies and public policies within the shipping environment.

12.2. ICTs IN SHIPPING

The shipping industry has evidently been affected by the emergence of newICTs. The adoption and use of ICTs is increasingly being recognized as theoptimal medium for the exchange of information between shippers andcarriers throughout the supply chain. The benefits of utilizing new ICTsalong the entire shipping value-chain include quicker access to information,improved communication with customers and business partners, better


customer service, reduced costs, higher productivity and quality of service.Fig. 12.1 demonstrates a high-level model of the maritime actors(stakeholders) and their possible electronic interactions and operations (themodel refers in particular to freight shipping).

Modern ICTs have become a focal point for shipping companies in theireffort to gain a competitive advantage over their rivals by collaboratingclosely with affiliated partners in their network-oriented value-chainactivities. Today, installations of communication networks in firms,interlinking external value-chain participants and internal departmentsenable companies to coordinate their informational, virtual and physicalvalue-chains in order to create added value for their customers, partners andindeed for internal improved organizational performance (Dourmas,Nikitakos, & Lambrou, 2005).

The maritime sector, encompassing a diverse set of interacting stake-holders that includes manufacturers and distributors, shipowners, managersand brokers, terminal operators, port authorities, regional and nationalgovernments, ship builders and other third parties (associations, etc.), iscurrently constrained by the lack of widely accepted standards and byrelatively high costs of software and hardware e-business solutions. At themoment, the lack of interoperability between applications from differentvendors prevents shipping companies from maximizing the benefits ofdeploying ICTs onboard ships and ashore. Since few (if any) vendors ofmaritime software systems can deliver a fully integrated system, the industryis loosely faced with ad hoc, if not at all, integrated information systems.

Currently, maritime electronic services primarily target the facilitation ofroutine and critical maritime business processes and tasks such aschartering, procurement, manning, planned maintenance, technical andoperational monitoring of the vessels, voyage planning and navigation and

RegisterInsurance Organization Ship Regulations compl. Flag

Int. Organ.(IMO)Operation

TransactionRepairs and Maintenance Find Freight to transport Withdrawal

Shipyard Ship-BrokerCharterer

Maritime transport implementation

Agent MRO SupplierLocal Authorities (Ports)

Shipping Company

Fig. 12.1. Shipping E-Actors and Interactions.


safety, security and emergency operations. Additionally, great efforts aremade in order to link and integrate applications and provide value-addedservices. A differentiation in available software solutions and practices isobserved in the market, whereas added value e-services in creating shippinge-markets and interconnecting applications are apparent as well.

Extensible Markup Language (XML)-based integration standards cangreatly facilitate such a task. All future ICT systems supporting e-shippingcan be built to be XML compliant, following proven approaches forbusiness process integration, which have emerged in other business sectorsin the last years. In the maritime industry, various initiatives such as theMTML (Maritime and Trade Markup Language) utilize the XML standardto encode marine and trading transactions.

Moreover, particular maritime tools in digital form, incorporated inshipping processes, namely the digital electronic navigational charts (ENC),weather, traffic, navigational or environmental information systems exist.Several initiatives (within the European Union and internationally) haveestablished the Vessel Traffic Management and Information Systems(VTMIS).

These developments signal a growing demand for integrated ship–officecomputer and communication systems, and therefore a close cooperationand interoperability between shipping service providers and the network orICTs service providers.

The introduction of ICTs in the shipping companies’ operations onboardand ashore, associated with national or international actions (i.e., offeringoffshore or satellite coverage), diffuse information about weather forecast-ing, navigational hazards, changes in nautical charts, tides and sea states,etc., already has a considerable momentum.

In the last years, the ICTs’ infrastructures on ships have impressively beenupgraded. Newbuildings are being equipped with satellite systems which givethe ability for instant and uninterrupted communication between the shipand the office. The broad implementation of GMDSS (Global MaritimeDistress and Safety System) from INMARSAT, multiplies maritimecommunications. Today there is the ability for connection with wirednetworks on shore such as, PSTN (public switched telephone network),PSDN (public switched data network) and communication services suchas ISDN (integrated digital network) or xDSL (digital subscriber line).Ships are also equipped with modern radiotelephones VHF/DSC (digitalservice call), VHD/GMDSS, AIRBAND and SSB MF/ HF. Accordingto INMARSAT data, most of the big shipping companies follow anoffensive ICT strategy. About 75% of ocean-going ships are equipped with


computers in order to communicate with the company. Most of the shippingcompanies adopt modern SMA (ship management applications) withSwedish companies leading the way.

The fast pace of satellite communication developments during the lastyears has resulted in innovative technologies that will provide broadbandconnections to the maritime industry. In the telecommunications market, avariety of alternative satellite communication services are offered by newproviders to the ocean-going but also to the short-sea shipping industry,where INMARSAT held the leading role for many years. Iridium andGlobalstar present competitive products in voice services, whereas VSATsystems provide broadband connections to the vessel.

Systems based on geostatic satellites like Thuraya, in combination withland mobile telephony systems, comprise an alternative solution at a lowercost of use in specific geographical areas. The choice of the suitable/convenient service depends both on the specific users requirements/needsand on the equipments’ acquisition cost.

On the other hand, the competition between the providers is expected tominimize costs and offer many companies the opportunity to adopt newservices. This will result in the efficient exchange of data, the support of totalsolutions and finally, a virtual incorporation of vessels into the corporatenetwork. Telecommunication services are not within the scope of this study,but there is a direct link with the communication and data exchangecapabities between the office and the vessel, and the e-business readiness ofshipping companies.

Against this background, the use of state-of-the-art ICTs and e-shippingapplications is expected to flourish in maritime practices, processes andtransactions, leading to the modernization of the shipping companiesglobally, in all respects and levels of operations, between the ship and theshore. In the following section, we focus on the patterns and trends of thisdigital shipping evolution, as regards in particular the Greek-ownedshipping sector.

12.3. THE OPERATIONAL FRAMEWORK OF

DIGITAL SHIPPING

According to Stopford (2002), maritime communications were developedduring the 1950s and 1960s with the use of telex. In the 1970s, thedevelopment of new technologies boosted telecommunications with the use


of databases and software for voyage estimation. In the 1980s, electronicdata interchange (EDI) networks were developed resulting in the use ofe-services, not only by big shipping companies, but also by small andmedium-sized ones (SMEs). During the last decades, with a giant leap whichoccurred in the ICT sector, the cost of ICT solutions’ acquisition hasdecreased considerably whereas the operational costs remain high, as interms of training, use and efficiency, more experienced staff is needed andthe cost of labour is increasing, compared to the past decades wherehardware systems prices were quite high and the labour was cheap.

More precisely, the adoption of ICT in shipping companies started beforethe last century following three main phases: (1) the ‘‘communication’’,(2) the ‘‘cooperation’’ and (3) the ‘‘coevolution’’ phase, which is related to thedevelopment of advanced digital shipping models. The communication andcooperation phases include some specific stages, which are connected withchronological evolution. The gradual adoption of ICTs by shipping com-panies, increases the interchanged value among cooperating (or connectedspeaking of networks) productive units internal or external to the company.Each stage builds on the previous, steadily approaching the bold vision of anetworked and cooperative digital environment. The appeal of this vision isconsiderable, since the competition and cooperation strategies are seen as thebasis of the future digital economic activities.

The ‘‘communication’’ phase. When we take a really long-term view ofbusiness communications in shipping, the Web is not quite as revolutionaryas it seems at first sight. Over the last 150 years, the technology forgenerating and receiving messages has improved – telegraph, telex, fax andnow e-mail and web technologies – but the basic tasks are to a great extentunchanged. What has changed is the cost, both in terms of communicationsand the labour required to use them. Both are dramatically cheaper today.A revolution came in the 1960s when a computer could be interconnected toa network allowing information to be processed and managed. Previously,telegrams and the telephone had relied on operators to handle messages andcalls, so messaging was too slow and expensive to run, for instance in anegotiation involving several charterers/owners. In the 1990s, a whole newdimension was opened up when information networks became available.Internet emerged as a cheap and easy way of communication between thecompany mainframe and PC networks. The usage of Internet forexchanging e-mails leads to the next phase, that of cooperation.

The ‘‘cooperation’’ phase. When technology finally allowed the use ofInternet to perform economical and commercial transactions on-line,between enterprises on a business to business basis, a real commercial


cooperation started using ICT as a tool, allowing the companies to processorders, purchases, sales, e-payments or negotiations and contracts, amongothers. The first step was the use of the EDI systems, which have occupied acentral place mainly in the liner business in recent years. EDI is a specifictype of inter-organizational information system, which facilitates thetransmission of structured machine-readable data from computer tocomputer memory across organizational boundaries. Unfortunately EDIis expensive, inflexible and not very user friendly. Each shipping companyhas developed a system, supported by a large and very expensive ITdepartment ($10–15 million per annum spent). Compatibility is as much of aproblem as cost. It is common sense that businesses in the following yearswill migrate from EDIs to more interoperable information systems andnetworks. The second step was the network development via Internet.Internet technology at present has gone far beyond a mere means ofelectronic transactions, becoming a foundation for applications linked tothe core business systems, attributing the primary concept of e-business.E-business technologies allowed enterprises to effectively and directlyconnect with clients, suppliers and business partners. The connection hasrecently been made easier by the continuous emergence of new interoper-ability techniques and standards (like XML, ebXML). Modern ICTs workas a tool for shipping companies in their effort to gain a competitiveadvantage over their rivals by selecting and integrating the appropriatepartners in their network-oriented value-chain activities. Today installationsof Internet-based networks in firms, connecting external value-chainparticipants and internal departments enable shipping companies tocoordinate their virtual and physical value-chains in order to create addedvalue for their customers, partners and especially for themselves.

In this phase, the whole evolution develops a network-centric enterprise(NCE). One of the main characteristics of NCE is viewing the actors ascomposing a continuous networked and adaptive digital environment. Theability of a competitive digital business network to generate and exploitcompetitive awareness (an awareness of one’s competitive domain orcompetitive space) has emerged as a main point. Connectivity andawareness about customers, competitors and the environment allowshipping companies to understand better what the characteristics orattributes of their services are or need to be in order to maximize value.Awareness of customer needs also contributes to improved capacity andlogistics planning which, in turn, can improve service availability. In theprocess of exploring awareness, the most significant item is the role of avirtual world. Virtual collaboration enables individuals to collaborate in a


virtual domain. These individuals can be geographically dispersed, which isvery common in shipping business. One of the major advantages ofcollaboration is an improved service provision process – one that is not onlyfaster and less costly, but also produces value-added services.

The main task in shipping is the offering of transportation services forcargos or passengers. Shipping stakeholders, who cooperate to produce thetransport service most of the time, are located in different geographicalareas. This characteristic results in the foundations of a distinctive virtualorganization. More specifically, the personnel ashore and onboard maywork in virtual teams. These teams support the ‘‘productive’’ units, whichare the nodes of a network, which could be globally extended. The nodescooperate and interact by gathering, diffusing and sharing information.These nodes can be departments/units of a shipping company or belong toother external, third-party companies which participate in the network(permanently or when needed). The value and productivity that each nodeoffers, depends on its information capacity.

Another contribution of the network-centric concept is that it exploits theuse of information to suppress transaction costs and risk. Shippingcompanies attempt to limit administrative and operational cost and riskby using Management Information Systems (MIS) in most operatingprocedures. An example is the implementation of SPS (ship positioningsystem) towards suppressing costs and risks. Checking the ship’s positiongives the head office the ability to suggest and order alternative courses inorder for a ship to avoid hazardous conditions at sea or harbour which canthreaten the safety of the ship, the crew and the cargo (e.g., deviation foravoidance of bad weather conditions, belligerent zones, terrorist or pirateactions). In addition, the head office can give orders to master shipoperations relative to the commercial activity of the ship, such as limit thedaily operational cost by reducing the operational speed or changing theship’s course, or delivering freight by deviating the ship in a harbour wheredemand came up. Even after the completion of a carrying task, themanagement needs information about the results of the ship’s commercialactivity in order to avoid the repetition of mistakes and record the operationin order to perform statistical and business intelligence tasks.

The ‘‘coevolution’’ phase. Coevolution is described as a process in whichinterdependent species evolve in an endless reciprocal cycle – ‘‘changes inspecies A set the stage for the natural selection of changes in species B’’ – andvice versa. The same holds true in business. Managerial efforts are primarilyfocused on day-to-day product and service-level struggles with directcompetitors. Over the past few years, more managers have also emphasized


cooperation; strengthening key customer and supplier relationships and insome cases, working with direct competitors on initiatives like technicalstandards and shared research to improve conditions to everyone. As a con-sequence of this evolution, the dynamic networking of the organizations drivesto the dynamic cooperation of the players (could also be the competitors) onthe marketplace and the connection of the resources in a system, building acommunity that shares business, knowledge and infrastructures. This willdramatically affect the ways enterprises, including shipping organizations, areconstructed and business is conducted in the future and the actual less adaptiveorganizations will be replaced by more, fluid and often transitory structuresbased on alliances, partnerships and collaboration (Fig. 12.2).

12.4. DEMAND FOR ICT AND ELECTRONIC

SERVICES AND APPLICATIONS

The significant differences in maritime markets brought up different needsfor telecommunication systems and electronic services. To be more precise,vessels that endeavour in the markets of bulk cargoes perform a small

Fig. 12.2. Networked and Collaborative Shipping Models.


number of voyages during the year, carrying one kind of cargo most of thetimes. Bulk carriers have a limited volume of transactions as they perform6–10 voyages per year. Thus, they do have fewer requirements regarding theneeds for the exchange of data.

In the case of tanker ships, although the same number of voyages per year(6–10) is observed in these markets, depending on the charter party (time,voyage charter or Contract of Affreightment), the need for the exchange ofdata is constantly increasing, due to strict legislation frameworks imposedfor pollution prevention and security assurance (IMO), as well as for themonitoring of the vessel’s performance.

In liner shipping, vessels (namely, containerships, ro/ro, passengershipping) have circular voyages to perform. The result is the increasingneed for the trip’s organization and coordination, the vessel’s monitoring(technical and operational), cargo loading/discharging and last but not theleast, issuance of documents and certificates. Thus, vessels endeavouring inliner shipping have an increasing need for data exchange.

Furthermore, in the era of intermodal transportation, where differenttransportation modes are combined and serve the integrated supply chain,vessels play a major role, and coordination with other modes and nodes of anetworked transport chain is required.

As aforementioned, electronic services enable the facilitation of maritimebusiness tasks and processes, from chartering to safety and securityoperations. Providers of electronic maritime services (EMS) and solutionsare fulfilling more and more the present needs of their customers and arepositioned to cover the emerging ones. Additionally, great efforts are beingmade by software solution providers in order to link applications (integration)and provide continuous support so as to gain competitive advantage. On theother hand, a lot of shipping companies that have the size and the know-howappeared to develop their own in-house applications and in certain cases, tocommercialize their products. A differentiation in the ICT products providedis also apparent; this happens in order for software solution providers toattract greater number of customers and thus acquire a bigger portion of themarket by customizing the software/solutions, targeting to ‘‘lock them in’’.Providers are also trying to give added value services by creating shippinge-markets and interconnecting applications of their competitors.

Electronic maritime services (EMS) can be divided into 10 basiccategories, according to the type of intended use:

1. Communication software/teleconference2. Planned maintenance/ship performance/monitoring/hull and machinery

maintenance


3. ISM and ISPS code monitoring4. Inventory control (provisions/stores/spares)5. Electronic procurement (provisions/stores/spares)6. Operations/voyage management7. Crew manning/human resource management8. Financial applications/MGA9. Chartering and S&P solutions10. Maritime electronic marketplaces.

This categorization is adopted based on the available EMS provided byvendors in the shipping industry. However, the solutions are not exhaustiveas new needs of the shipping companies are constantly covered by newdevelopments and customizations in the existing solutions for office andonboard purposes.

The Greek-owned ocean-going fleet in particular is ranked in the firstplace globally numbering 2,923 vessels greater than 1,000 gross registeredtonnes, and shows continuous adjustment to the changing conditions of theshipping market by developing infrastructure, increasing efficiency andquality of services. Moreover, its investment programme in newbuildingshas exceeded US $20 billion during the last five years. However, in the fieldof communication and e-business applications, the investments are notfollowing the same trend. According to the ship management companies’perspective and prevailing perception, the reasons accounting for the majorobstacles in the adoption of electronic services are start up costs or costs ofacquisition, lack of reliability and efficient technical support, as well as thehigh cost of satellite communication services. Additional reasons arecompatibility and interoperability problems in the present framework ofprocesses, the lack of standardization in digital forms and documents thatconstrain the advantages stemming from the adoption of e-businessapplications.

As far as the Greek short-sea sector is concerned, it is evident that largeoperators, such as ocean-going carriers, are to a certain degree able tohandle the financial, operational and cultural problems regarding the use ofICTs today and in the near future as they rely on a more robust asset basis,relatively large staff of well experienced and trained personnel and adequatefurther resources. On the contrary, small operators are expected toexperience serious difficulties in daily operations with tighter administrativeand operational activities related in particular with regulation compliance.Short-sea shipping (SSS) companies appear to be very vulnerable and this


applies to the shipowners, as well as to the companies servicing the shipapproaching or staying in port.

Recent work suggests that Internet may be revolutionizing traditionalsmall and medium-sized business practices. By offering location and timeindependence, and ease of communication, Internet can help smaller firmsgain efficiencies and cost savings that previously only larger firms couldenjoy. A variety of reasons have been offered for the apparent reluctance ofsome firms to engage in e-business, notably financial and human resourceconstraints and the failure to see its benefits, of which, the failure tounderstand the benefits is the most critical, since it increases the perceivedrisk of engaging in e-business.

Thus, robust ICT applications, though at an infant stage in Greek-ownedenterprises, can be seen to offer a significant benefit for SSS. Although largercarriers are still being consolidated since the 1950s and 1960s plethora ofship operators, small operators are still responsible for a significant part ofthe regional traffic or SSS in Europe. This is the case in the Mediterranean,as well as in other parts of Europe. SSS accounted for 63% of the entirevolume of goods transported by sea in the EU-15 in the year 2003, totallingover 1.6 billion tonnes. The United Kingdom and Italy accounted for thelargest share of cargo handled by SSS, totalling 342 and 302 million tonnes,respectively. The Mediterranean and the North Sea had the largest share ofSSS, with 30% (491 million tonnes handled), and 27% (448 million tonneshandled), respectively .

In this context, a central problem for SSS actors is to combine knowledge(about application of rules, legislation, standards, etc.) with information(data on route, port, ship, cargo, crew, etc.), towards more efficientoperations. This problem is deteriorated by the fact that both knowledgeand data are heavily distributed.

12.5. EMPIRICAL DATA

12.5.1. The Greek-Owned Ocean Shipping Sector

During the works of the Greek Research and Technology Committee of thee-business Forum in January 2005, a special task force was formed withthe main objective to investigate the current state, trends and issues in theGreek-owned, ocean shipping industry with regard to EMS. The researchfocused on the assessment of critical factors of demand and supply


regarding telecommunication (satellite) solutions and electronic services.This is a study of the characteristics of telecommunication and maritimesoftware solutions that are recommended by the Greek and InternationalICT Market and analysed the global market on maritime electronic servicesand solutions, their present state and prospects. Furthermore, the researchteam created a workgroup which consisted of 138 members, representingdifferent groups of experts in the maritime sector and the Greek shippingindustry such as ship operators, satellite communication services andtelecommunication providers, software solution providers and maritime orbusiness administration and information technology research and educationinstitutions. Roundtable sessions were organized and discussions with allparties simultaneously took place in order to understand the problems facedby all parties, the prospects for their solutions and promotion of newdevelopments in both the telecommunication and business applicationsectors.

For the purposes of this study, we created a questionnaire to beanswered by the ICT managers or general managers of ship managementcompanies in Greece, endeavouring in the ocean-going market. Briefly,these questions addressed the size of the company (number of office staff,type/size/number of vessels), the telecommunication solutions used andintended to be used, planned future developments, the EMS used, the typeand level of integration of applications, the type and level of connectionand data exchange between the shore and the vessels, motivation and theperceived barriers in the adoption of new technologies and softwaresolutions. The respondents were primarily general managers and ICTmanagers who were responsible for making the firm’s ICT-relateddecisions. In addition to the roundtable sessions and the questionnaire, anumber of semi-structured interviews were conducted in order to ensurethat the questions being asked will cover the needs and the researchobjectives of the team.

The overall research objectives were (a) to study the characteristics oftelecommunication and maritime software solutions that are recommendedby the Greek and International ICT Market, (b) to analyse the globalmarket on maritime electronic services and solutions, their present state andprospects, (c) to record the present use of the electronic services andsolutions in the Greek shipping industry and the potential for furtherdevelopment according to international practices and finally (d) to study thenecessary business processes and actions that are required, as well as themechanisms of promotion of the technological solutions in the maritimeindustry.


In the following section, the most important questions and underlyingissues examined are presented, as well as the results extracted from thequestionnaire survey, in combination with the overall methodology used(roundtables and interviews).

The Greek-owned ocean-going fleet: According to the given answers by 13ship management companies, the number and types of vessels managed arethe following:

� Bulk carriers: 48� Crude tankers/product carriers: 109 + 13� Containerships: 1� Reefer: 4� Ro-Ro: 1.

In total 176 vessels (Fig. 12.3).

IT department in ocean-going shipping companies: A 77% of the companieshave IT departments experts, while 23% do not have an IT department oran expert; they outsource the IT support to third parties (Fig. 12.4).

Decision-making for investments on telecommunication and IT solutions:The decisions are mostly made by general managers (62%) and by ITmanagers (38%). The general manager is in most cases the shipowner, evenif the company already has an IT department and an IT manager. The ITmanager always proposes to the general manager who is the one thatapproves (Fig. 12.5). A formal budget document and IT policy are notpresent in the majority of the companies and decisions on new developmentsin the company are made, only on occurring events.

Container ships1%

Product Carriers

7%Reefer

2%

Crude tankers/62%

Ro-Ro 1%

Bulk Carriers 27%

Fig. 12.3. Percentage of Type of Vessels Operated by the Questioned Ship

Companies’ Management.

Yes77%

No 23%

Yes

No

Fig. 12.4. Do you have an IT Department in your Company?

General Manager

62%IT Manager

38%

Fig. 12.5. Who makes the Decision on Investments on Telecommunication and

IT Solutions?


In-house development – IT outsourcing infrastructure and application

monitoring:

� Hardware support. According to the given answers, the hardware supportis made in-house by 46% of the companies, 23% is outsourced and/or31% have a combination of both in-house and outsourced support(Fig. 12.6).

The software used by the shipping companies in the office and onboardare classified into two categories:
(a) Operating systems (Windows, Linux, etc.) and general applications
support (e.g., MS Word, MS Excel, etc.): 46% of the ship manage-ment companies use their staff for the installation and maintenanceof the clients’ operating system, while 31% use third-party companiesand 23% use both solutions (Fig. 12.7).

(b) Specialized/customized maritime applications support: The specializedmaritime applications are either developed in-house or by solutionproviders (vendors). It is logical that 69% of the companies that use abespoke application, use vendors’ services (help desk, after salesservices) as defined in the terms of the contract signed by both parties(Service Level Agreements) (Fig. 12.8).

Inhouse / Outsourced

31%

Outsourced 23%

In house46%

Fig. 12.6. Hardware Support.

Inhouse /Outsourced

23%

Outsourced 31%

In house46%

Fig. 12.7. Technical Software Support (Operating Systems/Other Applications).

Outsourced69%


31%

Fig. 12.8. Technical Support for Maritime Applications.


� Technical support of the enterprise network. The technical support of theenterprise network is supervised by the IT departments (62%) of thecompanies; their responsibility covers the maintenance (installation,repairs, administration, etc.). A smaller percentage (23%) of thecompanies outsources these tasks due to the high technical knowledgerequired for the maintenance of the network support, while 15%combines both solutions (Fig. 12.9).

Inhouse62%

Outsourced 23%


15%

Fig. 12.9. Technical Support of Enterprise Network.


� Support of web-enabled applications. Shipping companies apparently treatweb-based applications as of secondary importance, while these are usedby the companies for informational or transactional purposes. TheCompany’s website, the remote access environment to the corporatenetwork for managers can be classified in this category. The developmentof such applications is 31% in-house or outsourced development, but38% do not have remote access capabilities and web presence. Webpresence is not needed in most cases according to the survey responds, butcan be used as a marketing tool for their services. Only shippingcompanies/ship management companies that are listed in the NYSEmaintain an updated webpage for their investors (Fig. 12.10).

� Systematic acquisition of information from the World Wide Web. There isan extended use of Internet services for data mining concerning theoperational cycles of the companies. Most of the information pulled,concerns weather forecasting, bunker prices, market intelligence, freightprices, port infrastructure, prices for spares/provisions and last but notthe least sale and purchase information. Such applications are consideredadvantageous tools in the hands of managers for efficient, decision-making (Fig. 12.11).

The use of electronic maritime services: The study pinpointed 15 maritimeoperations where shipping companies already use software/applications inorder to facilitate their day-to-day operations. In our sample, thepercentages of their use are depicted in Table 12.1

12.5.1.1. Motivation for the Adoption of Electronic Maritime Services

E-business motivation can be defined as a reason or a business goal thatprovides impetus and direction for a firm to adopt e-business applications.Organizations anticipate or perceive certain benefits of implementinge-business applications, and these perceived and anticipated benefits

16%

9%

15%

17%17%

13%

13%

Web-based marketinformation services

S & P Information

Chartering Fixtures

Bunkering Information

Weather Forecasts

Ports’ Details

Spare parts / Provisions / Stores Prices

Fig. 12.11. Percentage of Type of Information Acquired from the Internet.

Not applicable38%

Outsourced 31%

Inhouse 31%

Fig. 12.10. Support of Web-Enabled Applications and Web Presence.


(e.g., increased profits, minimized operational costs) drive decision-making,regarding technology adoption.

Commonly, organizations perceive e-business benefits and their motiva-tion for adoption is influenced by the following aspects: building relation-ships (e.g., customers, suppliers or employees); marketing, sales and serviceimprovement (e.g., improvement of corporate image, attraction ofcustomers or distribution of information); improving financial performance(e.g., reduction of operations’ cost); obtaining information (e.g., finding newsources of supply, industry-related information or marketing intelligence).

As the literature suggests, other important factors are also influential one-business adoption motivation, including: firm strategy (strategic orienta-tion); firm characteristics (age, size, industry sector, market scope) and firmowner/manager demographics (age, education, leadership style).

Table 12.1. Percentage of Maritime Processes Where EMS are Used.

Communications (combined internal & external/ship to shore) 85%

Teleconference 15%

Inventory control (provisions/stores/spares) 69%

Electronic procurement 38%

ISM code/ISPS monitoring 62%

Voyage management 62%

Planned maintenance/ship performance 62%

Crew/human resources 69%

Accounting/MGA 77%

Monitoring/hull maintenance 23%

Training 38%

Insurance 23%

Loadicator 100%

Ship investment analysis 15%

Decision support system 8%


Against this background, the study also examined the motivations for theadoption of electronic applications by the shipping companies, which areranked below according to the importance given by the responders:

1. Improvement of service quality2. Increase of efficiency3. Increase in security4. Improvement of internal controls5. Decrease of cost.

12.5.1.2. Obstacles in the Adoption of Electronic Services/Applications

As the literature suggests, factors constituting perceived barriers one-business adoption include attitudinal, structural, procedural and opera-tional issues which inhibit e-services and the development of applications.The central factors range from general macro-level dimensions (economic,political, institutional, legal aspects) which impinge across businesses andindustries to specific micro-level factors (financial, human resources, set ofbusiness competencies, security concerns, resistance to change, inertia indecision-making) which impact on businesses employing ICTs. In addition,barriers include particular product and sectoral characteristics, hencee-business in certain cases is deemed irrelevant. A conservative, risk-averseorientation of an owner/manager may mean that a dominant negativeattitude is displayed towards its adoption. There may be a sense that,


business is dictated mainly by the end customer, supplier or distributor whodoes not want to embrace e-business technology, instead preferringconventional, traditional methods. Conversely, those owner/managersexhibiting entrepreneurial characteristics and implementing decisions basedon core sets of interacting conventional business and e-business compe-tencies will be more able to take advantage of the medium for the longer-term profitability of the firm.

Against this background, the study also examined the perceived obstaclesfor the adoption of electronic applications by the shipping companies, whichare ranked below according to the importance given by the responders:

1. Initial cost of acquisition2. Lack of efficient technical support3. Annual operational cost4. Lack of compatibility with the present state of business cycles5. Lack of standards6. Need for expert employees7. Lack of sufficient data security.

12.5.2. The Greek-Owned Short-Sea Shipping Sector

The Department of Shipping Trade and Transport, University of theAegean, conducted a survey in June 2003, with a sample population of 40Greek-owned short-sea cargo shipping companies. These companies wereexamined in order to identify the level of ICT adoption and e-businesspractices and EMS, the potentiality, the motivation and the major obstaclesthese shipping companies encounter in moving towards advanced digitalshipping models. The researched Shipping Companies (SC) were dividedinto four categories, according to the number of ships they operate. Theshipping companies’ categorization and the sample’s percentage arepresented in Table 12.2.

The following were the main issues examined:

� the level, maturity of ICTs use,� the perceived benefits of ICTs and the e-business practices’ adoption,� the perceived obstacles hindering the exploitation of advanced e-businessmodels,

� the networking ability in shipping business processes and operations.

Table 12.2. SSS Sample.

Shipping Company Category Number of Ships Sample’s Percentage

SC1 1–5 25

SC2 6–10 20

SC3 11–20 25

SC4 W 20 30


The questionnaire design included different question groups concerning thetargets set at the beginning of the project. The questionnaire, althoughrecording opinions, experiences and facts, to a certain extent, did not fullydetect the examined issues and their causalities. Consequently, with themajority of the examined companies, semi-structured interviews followed,interviewees were asked to focus on specific issues. The selection of theparticipating individuals was made from four different working departments(technical, operations, HRM and R&D) of the shipping organizationsashore. The largest part of the questionnaire was covered by quantitativequestions requiring a rating by the participants. Open questions were limitedin the questionnaire but were abundant during the interviews, the goal beingto achieve a fruitful conversation. As far as the style of the questions isconcerned, we preferred to use all kinds, and more specifically thepercentages for each type of question were the following: 25% directivequestions, 60% deductive questions and 15% hypothetical questions.

The most important survey results stemming from the questionnaire andthe interviews data collection and analysis are:

(1) Shipping companies target a competitive advantage through cost andrisk reduction and suppression of response time, trying to offer high-quality services and make a good reputation. Companies cooperate withother shipping actors, building business networks and acting all togetheras a team but networking is not fully supported by ICTs. Only big andmedium-sized shipping companies pioneer in network development,expansion and functions supported by ICTs.

(2) Business networking costs, based on the ICTs implementation and usecould not be defined precisely and a considerable percentage (40%)ignored it. Answering to open questions, managers admitted that thefirst priority of the company is to cover the cost for digitalcommunication with the ships financing for satellite connections and


to a lesser extent for infrastructures integrating the ship and the headoffice’s information systems.

(3) For the majority, business networking supported by ICTs contributes tothe company’s viability, market solidification and quality of services butdid not confirm that all the above results depend exclusively on theICTs’ enabled networking.

(4) The main problems for using ICTs are the systems’ compatibility andapprehension and information management resources and skills. Mostcompanies outsource the organization’s computer centre operations,telecommunication networks and software applications development toexternal vendors.

(5) The applications that are mostly used by the shipping companies areprimarily related to ship safety and secondarily related to the facilitationof their commercial activities. The first priority is to ensure continuousand safe communications with the ships. More precisely, the mostcommon systems for the Greek shipping companies are Radio-Satellitecommunication systems and Internet, ship maintenance informationsystems, ship positioning systems and information systems forcommercial transactions.

(6) The main perceived benefits of the above systems’ usage are: flexibilityincrease, time response reduction, information acquisition/exchange andparticular services offer. Managers witness that the high frequency oftransactions and the need for communication imposes the ICTs’adoption in order to support the business process which is based on a‘‘sense and respond’’ mentality.

(7) The main perceived problems of the networked software systems’ useare related to interoperability, incompatibility and the frequency of thesystems’ malfunctions. Most of the shipping companies use softwareprograms and ICTs applications that are commercially available for saleas software packages. The main reason for the ICTs outsourcingpreference is that software packages are supported by vendors (forinstallation, updating and maintenance) and can cover commonfunctions for all ships.

(8) The main reasons why shipping companies do not use networkedsoftware systems are: the high cost of the initial investment, the high costof legacy system migration, the lack of knowledge and skilled personnel,the lack of technological solutions and interoperability and complexityof regulations for e-business. Although most shipping companiescontinue investing money on installing computers and application andcommunication systems, interviewees admitted that the management


demands a visible and clear relationship between the costs of the ICTsand the ultimate company’s economic performance.

Correlating the market sector, the firm’s characteristics – company size andICTs and advanced e-business practices and stance – gives us the followingimportant results:

(1) Big and medium-sized SSS companies participate in networks with morenodes and do not have problems with compatibility in contrast to smallSSS companies. Of course networking cost is higher for biggercompanies.

(2) Big and medium-sized SSS companies use almost all referred softwaresystems to broadly support the business process in contrast to smallcompanies, which use the necessary systems to support (especially insafety and security issues) ship navigation and communication with thehead office.

(3) In big and medium-sized SSS companies, the extended use of networked,integrated software systems is hindered by the preoccupation that thepersonnel will react to the change, and software systems will causedeclination of standard functions. For small companies on the otherhand, the most important hindering factors for the use of integratedsystems are the high costs for initial investment and conversion, the lackof knowledge and skilled personnel, the lack of technological solutions,the interoperability problems and the complexity of regulations one-business.

12.6. A TYPOLOGY OF DIGITAL SHIPPING

BUSINESS MODELS

E-business models are defined as concepts, methodologies or frameworks/architectures that aim at guiding companies to identify and developsustainable initiatives in order to exploit ICTs and hence support theirstrategic goals; create value for their stakeholders, capture a dominantmarket position or a viable market niche, reduce cost and improveefficiency. The popularity of e-business has resulted in the rise of a numberof e-business models theories and typologies (Timmers, 1998; Kauffman &Dai, 2002; Viehland, 2005)

Foundation theories of digital business models include MIS concepts andtechniques, Business Strategy and Strategic Information Systems’ principles.


Currently, e-business models theories seem to have converged and coevolvewith the quite mature stream of e-business strategy.

The following six main functions could be attributed to a business model(Chesbrough & Rosenbloom, 2002): articulation of the value proposition,identification of a market segment, definition of the structure of the firm’svalue-chain, specifying the revenue generation mechanisms, description ofthe firm’s position within the value network and formulation of acompetitive strategy in the digital business environment.

In the following section, we explain the basic concepts and principles thatpertain e-business models in order to analyse and present innovative,emergent and future digital shipping business models, as based on theexperiences and lessons learned from studying and empirically testing theGreek-owned shipping sector, regarding the adoption of ICTs ande-business strategies and practices.

The classic literature of e-business models identifies a number of the mostimportant modes of digital business operation; their emergence into theshipping environment context can be viewed as follows:

1. E-presence: A basic transformation of the traditional-physical, com-mercial activities of the company into electronic forms are implemented,such as basic business information provision and exchange, i.e.,informational website of a shipping company, information pages withdetails such as ports of call, fleet capacities, etc., or interactive servicessuch as electronic shipping orders, cargo electronic shipping reserva-tions.

2. Electronic maritime operations: Information systems and communica-tion infrastructures can enable an efficient operation of the centralshipping operations of a company activated in a particular shippingsector (bulk, container, etc.). These digital operations supported byparticular state-of-the-art software platforms, include:� Communications (combined internal & external/ship to shore)� Teleconference� Inventory control (provisions/stores/spares)� Electronic procurement� ISM code/ISPS monitoring� Voyage management� Planned maintenance/ship performance� Crew/human resources� Accounting/MGA� Monitoring/hull maintenance


� Training� Insurance� Loadicator� Ship investment analysis� Decision support system.

3. E-intermediaries and e-markets: A new type of intermediaries, third part

information portals, e-brokers, e-charterers have appeared and devel-oped, aiming at providing added value services such as informationbrokerage (i.e., routes, available carriers, third parties), electronicnegotiations and chartering, electronic auctions for cargo transporta-tion or an integrated electronic marketplace platform of a shippingsector (bulk, container, short-sea, etc.) that resembles and rationalizesa physical shipping market environment into its digital form. A critical,still open question regarding this business model is whether thenew electronic intermediaries disintegrate or re-integrate a shippingmarket.

4. E-supply chain management and multimodal e-transportation: Variousforms of electronic services and technologies support upstream and/ordown stream activities across a supply chain. These may include casessuch as, real-time fleet management and product/freight distributionbased on wireless communications technology or e-auctions foroptimized intermodal logistics realization. In this model, the digitalshipping companies’ activities are seen as integrated with the overall,intermodal activities across a supply chain that offers rationalized andadded value services with a door-to-door customer service provisionorientation.

5. Electronic port services: Within a port community, the effective flow ofinformation is considered to be an important variable, whereas a highlysophisticated information technology is required to provide reliable andtimely information for a multitude of actors within the port community.Among them are freight forwarders, transport companies, railoperators, and container carriers in terminals, customs, and portemployees. To carry out an effective data management, appropriateelectronic devices must be used; furthermore they should be integratedinto the port and transport network communications via a computersystem. Since the introduction of the EDI systems in the mid-1980s, theport sector has progressively endorsed several ICTs such as web portals,intranets, extranets and support software platforms (i.e., ERPs,Workflow Managements Systems) and communication platforms(i.e., wireless and sensor systems, RFID technology).


However, despite the fact that several technologies and devices areavailable in the market, they are not broadly employed yet. Only a fewinternational ports have taken maximum advantages of the existing ICTsto improve their operational efficiency, minimize terminal congestion andestablish a fully integrated system. Shipping companies should be able tointegrate their applications with port applications towards a seamless,networked shipping environment.

6. E-regulations’ compliance-safety and security: Maritime safety andsecurity remains a critical issue, requiring shipping companies andports to expand capacity without compromising the safety and securityof organizations and citizens. Most of the necessary maritimeinformation required for shipping rules and regulations’ compliance iscurrently available as unstructured textual data maintained andprovided by multiple distributed sources. With security regulationslikely to continue to intensify, more research is needed on freightshipping and passenger shipping security technology such as electronicseals, container tracking (such as RFID) and equipment screening. FALhas urged the IMO member states to work towards a ‘‘single windowconcept’’, an idea also pursued by a number of European andinternational projects on Electronic Port Clearance, by one-stop portbased intermodal web portals. Tools for automatic compliance checkare also useful (i.e., ISM, ISPS compliance assessment tools). Researchcan also assess the effectiveness of Homeland Security programmes alsohelp to determine funding requirements for port and shipping security.

7. Ancillary and value-added shipping services: Apart from the coreshipping and port operations that are digitally provided and supportbased on state-of-the-art ICTs and e-business methods, a number ofancillary, yet important, value-adding electronic services and applica-tions are emerging, including, e-learning, e-health, e-governmentservices:e-learning: e-learning platforms can be developed and used in the

shipping industry environment, where trainees/seafarers have specificlearning needs in order to adapt and perform successfully in acontinuously changing organizational, business and employment envir-onment. Common career paths in the shipping industry may requirealternate career changes and job rotation such as acquisition of differentpositions onboard, work on different types of ships, and employment,ashore, in an office position related with the shipping and port operationsmanagement. The e-training pedagogical and information processes,enable flexible and individualized content and training provision in terms


of adaptive-blended learning (combined traditional lectures, e-learning inthe office, e-learning onboard with an instructor), cooperative learning(practice onboard, emergency drills with peers) and contextualizedlearning and content, based on real shipping business situations andproblems.

8. Third-party services: In the shipping environment a multitude ofactors co-exist and interact, including international organizations (i.e.,IMO), educational and research institutions, industry associations,insurance organizations, P&I clubs, ship surveyors, etc. These shippingthird parties may implement and use information systems ande-business applications that interoperate with shipping companies’e-services.

9. Mobile shipping data services: Following the Internet revolution, asecond wave of technological innovation has emerged, regardingdigitized information using wireless technology and personal commu-nication services, including short messaging services, email, downloadservices and Internet connection services, enabling communication andinformational applications for shipping managers, employees, portofficers and workers, etc. The users of M-shipping data services areprovided with timely and accurate information, data and communica-tion capabilities anywhere, anytime – a comparative advantage overfixed-network services that present geographic and time constraints.Efficient shipping decision-making and operations management can begreatly facilitated by timely management of perishable information anddata, as well as by individualized communication (i.e., charteringnegotiations, vessel technical maintenance and repair operations).

10. Communication network services: The enabling infrastructure foradvanced digital shipping services consists of, onboard telecommunica-tions (i.e., short range or satellite communications) and ashore–officecommunications (i.e., xDSL, Internet, Wifi, etc.). Although commu-nication services do not represent a pure digital shipping businessmodel, they are included in the typology since they constitute adominant and important type of the ICTs used in shipping.

Apart from the digital shipping business models presented above, hybridsand combinations or variations of these are also apparent and foreseen.

In addition to the above-proposed taxonomical analysis of digitalshipping services and models, a useful distinction is the one that citese-business models with regard to the side that it primarily implements, and


offers the electronic services under consideration; hence a digital shippingbusiness model can be:

(a) a supply-side or seller-oriented system, where in a one to manyrelationship, a shipping company can offer informational and transac-tional services to its customers, i.e., passenger trip/ticket e-reservations,cargo shipping capacities e-booking, cargo capacities e-auctions;

(b) a demand-side or buyer-oriented system, where an e-shipping applicationis offered by a shipping customer (i.e., shipper, cargo forwarder) and ashipping company may act as a ‘‘user’’ of this service (i.e., cargobooking, vessel oil procurement, etc.);

(c) a third party or an e-marketplace platform, where a third party or aconsortium of shipping or ICT stakeholders own and operate anintermediary application (i.e., a chartering platform).

Complementary to this understanding is the meticulous identification of allthe stakeholders (actors) who are involved in a particular business model,the information flow for its realization, as well as the revenue or economicmodel, which ensures the sustainability and attractiveness of each one of thedigital shipping business models (Fig. 12.12).

The above-presented taxonomical analysis serves as a generic roadmapfor understanding digital shipping options and respectively aid in decisionand policy making in the shipping context. Its normative character offers acomplementary means towards an integrated, strategic orientation of theshipping companies and the shipping stakeholders in an emergent digital,information and knowledge intensive environment (Fig. 12.13).

12.7. A TECHNOLOGY ACCEPTANCE MODEL FOR

DIGITAL SHIPPING

A technology acceptance model (TAM) represents an important theoreticalcontribution towards understanding information systems, e-business usageand respective acceptance behaviours. The goal of TAM is ‘‘to provide anexplanation of the determinants of computer acceptance that is explaininguser behaviour across a broad range of end-user computing technologiesand user populations’’.

A TAM considers that perceived usefulness and perceived ease of use,determine intentions to use a system. Perceived usefulness is also seen asbeing directly impacted by the perceived ease of use. Attempts to extend

Fig. 12.12. Digital Shipping Business Models.


TAM have generally taken one of three approaches: by introducing factorsfrom related models, by introducing additional or alternative belief factors,and by examining antecedents and moderators of perceived usefulness andperceived ease of use (Wixom & Todd, 2005).

More precisely, the TAM consists of two main beliefs, perceived utilities

and perceived ease of application, which determine attitudes to adopt a newtechnology. The attitude towards adoption depicts the prospective adopter’spositive or negative orientation/behaviour about adopting a new technol-ogy. Attitudes are determined by relevant internal beliefs. Attitude towardsadoption is influenced by factors such as: (1) perceived ease of adoption,(2) apprehensiveness, (3) perceived utilities of technology (extrinsicmotivation) and (4) enjoyment (intrinsic motivation). In addition, theindividual managers’/users’ characteristics like age, qualification, their priorexperiences in adopting technology, technology suppliers’ commitment,compatibility with existing technology and enhanced value are importantfactors. Social pressure is another important factor. Based on a strong

Fig. 12.13. An Extended Technology Acceptance Model for Digital Shipping

(TAM-DS).


behavioural elements orientation, TAM assumes that when someone formsan intention to act, this immediately results in the freedom to act withoutlimitation. In practice, constraints such as limited ability, time, environ-mental or organizational limits, and unconscious habits will limit thefreedom to act (Davis 1986; Davis, Bagozzi, & Warshaw, 1989; Wang,Hsu, & Fang, 2004; Pisanias & Willcocks, 1999).

Against this background, in the following section we present an extendedTAM adapted and extended to the context of an emerging digital shippingenvironment, in particular the shipping work environment, in order toformulate a framework that allows for a broader and less normativeunderstanding of digital shipping business models, their adoption andimplementation organizational contexts and consequently enable knowl-edgeable and strategic decision-making of the shipping companies andthe shipping stakeholders, in a emergent and information intensiveenvironment.

In the extended TAM for digital shipping (TAM-DS), we present a two-layered model that encompasses both background factors as well as direct,critical factors for the adoption and use of digital shipping services.


In the TAM-DS background factors we include:Firm-specific characteristics: The particular sector (i.e., bulk, container) in

which the firm operates, the size (vessel fleet), the financial basis, theorganizational culture of a shipping company regarding new technologiesand technical change, the company’s prior experience regarding the ICTsprojects’ implementation, their ICTs procurement and staff trainingprocesses all influence the adoption decisional context. Accumulatedtechnical knowledge of the adopters and positive working relationshipswith the technology suppliers through previous shared experiences, have apositive relationship with the intention of adoption.

Shipping owner/manager personal factors: The decision-maker of a digitalshipping service investment and operation is most commonly a high-levelmanager or shipping owner; the demographic characteristics of the decision-maker, that is age, education, stance to new technologies, personal skills andknowledge regarding new technologies, prior experience with ICTs projects,relationship with the ICTs’ suppliers, all influence the decisional context ofadoption.

Type of digital shipping services: The type of digital shipping services, aspresented in the digital shipping business models, whether the adoption anduse decision refers to a simple or heavyweight application or core orancillary application, i.e., (a) a simple informational web service, (b) theintegration with a complex procurement platform of a supplier and (c) astand alone security assessment application, etc., embeds complexity, andorganizational impacts elements, thus influence the perceptions regardingusefulness, ease of application and cost implications, hence influence thedecisional context of adoption.

Furthermore, the application functionality, the operations–tasks’ char-acteristics and the respective task–technology fit also impact the decisionalcontext of adoption.

ICTs maturity: Whether the examined digital technology and applicationare innovative with limited previous proven successful implementationbusiness cases, or it is a state-of-the-art solution, influence the decisionalcontext of adoption. Shipping companies with an orientation towardstechnological innovation are prone to experiment with new ICTs and seek acompetitive advantage.

ICTs vendor factors: The image, the size, the capabilities (such as the salesand negotiation capabilities) and the assets (experienced programmers,integrators and consultants) of the ICTs’ vendor, as well as a prior


relationship with the shipping company are significant factors in promotingdigital shipping, and influence the decisional context of adoption.

Socio-economic factors: The globalization and international competition,social pressure on sensitivity and corporate social responsibility regardingenvironmental, safety and security issues, respect and appreciation forinnovation, learning and knowledge creation are factors that influence thedecisional context of adoption.

All the above TAM-DS background factors determine the first layer,direct–critical TAM-DS factors, namely:

Perceived usefulness: Applying the new technology in order to benefit forthe adopting company’s well being is regarded as a subjective perception.Usefulness or utility for the adopting organization, usually means economicbenefits resulting from adopting a digital shipping service. These benefitsmay consist of increases in productivity, enhancement of service quality,cost savings, improvement in the market share and entry into a new market.It may also consist of improved shipping employees’ seafarers’ jobperformance and job satisfaction and the associated intrinsic and extrinsicrewards. Other forms of benefit relating indirectly to the adoption of thetechnology such as the generation of a quality image or enhancement of thecorporate image also account to perceived utilities. When the new ICTtechnology threatens organizational continuity (disruptive technology), thedigital shipping service’s utilization may be perceived as negative.

Perceived ease of application: The degree to which the shipping company’smanagement expects the new technology adopted to be free of exceedingeffort and support, regarding its transfer and utilization is a direct factor ofadoption intention. Compatibility with existing the company’s informationsystems, work operations, work norms and culture are embedded elementsin the digital shipping technology complexity of application.

Perceived cost: an additional factor that we explicitly include in theTAM-DS, is the perception of monetary costs of shipping decision-makers,regarding the adoption of digital shipping services. Actually, this isconsidered a strong determinant that has a negative relationship withadoption intention, unless clear cost-benefit arguments can be contributedto the decisional context.

The last three important TAM-DS factors have a direct impact on thedigital shipping services’ intention of adoption and result in varying digitalshipping services settings across markets, geographical regions andcompanies.


12.8. SUMMARY AND DISCUSSION

Digital shipping is defined as any form of communication, informationexchange and electronic transactions across shipping electronic organiza-tional networks. These transactions can be realized within a shippingcompany, between shipping business partners (i.e., shipping company–broker–charterer interactions), and between businesses and customers (i.e.,shipping company–cargo forwarder). Electronic shipping transactions mayrefer to any particular shipping market, namely freight transportation,passenger shipping, the cruise industry, short-sea and ocean shipping, thebulk or the container sector.

This chapter overviewed the generic phases and patterns of the ICTs andelectronic services’ evolution in the maritime sector and we explain pertinentcharacteristics for their use and diffusion.

Furthermore, we cite empirical evidence from two research studiesregarding the adoption of digital shipping services: (i) in the Greek-ownedocean-shipping sector and (ii) in the Greek-owned SSS sector. In thesestudies we address firm and sector characteristics, EMS used, type and levelof integration of applications, type and level of network cooperation anddata exchange between the shore and the vessels, planned futuredevelopments, motivation and perceived barriers in the adoption of digitaltechnologies and software shipping solutions.

Building on the above theory and empirical findings, we present atheoretical, combined frame of analysis consisting of (a) a typology ofdigital shipping business models and (b) an extended TAM for digitalshipping, broadly applicable in the international shipping environment.

We consider that digital shipping evolves around 10 dominant businessmodels, namely e-presence, electronic maritime operations, e-intermediariesand e-markets, e-supply chain management and multimodal e-transportation,electronic port services, e-regulations compliance-safety and security,ancillary and value-added shipping services, third party services, mobileshipping data services and communication networks services.

In order to explain how different organizational actors adopt variousdigital shipping business models and services, we present an extendedTAM-DS that includes the adapted, direct Adoption Intention determi-nants (perceived usefulness, perceived ease of application, perceived cost)and their background factors, including firm-specific characteristics,shipping owner/manager personal factors, type of digital shippingservices, the ICTs’ maturity, the ICTs’ vendor factors, and socio-economicfactors.


This chapter formulated a frame of analysis that allows for a broader andless normative understanding of digital shipping business models, theiradoption and implementation organizational contexts in order to assist inknowledgeable and strategic decision-making of the shipping companies andthe shipping stakeholders in a emergent and information intensiveenvironment.

REFERENCES

Castells, M. (2000). The rise of the network society. London: Blackwell.

Chesbrough, H., & Rosenbloom, R. (2002). The role of the business model in capturing value

from innovation: Evidence from Xerox corporation’s technology spin-off companies.

Industrial and Corporate Change, 11(3), 529–555.

Davis, F. D. (1986). A technology acceptance model for empirically testing new end-user

information systems: Theory and results. PhD Dissertation, Registered at the Sloan

School of Management, Massachusetts Institute of Technology, Cambridge, MA.

Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer

technology: A comparison of two theoretical models. Management Science, 35(8),

982–1003.

Dourmas, G., Nikitakos, N., & Lambrou, M. (2005). The concept of digital business ecosystems

applied to the shipping industry. Proceedings international association of maritime

economists 2005 conference, Cyprus.

Filos, E., & Ouzounis, V. K. (2003). Virtual organizations: Technologies, trends, standards and

the contribution of the European R&D programs. International Journal of Computer

Applications in Technology, 18, 6–26.

Jelassi, T., & Enders, A. (2005). Strategies for e-business: Creating value through electronic and

mobile commerce. London: Prentice Hall.

Kauffman, R., & Dai, Q. (2002). Business models for internet-based B2B electronic markets.

International Journal of Electronic Commerce, 6(4), 41–72.

Pisanias, N., & Willcocks, L. (1999). Understanding slow Internet adoption: ‘Informediation’ in

ship-broking markets. Journal of Information Technology, 14, 399–413.

Stopford, M. (2002). E-commerce implications, opportunities and threats for the shipping

business. International Journal of Transport Management, 1, 55–67.

Timmers, P. (1998). Business models for electronic markets. Electronic Markets, 8(2), 3–8.

Viehland, D. (2005). Overview of business models for electronic commerce, http://www.massey.

ac.nz/Bdviehlan/busmodels.html

Wang, C., Hsu, Y., & Fang, W. (2004). Acceptance of technology with network externalities:

An empirical study of internet instant messaging services. Journal of Information

Technology Theory and Application, 6(4), 15–28.

Wixom, B. H., & Todd, P. A. (2005). A theoretical integration of user satisfaction and

technology acceptance. Information Systems Research, 16(1), 85–102.

digital shipping: the greek experience

Documents