Page 15: of Maritime Reporter Magazine (October 2000)

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From E-Biz to E-Bust: Is Online Chartering and Sale and Purchase Possible?

The failure rate for new ventures in cyberspace is very high, and there is no reason to believe that mar- itime "dot corns" will fare differently. When e-biz com- panies fail, the reasons often given are lack of invest-

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Circle 259 on Reader Service Card ment ("the money ran out") or failure to find a market ("lots of hits on the site, but few buyers"). But those are not causes of failure, those are effects of failure.

Most failing e-businesses fail for the same basic rea- sons that have sunk non-e-businesses for centuries, such as overestimation of market share, lack of differentiation from competitors and failure to manage vendors and consultants effectively.

But there are two areas, at the heart of maritime business, that have attracted the attention of e-biz entrepreneurs that may well give rise to a new category of failure - failure due to lack of knowl- edge. Those two areas are chartering and sale and purchase, or to give them their full titles "on-line chartering" and "on-line S&P."

It may seem bizarre to claim lack of knowledge about chartering and S&P when those activities are practiced daily around the world. But no one, including the brokers, knows exactly how success- ful chartering and S&P practitioners do what they do, and unless those process- es can be analyzed and translated into algorithmic frameworks for computer processing, there will be no true online chartering or S&P. There may be lists of ship for sale or charter that will be acces- sible over the Internet, but that is cer- tainly the smallest part of the negotiating process that results in sales or fixtures.

Further complicating the situation, a large part of the negotiating process has nothing to do with ships or markets. It has, rather, a great deal to do with the psychology and personalities of the par- ties involved.

So the task of the e-biz developer in these cases is a daunting one. Although the problem is solved every day by peo- ple, using intuitive methods that are both complex and little understood, there is no easy way to transfer that ability into cyberspace.

It may turn out that on-line chartering and S&P will never be accomplished, or perhaps more likely, will only be accom- plished after a lengthy period of expen- sive research and development.

But the announced plans of several e- businesses in on-line chartering and on- line S&P indicate that the attempt is being made. To those entrepreneurs, the case of IBM and computerized chess may be an eye-opener. About 40 years ago a small group was formed at IBM to devise a computer program to play chess at the championship level. The group included both highly skilled program- mers and world-class chess players. At the time it was estimated that the prob- lem would be solved in about five years with the computers then available. The estimates were wildly wrong. The problems encountered were almost intractable, and it took about 35 years before a com- puter could in fact beat the world champion, and the



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