TradeWinds

By Julian Bray

Alexander Goulandris represents the seventh generation of his family in shipping but he has chosen a career away from shipowning.

The son of John D Goulandris — one of the “six Johns” — he started his life in shipping aged 16 with work in the summer holidays for a French shipbroker.

After starting his full-time career as a maritime lawyer in London with Holman Fenwick & Willan, he later moved to New York where he joined Freehill Hogan & Mahar. It was there that his interest in new technology and how it could solve some of the issues facing the industry was sparked.

“One day, a Norwegian shipowner ‘recut’ some bills,” he recalled. “I received one set of originals on behalf of the shipowner who was then going to sign a new set of bills.

“I remember thinking I was highly qualified and rather expensive to be doing a simple clerical job. It made me think there had to be more efficient ways of working.”

Fate intervened in 2002 when he met Martin Glesner when they were both at Wharton Business School. Glesner had just completed eight years with AP Moller-Maersk, where he had seen the same problem operationally. He also had first-hand experience of the ambitious and expensive Bolero shipping e-commerce project, which ultimately failed to gain widespread market acceptance.

From that idea Goulandris and Glesner formed Electronic Shipping Solutions (ESS).

“We took a very different approach from most people,” said Goulandris. “We realised that we needed to be able to represent all the different stakeholders’ interests and ensure it benefitted everyone.”

The philosophy led to the formation of a users’ association, which now has over 100 members who influence product development.

Goulandris admits it has been a long, slow process driving change, although at times the industry has adapted to new working methods without realising it.

“One of the funny things to me about shipowners, who are very conservative souls, is that they were some of the earliest people to adopt electronic documents because charter party ‘re-caps’ have been e-mails for years.”

He declines to reveal how much ESS has invested in development since its formation in 2003, although he admitted: “It’s a pretty steep and expensive learning curve — to even get into the game.”

ESS is now on its second-generation platform. “The first one was thrown away in its entirety. The technology took three years to get going.”

Incorporated in Malta — “neutrality is pretty key” — ESS has its head office in London’s Fitzrovia. With a “young and energetic team” of around 25 staff “who know how to overcome hurdles”, Goulandris appears confident that the company may be close to finally bringing electronic documents to shipping.

“We are already seeing the change,” he claimed. “We see the acceleration is already there.”

“The issue is getting to a market-accepted solution, then it is just a matter of adding people. Getting to a market-accepted solution with critical mass takes a long time.”

As a business, ESS will earn a fee each time an online document is used — that is, a transaction-fee business model. Even if business takes off, the risk for ESS is that the market for e-documents becomes commoditised.

“This will become commoditised and very quickly,” Goulandris admitted, “but there are a lot of documents!

“We’ve focussed on bills of lading but if you can deliver a bill of lading, you can deliver anything; notices of readiness, or invoices. There will be an increasing number of opportunities where ESS can deliver even more value.”

Already, ESS is offering electronic data sheets. “I think in five to 10 years, ESS will have a much wider range of electronic documents, each of which adds more value than just moving documents from A to B electronically.”