The Baltics are home to some great efficient profit-making ports, boasting state-of-the art facilities and visionary managements. One of several attention-worthy start-ups that some of the local seaports work with streamlining cargo operations and the workflow is Marine Digital. Its CEO Ivan Ladan sat down with The Baltic Times Magazine to provide a better understanding of why the company has been an asset in the marine industry.
If you were to introduce your company to someone whose relation with the sea is limited to nice walks along the seaside, how would you understandably describe your company?
I would say that 60% of all logistics is maritime and 40% of sea freight cargo passes through small- and medium-size terminals and ports. We found out that these terminals happen to suffer from a lack of automation that leads to revenue loss, sometimes their expenses are 10-15% higher than they should be. The prices of big IT companies, being too expensive, are not affordable for them. You may ask why the prices are so high. The reason is the poor IT expertise of this market today. We develop a cloud-based terminal operating system based on modern technologies in the core so we can offer it four times cheaper than our competitors.
As I live in Klaipeda, let me ask you this: where could you be of help for such a well-functioning port as Klaipeda's? How do you propose to make ports more technologically advanced?
I do know that Klaipeda has a modern PMIS system, I spoke to operational managers, and was impressed with this progress. It's always hard to implement any innovation in the operation cycle of a big port like Klaipeda. Still, there might be some more challenges in the future: intercommunication between other ports and data privacy; to solve this zero-knowledge protocol and modern cryptography, efficient data management with machine learning, and OCR data input should be used. We can help with that. It sounds futuristic, but we see the particular efficiency in the ports with this.
What is your background as the Marine Digital CEO's which lets you be a sort of visionary in port logistics?
It starts with my graduation with the University of Transport in Moscow, I got an honours diploma and have always tried to develop progressive solutions, whether I was working in a bank with a logistics industry portfolio or developing a self-service warehouse project as an investment director.
My experience combines the Banking sector, IT, and logistics, so it really helps to find the opportunities on the edge of these technologies.
As a CEO, I'm a team player, and that is what makes the Marine Digital expertise that I represent so strong. The Chief Product Officer is the former CFO of a shipping company, and our Legal consul has about 20 years’ experience in marine legal, the CTO also has strong experience in logistics projects.
Marine Digital is founded in Moscow. How hard is it for you to do business amid geopolitical tensions between Russia and the West?
I'm not into politics at all, I'm looking for the best business opportunities for my project and my team. I believe in common sense and hope the nationality won't be the problem, my team is based in Riga and my company was set up in Latvia.
I'm 100% focused on my project. I decided to relocate because I see more business opportunities for a small IT company in the EU and more options for scaling from the Baltic region, than it was possible in Russia. It's my own experience and opinion based on the past 6 months. I believe that a product and a technology has no nationality if it meets the market demand.
Yet you applied for a Latvian start-up visa and were granted it. Was it easy?
Latvia as a part of the Baltic region is well known for its port logistics business. Most of the locals here have friends in logistics or work in the logistics industry. It was easy to explain the idea of marine digital. The whole process took about two months, and it was an interesting experience. I was expecting that I would spend days filling in the forms and different papers to apply, I thought there would be lots of barriers within the bureaucracy and government services, sad faces in the cabinets and etc. None of these things happened. It was easy. LIAA helped us not only with relocation but with business contacts and networking, which was helpful for our start-up, and it was also a positive experience.
I heard Marine Digital has launched some exciting pilot projects after being awarded the visa. Can you please speak about them?
Life never fails to surprise me and soon after relocating the team we found a partner, the Magnat Group, they operate with bulk and general cargo. We had some negotiations and decided to try our automation ideas on a free trial basis. Within a couple of months, we built the warehouse management solution and found some interesting cases that we are working on. One of them is Computer Vision, and we use it for typical documents that go with the cargo, and we are speeding up the operations, excluding paperwork and manual procedures. Within the Magnat Group terminals, we have also developed the queue management system, weight and some other modules.
Can you please speak about your team? How did you manage to assemble it full of niche-field experts?
All of the niche-field experts are fanatics of their industry, in a good way of course. They enjoy looking into problems and then solving them successfully. Maritime IT is a huge challenge, the industry is conservative, it has established traditions, laws and hidden rules. Not many start-ups dare to go this way. This year at the web summit Marine-Digitale was one of the few who represented Maritime industry there. As a CEO my strong side is team management, each member of the project is a unique expert, I do my best to focus the whole scope of their expertise on solving the industry problems and developing solutions to meet particular client requests that have been painful for decades.
How big is the competition among port logistics-oriented companies?
In my opinion, the market seems to be divided into several parts: large IT companies like cargotec / sap / jade logistics, big ports with their own products like Hamburg, Rotterdam (it's also the IT companies today), and trade finance marketplaces like Cargox and Marcopolo, tecnological start-ups and logistic companies with freight exchanges like.... One may get an impression that there is a huge competition on the market, but if you go into the details you see that there still is a place for new players, especially with the SAAS model for small- and medium players. As I said before the market is really huge. Lack of industry experts and an integrational approach slows down big companies, purely IT start-ups struggle to understand the problems of the industry and sometimes they solve problems that don’t exist in practice. This market with high entrance barriers requires great industry knowledge.
What do you expect for your company in 2020?
We are moving within the normal way of the growing start-up company. We have finished the R&D cycle, found the particular solutions that meet the market demand, and we are going to grow with the acceleration programs/industry partnerships, and afterward, we will go for the next stage growth round with the industry fund. One of the main challenges for us is to build the universal box solution for the whole scope of different types of terminals/ports (bulk, general cargo, lpg, container and etc.) One of the greatest challenges of the year 2020 is to connect port logistics within one ecosystem with banks and trade Finance funds. Now they live on different planets and have no plans to interact. We have a lot of work to do next year.
During the interview, we were informed that a cloud QMS solution truck electronic queue is entering the market with a cost of 49 € per month for one cargo terminal or warehouse. But now everyone is offered free access for two months.