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Bringing transparency to maritime procurement

The Naval Architect: January 2019Freddy

Shipping is unique in many respects – often positively so. However, for Moscord CEO Freddy Ingemann, the industry is clinging on to one less welcome behaviour. “The ship supply business is the only business left where you are hiding your prices,” he says. “In all other business it is transparent.”

 

In an era where widespread digitalisation has opened up the free exchange of information in both industry and society, strategic opacity seems to be on its way out. Yet, as Ingemann points out, ship suppliers leverage the status quo in the maritime industry to gain a commercial advantage – to the detriment of the shipowner.

 

With over 15 years’ experience of innovation in the procurement sector gained at ShipServ, Ingemann is hoping to make a change with his new venture. Referred to by some as ‘the maritime Amazon,’ Moscord is an online platform that enables procurers to buy ship supplies directly from manufacturers and wholesalers.

 

Crucially, products available on the platform are pre-priced, and owners have the ability to negotiate directly with suppliers. The price paid also includes ‘last mile’ delivery, in which Moscord consolidates all products ordered at a proprietary port hub and sends them directly on to the vessel.

 

A further important aspect of the offering is the integration between Moscord’s platform and the ship’s existing purchasing software, including popular services such as Sertica, SpecTec’s Amos and Shipnet. This integration makes it easier for owners to implement Moscord into existing workflows, and reflects the fact that “you will never get a marine purchaser to go and just buy online with their credit card,” says Ingemann.

 

At present, the product list on the platform is relatively limited, taking in valves, electric motors and components, filter cartridges, and consumables. Pending an agreement with power management multinational Schneider Electric, however, total product numbers will reach approximately 100,000. In the near future, Moscord is also set to offer ‘service’, including spare parts and engineering, as a purchasable item.

 

For buyers, using Moscord is free. The company’s business model operates by charging suppliers a fee, who then should be able to access a wider marketplace and secure repeat business. It is important, says Ingemann, that suppliers “should have more value in return” despite paying; the platform allows them to operate a direct model without the administrative burden of logistics and delivery.

 

Data plays a significant role in Moscord’s optimisation of the procurement process. Reflecting e-commerce best practice, all product entries are written in a standard format and are organised/categorised effectively, ensuring products are searchable.

 

Moreover, entries are continually updated to ensure they feature accurate product information. This allows Moscord to minimise wrong-part delivery, which is a significant problem across the ship supply business; according to Ingemann, “as much as 20% of final deliveries are returned because the wrong items are specified due to wrong or missing data.”

 

By working directly with suppliers, Moscord also guarantees product provenance, unlike resellers who often sell second-hand or generic parts that may not have been manufactured to the same quality standards. “The customer should also know what they get,” says Ingemann. “If you order an ABB motor, you should get an ABB motor and not an unbranded motor.” This works the other way, too, he adds: “It’s also important for suppliers to know who buys their product.”

 

The second underlying aspect of Moscord is lean logistics: “It’s not enough to display the product data online on our business,” says Ingemann. “[Products] have to get out aboard the ship.” Ingemann believes that conventional logistics is conducted in a highly inefficient way, over-utilising air freight, sending products in separate packages, and paying more for delivery than the value of the product itself.

 

As such, Moscord’s delivery strategy revolves around using international logistics companies with global presence, who can deliver to any of the ‘port hubs’ Moscord plans to establish. The largest company with which it has an agreement is Gulf Agency Company (GAC), which claims access to 1,000 ports around the world. Local logistics firms will also be used to ensure a leaner chain.

 

Moscord is, essentially, an expression of the competitive, free-market principles, that the supply business hasn’t always followed. “The product has a price,” Ingemann states, “and the guy who can produce the product most efficiently with the most lean logistic chain should win the order.” By providing part of this ‘lean logistic chain’, Moscord removes unnecessary overheads for suppliers, allowing them to price competitively and win orders. Tech may begin to play a greater role, too; Ingemann foresees dual-pricing between conventional parts and 3D printed versions, which can be manufactured and delivered rapidly, therefore commanding higher prices.

 

E-commerce may not have broken into shipping to the extent that is has in the consumer goods industry, but with a platform dubbed the ‘maritime Amazon’ seeing rapid growth, this may now be set to change.

 

 

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