Leveraging Technologies of Industry 4.0 for risk management in Sea Freight Forwarding Operations Supervisor: Shahryar Sorooshian Author: Angelina Biiak & Yijuan Lindskog Course: GM0561, V23 Master Degree Project in Logistics and Transport Management Graduate School School of Business, Economics and Law at University of Gothenburg Abstract Maritime logistics dominates the goods transportation market and is continuously growing along with the growth of global trade. However, a variety of risks continuously occur and significantly affect the maritime logistics industry, and thus the sea freight forwarding operations. On the other hand, development of technologies is kept ongoing all the time. Many academics state that technologies of Industry 4.0 are applicable for mitigating/ managing risks. Yet, there is a lack of a systematic overview in science regarding which technologies of Industry 4.0 are applicable for managing the risks that sea freight forwarders encounter in the shipping industry. In terms of the knowledge of Industry 4.0, the gap between practice and science is large. Besides, studies on risk management for sea freight forwarding operations are scarce in science. Hence, this paper applies a qualitative research approach to broadly reviews types of risks recurred and applicable technologies of Industry 4.0 for mitigating/managing the corresponding risks in sea freight forwarding operations. Results show that four key internal risks and over ten critical external risks have been experienced and/or are concerned about by sea freight forwarders. However, all these risks can be mitigated by a certain technology and/or a combination of several technologies of Industry 4.0. Specifically, Big Data Analytics and Cyber Security are the most critical technologies to address both internal and external risks identified in this study. This study contributes to the existing literature by taking the perspective of both sea freight forwarders in regards with risk management and the IT expertise specialising in the technologies of Industry 40. Keywords: Risk, Risk Management/Mitigation, Maritime Logistics/Shipping Industry, Sea Freight Forwarder, Industry 4.0, Technologies/Pillars. 1 Acknowledgements First of all, we want to express gratitude to each other for the collaborative spirit and commitment that was put into this research. During the entire journey of this study, we supported and encouraged each other by openly sharing the ideas and having countless meetings and discussions. We are proud to say that the whole research was made in collaboration including all parts of this Master Thesis. We express our sincere gratitude to our supervisor, Shahryar Sorooshian, for his guidance, continuous kind support, and encouragement throughout the entire development of our Master Thesis. His competence in supply chain management, strong expertise and experience in risk management practices and insightful feedback have greatly contributed to the success of our research. We extend our thanks to Jonathan Lundbäck for his significant contributions to the investigation of risks in sea freight forwarding operations. Furthermore, we are deeply grateful to all the sea freight forwarding industry representatives who generously shared their experiences, particularly those who chose to remain anonymous due to the sensitive nature of the topic. We would also like to gratefully acknowledge the valuable contributions of Emil Dabrowski and Olusegun Adare as representatives of the IT and Digitalization industry. Their strong competence and experience within the IT field have enriched our study and provided valuable practical implications. We are grateful to all individuals who have exceptionally supported us throughout this research endeavour. Their contributions have been significant, and we deeply appreciate their assistance. Angelina Biiak Yijuan Lindskog 2 Table of Contents Abstract ................................................................................................................................ 1 Acknowledgements ................................................................................................................ 2 Chapter 1. Introduction ........................................................................................................ 6 1.1 Background ................................................................................................................... 6 1.2 Problem Discussion ........................................................................................................ 8 1.3 Research Questions ......................................................................................................... 9 1.4 Purpose ......................................................................................................................... 9 1.5 Delimitations ................................................................................................................. 9 Chapter 2. Literature Review ............................................................................................... 10 2.1 Maritime logistics ......................................................................................................... 11 2.2 (Sea) Freight forwarders ................................................................................................ 11 2.3 Risk Management ......................................................................................................... 12 2.4 Internal Risks by 4 P model ........................................................................................... 12 2.4.1 Project Related ......................................................................................................... 13 2.4.2 Practices ................................................................................................................... 13 2.4.3 Participant ................................................................................................................ 15 2.4.4 Procurement ............................................................................................................. 16 2.5 External risks by PESTEL ............................................................................................. 17 2.5.1 Political .................................................................................................................... 18 2.5.2 Economic ................................................................................................................. 20 2.5.3 Social ....................................................................................................................... 21 2.5.4 Technological .......................................................................................................... 23 2.5.5 Environmental ......................................................................................................... 25 2.5.6 Legal ........................................................................................................................ 26 2.6 Maritime 4.0 ................................................................................................................ 28 2.7 Industry Revolution ...................................................................................................... 29 2.7.1 Industry 4.0 .............................................................................................................. 29 Chapter 3. Methodology ....................................................................................................... 37 3.1 Qualitative Research Approach ...................................................................................... 37 3.1.1 Basic Qualitative/Interpretive Research .................................................................. 38 3.2 Research Process .......................................................................................................... 38 3.3 Qualitative Data Collection ............................................................................................ 39 3.3.1 Literature Review .................................................................................................... 39 3 3.3.2 Interview .................................................................................................................. 39 3.3.3 Conduction of Interviews ........................................................................................ 40 3.4 Data Analysis ............................................................................................................... 42 3.4.1 General Analytical (RQ1) ........................................................................................ 42 3.4.2 Casual Map (RQ2) ................................................................................................... 43 3.5 Quality Criteria ............................................................................................................ 44 3.5.1 Credibility ................................................................................................................ 44 3.5.2 Transferability ......................................................................................................... 44 3.5.3 Dependability........................................................................................................... 45 3.5.4 Confirmability ......................................................................................................... 45 Chapter 4. Findings ............................................................................................................. 46 4.1 Internal Risks (4 P) ....................................................................................................... 46 4.1.2 Project related .......................................................................................................... 46 4.1.3 Practice .................................................................................................................... 47 4.1.4 Participant ................................................................................................................ 48 4.1.5 Procurement ............................................................................................................. 49 4.2 External Risks (PESTEL) .............................................................................................. 49 4.2.1 Political .................................................................................................................... 49 4.2.2 Economic ................................................................................................................. 50 4.2.3 Social ....................................................................................................................... 51 4.2.4 Technological .......................................................................................................... 52 4.2.5 Environmental ......................................................................................................... 52 4.2.6 Legal ........................................................................................................................ 53 4.3 Applicable Pillars of Industry 4.0 for Risk Management of Sea Freight Forwarders .................. 53 4.3.1 Cloud Computing (CC) ........................................................................................... 55 4.3.2 Big Data Analytics (BDA) ...................................................................................... 56 4.3.3 Internet of Things (IoT) ........................................................................................... 57 4.3.4 Robots and Artificial Intelligence (AI) .................................................................... 58 4.3.5 Cyber Security ......................................................................................................... 59 4.3.6 Additive Manufacturing (AM) ................................................................................ 60 4.3.7 Intelligent Simulation (IS) ....................................................................................... 60 4.3.8 Augmented Reality (AR) ......................................................................................... 61 4.3.9 System Integration (SI) ............................................................................................ 62 4 Chapter 5. Discussions ......................................................................................................... 63 5.1 Internal Risks ............................................................................................................... 63 5.2 External Risks .............................................................................................................. 67 5.3 Leveraging Industry 4.0 Technologies for Risk Management for Sea Freight Forwarders ...... 73 5.3.1 Applicable Technologies for Managing Internal Risks ........................................... 73 5.3.2 Applicable Technologies for Managing External Risks .......................................... 76 Chapter 6. Conclusion .......................................................................................................... 81 Chapter 7. Limitations and future research .......................................................................... 83 APPENDIX ......................................................................................................................... 85 Appendix A: Tables of Risks in Sea Freight Forwarding - Literature Review Findings ............... 85 Appendix B: Tables of Risks in Sea Freight Forwarding - Empirical Findings from Interviews ... 87 Reference List ...................................................................................................................... 91 5 Chapter 1. Introduction This chapter provides the overview of contextual background, followed by discussion of the issue that led to the formulation of the study’s purpose. The chapter delves into presentation of research questions and finalisation with the study’s delimitations. To simply define, the term risk involves “concepts of uncertainty and potential negative consequences”. Risk can comprise real risk or subjective perception of risk. Managers' perceptions and attitudes to risk influence their crisis and disaster planning and strategies (W Ritchie and Jiang 2019). In this study, we do not discuss the theoretical definitions of risk in detail. In the context of this study, risks include uncertainties and potential negative factors which would trigger risk occurrence. When a risk has taken place, it turns into a crisis which in its turn becomes a disaster. In this study, crises and disasters are excluded, i.e., the development of the risk is not the focus of the study. However, many risks recur over time in the world. The focus of this study is on those recurring risks. 1.1 Background International logistics has grown significantly along with international trade (Pierre David, 2018). Therein, maritime logistics is the dominant transport mode with its share of 90% of world trade volume (Lam et al., 2019), which has boosted the world economy considerably in the recent decades, in association with technology development among others (Pierre David, 2018). However, maritime transport and logistics have been affected significantly by factors such as pandemic, geopolitical conflict (e.g. the war in Ukraine), and climate change in the very recent years. It has led to port congestion and/or closing, reconfigured routes, extended delays and extremely high shipping costs. Thus, there is a need for expanding capacity, renewing and expanding fleets and equipment for actors including ports, shipping firms and transport operators. Besides, it’s necessary for these actors to ensure sufficient and capable labours, to improve connectivity and performance, to reduce emissions and to preserve competition so that maritime transport can manage the next storm (UNCTAD, 2022). Paraskevadakis and Ifeoluwa (2022) mention that maritime industry is potentially affected by a variety of factors such as economic strategy shift (e.g. offshoring/nearshoring), political factors, climate change, technology innovation and digitalization, new regulations, etc. For example, goods transportation in the UK has been significantly impacted by restrictions related to Covid-19 pandemic and new regulations associated with Brexit. Roscoe, Skipworth, Aktas 6 and Habib (2020) argue that supply chain and logistics has been dramatically disrupted by geopolitical events such as 2019’s trade tension between China and the US, and the 2019’s political protest in Hong Kong. As disruptive geopolitical events are increasing, the business environment has become more and more uncertain for companies (ibid). Despite the macro factors mentioned above, the global freight forwarding market is continuously growing in association with the growth of international trade, expansion of the global e-commerce, and rise in the free trading between nations. Technological advancements, cost reduction and shorter lead time through adoption of multimodal systems are expected to facilitate the growth in the freight forwarding market during 2022 and 2031. However, the growth can be affected by some other factors, for instance, strict emission regulations, standstill of the global economy and a decline in international trade due to COVID-19 pandemic. On the other hand, this pandemic has given rise to the expansion of e-commerce, which has forced freight forwarders to employ digital technologies to manage the increasing demands of customers. Artificial intelligence, Internet of Things (IoT), and other technologies have been adopted to ensure precision and reliability of goods delivery to customers (Gunjan and Sonia, 2022). According to Raza, Woxenius, Vural and Lind (2022), there is a need for digital transformation of maritime logistics. Razmjooei, Alimohammadlou, Ranaei Kordshouli and Askarifar (2023) mention that digital transformation of organisations (i.e. digitalization) is known as Industry 4.0. These two terms digitalization and Industry 4.0 are correlative since digitalization is the major contributor to the implementation of Industry 4.0. Rüßmann et al. (2015, cited by de la Peña Zarzuelo, Freire Soeane and López Bermúdez, 2020) outline nine pillars of the advanced technologies which are the cornerstones of Industry 4.0: autonomous robots and systems; Internet of Things (IoT); Cybersecurity; Horizontal and Vertical System Integration; Cloud Computing; 3D printing and Additive Manufacturing; Big Data and Business Analytics; Augmented Reality; and Simulation and Modelling (ibid). Abdirad and Krishnan (2020) state that Industry 4.0 has a focus on automation, digitalization, and cyber-physical systems networked in companies. Adoption of this concept can facilitate improvements in manufacturing, supply chain (SC), and logistics (ibid). Ivanov et al. (2019) point out that application of digital technologies influences management of disruption risks including risks such as fire accidents, natural disasters, economic downturn, legal disputes and 7 strikes; demand and supply related risks, delays, as well as communication breakdown and information infrastructure breakdown (ibid). 1.2 Problem Discussion The freight forwarding companies have experienced the worst disruptions in recent years. With the assumption that no unexpected disruptions would occur, the shipping market will recover by March 2023. But new challenges will take place when the old ones are fading (Maersk, 2022). The global shipping industry has been suffering from volatile freight rates and bunker fuel prices. Significant earning risks arise consequently (Bai, Cheng and Iris, 2022). Roscoe et al. (2020) express that geopolitical disruptions can hinder the logistics systems across countries and lead to tariff and non-tariff barriers. According to Li et al. (2022), logistics disruptions caused by big disasters lead to increase of operation costs. Wu and Chaipiyaphan (2019) highlight that accidents can threaten the safety of logistics providers, damage goods and hinder the operations, cause death and/or injuries of labours, as well as lead to economic damages (ibid). Urciuoli and Hintsa (2020) mention that “the complexity of operational risks may undermine the scheduling reliability of port terminals, liner services, and thereby, supply chain actors”. Raza et al. (2023) describe that the digital revolution has profoundly transformed the competitive dynamics of different industries including logistics. The maritime logistics industry plays a crucial role in global and regional trade. But it is not at the same pace as other industries such as media, banking, retail etc when it comes to digitalization (ibid). As a variety of risks occur constantly and impact companies often heavily, Roscoe et al. (2020) suggest that it’s significantly crucial for companies to formulate and implement strategies to mitigate risks “related to natural disasters, terrorist attacks, supplier insolvencies and financial crises” (ibid). Many companies have strategies and guidelines for addressing risks. Given that companies are constantly challenged by various risks under the era of Industry 4.0, it’s necessary to make sense of which technologies are useful for managing risks. Some researchers have found certain pillars of Industry 4.0 are feasible for addressing certain risks. For instance, Li et al. (2022) reveal that Big Data Analysis is a tool for coping with logistics disruptions. Urciuoli and Hintsa (2020) describe that operational risks can be controlled and offset continuously in various manners, i.e. the risks can be quickly prevented, detected and recovered 8 from critical disruptions, through the enhanced visibility owing to the use of digital ecosystems and big data analytics (ibid). However, there is a lack of a systematic and overall view in science when it comes to which pillars of Industry 4.0 are feasible for the specific risks that freight forwarders encounter in the maritime logistics industry. In addition, studies on risk management for sea freight forwarding business are scarce. Abdirad and Krishnan (2020) point out that there is a large gap in the knowledge of Industry 4.0 between industries and academic sector, despite that the interest in implementing Industry 4.0 in manufacturing and logistics systems have been increasing in recent years (ibid). Hence, we desire to study risk management in freight forwarding operations within maritime logistics in association with the technology development in the era of Industry 4.0 in order to contribute to narrowing the gap between science and practice in terms of the knowledge of Industry 4.0. 1.3 Research Questions Based on the problem discussion and the research gap identified, the research questions for this study are formulated as below: RQ1: What types of risks have sea freight forwarders experienced and/or are concerned about in recent four years? RQ2: Can the technologies of Industry 4.0 be applicable for managing/ mitigating risks for freight forwarding companies in the maritime logistics industry? 1.4 Purpose The purpose of this study is to investigate the types of risk that sea freight forwarders have experienced and/or are concerned about in the recent four years, as well as the applicable technologies of Industry 4.0 for managing/mitigating risks for freight forwarders in the maritime logistics industry, so as to gain an in-depth understanding of risk management in freight forwarding operations in maritime logistics in association with technologies of Industry 4.0. 1.5 Delimitations The unit of analysis in this study is sea freight forwarders with a presence in Sweden in the maritime logistics industry. The choice of the location is based on the authors’ familiarity and 9 knowledge of the country. This study considers only the recent period from 2019 to 2023. This time frame was chosen to explore the most updated and relevant risks that the industry needs to focus on. However, by focusing solely on this period, the study may miss important historical content and patterns that could provide a deeper understanding of the issue. In addition, this study excludes the traditional process of risk management, i.e. identify, analyse/assess, action, and monitor risks. While the use of the 4P and PESTEL frameworks enabled us to structure the risks and generally ease the work. These frameworks can be subjective and may not gather all unique and relevant risks that sea freight forwarders face. Therefore, during the interview sessions and brainstorming, participants were encouraged to freely discuss any risks that they perceive the industry faces, without consideration of predefined categories. Risks were later categorised at the end of the session. This approach aimed to ensure that the full range of risks was captured. Furthermore, it is important to mention that although the risks are split on internal and external categories, they might be connected in such a way that external risk(s) might influence internal risk(s). Therefore, when analysing internal risks, external factors might be mentioned. This highlights the complexity of the risk environment that the sea freight forwarding industry is experiencing. Furthermore, in our study we mostly focused on the 9 pillars of Industry 4.0 since they are more relevant to our study. We decided to not include the technologies of Industry 5.0 which involves human-machine collaboration. This approach was chosen with consideration that the sea freight forwarding industry does not embrace these technologies Chapter 2. Literature Review This chapter presents the reviews of the existing literature on risk management in maritime logistics and the current industry revolution, and outlines the literature research data to be applied in this study. Reviews on maritime logistics, sea freight forwarders, and risk management are illustrated, followed by a review of risks categorised by the framework of 4P - Project Related, Practices, Participant, Procurement respectively PESTEL - Political, Economic, Social, Technological, Environmental, and Legal. Additionally, literature on Maritime 4.0, Industry Revolution, Industry 4.0 and its 9 pillars are also reviewed. 10 2.1 Maritime logistics Marine trade has become the main driver for economic development over the last few centuries (Lam et al., 2019), especially the very recent two centuries in association with containerisation which has facilitated the growth of international trade enormously (Mangan, Lalwani & Calatayud, 2021). With its low cost and efficient transportation, maritime transport has become the dominant transport mode, which conveys approximately 90 percent of world trade volumes. The key components of maritime logistics include port and shipping, which contribute to managing the flows of materials, products, and information effectively and efficiently in the supply chain networks. However, the two key components contain uncertainty in the trade and logistics, associated with the concentration of goods being transported (Lam et al., 2019). 2.2 (Sea) Freight forwarders Freight forwarders are important actors in the transport process which is associated with the freight carriage (Skiba and Karas, 2022). According to the International Federation of Freight Forwarders Associations (FIATA) (2004), which represents the freight forwarders on the international level, freight forwarding are any services associated with the “carriage, consolidation, storage, handling, packing or distribution of goods”. The service might include assistance within the whole supply chain regarding goods declaration, customs, taxation, and insurance. They act as the middlemen who operate on behalf of their clients and sell their service guaranteeing safe and efficient transportation of the goods that are commonly associated with importation and exportation (Skiba and Karas, 2022). Freight forwarders are the trade facilitators who offer their clients to enjoy the benefits of advanced information technologies that revolutionise contemporary traders' operations (FIATA, 2004). Today’s business trend is to go for more digital freight forwarding, and in fact, many large traditional freight forwarding companies are starting to operate as third-party logistics (3PL) and/or fourth-party logistics (4PL) integrators (Thuermer, 2021). Uniformity in the quality of the services is critical in this business for marketing purposes. Inconsistency in the quality of the operations might cause dissatisfaction among customers leading to difficulty in customer retention (Mitri and Ozsomer, 2015). Freight forwarding services involve legal, financial, administrative, organisational elements. To maximise the benefits to the customers, freight forwarders must have a genuine knowledge of these elements to be able properly organise their activities and effectively resolve problems that commonly 11 arise in the early phases of shipment planning. To do that, it is critical for them to have an effective partnership with all members of the supply chain. Furthermore, they have to prevent supply chain disturbances by anticipating and managing the risks in their operations. One might say that the most complex transportation is the one which involves the sea leg and the risk management in such operations is critical (Skiba, 2020, cited by Skiba and Karas, 2022). The expansion of trade and logistics activities leads to a fiercely competitive market. On the other hand, service providers are under the pressure to constantly improve the standards and quality of logistics services while lowering prices. To relieve cost pressure, freight forwarders have tried to break the transport process into multiple steps and to optimise each of these steps separately, which creates problems for coordination and integrated cooperation between the parties involved. Thus, a central contact with a holistic overview of the entire transport chain is often missing. To address such “silo” operations in the logistics industry, new digital business models have increasingly emerged. It’s trending towards the providing of information technology (IT) platforms and other value-adding services such as planning, analytics, and monitoring. As a result, fourth-party logistics (4PL) business models have emerged. These 4PL providers are almost asset-free, i.e. they don’t own any ship/vessel or truck (Gruchmann, Pratt, Eiten and Melkonyan, 2020). 2.3 Risk Management Risk management is about to identify, investigate and manage those risks which probably would threaten an enterprise’s assets or profitability. It must be taken into consideration when designing the supply chain so as to avoid negative impact when risks have occurred in the supply chains (SCs). In general, supply chain risk management consists of three parts: sourcing risk management, operations risk management in production, and logistics risk management. Logistics risk management is about to manage risks which can arise from logistics activities such as transportation, storage and inventory (Govindan and Chaudhuri, 2016). 2.4 Internal Risks by 4 P model Table 1 attached in appendix illustrates the internal risks identified from literature review. Based on the literature, Project related risks such as Financial constraints/risks and High dependence on intensive use of IT and higher skilled human capital are risks for logistics service providers in maritime logistics. Regarding Practices, 5 major risks are identified: 12 Submission of inappropriate documentation to customs; Bill of lading related risks; Legal liability due to negligence and poor practices that caused the loss, damage, and delays; Packaging and warehousing; and Logistics system’s vulnerability. In the category of Participant, the major identified risks include Cooperation risk/Partner performance risk; Abandonment of the cargo; Changing customer expectations of quality, service, and price; Regulatory compliance; and High dependence on first-party logistics (1PL) to third-party logistics (3PL) business partners due to no own assets. Regarding Procurement, the risks such as Product price fluctuation due to capacity shortage (High freight rates for transportation) and Payment related risk are identified. A detailed description of each risk is presented after the table 1 illustrated. 2.4.1 Project Related Financial risks refer to instability in finance and include price and cost, exchange rate and the financial strength of SC partners. A high level of financial uncertainty would result in less investments by stakeholders (Panjehfouladgaran and Lim, 2020). Financial risks can be caused by the dynamic external economic environment and internal factors. The financial risks caused by external factors such as exchange rates, taxes and fuel prices will impact international logistics and operations. Besides, risks due to taxes and fuel price will affect domestic operations. The financial risks caused by internal factors such as debts and capital shortage will result in liquidity problems for 3PLs (Govindan and Chaudhuri, 2016). Another risk can be insufficient digital capabilities and skills which are needed for delivering values for customers. Digitalization enables not only collaborative value creation across organisations, but also collaborative value delivery through data exchange. This leads to higher interdependencies between logistics service providers and their business partners (Gruchmann et al., 2020). 2.4.2 Practices Freight forwarders might face risks including the submission of inappropriate documentation to customs, damage or loss of the cargo due to poor handling while in the custody of the freight forwarder, and delays (Chou, 2016; Manadiiar, 2020). These risks can negatively affect freight forwarders since other parties, such as shipping lines, shippers, consignees, and government bodies will look after them to solve problems and test their liability (Manadiaar, 2020). 13 Therefore, freight forwarding companies try to transfer their responsibilities. The liability of the freight forwarder is a complex issue since their role in the process of the cargo shipment can vary. The freight forwarders issue the bill of lading, which might cause a number of risks since it is one of the most important documents in the sea trade which has extremely important functions. Bill of lading is a receipt that specifies the amount of the goods, weight, quantity, and condition of the goods received. It is also a document of title that gives rights on the goods transferred through endorsement and the evidence of the contract of the carriage (Lin Chang, 2014, cited by Chau, 2016). Freight forwarders should make sure that it realises the cargo to a correct party depending on the bill of lading issued: negotiable or nonnegotiable. In case if the bill of lading is negotiable the proper endorsement is required for cargo release. Furthermore, there are some cases with the fabrication of the bill of lading and endorsement where the frauder claims that he/she has possession of the goods (Manadiaar, 2020). However, by issuing a bill of lading, a freight forwarder does not automatically become a carrier. The contract between the freight forwarder and the shipper can specify that the freight forwarder acts only as an agent, which is critical from a legal perspective since the agent is not "liable for breach of the terms of the shipment contract between the shipper and carrier." However, if the freight forwarder acts as a principal, the chance of suiting the freight forwarder increases (Leung, 2007). For example, if the freight forwarder operates as a principal, he is completely liable to the shipping company for the goods that are abandoned. If the freight forwarder is acting as an agent, the shipping line should seek financial compensation from the sender or recipient under the bill of lading and signed agreement of carriage (Roemer, 2021). Logistics processes have become more and more vulnerable to various unexpected occurrences due to dynamic market changes regionally and globally. Logistic risk is defined as a potential possibility of an unexpected event occurrence that will impact the logistic system to achieve delivery precision (right time, right place, accurate quantity, and good quality) at a desired or declared service level with a cost-effective price. In this context, a logistics system’s vulnerability refers to a decrease in the level of logistics service performance in association with the logistics system’s response to an undesired event occurrence (Tubis and Wojciechowska 2021). Panjehfouladgaran and Lim (2020) reveal that port disruptions lead to vulnerability for shipping connectivity within a region. Manners-Bell (2017) highlights that more complex supply chain networks expose its vulnerability to external risks. Though, risks 14 can be spread over to a number of markets by the decentralisation in such networks (i.e. multiple sourcings). Thus, the vulnerability in such a large and complex supply chain is less than in a small supply chain with a single manufacturing site (ibid). 2.4.3 Participant Cargo abandonment refers to the failure of the consignee to collect the cargo due to various reasons, including financial problems of the consignee, loss of the market, problems in the regulatory arm pass, illicit trades, etcetera. The problem can escalate since several actors, such as the agent/ principal, shipping line, the terminal, the storage facility, and regulatory bodies (e.g., safety authorities, customs), might be involved in the issue. This problem can be exacerbated by the costs of ticking up for demurrage, detention, storage, disposal, and attorneys and courts that might be involved in the process of finding out who owns and responsible for the cargo (Storrs-Fox, 2021). Furthermore, liner shipping might be used for the movement of weapons, which is possible due to the flexibility of the design of the maritime trading system and the ineffectiveness of the inspections (Chalk, 2008). The deadly explosion in Beirut in August - 2020 that was aggravated by numerous dangerous abandoned cargo is the warning message for all actors involved in ocean transportation business (Storrs-Fox, 2021). There are cases where the freight forwarders are liable to the carrier, with no insurance possible to cover this risk (Pająk, 2019). According to the Convention of the Contract for the International Carriage of Goods by Road (CMR), the sender is responsible for the damages to the carrier resulting from "the absence, inadequacy, or irregularity of such documents and information" (CMR, 1956, cited by Pająk, 2019). CMR might even be applicable to a multimodal transportation contract where the shipment is performed by road and partly by other modes of transport including a sea leg. For example, in 2014, in the dispute about illegal smuggling of undeclared perfumes from Turkey to Denmark, a Danish freight forwarder who had a contractual relationship with the carrier became liable to the carrier for the losses due to the long-term detention of the truck driver at a Bulgarian border, even if he was not aware of hidden perfumes in the truck. Meanwhile, even though the Turkish forwarder was listed as a sender on the consignment note, the Danish forwarder could not suit him because the time of the matter was barred. However, it indicates that if the freight forwarder is listed as the sender, he might end up liable under CMR (Pająk, 2019; Windahl, 2014). There are other internal risks that appear due to the supply chain participant failing. Link 15 highlighted the cooperation risk (2001, cited by Chau, 2016) and suggested that it comes from the differences in the values and cultures of the companies and can be related to the miscommunication risks that come from a lack of transparency, poor information systems, and so on. Das and Teng definition of cooperation risk (2001, cited by Chau, 2016) sums up the number of elements including dishonouring the contracts terms and conditions, dishonest attitude, concealing the information by contracting party, all of which undermine the trust between the parties and cause disruption in the supply chain. Partners can perform poorly not only because they are selfish and dishonest, but also because they might lack the capacity and the qualifications that are needed to demonstrate a great performance (ibid). Malkus (2018) highlights the trust issues between the partners and the negative effects of it on the entire supply chain operation. Chau (2016) says that the ocean freight forwarding company might be challenged by partnering with an incompetent shipping line that provides poor transportation services due to a lack of competence. The logistics service providers have a huge responsibility that comes not only from the relationship with the carriers but also from the large burden of risks transferred from customers to them. As a major factor in the logistics and supply chain, customer-side risks such as delays caused by customers’ mistakes, high customer expectation, and forecast error of freight volume can cause disputes and impact the operations for logistics service providers (Wang et al., 2020). Raza et al. (2023) emphasise that changing customer requirements and expectations creates uncertainty for logistics service providers. On the other hand, it’s one of the key drivers of digital transformation in maritime logistics. Casaca and Marlow (2009) share the same view as other authors. Changing customer expectations of quality, service and price contains risks for shipping companies to meet customers’ needs, wants, and values, which in turn will impact the companies’ profit maximisation and growth eventually. Since 4PLs almost do not own assets, they are highly dependent on 1PL, 2PL and 3PL business partners for creating value for their customers. In addition, 4PLs highly depend on intensive employment of IT and higher skilled human resources than 3PL logistics service providers (Gruchmann et al., 2020) 2.4.4 Procurement Carrier freight rates are a significant contributor to freight forwarders' total earnings. The biggest percent of the revenues is used for buying carrying capacity from shipping lines. Gross 16 profit margins fall as the freight rate rises and increase when freight rate falls. Over a ten year span, gross total margins increased by 4 present while the freight rate fell. However, this tendency has altered and the profit margins for many forwarding companies decreased while the ocean freight rate is high. Meantime, gross profit per unit has increased due to the rise in the demand which in combination with the flat running expenses improved earnings before interest and taxes (EBIT) margins. Director of CEVA Logistics Shawn Stewart in North America highlights a problem of the situation when the “providers are locked in on the contracted rates without the mechanism to distribute the costs” (Thuermer, 2021). Daher, Hausmann, and Wölfel, (2022) predicted that in the future, the freight forwarding companies’ earnings might fall following the carrier downturn in freight rates. During economic downturns, the supply chain is extremely vulnerable since its members are at high default risk, and therefore the payments play a critical role. The firms make a great deal of organising goods and information flows, but the problem of financing and risks of payments is often ignored (Liebl, Hartmann and Feisel, 2016). The problem for a freight forwarder as an intermediary is that it deals with the interest of several parties. For example, shippers prefer to have a deal where they can pay after approximately 60 days after the shipment. Meantime, storage facilities and carriers want to be paid immediately. These expenses in combination with the slow revenue flows might cause the problem of liquidity. Therefore, some freight forwarding companies might choose to use financial tools such as factoring, whose use has increased dramatically over the past years since it is perceived as a low-risk and low-cost financial tool. It helps to free up the cash flow to enable quick access to cash that can be used for payments to employees, partners, or other parties (Kouvelis and Xu, 2021). Today, reverse factoring is also an option for firms to enhance their financial flows. In contrast to standard factoring, reverse factoring is initiated by the buyer, who also works with a third party (e.g. bank) to make sure that the deal is financed within a short time, making the buyer to take the biggest risks (Liebl, Hartmann and Feisel, 2016). 2.5 External risks by PESTEL Table 2 attached in the appendix demonstrates the external risks identified from literature. From the political dimension, factors such as conflict and political unrest, import and export restrictions (inland freight policy), pirate trade and sea piracy and organised crime, as well as terrorism attempts are considered as risks for logistics service providers in the maritime 17 logistics industry. As for the economic dimension, the identified major risks include demand fluctuation, exchange rate fluctuation, fuel price/energy cost, stringent competition within the industry, and complex operation process in global ocean transportation. Regarding the social dimension, factors such as reputation (sustainability and related corporate reputation), international relationships/community relations/culture/dependency and opportunism, and strikes are considered as risks for actors in the industry. Moving to the technological dimension, data confidentiality and security, cyber-attacks, and attacks on modern supply chain & logistics systems/networks indicate obvious risks for logistics service providers. With regards to the environmental dimension, risks identified include natural disasters, weather conditions, epidemics, accidents at ports/ships, inadequacy of infrastructure, road congestion, labour shortage, as well as queues in port terminals. Lastly, policy interventions and environmental regulations are identified as risks from the legal dimension. Regarding all these risks, a detailed description is illustrated after table 2. 2.5.1 Political Political instability refers to major changes that political regimes make in certain contexts, which is considered as a political risk and may impact the logistics and SCs (Panjehfouladgaran and Lim, 2020). The political protests in Hong Kong in 2019 resulted in disrupted transportation networks associated with city centre shut down. The increasingly disruptive geopolitical events create uncertainties for businesses and SCs. The uncertainty may occur at any point along the global supply chain, which may lead to various consequences. Furthermore, the impact of trade tensions between China and the US in 2019 on SCs is significant (Roscoe, Skipworth, Aktas & Habib, 2020). Another example of a geopolitical event is Brexit which affects companies in different ways (Roscoe et al., 2020). Paraskevadakis and Ifeoluwa (2022) emphasise that Brexit, creating a geographical barrier between the UK and other EU countries, have significantly affected maritime logistics, especially the RoRo ferry shipping which is crucial for goods transportation between the UK and the other nations of EU. It has resulted in a series of negative impacts, such as trade tariffs, border controls, customs clearance, freight, and passenger traffic checks, which has damaged the efficiency of logistics and supply chain performance. An exceptional traffic shift was added between 2020 and 2021 due to changes in EU-UK trading restrictions. In addition, the geopolitical risk has significantly affected the goods transportation of the 18 Republic of Ireland. Historically, the UK's road network has been used by Irish traders to transport products between Ireland and the continental Europe. As an outcome of Brexit, Ireland must find alternative solutions for freight movement. However, Brexit has brought opportunity for Ireland. It has led to a modal shift to a fully integrated multimodal maritime system from the traditional road-based freight for Ireland (ibid). Trade restrictions are considered as one of the political risks. Government imposes restrictions on logistics service providers (LSPs), which will prevent LSPs from entering a market. It’s called discriminatory regulations, for example, foreign logistics firms are not allowed to invest in the transportation industry in Indonesia. There are also non-discriminatory regulations, for instance, limiting LSPs’ operation hours in road transport in big cities. Restrictions are various and many. The greatest obstacle to trade in logistics services is related to customs regulations. A more restricted trade environment gives a negative impact on LSPs’ operation performance (Hollweg and Wong, 2009). Paraskevadakis and Ifeoluwa (2022) also argue that trading restrictions between the UK and EU has resulted in many various issues for logistics service providers. Another political risk is associated with maritime security. The large number of attempted piracy attacks is registered every year and has the largest concentration in Southeast Asia. Factors such as the increase in commercial maritime traffic, the rising number of ports around the world, ships passing narrow and congested maritime points that lead ships to reduce the speed to ensure safe passage, and economic instability lead to piracy crimes. These challenges were particularly highlighted after the terrorist attacks in September 2001 in New York, which resulted in the additional invention of security measures (e.g. ISPS Code) (Chalk, 2008). Park and Park, 2018 emphasise that terrorism is a concern for the entire supply chain, and events on September 11 made it a matter of passenger safety, national security, and cargo security. Piracy is a direct threat to people, their lives, and their welfare. It causes economic and financial damage in terms of fraud, stolen goods, and delayed transportation which is undermining the country’s trading ability. It encourages corruption among the officials and might even lead to environmental disasters, especially if the event happens in the high traffic of oil tankers. The high rate of pirate attacks demonstrated the vulnerability of the maritime industry, which encouraged terrorism. Maritime attacks cause economic problems, especially when the SCs are so vulnerable due to the use of the just-in-time concept (Chalk, 2008). 19 2.5.2 Economic Maersk (2022) is concerned about customer retention due to the global economic and trade downturn, as well as the rise of protectionism in countries. During the war in Ukraine, export restrictions increased and as of April 2022, 16 countries had implemented export bans on foods that affect seaborne trade (Glauber, Laborde and Mamun, 2022, cited by Maersk, 2022). The World Trade Organization (WTO) (2022) stated that global trade growth will fall to 1% in 2023 in contrast to an earlier prognosis of 3.4% that in the belief of Maersk (2022) will affect the forwarders' client base negatively. Meanwhile, the company also forecasts that the worldwide container demand will fall up to 4%, pressing the freight rate down, and making this market flat negative (Maersk, 2022). C.H. Robinson (2023) reports that as of February 2023, the ocean freight demand for most trades continues to fall and stay flat, following the freight rate downturn. Even more uncertainty in the maritime industry can arise from volatile fuel prices and severe competition from alternative transport modes (Raza et al., 2023). Cost of fuel is considered as a risk for transportation cost, apart from shipping rates (Manners-Bell, 2017). Khan, Su, Tao and Umar (2021) argue that the fuel cost of oil is the largest part among energy sources in the shipping industry. It accounts for 50-60% in operating costs. Unstable oil price influences freight rates and thus the shipping industry. The skyhigh shipping costs during the COVID-19 has resulted in a deceleration in the maritime trade and thus decreased shipping demand (ibid). UNCTAD (2022a) highlights that the war in Ukraine has brought maritime trade logistics higher energy costs, resulting in the higher marine bunker prices and increasing shipping costs for all sectors (ibid). On the other hand, in accordance with an agenda of sustainable development, the government comes up with different solutions for sustainability, such as high taxes. The fuel tax in Europe can vary from 50% up to 66.5% depending on the country and fuel type, which burden might be devastating, especially in circumstances when the fuel price is already high. The constant increase in taxes and fuel prices reduces the marginal profit of logistics companies (Anes, Abreu, Dias and Calado, 2022). Chiriatti, Manners-Bell and Cullen (2022) illustrate that the competition in the global freight forwarding market is fierce. The successful acquisitions made by freight forwarder Kuehne + Nagel and DSV Panalpina in recent years contribute to their strong positions in the global freight forwarding market. They are ranked in the first and second place respectively in 2021. 20 Global transport demands recover significantly along with rebounding global economy as the epidemic starts to fade, particularly in the manufacturing and retail industries. It leads to an intensive competition for ocean and air freight capacity (ibid). In the shipping industry, intermodal competition is well-known. But the railway also competes with the shipping industry to a certain extent. Often, the main intermodal of competition is considered as competition between rail and sea freight. However, sea freight would be less competitive than the other transport modes due to its dependence on long-term contracts in the shipping market (Engström 2004). Inappropriately low revenue might be caused also by the currency fluctuation effect, and therefore freight forwarders should not disregard this issue (Chou, 2016). Another economic risk is associated with the complexity of the operation process in global ocean transportation. Maritime industry involves many various players in the operations including shipping companies, rail operators, road hauliers, seaport and inland terminal operators, agents, financial institutions, customs authorities, freight forwarders, etcetera. In some cases, the number of different players can reach up to 40, undertaking specific logistics activities within the network both regionally and globally. It’s a complex operation process in a port-to-port or door-to-door voyage. Manual processes and fragmented coordination among these actors make collaboration difficult and cause longer transit times, delays, poor reliability, and higher cost of maritime logistics services (Raza et al., 2023). There is a risk in the transport chain that the information flow is discontinued in terms of document management due to a large number of different actors involved in the complex process with their various documents and contracts (Gruchmann et al., 2020). 2.5.3 Social The tendency of choosing more sustainable products among customers is rising since they are deeply concerned about environmental problems. Moreover, for over 66% of the customers, sustainability stays at the top of the five drivers that encourage them to make a purchase (Jain, 2022, cited by Maersk, 2022). Following increasing customer pressure on businesses, sustainability has already become a core component of corporate strategic frameworks, and this trend will continue in 2023. Freight transportation is responsible for 8% of CO2 emissions, and therefore freight forwarders can play a critical role in sustainable development since they have a procurement power that allows them to choose sustainable transport options (Maersk, 2022). Multaharju, Lintukangas, Hallikas, and Kähkönen (2017) highlight that when 21 purchasing logistics services, the companies must also consider the social dimension, which involves diversity, equality, labour practices, working conditions, health and safety issues, and decent wages for the employees. If the company decides to operate following sustainability principles and even goes beyond legislative requirements, it has to control its suppliers accordingly. Otherwise, they can risk that stakeholders might react critically if their expectations are not met (ibid). Roehrich, Grosvold and Hoejmose (2014) highlight that, in most cases, reputational risk is the biggest motivation for companies to implement sustainable supply chain management practices, which appear to be complex tasks that are often associated with high costs. Furthermore, the authors conclude that the most common challenges for businesses are a lack of information, constrained resources, competing priorities, and contextual settings. Firms should have a long-term access to the resources since a "quick fix" does not work in the implementation of a sustainable supply chain. The priorities should be redistributed evenly among the sustainability objectives, which might be difficult for companies since not all dimensions of sustainable development can be easily counted. The companies might be encouraged to align with the sustainability concept due to contextual factors, where, for example, the highly regulated environment does not allow them to remain irresponsible. Overall, the companies are aware that if they fail despite the named reasons, the price of reputational damage is very high (ibid). However, perceptions of the people on different matters, including sustainability, might vary depending on different factors such as cultural background. Ghemawat (2001) developed a concept according to which different markets have "distance" between each other. The "distance" is not measured by a single physical or linear distance and instead describes any element that differs from the foreign market to the company market. Ghemawat (2001) categorises the "distances" by cultural, administrative, geographical, and economic categories and describes the opportunities and risks of global business expansion. The cultural differences might include the way people communicate with each other, their beliefs, religion, social norms, language, etcetera. The trade between countries that share a language is three times higher than with those who use different languages. Social norms are unspoken rules that are often invisible, even to people who are being guided by them. Tastes and preferences of the customers might be dictated by social norms, and therefore the companies have to be aware of them. The cultural differences between headquarters and other units of the network that the 22 companies develop while expanding their business operations globally might also be a risk that can cause a variety of issues and have a significant effect on the firm’s performance (Antia, Lin and Pantzalis, 2007). Essentially, all these elements have to be considered when weighing the benefits and risks of business expansion. It is always easier to deal with a country that has a similar profile since the business model might be simply replicated from the original one (Ghemawat, 2001). Another risk that can have huge consequences for the supply chain is the labour strikes (Rogerson, Svanberg and Santén, 2022). Ports are the key infrastructure in the global supply chain, and it is not surprising that non-vessel companies rank port strikes as one of the worst possible disruptions which tend to rise especially in Asia (Loh et al., 2017, cited by Rogerson, et al., 2022). In 2015-2016, the conflict in the Port of Gothenburg caused large supply chain disruptions, implications for importers and exporters, haulers, rail operators, etcetera, and generally weakened relationships between the parties. During the conflict, the port's capacity reduced, and the actors involved in the transportation of the goods started to compete for the resources. For example, freight forwarders fought for the trucks. The largest freight forwarder would get priority from shipping companies even if they claimed that they tried to redistribute capacity equally (Rogerson, et al., 2022). 2.5.4 Technological Digitalization entails data sharing, which in turn increases security and privacy risks. Many companies are concerned that sensitive data would be leaked in terms of data sharing (Gruchmann et al., 2020). Govindan and Chaudhuri (2016) share the same view that sharing information is risky for the companies. Raza et al. (2023) point out that a competitiveness risk can arise when companies share their data on platforms since the data is valuable for being used for analysing trade patterns or customer demand. Misra, Dixit, Al-Mallahi, Bhullar, Upadhyay & Martynenko (2020) demonstrate that breaching data security could lead to loss of business or damages of reputation for companies. When it comes to using data for AI, there are many concerns and questions regarding data ownership and privacy. Companies are hesitating to embrace AI technology due to the concern of data leakage. On the other hand, blockchain is considered as a point-to-point network which enables data ownership for each participant. Though, the protocols used in the blockchain must be standardised in order to enable mass adoption and integration with AI. With that, it can assure data immutability, transparency, and 23 enhanced security. To make sure data sharing among the parties participated, there are two ways: “smart contracts for data sharing” and “strong algorithms for data privacy” (ibid). Tusher, Munim, Notteboom, Kim and Nazir (2022) argue that highly automated ships would be more vulnerable to all kinds of cyber threats apart from the vulnerabilities of non- navigational accidents onboard due to a large amount of data exchange over radio frequency or satellite communication. Given that global maritime operations’ complexity is increasing and the maritime operations are over-reliance on cyber-space, it is essential to secure the system from any cyber threats. Typically, cyber risk management has a focus on “system or network availability, integrity and confidentiality” (Tusher et al., 2022). Availability means that data in the system or network is accessible for users in any time and any place. Confidentiality implies ensuring that only authorised users are allowed to have access to information or systems. Integrity refers to “preserving information or system accuracy”, hence “avoiding unauthorised modification or deletion” (Tusher et al., 2022). Since autonomous technologies increasingly require safeguard against potential cyber threats associated with the increasing reliance on cyber-physical systems over time, maritime stakeholders must take proper precautions against cyber threats (ibid). Technology failure has been a concern for shippers, which has resulted in lots of investment in assessing and planning for cyber-attacks. The reliance on information and communications networks in future is increasing since it’s becoming more and more paperless in the supply chain industry. In accordance, the risks will be enhanced (Manners-Bell, 2017). Risks for maritime industry due to various cyber threats include illegal extraction, stealing or modifying data to affect the market, damaging or destroying vessels, smuggling, stealing goods or kidnapping vessels. It’s vital to secure the safety of the system against any cyber threats when the complexity of operations process in global ocean transportation is increasing and overdependent on cyberspace. Cyber risk management typically has its focus on “system or network availability, integrity, and confidentiality”. In the shipping industry, one example of cyber-attacks is that the container ship operators A.P. Moller Maersk encountered a cyber- attack in 2017. It resulted in tremendous losses associated with major disruptions for over 600 container ships, shore-based offices and a few port terminals in the globe. Shipping company BW Group’s internal computer system was attacked by a global ransomware in 2017. The collision between US Navy ship USS John S. McCain and an oil tanker, which was suspected as the result of possible cyber-attack on the navy ship whose navigational signal was modified 24 (Tusher et al., 2022). 2.5.5 Environmental McFarlane and Norris (2006) define disaster as (2016, cited by Kwesi-Buor, Menachof, and Talas 2019) the consequence of a massive ecological collapse between humans and their environment. It is a severe distraction that affects individuals, neighbourhoods, societies, and companies at such a scale that it requires hard work and determination to cope with it, as well as governmental and international help. Disaster might also be defined as a jointly experienced phenomenon that often has a sudden onset with time limitations to act and can be caused by natural, technological, or human forces (McFarlane and Norris, 2006). Kwesi-Buor, Menachof and Talas (2019) describe that natural disasters can be in the form of flood, storms, earthquake, mass slides and avalanche, etcetera. Lam et al. (2019) point out that natural disasters such as earthquakes, floods and cyclones have been challenging global economic development increasingly. Wang et al. (2020) mention that natural disasters (e.g. bushfire) create risks for the logistics and supply chain. Kwesi-Buor et al. (2019) depict that bad weather can cause disaster and result in disruptions in maritime logistics and supply chain networks. Bennett et al. (2020) state that severe weather is one of factors generating risks for vessels sailing on polar water. Urciuoli & Hintsa (2020) also mention that extreme weather conditions are one of the risks which affect maritime logistics and make schedules unreliable. A very recent natural disaster that caused a loss of human lifes was the 7.8-magnitude earthquake that hit southern Turkey and northern Syria in February 2023. It also caused severe logistics damages in the region. The Iskenderun Limak port was damaged and was out of operation. To resume operations in the future, the infrastructure of the port must be repaired. Until then, the cargo must be moved to other ports (C.H. Robinson, 2023). Another large accident happened in Asia. A fire and explosion at the Tianjin Port occurred in 2015, resulting in deaths and severe injuries, significant economic damages, and serious disruptions for logistics and SCs. Maritime transport providers and the SCs’ stakeholders, such as government authorities, manufacturers, distributors, and inland transport providers, were affected. In addition, vessel traffic safety is a major concern in maritime logistics, which includes congestion at ports and vessel traffic accidents in port waters (Lam et al., 2019). It is also pointed out that intra-regional shipping connectivity can easily lead to port disruptions (ibid). 25 Referring to Li et al. (2022), Covid-19 is also considered as a big disaster that occurred in recent years and caused disruptions for the global logistics and SCs. Some governments adopted lockdown measures. Cities were shuttered, and countries borders were closed. 20 percent of the container ships stuck at ports and significantly impacted deliveries, which in turn increased the operation costs. For example, spot charges on some trade routes increased by 25– 40 percent, caused by a sudden shortage in capacity and increased demand on manufactured goods (Li et al., 2022; Gu and Liu, 2023). Khan et al. (2021) highlight that the consequence of pandemic restriction is skyrocketing freight rates due to sudden shortage of shipping caused by port closure, delays in cargo loading/unloading. According to Gu and Liu (2023) Covid-19 has also caused the problem of congestion in the port terminals. In the second half of 2020, it rose by 20 percent, and large international seaports including Long Beach, Singapore, and Los Angeles struggled with this issue (ibid). Obviously, the port congestion might be caused by other reasons than Covid-19. For example, by poor port operation efficiency, unadvanced port infrastructure and handling equipment (ibid). As for current days, while the congestion in Chinese ports increases due to longer waiting times, it is seen that the situation in the ports of North America has improved, with only insignificant bottlenecks at some inland rails. It will stay this way for the moment if the demand stays at a relatively low level and the port negotiations do not cause the stoppages, which is always a risk (Robinson, 2023). Paraskevadakis and Ifeoluwa (2022) point out that Covid-19 has also caused delays in freight transit, which in turn has led to a shortage of truck drivers in the UK due to border controls, resulting in a long queue of trucks stranded at ports. Chiriatti et al. (2022) point out that worker shortages for loading/unloading of containers is one of the factors leading to reduction in ocean freight volumes for freight forwarder Expeditors in 2021. This freight forwarder has also experienced port congestion which leads to a drop in ocean freight volumes in spite of its increased revenue in 2021. In addition, port disruption and closures has resulted in decreased volumes of sea freight for DB Schenker in 2021 despite its increased revenue owing to an increase in air freight volumes. 2.5.6 Legal Wang et al. (2019) claim that government laws or regulation result in uncertainty for logistics service providers. Deregulation is considered as a business challenge by some logistics service providers (Casaca and Marlow, 2009). Paraskevadakis and Ifeoluwa (2022) reveal that Covid- 19 restrictions and new customs regulatory requirements to trade between Ireland and the UK 26 due to Brexit have disrupted the freight movement. In the first two months of 2021, freight transport has decreased by 47 percent in values in EU imports from the UK (ibid). Many western countries have been strictly regulating their national transport markets with mandatory road freight rates for a long time. Small and medium-sized logistics service providers (LSPs) such as freight forwarders and road carriers were not motivated to increase efficiency due to the high mandatory prices. Since the end of the 20th century, deregulation of many European transport markets has resulted in free pricing. However, uncertainty existed among LSPs and customers to a great extent in terms of pricing since there was shortage of competence in the field of controlling and price setting. In the current deregulated transport markets, prices have dropped drastically, which has led to a consolidation of LSPs. Customers’ demands have become different. They require more and more sophisticated logistics solutions which consist of transport, warehousing, and value-added services. Pricing models are changed towards more customisation (Boone, 2018). Environmental regulations also affect logistic companies. These rules are a tool that influences companies to manage and control harmful activities from their operations (Xu and Xu, 2022). However, compliance with these regulations might be pricey but the idea of the governments is that the benefits will outweigh the costs of it and will create healthier competition on the market (Atkinson & Mourato, 2008; Demirguc-Kunt et al., 2003, cited by Prause and Olaniyi, 2019). The most significant changes regarding the regulations applicable to shipping were the introduction of SECA regions that limited the content of sulphur in the fuel (Prause and Olaniyi, 2019) and the agreement on the expansion of the EU Emission Trading System (EU ETS), which will cover the shipping industry as well, starting on January 1, 2024 which is based on the idea that polluter has to pay the price for the emissions (Tan and Ryan, 2022). In case if the polluter will not comply with the requirements of the regulation, he might face fines, refusal to make port calls or detention of the ship (ibid). It is clear that all involved parties might suffer, especially in terms of the costs caused by such disruptions if they occur (Prause and Olaniyi, 2019). IMO 2023 is another regulation targeting ships efficiency and carbon emissions that came into force from January 1, 2023. The measures such as Energy Efficiency Existing Ship Index (EEXI) which assesses the energy performance of the ships and Carbon Intensity Indicator (CII) that rank and monitor efficiency of the individual ships were introduced (DHL, 2023). 27 The logistic giant DHL (2023) warns that this regulation will affect the freight rate since the ship owners will have to invest significantly in the new fuel technologies and upgrade their fleet in order to be able to meet the requirements. It can cause capacity limitations and slow steaming while the ships are being left for modifications (ibid). 2.6 Maritime 4.0 Maritime industry has had large changes due to the industry revolution. Maritime 4.0 refers to integrated deployment of “digital processes and technology” in the maritime sector. Maritime 4.0 aims to transform the supply chain in sea logistics by digitalization and integration. This approach brings great advantages by creating a new value straightening collaboration among actors, lowering operational costs, and boosting the revenue (Razmjooei et al., 2023). According to Sullivan, Desai, Sole, Rossi, Ramundo, Terzi (2019) Maritime 4.0 is driven by dynamic policy and marketplace, technological evolution, and variety of environment. It has similarities with Industry 4.0 in terms of technologies but Maritime 4.0 focuses on the digitalization and technologies applicable for “design, development, maintenance, operation, and service of the vessels.” It aims to automatically incorporate the actual data for the decision- making process and incorporate integrated technologies for those features, which at the same time minimise the environmental damage of these activities in terms of noise, emissions, and waste. It is also meant to improve the safety and security of the operations by reducing the variety of risks. Four principles guide Maritime 4.0 including innovation, sustainability, safety and security, connection and automatization of the operations (Sullivan et al., 2020). Raza et al. (2023) describe that one major success element for many companies in the manufacturing and service sectors is the transparency and interconnectivity of multimodal marine logistics networks facilitated by the internet, digitalization and satellite communication systems. Satellite communications have connected vessels with shore centres since the 1980s. Later, digital technologies have evolved into IT methodologies such as cloud computing, pervasive computing such as the “Internet of Things (IoT), cyber-physical systems, mobile computing, blockchain, virtual augmented and mixed reality, digital twins, robotics, autonomous vessels and vehicles in ports, real-time data and related tools” such as big data, artificial intelligence (AI), as well as machine learning (ML). Today, Maritime 4.0 requires that vessels not only fulfil present demands, but are also capable of interacting with one another in order for them to cater the needs of the future (Sullivan et al., 2020). 28 2.7 Industry Revolution Every industrial revolution improved the quality of human life by driving economic growth. The first industrial revolution began in 1760 when the steam engine was invented. The steam engine was the greatest development at this time, which allowed for a new manufacturing process where coal was used as the main energy resource (Xu, David, and Kim, 2018). This revolution is one of the most momentous in history since human and animal labour was partially transferred to machinery (Mohajan, 2019). The introduction of the internal combustion engine triggered the second industrial revolution in 1990, when the main sources of energy for powering mass production were electricity and oil (Xu et al., 2018). Under the first and second industrial revolutions, the banking and monetary systems developed, which helped the productions and other businesses to function more efficiently (Mohajan, 2019). The third industrial revolution started in the 1950s, when electronics and information technologies were employed and integrated in the industries for process automatization (Xu et al., 2018). 2.7.1 Industry 4.0 While Industry 3.0 can be referred to as automation, Industry 4.0 can be referred to as a “smart” industry. The notion of the fough industrial revolution (Industry 4.0) was introduced in 2011, which can be described as the next stage in the digitization process where robots can learn, interact, and enhance themselves without the active involvement of humans in the process. “Smart” enables interaction between people and the devices through the Internet of things (IoT). “Smart” intelligence is integrated into the machines, allowing decentralised analytics and artificial decision-making systems to provide sophisticated output that optimises the existing environment (Lau, Zakaria, Aminudin, Chang Saar, Abidin, Roslan, Abd Hamid, Mohd Zain, and Lou, 2019). The terms Industry 4.0 and digitalization are strongly interconnected since transformation into Industry 4.0 is feasible only through digitalization. Furthermore, digitalization is the primary driving element towards innovation and progress in the future (Razmjooei, Alimahammadlou, Ranaei Kordshouli, and Askarifar, 2023). According to Ardito, Petruzzelli, Panniello and Garavelli (2019), the main idea of Industry 4.0 is driving businesses by employing digital technologies which enable real-time data sharing across companies. Those digital technologies entail connections among a network of machinery, supply systems, production facilities, and final products. The most relevant digital technologies to support the transition towards the Industry 4.0 include Advanced 29 manufacturing (e.g. advanced robotics, CAD and automation solutions), Additive manufacturing (e.g.3D printing), Augmented reality, Simulation, Cloud computing, Industrial IoT, Cyber security, Big Data analytics and customer profiling. 2.7.1.1 Cloud Computing (CC) Using the Internet as the platform for applications and data has been enabled by web technologies today. The applications and data residing in the cloud can be accessed at any time from anywhere. Gmail, Google Docs and Google Calendar are good examples of cloud computing. All of these services can be accessed via a web browser instead of the traditional desktop applications. Cloud computing has made entrance into a variety of organisational applications and many organisations rely on an information systems infrastructure in the cloud. Cloud computing can also enable advanced analytics of massive amounts of Big Data generated by mobile services, sensors, and users of social networks (Valacich & Schneider, 2018). When it comes to digitalization in transport and logistics, it’s vital to have proper information and communication infrastructure for data collection, data management, and data exchange so as to establish a solid digital connectivity internally and externally. Cloud computing has become mainstream in recent years. It allows authorised users to have access to online platforms from various devices at the same time and use real-time services including networks, servers, storage and applications. However, it’s important to ensure willingness and incentives for data exchange between organisations involved (Raza et al., 2023). 2.7.1.1.1 Blockchain Blockchain is a means of digital transformation for companies. It enables effective processing of electronic data such as customs documents, sea waybills and other documents. As a result, the ships turnaround time at the terminals decreases and trust increases owing to smart contracts (Zhao, Liu and Hu, 2022). The emergence of blockchain allows for verified transaction data being stored invariably in a decentralised way. One major benefit of blockchain is the transparency created for members involved within the network, i.e. blockchain applications enable data sharing between the members involved in the same network. By adopting the blockchain technology, extensive paperwork in shipping can be eliminated among others. However, the information flow is fragmented and often exchanged through printed paper documents. It easily exceeds 15 to 20 percent of the shipment costs for ocean shipping when 30 processing the paperwork. Digitalization enables SC&L optimization, thus information flow optimization, apart from hardware upgrades. Unfortunately, it’s relatively limited when it comes to the implementation of digital technologies. Central technological ideas such as platforms, data analytics, or cloud computing are very limited to spread (Petersen, Hackius and See, 2018). Specific applications of blockchain are adopted to the key fields including Product Tracking, Product Tracing, and Supply Chain Finance. Tracking cargo allows for predicting and scheduling necessary changes due to deviations that can be caused by different factors, such as missing or incorrect documents, scheduling changes, handling errors, or newly available sensor data. Moreover, blockchain applications in the Finance module can optimise working capital among the SC members and can prevent financial trouble and thus bankruptcy for small companies (Petersen et al., 2018). Despite the promised benefits in streamlining business processes and increasing visibility in SCs including maritime logistics, there are challenges to implement blockchain applications in the shipping industry. There is a lack of an organisation who can unite all users on a common blockchain platform. In addition, it’s difficult to have a united organisation in the shipping industry led by only a few large organisations. Furthermore, companies are conservative when it comes to information-sharing that is a key part for implementation of blockchain technologies (Raza et al., 2023). 2.7.1.2 Big Data Analytics (BDA) Big data is the concept of massive, diversified, and sophisticated datasets that impact the company’s decision-making process (Erboz, 2017). IoT and cloud computing are examples of Industry 4.0 technologies that can be applied to data collection and management. The data can be structured and unstructured, historical and real-time. It may come from a variety of sources including sensors, machinery, commodities, employees, and customers (e.g. customer feedback) (Pilloni, 2018). Big data analytics improves the performance, innovation, and competitiveness of the company. This concept solves organisational issues through advanced monitoring, evaluation, and management of the data. Big data analytics can be applied for fault and risk detection by using predictive algorithms that are based on historical data to decrease the probability of errors that may appear (Erboz, 2017). Li, Gong, Wang and Liu (2022) suggest that logistics firms shall improve the ability of big data capture and analysis. It requires improved infrastructures of big data, which can enhance the 31 development and utilisation of big data. No doubt, by using big data, firms can get more accurate, real-time, and complete information. With that, supply chain uncertainty can be reduced. Apart from the use of big data, logistics firms shall also integrate with their supply chain partners for sharing information networks, available inventory and demand forecasts. Thus, they can address big disasters in a much better way and have better performance. Maersk has actively used big data in operations for monitoring COVID-19 trends and improving its digital platforms. This enables continuous operations keeping on running and provides customers with a prompt delivery of goods during the Pandemic (ibid). 2.7.1.3 Internet of Things (IoT) Internet of Things (IoT) means a network of physical objects or things that enables data exchange over the Internet. These things include sensors, metres, signals, motors etc. Industrial IoT enables enormous enhancement in efficiency and productivity, product quality, agility and flexibility, better supply chain monitoring, and so on (Valacich & Schneider, 2018). Ardito et al. (2019) mention that Industrial IoT includes various technologies such as QR code, RFID readers and tags, smart sensors, in-store positioning technologies etc. IoT is one of the digital technologies (ibid). By adopting this technology, cargo handling and operation can be monitored in logistics centres for ensuring that prompt action(s) can be taken when accidents have occurred. Sensors have been used in equipping merchant vessels for two decades, which enables real-time data updates on position, speed, and direction. With the valuable data source, predictive analytics can be conducted. Using location detection and tracking technologies (RFID and GPS) can solve the problem of fragmentation in the maritime logistics networks due to involvement of too many different actors, time zones and the global nature of operations. Another advantage of this technology is that the improved tracking capability contributes to increasing visibility and reducing transaction costs for container shipping companies (Raza et al., 2023). Hence, enhanced connectivity and visibility can contribute to effective and better decision- making for all involved actors, reducing loss of goods through unseamed track and trace of goods, better inventory management, reducing demand forecast error, shorter order processing times, enhanced flexibility, and so on. Maersk Line has equipped its 600 vessels with IoT sensors, which generated data for this maritime giant to be used for enhancing fuel economy, optimising routes and empty containers, as well as monitoring reefer containers. Hapag-Lloyd 32 has also equipped its container fleet with IoT devices for the same purpose as Maersk Line. However, research reveals that digitalization in sea freight logistics mainly relates to ship safety or navigation technology only. High dependence on manual documentation and operations continues in the industry while keeping their conservative attitude against digital transformation. Nevertheless, the situation has changed during the pandemic. Digital support for commercial operations has been required clearly (Raza et al., 2023). Petersen et al. (2018) state that sensors enable a more visible supply chain due to real-time data capturing and sharing. With a sensor-equipped pallet, data can be captured and transmitted to a private Blockchain accessible by all partners involved along the way. Except for tracking the location, motion and temperature sensors enable monitoring cargo handling along the supply chain. If the cargo is mishandled, it can be detected. Similarly, the RFID scanning technology enables companies to close the gap between the different partners’ databases. This would enable an even more agile supply chain established by the SC partners. In addition, the database can provide data for analytics, which contributes to efficiency enhancement. All in all, the IoT, especially the widespread use of cheap sensors, will drive the applications of Blockchain in Supply Chain and Logistics (SC & L) greatly. 2.7.1.4 Robots and Artificial Intelligence (AI) Robots and Artificial Intelligence are utilised in industries to handle complex tasks which are difficult for humans. It is not a new technology, but technological progress makes it easier to employ robots today. Before robots were required to be pre-programmed but sensors, networking and cloud computing made it possible for robots to adapt to surrounding changes by retrieving information from the cloud (Erboz, 2017). While robots emerged as a result of the digital revolution, today they drive it. The market of robots and intelligent machines is growing very fast and especially accelerated during COVID-19 pandemic. Robots are used in different fields such as agriculture, construction industry, military, disaster relief, and health care. The tasks are many, such as photography, delivery service, production, environmental monitoring, policing, search and rescue, crisis management, counterterrorism, etc. Robotics are employed in autonomous boats, ships, anti-piracy operations (e.g. Somalian coasts). During the COVID-19 pandemic, robots were used extensively to monitor infected cases and maintain medical supply tests, labs and deliveries, disinfection, and customer delivery in the US and 33 many countries in Asia and Europe. AI tools were adopted extensively by Middle Eastern and North African countries (Yaacoub, Noura, Salman and Chehab, 2021). 2.7.1.5 Cyber Security “Cyber security is aimed at the protection of hardware, software and associated infrastructure, networks and the data on them, and the services they provide, from unauthorised access, harm, misuse, or destruction. Cyber security in shipping is increasingly becoming multidimensional with threats including activists, competitors, criminals, and terrorists” (Tusher et al., 2022). To differentiate from traditional shipping operations, higher cyber-physical interaction is required for autonomous ships. Hence, it will be more vulnerable to cyber-attacks (Tusher et al., 2022). Cyber security is considered as one of the key factors that hamper “the adoption of digital technologies in shipping and logistics. Complexity of ships is constantly increasing, with more software and automation, more internet connectivity, and more interconnection between systems onboard which have made shipping more vulnerable to cyberattacks” (Raza et al., 2023). The operations and interconnected digital systems suffer also from cyberattacks in those large liner shipping companies (ibid). New challenges arise along with the digital trend in the form of cloud computing, IoT and big data with regards to cyber security. The reason is that technologies such as data platforms, wireless sensor networks, RFID, GPS, and business management systems can be vulnerable to being attacked. Data leakage could be vital to companies, which could lead to loss of business or negatively impact on reputation (Misra et al., 2020). 2.7.1.6 Additive Manufacturing (AM) Additive manufacturing (AM) (3D printing/3DP) is increasingly being observed in many traditional businesses, manufacturing and transportation industries. This technology has the power to disrupt the existing business processes in many industries from many scholars’ points of views. In particular, the cargo transportation industry, supply chain and logistics, and global trade network will be highly affected. Among all transport modes, maritime shipping is the dominant mode transporting approximately 90% of trading goods and raw materials worldwide. It is expected that AM will revolutionise the maritime and shipping industry. It’s claimed that AM will enable reduction of the transportation of finished products and increase of the shipping volume of raw materials (Teweldebrhan, Maghelal and Galadari, 2022). 34 AM/3DP is currently used in industries including aerospace and defence, medical and dental, automotive, consumer products (electronics), and industrial machinery. The first two industries are the primary users of 3D printers, though the scale is smaller compared with the later three industries. This technology is beneficial for manufacturers and customers to produce finished goods in a convenient and efficient way. Consequently, the total global maritime shipping demand would drop after adoption of AM. Finished products’ exporting demands would decline in the traditional manufacturing countries while digital manufacturing would increase in consumer countries. Fleet types would be changed in accordance. For example, car carrier (RoRo) fleets would be shifted to bulk cargo fleet types. Despite whether AM is used in manufacturing industries or directly by consumers, the transportation of finished goods would decline. The supply chain would be significantly affected. Risks for transportations including air cargo, ocean container and road freight would increase consequently. The operations regarding shipping volumes, routes and fleet types would be affected. Although application of AM is still at the infant phase currently, the related actors such as shipping owners, manufacturers and operators shall consider the future demand of transportation and type of fleets they need to equip with and manufacture. The logistics service providers shall prepare and adapt the change in the future when AM is widespreadly adopted by both traditional and digital manufacturing industries (Teweldebrhan et al., 2022). 2.7.1.7 Intelligent Simulation (IS) Referring to De Paula Ferreira, Armelini, De Santa Eulalia (2020), simulation is a powerful technology for designing the planning and exploratory models needed to improve the decision- making process, which is applicable in science and in a variety of industries including supply chain management, industrial engineering, or operations. Simulation and modelling consist of a collection of methodologies and tools that enable testing, evaluation of systems and products, and system performance prediction. They assist companies in assessing risks, costs, difficulties with new product adoption, effects on operational efficiency, and bringing the company in line with industry development. De Paula Ferreira et al. (2020) highlight that hybrid simulations and digital tweens are the main simulation based tools within Industry 4.0. Digital tween can be defined as a digital representation of the tangible systems that receive the information and respond to orders and commands automatically. As intelligent digital copies that improve the decision-making process, digital tweens can be designed with the help of simulations. The simulation, along with graphical interfaces and information about the operations that come 35 from sensors, IoT devices, and other information systems, is the foundation for the digital tweens. The decision-making process is supported by digital tweens through diagnostics, monitoring, and prognosis that predict behaviours which are critical for risk management (Santos, Queiroz, Leal, Montevechi, 2020). 2.7.1.8 Augmented Reality (AR) Augmented reality integrates an individual's vision of reality by layering a software picture upon that. It integrates digital content into an individual's view of the physical environment using a hand-held, wearable, or compact gadget. The AR elements are a mixture of reality and graphics, a real-time connection, and three-dimensional registration. AR includes different components, such as a camera, tracking system, and user interface. The camera is the key element, which acts as a sensor that bridges reality and digital graphics. At the same time, AR tracking devices precisely locate and place virtual items in their physical environment. The exchange of information between the platform and the individual is referred to as the AR interface. So information is delivered from the system to the user, who accesses it through gestures, voice recognition, and so on, but the user also shares the information in the form of feedback (Shahma, Mehtab, Sanjay, Mohan, Kamal, Shah, 2021). For example, a smartphone camera can be paired with the Global Navigation Satellite System (GNSS) to visualise the route against a real-world environment. There are some applications available for the maritime industry. However, for efficient navigation on the sea, updated and accurate data regarding the present situation on the water, navigable routes, and positions of danger zones with shallows, stones, etc. is required. This data can be derived from different sources and stored for further proceedings. The Geographic Information System is used to renew and add fresh content to the dataset, enabling the analysis of the bottom shape, water level, labelling of risky locations, and identification of secure routes. Another benefit of AR is that it can recognise moving objects and present data related to them. AR benefits from genuine mobility and location awareness. It enables the creation of only those objects required to augment reality (Templin, Popielarczyk and Gryszko, 2022). 2.7.1.9 System Integration (SI) System integration aims to connect the system elements, including software, hardware, and so on, making them work jointly and respond with solutions in accordance to their goals (Drăgan, Selea, and Teodor-Florin, 2017, cited bySanchez, Exposito, and Aguilar, 2020). Sanchez et al. 36 (2020) identify different technologies, including the Internet of Things (IoT), Augmented Reality (AR), social networks, etcetera, that allow connection, communication, coordination and collaboration between people, data, services, and "things". However, it can be done differently by horizontal, vertical, and end-to-end integration. While horizontal integration refers to the interaction of multiple companies that share common goals, vertical integration aims to connect different elements within the enterprise (Khan et al., 2017; Suri et al., 2017, cited by Sanchez et al., 2020). The end-to-end integration is an entire integration of digital and physical entities that can communicate with cyber elements of the system. For example, the gadgets linked to the common network can transmit the information to the cloud and to people who use Human Machine Interface (HMI) for communicating with the system (Pisching et al., 2018, cited by Sanchez et al., 2020). Chapter 3. Methodology This chapter presents an outline of the methodology employed for data collection and analysis. It also includes a justification of the chosen methods. The aspects of credibility, transferability, dependability, and confirmability will be addressed as the chapter is finalised. We have decided to design our study under an interpretivist paradigm. According to Mangan, Lalwani & Gardner (2004), interpretivism paradigm is a phenomenological paradigm, which is a “bottom-up” and “inside-out” research approach (ibid). Given the nature of the phenomena and our research purpose, a qualitative research approach is appropriate to be employed for our study. 3.1 Qualitative Research Approach To conduct this study, a qualitative research approach is employed aiming to obtain an in-depth investigation of the phenomenon. A theory is expected to be developed from the empirical study through an inductive research process and thus will induce general inferences (Collis & Hussey, 2014). A qualitative research approach enables a thorough analysis of the phenomenon and contributes to developing theories/knowledge in the logistics field with help of the obtained raw/original information, according to Näslund (2002). Yin (2018) states that a qualitative research approach enables an in-depth analysis. Eriksson and Kovalainen (2008) highlight that the qualitative research approach allows an extensive analysis of business phenomena conducted. Since the phenomenon of “risks” continuously occurs both internally in organisations and externally in the dynamic world, as well as constantly ongoing industrial 37 revolution and associated advanced technologies evolution, we have decided to adopt a qualitative research approach to conduct our study. 3.1.1 Basic Qualitative/Interpretive Research Basic qualitative is one of the methodologies which can be used in qualitative research. It stems from social sciences and aims to describe and interpret a phenomenon or process. It “seeks to understand participants’ point of view” and “identifies recurrent patterns or themes” (Ary et al. 2014, cited by Meihami 2020). Merriam (2009) states that the most common qualitative research methodology is a basic qualitative research/interpretive study. A basic qualitative study has constructionism as its base. Conducting such a study, it indicates that the researchers primarily aim to understand how people understand their lives and experiences. In basic qualitative research, data collections are conducted through interviews, observations, and/or document analysis. The theoretical framework of the study determines question formulated, content observed, and which documents are relevant to be analysed (ibid). Since we are interested in what type of risks the freight forwarders have experienced and/or are concerned about, and which technologies/pillars of Industry 4.0 are applicable in risk management/mitigation, as per the participants’ understanding and interpretation of these phenomenon, hence, we have determined to apply a basic qualitative study as the methodology in this exploratory research. 3.2 Research Process The research process starts with an idea of the subject and purpose of the study. We conducted a broad literature review to identify research objectives and questions, examining risks in the maritime logistics industry, risk management, and Industry 4.0 technologies in relation to the risk which types we categorised on 4P and PESTEL approaches. In order to find the gap between the existing theories and empirical reality and obtain in-depth knowledge, a basic qualitative research approach (interpretive research) was employed. In order to secure the dependability of the research data, we have reached out to several freight forwarding companies that have branch offices in Sweden. We unsuccessfully contacted DB Schenker, DSV, DHL Global Forwarding, Speedman, Cargo Partner, Scandinavian shipping & logistics, Geodis and Bollore. Earlier in September 2022, we established contact with 38 anonymous sea freight forwarding industry representatives who later actively contributed to the research process, specifically addressing the first research question. To accomplish the first research objective, we conducted interviews with three representatives from the sea freight forwarding industry, and for the second objective, we interviewed two experts in the IT and Digitalization field (see section 3.3.3). Along with the data collection for the first research question, the data collected were processed directly afterwards. The list of the risks which was initially conducted based on the literature review was modified during semi- structured interviews. Separately, the interviews aiming to answer the second research question were conducted using a casual map (see section 3.4). Towards the framework of risk types acknowledged by respondents, the pillars of industry revolution are mapped out towards specific types of risks. This is a foundation for us to draw conclusions in the following chapter - conclusions. 3.3 Qualitative Data Collection 3.3.1 Literature Review In order to establish the in-depth knowledge of the subject for the authors in the field of risk management and the industry revolution, literature review regarding those objectives was conducted. In this study, the literature review includes a variety of primary and secondary literature sources. Primary sources include those that were published at the source, including industry and organisational reports. To ensure the appropriate quality of the literature, the biggest part of the report is allocated to peer-reviewed journals and articles, which can be identified as secondary resources. The journals and articles were found through Gothenburg University Library website and Google Scholars. A few literature books were also used. We have searched for information on the website of the United Nations (UN). 3.3.2 Interview Interviews are one of the most common methods of collecting qualitative data. They can be classified into structured, semi-structured, and unstructured types. While unstructured interviews are often conducted in combination with the observations, semi-structured interviews are a single source for the data collection. Semi-structured interviews are typically conducted by setting up closed-opened ended questions, including other questions that arise 39 from the dialogue between the interviewer and interviewee. Semi-structured in-depth interviews can be done with individuals or in a group. While individual interviews allow a deep conversation about the problem, interviews with multiple participants allow the interviewer to collect data with a wider range of experience (DiCicco-Bloom and F. Crabtree, 2006). To ensure the consistency, semi-structured interviews were used in this study with the notion of brainstorming. 3.3.3.1 Brainstorming Referring to Wilson (2013), brainstorming is commonly used for generating ideas and finding solutions to specific problems. Brainstorming is a widely known method that requires just a few resources. During brainstorming participants interact socially with each other in a democratic way. However, brainstorming might be ineffective in large groups, especially if one person takes a dominant position and decreases the productivity of the entire group. The process of brainstorming might turn out to be chaotic, so it is good to plan the session and have a prior prepared structure. The organisation of the brainstorming session involves developing a clear question for the session, finding stimuli for the ideas, and drafting the agenda for the meeting, where much of the time should be allocated to the introduction and discussion of the topic of the issue (ibid). Brainstorming is effective for small groups. Therefore, we adopted this method for data collection. 3.3.3 Conduction of Interviews Interview 1 Position Background Date of the Duration interview Sea Logistics Has 15 years of experience in freight 23 Feb 2023 14:00-15:54 Manager forwarding business and specialises in (1 hour 54 (Representative 1) sea logistics. minutes) Sea logistics Has large experience in the shipping 23 Feb 2023 14:00-15:54 Manager industry since 2006 and is currently (1 hour 54 (Representative 2) working in one of the largest freight minutes) forwarding companies. To answer the first research question, we met participants 1 and 2 on-site. Semi-structured interview was conducted on-site. In the beginning of the interview, we presented the purpose 40 and objectives of our research and answered clarifying questions. For this interview, we prepared a list of categorised risks based on the literature review with a detailed description of each of them to reach a common understanding among the participants. Each risk was discussed in detail, with clarification and the possibility of refuting it. Participants could also add to the list of risks if they wished to do so. We had two prepared questions regarding the risks: Have the industry experienced the risk during the last 4 years? Is the industry concerned about the risk? Then, further questions in relation to each of the risks were asked. Since the interview was done with elements of brainstorming, it was critical that the interview participants come to a consensus in their discussion regarding the risks. Interview 2 Managing Director Started his career in the freight 17 Apr 2023 15:00-16:10 (Representative 3) forwarding industry in 2009. He has (1 hour 10 worked in various managerial positions minutes) in large forwarding companies and currently manages his own firm. Interview 2 was conducted based on the principles of the first interview following identical steps, but with some tiny exceptions. This time the interview was conducted digitally on Zoom with one participant, who runs his own logistics company and has exceptional expertise in sea freight forwarding operations, which he gained through his long experience working in the industry. Interview 3 & 4 Self-employed A cloud computing engineer that 3 May 2023 19:15- 21:32 consultant, currently specialises in enterprise-grade (2 hours 17 working with application hosting. Cyber security minutes) enterprise application is at the core of his interests. He has hosting at Volvo worked as an information- and Cars, providing communications technician at the services to thousands maritime IT systems supplier SEA of R&D users IT. (Representative 4) 41 Self-employed Has an experience within the IT 7 May 2023 12:00-13:30 consultant who industry for over 18 years. Driven (1 hour 30 currently is working ICT Transformation projects and minutes) at Volvo Cars initiatives in various areas such as Corporation. Cloud-based solutions, NFV/SDN, (Representative 5) DevOps, Vendor swaps, EPC, IMS, VoLTE/VoWiFi, WAN MPLS network refresh, SDLC, Cybersecurity, IoT/IoE, Big Data, etc. During the third interview, Participant 4 was provided with a detailed explanation of the purpose and scope of the session. The interviewers also provided clear instructions on how to proceed. To aid the discussion and conduct a causal map, the interviewers prepared 18 pages of A4 paper, with 9 pages dedicated to internal risks and 9 pages for external risks, with one pillar of the industry revolution on each page. The participant's task was to identify the technologies that could manage the risks and determine the extent of their impact. In order to do that, the questions were raised: Does this technology have any possibility of managing some of the listed risk(s)? Is that technology critical or important in regard to the risk? If the technology was found to have a significant impact on the risk, the participant was asked to draw a red arrow from the technology to the risk. If the technology was deemed important but had no significant influence, a grey line was drawn from the technology to the risk. If the technology was found to have no impact, no arrows were to be drawn. The 4th interview with participant 5 was identical. Then, a shared casual map was conducted by approving the final results of the conducted maps by the IT and digitization industry representatives 4 and 5. 3.4 Data Analysis 3.4.1 General Analytical (RQ1) We have used a general analytical method to analyse the collected data for answering the first research question. A general analytical procedure consists of three steps: Data reduction, Data displays, and Conclusions and verification (Collis and Hussey, 2014). As mentioned under chapter 3.4, we collect the qualitative data by interviews. Since the collected data is abundant, it’s necessary to discard irrelevant data during the analysis process. We select, simplify, abstract, and transform the data that are displayed in written-up field notes. After reducing 42 irrelevant data, we display the selected data in tables, followed by conclusions on processed/analytic data in accordance. 3.4.2 Casual Map (RQ2) For answering the second research question we used shared casual maps. MacLennan and Markides (2021) identify different types of Maps including concept, causal, strategy, activity system and strategy execution Maps. While all of them involve visual representation, their outcomes are different (ibid). Since in this work we aim to identify how technologies of the Industry Revolution affect the risks that sea freight forwarding companies face based on the interview results from different individuals, we chose to use a causal map method for the analysis and visualisation. Cause-and-effect thinking would enable us to understand the relationships between the different phenomena and even the reasons behind them (see Fig.1) Causal maps were developed on the grounds of the cognitive mapping technique. While cognitive mapping focuses on the individuals and specifically their understanding of the issue, causal mapping aims to map together the results of the different individuals that are involved in the research. However, conduction of the causal maps does not necessarily have to involve focus groups for the interview and the interview can be conducted separately but results and the data has to be merged together and can be turned into a shared casual map. However, in that case the participants have to agree on the final result in order it can be classified as a shared map. This would allow us to get the results that represent not only a single individual but the whole group and therefore the map can be referred to in general making it possible to skip addressing the results to some particular participant (Pyrko and Dorfler, 2018). Fig.1: Visual example of causal map representing the relation of the 9 pillars of Industry 4.0 and the risks. 43 3.5 Quality Criteria To evaluate the quality of a qualitative research, there are four criteria that can be used. These are Credibility, Transferability, Dependability, and Confirmability, which together build trustworthiness in quality (Lincoln and Guba 1985, cited by Collis and Hussey 2014; Halldórsson and Aastrup 2003). The traditional measure approach favours criteria such as objectivity, validity and reliability, which is inherent in quantitative research within the logistics discipline (Halldórsson and Aastrup 2003). Since we are not aiming to generate any statistically generalizable findings, instead, we intend to address a phenomenon in the industry from the perspective of sea freight forwarders and subsequently contribute to the existing literature, we decide to apply the quality criteria consisting of components including Credibility, Transferability, Dependability, and Confirmability, which can ensure the trustworthiness of our study. 3.5.1 Credibility Credibility is about the study was conducted in a manner that ensures the correct identification and description of the inquiry subject (Collis and Hussey 2014). Halldórsson and Aastrup (2003) highlight that credibility can enrich the depth of meaning and understanding of the studied phenomena. Further, the respondents play a crucial role in “falsifying/correcting the picture of reality drawn by the researcher”, which provides a holistic interpretation of the realities (ibid). To capture a correct picture of the phenomenon in reality so as to strengthen the credibility of the empirical findings in our study, we have designed specific frameworks towards the specific research questions, which enable straightforward questioning and responding between interviewers and interviewees. Collecting data from all respondents in this manner can enhance the credibility of our study. 3.5.2 Transferability The other dimension of trustworthiness is transferability (Halldórsson and Aastrup, 2003). Transferability is about if “the findings can be applied to another situation that is sufficiently similar to permit generalisation” (Collis and Hussey 2014). Halldórsson and Aastrup (2003) describe that this dimension is about to which extent the findings of the study can be generalised and applied to another situation. Erlandson et al. (1993, cited by Halldórsson and Aastrup, 2003) argue that it’s not possible to truly generalise findings and the transferability relies on 44 “similarities between sending and receiving contexts”. Guba and Lincoln (1989, cited by Halldórsson and Aastrup, 2003) mention that “emphasis is on empirical process for checking the degree of similarity between sending and receiving contexts. Receiver is responsible for proving (ibid). In our study, the findings are not transferable to another situation, i.e. to a very minimum extent the findings of our study can be generalised and applied to another situation. Instead, we are seeking to have analytical generalisability of our findings and the possibility of developing theories based on the existing ones with our empirical data collected. 3.5.3 Dependability The third dimension of trustworthiness is called dependability, which is traditionally called reliability. This is concerned with the stability of data over time. “Dependability is achieved by documenting the logic of process and method decisions outlined in a dependability audit (Guba and Lincoln 1989, cited by Halldórsson and Aastrup, 2003). Collis and Hussey (2014) describe that this dimension has a focus on the research processes which is evaluated if it’s systematic, rigorous and well documented (ibid). Obviously, it’s very important to keep track of the research process in order to assure dependable data collected. In section 3.2, we have provided detailed descriptions of the research process. The frameworks of interviewed contents we designed enable straightforward answers from the respondents, which assures the dependability of our study. We can affirm that the results are in alignment with the empirical data collected. 3.5.4 Confirmability The last dimension of trustworthiness is confirmability, which is regarded as objectivity conventionally. It suggests that the findings stand for the results of the study, not the researcher’s biases. The researcher needs to demonstrate how findings through the data itself can be confirmed. “Conclusions, interpretations, and recommendations are to be traced back to their sources” (Halldórsson and Aastrup, 2003). According to Collis and Hussey (2014), confirmability is about assessment of the research process and trackability of the data sources (ibid). A systematic literature review contributes to building a robust foundation for our empirical study. Additionally, we have refined the theories through continuous search in literature. Combining this with the empirical study, we have gained a better understanding of the critical risks recurred in maritime logistics and the corresponding pillars of Industry 4.0 which can mitigate the risks identified. The biases of the researchers can accordingly be 45 reduced. Furthermore, the objectivity of the research is enhanced through the neutral interviews and brainstormings held throughout the research process. During the interviews and brainstorming, the researchers’ barely interfering with the participants' discussions affirms the confirmability of the study. Chapter 4. Findings This chapter demonstrates the empirical findings from the conducted interviews. Firstly, the empirical findings for various risks occurring in the maritime logistics industry are presented per framework, i.e. Internal Risks categorised by means of 4 P respectively External Risks by means of PESTEL (additionally, see Appendix A). Secondly, the empirical findings for applicable pillars (technologies) of Industry 4.0 for corresponding risk management/mitigation are presented (additionally, see Appendix B). The findings in section 4.3 are presented in a unified form. This consolidation justified in section 3.4.2. 4.1 Internal Risks (4 P) Tabel 3 attached in the appendix illustrates the internal risks which have been experienced and/or are concerned about by the representatives in the maritime logistics industry. 4.1.2 Project related The perspectives of the representatives of the ocean freight forwarding industry present a difference in opinion regarding the potential liquidity problems and financial risks that companies may face. Representatives 1 and 2 believe that small companies are most likely to face liquidity problems due to various economic factors such as weak economic situation, high fuel prices, weakened trade situation, exchange rate, and weak Swedish krona (SEK). On the other hand, representative 3 recognizes the risk of liquidity problems but does not see any immediate concern. When looking into the perspectives of representatives 1, 2, and 3, it appears that all three representatives do not see a significant risk in high dependence on higher skilled human capital for their industry. Representatives 1 and 2 state that they have not experienced this risk in their local offices and do not believe that other companies in the sea freight forwarding industry would be affected. Similarly, representative 3 shares the same opinion and believes that their company or in any other company there is enough skilled competence to deploy advanced IT solutions at the global level. 46 4.1.3 Practice All representatives of the ocean freight forwarding industry are confident in their ability to handle customs documentation. It appears that representatives of the ocean freight forwarding industry have the same opinion regarding the risk of submission of inappropriate documentation to customs due to changes in custom rules and unawareness or unfamiliarity with overseas customs regulations. Representatives 1 and 2 believe that if the company’s employees are competent enough, there is no risk of such an issue occurring. They claim that at least competent freight forwarders have not experienced this risk in the last four years and do not have any concerns about it. Representative 3 also acknowledges the complexity of the custom clearance and processes but provides a different perspective on it. He states that freight forwarders now send all customs documentation to their customers. The customers are then responsible for approving the documentation, which automatically shifts the burden of responsibility to them. Representatives 1 and 2 share also a similar perspective on the risk of legal liability due to negligence and poor practices. They both believe that the NSAB 2015, the union of freight forwarders, protects the industry from commercial claims. Representative 2 acknowledges that operation claims are not covered, but still maintains that the industry should not be concerned about the risk. They all claim that the industry has not experienced this risk in the past four years, and therefore, they have no concerns about it. Representatives 1, 2 and Representative 3 have different perspectives on the risk of bill of lading-related issues. Representatives 1 and 2 believe that the shipper typically approves the bill of lading, and therefore, the risk is transferred to the shipper. They also state that in Sweden, companies use strict guidelines, which makes the probability of mistakes very low. As a result, they do not see it as a significant risk. On the other hand, Representative 3 acknowledges the risk and highlights a specific issue with the delay of the bill of lading due to the post problem. He highlighted that blockchain technology that is meant to resolve this problem is not yet active due to legal problems. Representative 3 had an experience where the cargo was released without the original bill of lading, and their company was sued for $10,000. He emphasised that the problem of bill of lading delay is very costly as it requires the cargo to be stored until it can be finally released, which can even lead to bankruptcies. During the brainstorming session representatives 1 and 2 identified the risk of loading as an important risk. They noted that freight forwarding companies need to ensure that containers 47 are in good shape, and that the forwarder is often responsible for loading operations. However, the shipper also has to ensure that the goods are packed properly to prevent damage during loading. For example, goods should not be packed in carton boxes that can become wet and easily damaged. Representative 3 agreed that loading risk is a concern but emphasised that the shipper often takes responsibility for this risk, depending on the Incoterms. Again, the representatives agree that the risk of the logistics system's vulnerability is a significant concern for the industry. They note that it has been experienced in the past four years and it is still a concern. Representative 3 specifically emphasises the problem of complexity and unawareness of the logistics system which are the biggest problems that make it difficult to manage and mitigate this risk effectively. 4.1.4 Participant Participants 1, 2 and 3 that represent the ocean freight forwarding industry share similar answers regarding the risks in the “participant” section of 4P framework with some minor exceptions. The first issue is a partner's performance risk. All industry representatives believe that if a company carefully selects its partners, it can avoid experiencing problems related to partner performance. However, they still indicate it as a concern that every company should be aware of. Representative 3 suggests that implementing Standard Operating Procedures (SOPs) and checking the creditworthiness of potential partners can minimise the risks arising due to partner performance. By doing so, companies can avoid poor partnering with parties that may have problems with banks or credits, which can have a negative impact on the overall logistics performance. All representatives also agree in regard to the risk related to the costs of cargo abandonment issue, which includes demurrage, detention, storage, and disposal fees. Two participants mentioned that they have experienced this risk in their own companies. Participant 1 believes that while it is a concern on a global scale, it is not a significant issue in Sweden as regulations are strict. However, Participant 3 shared his experience where a container was abandoned due to problems with the bill of lading in their company. Another risk that the ocean freight forwarding representatives discussed is the risk of customer expectations. All three participants agree that changing customer expectations regarding quality, service, and price is a risk that the ocean freight forwarding industry has experienced in the past four years and is concerned about. However, while Representatives 1 and 2 see this as a challenge, Representative 3 views it as more an opportunity. However, in this context he 48 also mentions that as shipping lines continue to vertically integrate and take over the business, freight forwarding companies may become less attractive to clients. Next two risks that were lifted during the interviews are regulatory compliance (e.g. illegal smuggling) and high dependency on 1pl and 3pl service providers. The slight difference appeared in their answers in regard to the first risk. Representatives 1 and 2 are concerned about regulatory compliance with regards to smuggling weapons, drugs etcetera because they believe that if the goods were loaded in the ocean freight forwarders’ warehouse, the freight forwarder might be found responsible for missing the smuggling attempts of their customers. Representative 3, unlike Representatives 1 and 2, did not express any concern about regulatory compliance issues. While he has not experienced such a situation in professional settings, he also does not see it as a significant risk for an ocean freight forwarder. However, all representatives agreed that the dependency on 1pl and 3pl service providers is not a risk or even an issue for the industry. The industry is not concerned about the risk and did not experience it in the past two years. 4.1.5 Procurement Representatives 1 and 2 agree that this is a concern based on their experience in the ocean freight forwarding industry. However, Representative 2 adds a different perspective, stating that the business is counter-cyclical, and freight forwarders can actually earn more during economic downturns. However, all representatives agree that payment-related issues are a significant risk for the ocean freight forwarding industry. The industry has likely experienced it in the last four years. Issues such as delays in payment, defaulting on payments etcetera were mentioned as some of the concerns related to the risk. 4.2 External Risks (PESTEL) Tabel 4 attached in the appendix demonstrates external risks which have been experienced and/or are concerned about by the representatives in the maritime logistics industry. 4.2.1 Political Regarding the risk - Conflict and political unrest, all representatives share the same view, i.e. all of them have experienced and are also concerned about this risk. In terms of import and export restrictions, representatives 1 and 2 agree that it’s a risk for companies in the industry. 49 They are also concerned about it for future business. According to their opinions, there are regulations regarding Syria, Russia etc. that make business different. The companies might even restrict activities in some areas themselves to avoid damages including reputational factors. Representative 3 hasn’t experienced this obstacle yet but shows concern about it. He mentions that companies restrict their activities in some countries which are encountering sanctions (for example, Sudan, Iran, Russia etc.) in order to avoid causing reputation damage for the companies. 4.2.2 Economic When it comes to demand fluctuation, all of the representatives share the same opinion that it is a risk for companies in the maritime industry that they have experienced and are concerned about as well. The global economic and trade downturn, as well as the rise of protectionism in countries bring about uncertainty for the logistics companies, and thus fluctuated demands as a result. For example, export restrictions increased during the war in Ukraine has resulted in decreased demands for logistics and transportation. As of April 2022, sixteen countries had implemented export bans on foods that affect seaborne trade significantly. Furthermore, all of the representatives share the same view on the factor of exchange rate fluctuations. They have experienced that the big fluctuation of the exchange rate (e.g. EUR/SEK) brings about an impact on the companies’ financial results negatively (a loss of finance). However, volatile fuel price or unstable energy cost is not a risk for any of the representatives, which is considered as a big risk for the logistics service providers according to the literature. The empirical findings indicate an opposite view from the literature, which is very interesting. Representatives 1 and 2 think that the burden of the price is loaded on the customers (shippers consignees). Representative 3 expresses that “the higher the fuel price, the higher margin freight forwarder can gain”. Moreover, stringent competition within the industry is regarded as an experienced risk and concern by representative 1 and 2. Carriers’ vertical integration and digital evolvement of freight forwarders exacerbate competition in the industry, according to these representatives. On the other hand, representative 3 disagrees with them and doesn’t see it as a risk for companies in the industry. Though he shows concern about it. The last factor from the economic dimension is the complex operation process in global ocean 50 transportation. According to the literature, there are too many actors involved in the logistics networks. Activities are processed manually to a quite big extent. Coordination is fragmented among the actors, which makes the collaboration complicated and difficult. It will lead to longer transit time, delays, poor reliability and higher cost of the logistics service provided. Representatives 1 and 2 agree that it is a risk for companies in this industry. But they are not concerned about it in the future. They believe that the processes are getting more coordinated with the help of digitalization. For the last few years, the processes have been improved significantly. For representative 3, this factor is neither risk nor concern at all. Instead, he likes complexity. The more complex, the less actors entering in the market, the less competitors the freight forwarder companies confront as a result, according to this representative. 4.2.3 Social Four major risks are identified regarding the social dimension from the literature. One of these risks is employee safety in operations (occupational health and safety). By contrast, none of the representatives agrees with this type of risk. They are neither concerned about it. According to representatives 1 and 2, the accidents happen in the ports. The companies they work for don't have any operations at ports. Though they show their concern about the external employees. The other factor which gains the common view from all these representatives is Strikes. Strikes at ports or industrial strikes are considered as an experienced risk and concern for companies in the industry by all participated respondents. The third factor which all representatives share the same view on is international relationships, community relations, culture, dependency and opportunism. All of the participated respondents don’t consider this as a risk. But they are concerned about it. According to the literature, cultural difficulties are a risk which can affect business. Representative 1 and 2 argue that the company might experience some issues related to cultural differences since the offices are located all over the world. But there are routines and global guidelines to be followed. Code of Conduct is one of the examples that ensure the corporate culture for the company. In addition, when companies don’t use agents (outsourcing) and all offices’ businesses are run by local employees, the cultural difficulties in communication will be eliminated (ibid). The last but not the least, reputational risks (sustainability and related corporate reputation) is affirmed by representative 3 who also shows concern about it. By contrast, representatives 1 and 2 have a bit different opinion on this factor. They have not experienced this type of risk so 51 far. They assert that sustainability was not an issue in the past. But the situation will be changed in future due to the customers' concern and governmental pressure. Currently carriers are facing this pressure and affected by this risk (ibid). Hence, they admit that they are concerned about it. 4.2.4 Technological From the technological dimension, three factors are identified as risks for companies in maritime logistics from the literature: Data confidentiality and security; Attacks on Modern Supply Chain and Logistics systems/networks; and over-reliance on information and communication networks. The empirical research shows that all participated respondents share the same opinion regarding these three risk factors, i.e. all participants agree that data confidentiality and security is a risk for companies in the industry. It’s also a concern in the future. They are aware that attacks take place in ports and carriers. This could lead to problems for freight forwarders as well since the entire supply chain might be affected. By contrast, risks such as attacks on the modern supply chain and logistics systems/networks and over-reliance on information and communication networks are not relevant for the freight forwarding companies according to all representatives. 4.2.5 Environmental Regarding the environmental dimension, there are eight major factors identified as the external risks for companies in the maritime logistics industry based on the literature review conducted. All representatives share the same view on Natural disasters, Epidemics, Accidents at ports/ships or vessel traffic accidents, as well as Queues in port terminals, i.e. they all agree that these are risks for companies in the maritime logistics industry that they have experienced, and they are also concerned about these in future. With regards to Inadequacy of transport infrastructure and Labour shortage, representatives 1 and 2 confirm that they have experienced these two types of risks in the industry, and are also concerned about them continuously. According to them, the capacity of the ports is the main concern, especially in Germany, the Netherlands, and central EU. Driver shortage exacerbates the problem. Differing from these two representatives, representative 3 is only concerned about these two types of risk. When it comes to weather conditions such as storms, sandstorms, typhoons, hurricanes, tornadoes etc, representatives 1 and 2 agree that they have experienced this type of risk and are continuously 52 concerned about it. By contrast, representative 3 disagrees at all. 4.2.6 Legal From a legal perspective, three factors are identified as risks for the companies in the industry from the literature: Foreign ownership/investment restrictions; Policy interventions (e.g. customs regulation change); and Environmental regulations. For the first one, none of the participating respondents considers it as a risk or concern for companies in the industry. Regarding policy interventions, representatives 1 and 2 expressed their opinion that it is a minor concern and not a strong one. Like the former two representatives, representative 3 hasn’t experienced this type of risk so far. A bit different from the former representatives, this is not a concern for him at all. Instead, he shows concern about environmental regulations. Though this is not an experienced risk for companies in the industry as per his knowledge. On the other hand, representatives 1 and 2 haven’t experienced this type of risk. They are neither concerned about it. 4.3 Applicable Pillars of Industry 4.0 for Risk Management of Sea Freight Forwarders Shared casual map for Internal risks corresponding to the pillars of Industry 4.0: Fig 2: Shared casual map for Internal risks. 53 Shared casual map for External risks corresponding to the pillars of Industry 4.0. Fig.3: Shared casual map for External risks. 54 4.3.1 Cloud Computing (CC) Management of Internal Risks Cloud Computing has a critical importance in regards to managing risks associated with bill of lading because the blockchain technology can allow use of smart contracts and electronic bill of lading which can eliminate the risk of falsification and delays of bill of lading. CC is important for a product price fluctuation issue. CC is a platform where a large amount of data can be stored and it has a computational power which in combination with BDA allows for a powerful analysis. When examining the risk of product price fluctuation, a large amount of data can be collected to facilitate effective monitoring and analysis of historical trends. CC complements and reinforces big data analytics, making it important for product price fluctuation management. Since the CC is a platform, while BDA allows proactive risk assessment. The linkage of these technologies and the risk of product price fluctuation will be more described in the section 4.3.2.1. At the same time, CC is also important for minimising the risk of logistics system vulnerability. Management of External Risks Cloud computing has no critical importance for any of the external risks. However, it is important for the risk of demand fluctuations since it might support the analytics. It can also support operational data and mitigate the risk of complex operation processes in global ocean transportation. Some of the technologies in CC can also assist in mitigating cyberattacks. Data from harvested IOT data is able to support analytics of the weather conditions. Data from Cloud platform can support accidents and collision prevention. CC serves as a storage platform for operational, tactical, and strategic data utilised for BDA (Big Data Analytics). CC technologies can support service quality, high scalability, and faster time to market, thereby creating a competitive advantage for ocean freight forwarders. CC is important for mitigating political unrest and conflict-related risks. For instance, some countries have cheap electricity, so the company might store the data there. However, if the country gets involved in a political conflict, it might be necessary to move the data to another region. Cloud computing would help to move IT infrastructure, which would reduce the impact of the political instability in the region. Furthermore, cloud computing allows companies to 55 place their workloads in cheap countries, which might help reduce the impact of exchange rate fluctuations. In the context of organised crime risk, for example, the company might be shipping styrofoam. However, the weight of the product might be unusually large. This might indicate that the container might be loaded with something that is not reported. In this case, it makes sense to control the container more closely. 4.3.2 Big Data Analytics (BDA) Management of Internal Risks Big data analytics is helpful in analysing internal data and metrics from shipments, trucks, vessels, etcetera. Additionally, external and internal data might be used and analysed to identify liquidity risks and asset turnover in the company. For example, measures such as market circumstances, turnover patterns, and sales tendencies can be used for the analysis. BDA can be used even for managing the risks of bills of lading. Analysing this critical document electronically or by scanning, it might be beneficial for, for example, the detection of possible mistakes that might lead to contractual issues. For instance, companies such as DocuSign provide software to assist companies in the identification of legal insights on the issue through the application of IT and data analysis. By increasing awareness, the company might take proactive measures to mitigate this potential risk. For example, a freight forwarder might track the partner's performance. CC and BDA in combination are important for payment related risks since their use can help sea freight forwarders conduct risk analysis in regard to their partners before engaging in business with them. The analysis can evaluate partners’ creditworthiness. These technologies might help to indicate that the partner starts to uncommonly delay invoicing payments or acts unusually in some way. All of this might indicate a problem. BDA might help mitigate the risk related to the abandonment of cargo. Different measures can be analysed, including the cost of the cargo, the economic situation, the frequency of the cargo being abandoned, etcetera. BDA is critical for mitigating the risks related to product price fluctuations. By analysing external environments, including market trends, supply and demand, and pricing data, it is possible to see coming risks and opportunities on the market. Management of External risks 56 Big data analytics can provide valuable insights by analysing news and detecting anomalies that indicate conflicts and political unrest, or other potential disruptions. Furthermore, BDA in combination with CC can aid in detecting organised crime by inspecting the cargo being shipped (e.g. anomaly in weight of the cargo). Additionally, economic downturns can lead to increased unemployment rates, highlighting the connection between big data analytics and labour market trends related risks. BDA is important for mitigating rate fluctuations and can support the analytics of consumer behaviours across several cultures, which is crucial for dealing with the risk of stringent competition within the industry. 4.3.3 Internet of Things (IoT) Management of Internal Risks IoT might ensure regulatory compliance which is associated with the smuggling. The containers might have sensors and electronic fuses that make them more temper-proof. If the container was tempered the freight forwarder might get information about, knowing that it can be filled with something else. IoT is critical for mitigating loading risks and important for mitigating the risk associated with cargo abandonment, as it enables the tracking and monitoring of cargo. Management of External Risks IoT can assist in securing sealed containers. Implementation of layers as tamper-proof containers enhances the security of the supply chain by and contributes to analog supply chain (not-digital) by utilising electronic devices with fuses. These devices report in real-time the container status to the server. Labour shortage is another area for consideration in the shipping industry which can be managed by alleviation of the resilience of human labour by establishment of the autonomous fleet of vehicles. It can also be referred to as edge computing where vehicles and servers work autonomously and in tandem. Furthermore, since IoT enables receiving real-time information in regard to the container’s location, it might help reduce the risk of queues in the port terminals. It could be possible to instruct an autonomous vehicle to reduce speed if needed according to the urgency of the arrival and even achieve significant fuel economy. IoT is important for 57 mitigating the risk related to terrorism attempts and is crucial for minimising the risk of adverse weather conditions. This is because smart devices can be utilised for remote sensing, remote monitoring, and other related purposes. It can support remote tracking and tracing, thereby providing better visibility and control, which is helpful for mitigating the risks of accidents at ports, ships, and queues in port terminals. IoT in collaboration with robots can be important even for pirate trade and organised crime risk and to be explained in the section 4.3.4.2. 4.3.4 Robots and Artificial Intelligence (AI) Management of Internal Risks Loading process can be automated with the use of robots. AI can be used for anomaly detection in order to address risks of changing customers' expectation of quality, service and price, price fluctuation and regulatory compliance. AI and particularly machine learning and deep learning methods can help in assessing the vulnerability of the entire system. Therefore, it is critical technology for management of the risk related to the logistics system vulnerability. The definition of AI might be seen vogue and it might be seen as part of the big data analysis pillar. Management of External Risks Piracy often involves actions that are often associated with pirates taking some individuals as hostages, for example, the master of the vessel. This situation is highly challenging since humans highly prioritise their own lives. The use of robots can minimise this risk since robots lack self-awareness and simply follow instructions without considering their lives. However, the robots might not be responding effectively in unpredictable scenarios, especially when taking into account unpredictable human behaviour and the complexity of possible situations. Robots can be also used in the ports where the fully automated process eliminates the risk of the strikes. However, it is important to ensure that the behaviour of the robots is limited to certain boundaries and not rebelling against a creator. Nevertheless, employing robots for driving trucks can help to alleviate the risk of labour shortages as well as queues in the port terminals. The risks of the accidents at ports or ships can also be minimised with the utilisation of the robotic systems which are used for autonomous navigation, planning and monitoring. They can be used even for collection of oil spills during major accidents. Furthermore, robotics can play an important role for mitigation of natural disasters risks and recovery. 58 AI has a critical importance in mitigation or the risk associated with complex operation processes in global ocean transportation. It can assist in operational improvement using Machine Learning techniques, particularly deep learning CDL (Contrastive Divergence Learning) techniques. In this context, AI can analyse the patterns, make predictions, optimise processes and therefore minimise the risk associated with complexity in the ocean transport industry. 4.3.5 Cyber Security Management of Internal Risks An electronic bill of lading would enable automated processes of verifying it. The company might use a particular electronic signature which all parties involved in the supply chain would need to use. By using electronic signatures, the company can ensure cryptographically that the bill of lading carries original information. During the interview the delivery software process was described. It involves validation methods which exclude the probability that the code is malicious. This is a critical process for supply chain security and especially for those systems that are connected to the internet. Supply chain attacks where the code is being developed by a non-authorised party might lead to large consequences. The technology is critically linked with payment-related risks, bill of lading related risks, regulatory compliance and logistics system vulnerability. Cyber Security might minimise loading risks as well. Management of External Risks Cybersecurity plays an important role in managing the risks associated with the complexity of operation processes in global ocean transportation, as it supports intricate and complex global processes. Cybersecurity, in relation to risks of organised crime, sea piracy and terrorist attacks, plays a critical importance. In the scenario, where services control the ship through for example, cloud, pirates with malicious intents can use their computers for attacks instead of traditional weapons. They might hack the vessel, take over the cargo and bring it to Somalia. Acts of terrorism are also a critical concern in regard to cybersecurity. Autonomous tracks can be hacked and manipulated to create harm by unauthorised forces by, for example, running into people or other vehicles. Furthermore, the malicious acts might be connected to stringent competition within the industry by actors who are willing to sabotage a competitor. 59 Competitors with malicious intent might hack IT’s infrastructure. Their actions can lead to the loss of the cargo, trucking numbers and other critical information. This would allow malicious competitors to gain an unfair competitive advantage in the market. Attracted companies might experience a ruined reputation and the loss of customers. Cybersecurity is critical for risk of confidentiality and security since effective cybersecurity frameworks can mitigate data breaches. 4.3.6 Additive Manufacturing (AM) Management of Internal Risks AM is critical for fleet and ship operators, particularly those with AM collaborations or in- house capabilities. AM allows for the creation of complicated parts and components using layer-by-layer additive procedures, which has a number of advantages in the marine sector. This makes it crucial for the risk associated with logistics system vulnerability since the parts can be produced in-demand. In addition, this technology is critical for loading risk since it contributes for optimised designs, customization, etcetera. Management of External Risks Throughout external risk, AM was named as important in regard to stringent competition within the industry since AM can enhance operational efficiency by which competitive advantage can be achieved. AM can also help in the situation of import and export restrictions since it enables “printing simpler things” on-site. This means that the products can be manufactured locally, avoiding challenges with cross-border transportation. 4.3.7 Intelligent Simulation (IS) Management of Internal Risks Intelligent simulation might help alleviate the loading risk. The loading process can be simulated by creating different loading scenarios. Measures such as varying cargo weight, weather conditions, and weight distribution can be applied to the simulation. This company might find the best loading measures and reduce the risk of accidents and damage to the cargo during loading. Intelligent simulation and 3D technology, which during the interview was referred to additive manufacturing competence, can address some vulnerabilities in logistics 60 systems. By doing the simulation of different scenarios, the company can identify vulnerabilities Management of External risks Intelligent simulation is a valuable tool for understanding how a system operates, particularly under pressure, and for identifying bottlenecks. It plays a critical role in mitigating risks associated with weather conditions and their impact on cargo, thereby preventing accidents at ports and ships. Additionally, it is an important technology that can address risks related to natural disasters, epidemics, accidents at ports and ships, as well as queues in port terminals, especially with the use of Augmented Reality. 4.3.8 Augmented Reality (AR) Management of Internal risks Augmented reality can address the risk of loading. Augmented reality helps to see if the cargo will fit by providing the user who wears the glasses with a virtual picture that shows the cargo on top of the real one. The user can also see if the cargo is able to fit in the shipping container before filling it with it. The connection between augmented reality and the loading risk is identified as an important one. AR is critical for addressing the risk of logistic system vulnerability for ocean freight forwarding since utilisation of AR technologies, including 3D gaming elements, makes it possible to examine the layout of shifts and to understand the layout of the entire network structure. Generally, AR provides for a documented reality that can assist in the detection of logistics’ strengths and weaknesses. Management of External risks Augmented reality can be beneficial for masters of vessels, providing them with enhanced visibility to easily identify potential barriers and collision risks. During the interview, it was emphasised that IS is utilised in conjunction with augmented reality, and especially used for scenario planning to avoid accidents and collisions. This integration enhances education and training by providing comprehensive understanding of various scenarios. This technology in combination with IS is important for risks associated with accidents at ports and ships as well for natural disasters, weather conditions, epidemics, accidents at ports and ships and queues in the port terminals. 61 4.3.9 System Integration (SI) Management of Internal risks System integration is crucial in terms of bill of lading risk mitigation. It is important to deliver software and all the information that can be relied upon. It is critical that the bill of lading is following the process of the shipment. In this context, it was mentioned that it is also important to use the signatures between different systems that receive it. System integration might help in loading risk management. The system integration can enhance communication between the ports and vessels with regards to the cargo they receive. For instance, in the case of an oil tanker, if the customer has ordered 1000 cubic metres of oil and the port reports that 100 cubic metres have been loaded while the ship records 95 cubic metres, the system integration could be applied for calibration purposes to ensure that the right amount of cargo is received, and that could be flagged for. So, no man would need to stay on the vessel to ensure the amount of cargo was loaded. Instead, it can be done by a computer. By using system integration, calibration errors can be excluded because the system will provide exact measures. System integration is also important for minimization of the risks related to payments, product price fluctuation, regulatory compliance and many other risks since it enables communication between different systems and components within or between organisations. Management of External risks System integration has significant importance for communication between shipping companies and other parties. The companies might use APIs (Application Programming Interface). Using an API can facilitate seamless communication. However, it is important to validate the data that is being transferred in integrated systems to ensure security and prevent supply chain risk. Optimisation of the routes and optimisation of driver’s schedules, with the use of integrated systems, is important for dealing with the labour shortage and queues at the terminals. System integration is critical for reducing the risk associated with complex operations within the sea freight forwarding industry since its application can help enhance operational efficiency. It is also critical for policy intervention-related risks, as it increases transparency and enhances policy formulation for the industry. Generally speaking, system integration enhances access to insights that can mitigate most of the listed external risks at different levels. 62 Chapter 5. Discussions This chapter aims to elucidate the gaps and inconsistencies that exist between the existing literature review and the results of our findings that were presented in chapters 2 and 4. Analysis conducted in this chapter will provide a comprehensive understanding of relationships between research expectations and the reality of the research findings. 5.1 Internal Risks The empirical results of our study demonstrate that the most critical risks faced by sea freight forwarding companies include the Vulnerability of the logistics system, Abandonment of the cargo, Changing customer expectations of quality, service, and price, as well as Payment- related risks. The sea freight forwarding industry has experienced these risks in the recent four years and is still concerned about them, according to the industry representatives. The results align with the expectations given that the risks are associated with high costs for sea freight forwarders. In the logistics business, minor mistakes can make logistics providers end up with no profit or extremely low margins that may not even cover the costs. This escalates with high requirements on deliveries and high service levels. According to Tubis and Werbinska-Wojciechowska (2021), vulnerability of logistics systems increases along with unexpected occurrences due to continuous market changes, which will result in a decreased level of logistics service performance. The freight forwarding industry acknowledges those risks on such a high level since, as Tubis and Werbinska-Wojciechowska (2021) state, the risk management process is complicated to reduce logistics vulnerability. The logistics system can be vulnerable to a variety of disruptions which creates complexity in planning, managing, and implementing logistics operations. Abandonment of cargo can also increase vulnerability because such cargo has to be stored somewhere, which might, for example, block the loading processes of other cargo and add storage costs. This could be problematic for various parties involved in the supply chain process, including freight forwarders, terminals, ports, and others. This issue not only involves costs for demurrage, detention, eventual disposal or later legal processes involving lawyers and courts, but also safety concerns (Storrs-Fox, 2021). Supply chain might be even more vulnerable at the times of economic downturns highlighting the problem of payment related issues. As stated by Kouvelis and Xu (2021), ocean freight forwarders, as intermediaries, might experience pressure from different parties with conflicting interests. Due to this, companies 63 might use different payment methods, including factoring, and reverse factoring etcetera, depending on the parties involved in the transactions (van der Vliet, Reindorp, and Fransoo, 2015; Kouvelis and Xu, 2021). Over the past years, the challenging economic situation and technological progress accelerated the adoption of reverse factoring, as it offers great opportunities for firms. At the same time, it helps buyers reduce their working capital by up to 13 percent. However, even this solution has its disadvantages. For example, if a company allows partners to pay later by extending payment terms, cash flow variability increases, and the company might need to obtain additional working capital. It might be challenging for the company, including freight forwarders, to identify the maximum period of the payment extension to make it feasible. If they fail, the cost of financing can be larger than the benefits of the financial instrument, and the company might end up with a reduction in profit margin (van der Vliet, Reindorp, and Fransoo, 2015). Partner performance risk might be seen as less critical but not significantly. This conclusion comes from the fact that some of the representatives argue that the industry did not experience this risk in the past four years. However, the importance of this risk is acknowledged by all representatives of the ocean freight forwarding industry as well as existing literature that studies the risks. Therefore, the results align with the expectations regarding those risks. Malkus (2018) underscores the importance of mutual benefit of the parties since many aspects might not be explicitly described in the contract that the parties sign. The author emphasises trust as a significant influencer of the cooperation logistics risk and warns that trust might be built or vanished over time, posing risks in effective partnership. Since the author explicitly emphasises that the costs of the issues related to poor partnership might be large due to delays and reduction of competitiveness, it can be inferred that building strong relationships with partners involved in the supply chain might lead to significant costs savings and competitive advantage of the company (ibid). As emphasised by industry representatives during the interview session, selection of the partners is an extremely important procedure. It might be guided by various objectives. For example, the company might focus on a partner's sustainability performance. For example, Kafa, Hani and El Mhamedi (2017) argue that traditional methods of partner selection are not effective for the partner selection process. They recommend to include social and environmental aspects in addition to economic parameters. They conclude that incorporating sustainability parameters can improve competitiveness of the firm and its general performance (ibid). 64 The next risks can be potentially critical for the sea freight forwarding companies. These are Financial constraints, Bill of lading related risks, Product price fluctuation due to capacity shortage, and loading risk added by representative 1 & 2. It is challenging to say if the findings align with the literature since there is a significant difference regarding those risks in the response of the ocean freight forwarding representatives. According to the research of Govindan and Chaudhuri (2016), financial risks impact liquidity. It is important to mention that internal risk might be escalated by external factors, which is not surprising as the internal risks are strongly connected to external ones. In this context, under an external factors or environment, the authors emphasise economic external factors including fuel prices, exchange rates and so on (ibid). The representatives 1 and 2 of the sea freight forwarding industry provided identical information during discussion of this risk. Bill of lading is another risk where the representatives had different opinions on. The response of the representatives 1 and 2 were unexpected since the literature explicitly analyses bills of lading-related risks and aims to provide the solutions to this issue. For instance, Irannezhad and Faroqi (2021), state that one of the most important documents in shipping, the bill of lading, might pose serious risks which comes with the issues such as, for example, double- spending. This means that the bill of lading might be used for acquiring loans from the different financial institutions, which fraudulent actions might be risky for different parties, including banks who risk the money and sea freight forwarders who risk damaging their reputation and relationships with the bank. The authors note that fraud such as falsification of the bill of lading or duplicated documents are typical for the industry. A masqueraded bill of lading is a common risk for a freight forwarder, since they intentionally hide the names of the parties involved in transportation on the House bill of lading. The authors attempt developing the concept of electronic bill of lading with the application of the blockchain technology in order to mitigate these risks (ibid). Product price fluctuation, which is associated with the fluctuations of freight rates, is the risk that is mentioned in the literature. For example, Daher, Hausmann, and Wölfel (2022) predict that it is expected that freight forwarding will experience a decrease in earnings which will happen after reduced freight rates of the carriers. While this risk is taken quite seriously by industry representatives 1 and 2, representative 3 has no concerns about it since he argued that the freight forwarding business is doing well at all times. This argument is supported by 65 Manners-Bell (2017), which says that the freight forwarding business is counter-cyclic and that at times of economic recession, freight forwarders might increase their net profits even if their total revenue reduces. At times of recession, the shipping lines have excess capacity, which gives the opportunity for freight forwarders to make deals with carriers at a quite cheap price, passing only a small proportion of this "discount" to a shipper. It indicates that freight forwarding is quite resilient to price fluctuations since they are doing quite well at times of economic recession or "boom" (ibid). Representatives 1 and 2 added loading risk during our first interview session. It is interesting that Representative 3 has not recognised it as a risk. Since this risk was not identified by the systematic literature review that was conducted, it was not expected to pop up. When looking into the literature searching for this particular risk, it is seen that some authors raise this problem. For example, Andreji and Kilibarda (2018) conducted Failure Mode & Effect Analysis (FEMA) when analysing freight forwarders’ risks. This method focuses on operational processes by breaking them down into steps at which authors looking closely might be able to identify this risk. Furthermore, after calculating the risks (RPN) authors found that administrative mistake in the loading address is the most typical for this business. Authors highlight that this failure is difficult for detection and can lead to delays, empty driving and unexpected costs (ibid). According to the empirical study, regulatory compliance, which is associated with illegal smuggling of drugs, weapons, and other prohibited items, is the least acknowledged risk for ocean freight forwarding companies. Park and Park, (2018) highlight that supply chain is one of the priorities today after events such as 9/11, additional security measures are being constantly developed. For example, today freight forwarders can obtain a voluntary certification as an Authorised Economic Operator (AEO) to demonstrate that a company has good security measures and is compliant with the customs regulations, which might create a more trustworthy relationship between authorities and businesses (Park and Park, 2018). This risk has a high interconnection with external political risk of terrorism attacks, and it is not surprising that this certification aims to mitigate this risk as well. Factors such as High dependence on skilled human capital, Submission of incorrect customs documentation, Legal liability due to negligence and Poor practices that cause loss, damage, and delays, as well as High dependence on 1PL to 3PL business partners (due to no own assets), 66 were not considered relevant by the ocean freight forwarding industry representatives who participated in the study. This was unexpected by the researchers, as the existing literature acknowledges these risks as significant concerns in the industry. Gruchmann et al. (2020) state that the importance of digitalization is rising since it creates value for the parties involved in the supply chain through data exchange. Nevertheless, some logistics service providers might deliver insufficient services to their customers due to insufficient digital skills and capabilities. While the risk of high dependence on highly skilled human capital might seem irrelevant for industry representatives, digitalization creates large interdependencies between parties. The perception of the risk by the representatives might be justified by the fact that they are headed to Gothenburg, Sweden, which has many business and technical schools that prepare specialists in different fields, including IT. Therefore, representatives might feel that all specialists even within IT and digitalisation are easily interchangeable. All representatives agreed that legal liability due to negligence and poor practises is not a relevant risk since they think that NSAB 2015 protects them from a variety of climes. The Nordic Association of Freight Forwarders has established General Conditions to outline mutually the rights and obligations of freight forwarders and their customers. They cover the liability of the forwarder under different legal documents, including the CIM, the earlier mentioned CMR, the Hague-Visby Rules, the Montreal Convention, and documents that come in addition to these conventions. NSAB 2015 even mentions that freight forwarders have to provide relevant and complete documentation for the government authorities. However, even though these conditions cover the liability of the freight forwarders under a variety of legal documents, they do not exempt them from it (NSAB, 2015). 5.2 External Risks The study reveals that the most critical risks for sea freight forwarding companies include Conflict and political unrest, Demand fluctuation, Exchange Rate fluctuations, Strikes, Data confidentiality and security/ Cyber-attacks, Natural disasters, Epidemics, Accidents at ports(ships)/vessel traffic accidents on waters/seas, and Queues in port terminals. When it comes to Conflict and political unrest, it has been certified as a critical risk by many different researchers. It’s inevitable and recurs time over time. The impact on the logistics and 67 supply chain is significant. One typical example is Brexit (Roscoe et al., 2020; Paraskevadakis and Ifeoluwa 2022). One of the consequences of Brexit is the geographical barrier created between the UK and other EU countries that have a significant impact on maritime logistics, particularly the RoRo ferry shipping which is essential for goods transportation between the UK and other EU nations. The other outcome is the huge impact on the goods transportation of the Republic of Ireland, apart from the troubles created for customs clearance, border controls, trade tariffs etc between the UK and EU nations (Paraskevadakis and Ifeoluwa 2022). Demand fluctuation is another critical risk for sea freight forwarders. The development of global trade has a direct influence on demands of goods transportation. WTO (2022) points out that global trade will slow down the growth in 2023. Maersk (2022) foresees a drop of container demand by approximately 4% which will have a negative impact on the forwarders’ client base. Robinson (2023) predicts that ocean freight demand will decline continuously in 2023 (ibid). Furthermore, Exchange Rate fluctuation influences companies’ finance results negatively when Swedish Krona (SEK) is weak against other currencies such as EUR, according to this empirical research. Govindan and Chaudhuri (2016) confirm that exchange rate is one of external factors causing financial risks. In terms of Strikes, all participating representatives agree with this critical risk which disrupts logistics and SCs, and affects importers and exporters, haulers, rail operators etcetera (Rogerson et al., 2022). Moreover, Data confidentiality and security/cyber-attacks are notorious risks for most entities. The higher reliance on digitalization and automation, the bigger risk companies are encountering. Gruchmann et al. (2020) emphasise the threats of sensitive data leaking when sharing data on platforms. Misra et al. (2020) point out the risk of breaching data security when using AI technology and Blockchain. Same as other industries, the maritime logistics industry is facing the big threat of Cyber-attacks. Tusher et al. (2022) demonstrate that the highly automated ships, the more vulnerable to all kinds of cyber-attacks due to a vast amount of data exchange over radio frequency or satellite communication. The more reliance on cyber-physical systems, the higher risk of being attacked (ibid). Natural disasters are also considered as critical by the industry representatives. Apart from deaths and injuries, damage to the environment and enormous economic loss for the society, logistics and SCs are disrupted (Wang et al., 2020; Robinson, 2023). Accidents at ports(ships)/vessel traffic accidents on waters (seas) are critical risks as well. It can result in deaths and severe injuries, huge economic damage and significant disruptions for logistics and 68 SCs. Maritime transport service providers are affected among others (Lam et al., 2019). Queues in port terminals are also considered as a significant critical risk by the industry representatives. Namely, it's a congestion problem in port terminals, owing to inadequate infrastructure in some ports/terminals in certain countries, but also political risk such as Brexit which requires border control and customs clearance and thus leads to queues in the ports in the UK (Paraskevadakis and Ifeoluwa, 2022). Queues in port terminals occurred associated with Brexit, which worsened the truck driver shortage issue in the UK. These two headaches have been exacerbated by Epidemic Covid-19 that required distance restrictions which required longer processing time for border control and customs clearance in the UK during 2020 and 2021. Li et al. (2022) state that Covid-19 is a big disaster in recent years, which has disrupted the global logistics and SCs. Lockdown has been implemented in many cities and countries during 2020 and 2022. Countries borders were closed and container ships stuck at ports. Operation costs increased significantly due to drastic increased spot charges on some trade routes. Shortage of capacity occurred as well (ibid). Shanghai port closure in spring 2022 resulted in a vast jam of ships in the port, thus a huge damage on the global SCs. Sea freight forwarders were accordingly affected extremely, as other supply chain stakeholders. Gu and Liu (2023) confirm that Covid-19 has caused congestion in the port terminals. The next risks which can be potentially critical for the sea freight forwarders include Import and export restrictions, Stringent competition within the industry, Reputational risks, Inadequacy of transport infrastructure, and labour shortage. With regards to Import and export restriction, it’s considered as the next crucial risk for forwarding companies by the industry representatives. It’s highlighted that there are regulations for sensitive countries such as Syria, Russia, Sudan, Iran etc. Companies might restrict activities in such areas in case of reputation damage. Hollweg and Wong (2009) state that there are various restrictions. One of them is customs regulations which is a biggest obstacle to trade in the logistics service sector. The more restricted trade environment, the worse impact on performance of the LSPs. Paraskevadakis and Ifeoluwa (2022) share the same concern. In terms of Stringent competition within the industry, it is seen as a risk for representative 1 and 2, and it’s a concern for them as well for future business. They claimed that carriers’ vertical integration and digital development of freight forwarders exacerbate competition in the industry. Chiriatti, Manners-Bell and Cullen (2022) emphasise the intensive competition in the global freight forwarding market. Representative 3 shows concern about it. When it comes to 69 Reputational risks, representative 3 considers it as a risk which he has experienced and also a concern. But the other two representatives have a different view on it. They mention that carriers are affected by this risk, not freight forwarders. Though, all of them are concerned about it. Roehrich et al. (2014) said that many companies see this as a risk so that they dedicate themselves to building sustainable SCs (ibid). Regarding Inadequacy of transport infrastructure, representative 1 and 2 confirm that it’s both a risk and a concern for them based on their experienced issue of the port capacity in Germany, the Netherlands and central EU, which exacerbates the driver shortage issue. Differently, representative 3 is only concerned about these two risks. Apparently, both insufficient infrastructure and driver shortage will have an impact on goods transportation. Delivery time would be longer and freight rates would increase due to shortage of capacities/resources. Even though the clients will absorb the higher costs, longer delivery time will impact the freight forwarders’ service provided to their clients (worse experience of service). The risks that might be the least critical but not significant for the freight forwarders include Pirate trade/sea piracy and organised crime; Terrorism attempts; Complex operation process in global ocean transportation; International relationships/community relations/culture/ dependency and opportunism; Weather conditions; Policy interventions; and Environmental regulations. Piracy crime threatens the maritime industry. It results in financial loss for companies and damaging countries’ trading environment. It’s a significant risk for the industry. On the other hand, high frequency of pirate attacks discloses that the maritime industry is fragile, which can attract Terrorism attempts (Chalk, 2008). However, these risks are not significant for freight forwarding companies since they can buy corresponding insurance and get compensation from security firms for their financial loss if these risks had occurred, according to the industry representatives. The other less important risk is the Complex operation process in global ocean transportation according to representatives 1 and 2. They believe that digitalization can enhance the efficiency and simplify processes based on the experience of the improvement in the past few years. Though, it is regarded as a key factor which can affect the information flow in the transport chain due to too many actors’ involvement in the complex process with various documents and contracts (Gruchmann et al., 2020). Raza et al. (2023) regard the complexity of the operation process in global ocean transportation as a risk which can cause delivery precision and higher cost of shipping services. By contrast, representative 3 loves the complex operations 70 in global logistics. He argues that the complex will hinder new incomers entering the market and thus less competitors the freight forwarder confronts. Regarding International relationships/community relations/culture, all of the representatives are only concerned about it. According to the academic, the cultural differences might be a risk for companies’ business expansion and could affect companies’ performance significantly (Ghemawat 2001; Antia, Lin and Pantzalis 2007). However, one potential solution is to employ native people for the local branch / subsidiaries. This is certified by the representatives involved in the study. Besides, there are guidelines/routines to be followed, which can mitigate risks of potential mishandling according to the representatives. When it comes to weather conditions such as storms, sandstorms, typhoons, etc., it’s relatively critical for representative 1 and 2 because this factor can affect the service level to their clients when it occurs. But it’s not relevant at all for representative 3. However, many researchers agree that this is a critical risk for maritime logistics. Bad weather affects vessels sailing and leads to unreliable schedules, apart from potential disaster caused (Kwesi-Buor et al. 2019; Urciuoli and Hintsa 2020; Bennett et al. 2020). Moving to Policy interventions, it’s a minor concern for representatives 1 and 2 while it’s not relevant at all for representative 3. It can be related to that the companies have competences to cope with changed regulations. For example, customs regulations, freight forwarders have good control of following up the latest customs regulations modified by specific countries. When it’s manageable by the freight forwarders, then they don’t see any risk for them whichever regulation changed or deregulation. However, this is deemed as one of key factors affecting the logistics industry in the academic field. One example is the new customs regulatory requirements to trade between Ireland and the UK after Brexit, which disrupted the goods movement. Imports from the UK have dropped significantly, thus a drastic decline of the transportation volume in the first two months of 2021 (Paraskevadakis and Ifeoluwa, 2022). Apparently, this kind of regulation influences trading between countries and/or regions, which in turn impacts demand for transportation. When transportation’s demands decrease, freight forwarders’ turnovers will drop due to reduced order intake. Another example is deregulation of the European transport market according to Boone (2018). This has resulted in free pricing in the transport market. Due to a lack of competence for controlling and setting prices for freight, prices have dropped rapidly in the deregulated transport markets. It has led to a consolidation of logistics service providers (ibid). Most likely, there is no longer a shortage 71 when it comes to competence for price setting in the European transport market today. Presenting this example is just for demonstrating that deregulation is a risk for players in the logistics industry. Freight forwarders can be affected by a certain deregulation or regulation sometimes. The last but not the least risk - Environmental regulation is concerned by representative 3, but not representatives 1 and 2. According to the academic, environmental regulations influence logistic company’s operations. They have to follow the regulations when running their businesses. For example, the application of SECA regions and the introduction of the EU Emission Trading System (EU ETS) impact the shipping industry (Xu and XU 2022; Prause and Olaniyi 2019; Tan and Ryan 2022). To implement these kinds of regulations, it might increase the operation cost for shipping companies and freight forwarders since they need to have control and make sure that they don’t miss related environmental regulations when operating and/or handling clients’ requests. Factors such as Fuel price/energy cost; Employee safety and health in operations; attacks on modern SC & Logistics systems/networks; Over-reliance on information and communication networks; Road congestion; and Foreign ownership/investment restrictions are not considered as risks or concerns by the participating respondents in the empirical study. Regarding Fuel price/energy cost, it is regarded as a significant risk which affects transportation cost and shipping rates (Manners-Bell, 2017). Khan et al. (2021) reveal that fuel cost stands for 50-60% of the operating costs so that volatile fuel price gives a direct impact on freight rates and thus the shipping industry. By contrast, freight forwarding companies are not affected by unstable fuel prices, revealed in this empirical study. Instead, one of them discloses that the company can benefit (higher margins) from high fuel costs. In addition, all representatives don’t see risk or concern about attacks on the modern supply chain and logistics systems/networks for companies in the industry. According to Tusher et al. (2022), modern supply chain and logistics systems are dynamic and vulnerable for cyber- attacks. Besides, over-reliance on information and communication networks are considered as risks for companies in the logistics industry. The more advanced operations in the supply chain and logistics industry (e.g.,paperless, automated vessels etc.), the more reliance on cyber- physical systems, the higher risk of cyber-attacks for companies in the industry (Manners-Bell, 2017). 72 5.3 Leveraging Industry 4.0 Technologies for Risk Management for Sea Freight Forwarders 5.3.1 Applicable Technologies for Managing Internal Risks According to the IT expertises, Cloud Computing is a critical tool for managing risks related to bill of lading since Blockchain enables utilisation of smart contracts and electronic bill of lading which eliminates the risk of falsification and delayed B/L. Albrecht (2020) asserts that transport documentation issuance, including B/L, is the legal ground of global trade. The maritime industry heavily relies on this document since it serves three crucial functions such as a receipt, evidence of the contract of carriage, and document of title. However, these purposes pose significant risks for the maritime industry including loss, delay of the documentation that may lead to the damage of perishable cargo, and other related issues. The author highlights instances where the arrival of a bill of lading to the destination took up to one year. The industry attempted to resolve the problem by application of different solutions but it was not successfully done so far. Nonetheless, the primary challenge lies in making sure that individuals or entities are able to obtain authentic and unique assets rather than a copy of the bill of lading (ibid). Albrecht (2020) is sure that it is possible with the application of blockchain. According to Zhao, Liu and Hu, 2022 blockchain technology represents a genuine innovation that facilitates the transition to digitalization while ensuring the security of data, thereby fostering trust among parties involved in the supply chain process.The trust can be facilitated through smart contracts, which enforce and automate the terms and conditions of B/L enabling reliability and transparency. Blockchain technology has an advantage over other solutions (e.g. Bolero) since it enables system decentralisation where only trusted parties can confirm transactions. By employing separate blocks of information, adding them to immutable chains of blocks where each block is assigned to a specific timestamp, blockchain effectively addresses the problem of B/L falsification. The application of blockchain technology has the potential to eliminate the problem of B/L delays. Zhao et al. (2022) highlight the example of Maersk, which has already achieved a significant 40% reduction in document exchange time by leveraging blockchain technology. Even though the blockchain technology has a great potential, Albrecht (2020) highlights widespread application of blockchain technology for bill of lading is challenging due the specific nature of the law. To make the transition possible the existing law has to be adjusted accordingly (ibid). 73 Our findings illustrate that CC and Big Data Analytics should be often utilised in combination when targeting sea freight forwarding risks. This is also highlighted by Zanoon, Al-Haj and Khwaldeh (2017) that these technologies are complementary. The involvement of BDA drives the continuous development of CC, and both are centred around the data. While the BDA is a product, the CC is referred to by authors as a “container”, or by industry representatives as a “platform” (see section 4.3.1.1). Erboz (2017) states that BDA helps in detection of faults by employing algorithms and using historical data. By leveraging the insights from historical data, the probability of errors is being reduced. Our findings confirm this statement since IT industry representatives highlighted that the employment of data analytics and its abilities to analyse a variety of factors can address risks of mistakes in critical documentation, abandonment of cargo, logistics vulnerability, and many others. The findings demonstrate that IoT has the capability to mitigate risks related to regulatory compliance, loading, and cargo abandonment. Researchers Valacich & Schneider (2018) and Ardito et al. (2019) emphasise that IoT plays a crucial role in enhancing supply chain monitoring through the use of technologies like RFID readers, tags, smart sensors, and more. These technologies enable efficient monitoring of cargo handling processes and operations, facilitating effective control and risk management (ibid). The study's results regarding the application of IoT to the mentioned risks are fully expected and are consistent with existing literature. Robots can be used for automating the loading process. AI can contribute to address risks such as customers’ changing expectation of quality, service and price; price fluctuation; and regulatory compliance because of its capability of detecting abnormal phenomena. AI and machine learning can be used for identifying the vulnerabilities of logistics systems so that AI is considered as a critical technology for addressing risks related to the vulnerability of logistics systems by the IT industry representatives. This is confirmed by Erboz (2017) which states that robots have the capability to address the risks by the retrieval of the information from the cloud. This makes it possible for them to effectively deal with dynamic circumstances and mitigate the risk. Yaacoub, Noura, Salman and Chehab, 2021 confirms that robots and AI can be applicable for different types of risks and different circumstances. Cyber security is considered as a critical technology preventing and minimising the identified internal risks such as payment related risks, bill of lading, regulatory compliance, vulnerability 74 of logistics systems, and loading risks, revealed in the empirical study. The greater extent of digitalization in operations, the more vulnerable the organisations to being attacked in cyberspace. Many researchers emphasise the critical importance of entailing cyber security against potential cyber-attacks. As part of digital transformation, systems are highly interconnected. It may cause data security risks and expose more to cyber-attacks (Raza et al. 2023; Tusher et al. 2022; Misra et al. 2020). Advanced robot systems are also facing threats of cyber-attacks since “their data or operating systems’ confidentiality, integrity, availability, authentication, and/or privacy” are being the targets of hackers and/or terrorism (Yaacoub et at., 2021). AM/3D Printing is a crucial technology for managing risks associated with vulnerability of logistics systems since it enables the creation of complicated parts and components in place, as well as providing customers with customised service. Apart from these, AM is also a critical technology for addressing loading risk, according to the IT industry representatives. Researchers Teweldebrhan et al. (2022) anticipate that AM will impact the cargo transportation industry and supply chain & logistics significantly since AM technology will lead to lower demand of transportation of finished products and higher demand of shipments of raw materials on the other hand. The overall global maritime shipping demand would decline consequently. Apart from AM/3D printing technology, the IT industry representatives mention that Intelligent Simulation is also a technology which can be used for alleviating the loading risk through simulating different loading scenarios. It can also be used for identifying vulnerabilities of logistics systems with different scenario simulations. De Paula Ferreira et al. (2020) describe that IS can be used for assessing risks, costs, difficulties with new product employment etc. The major tool - digital tweens has its foundation in simulation, which supports the decision-making process through diagnostics, monitoring and predicting behaviours that are critical for risk management. Augmented Reality is considered as an important technology to the loading risk and a critical technology for approaching the risk of vulnerable logistics systems for sea freight forwarding. It provides a documented reality that can contribute to detecting the strengths and weaknesses of logistics systems. Templin et al. (2022) point out that some applications are available for the maritime industry. The Geographic Information System is one of the applications. It can be used to update the latest content to the dataset so as to enable the analysis of the bottom shape 75 and water level, to label the risky locations, and to identify safe routes (ibid). Looking at the empirical and theoretical data, it’s hardly possible to suggest that AR is a tool which can prevent or reduce loading risk. But it implies that AR can be used to identify, monitor, and prevent loading risk. System Integration (SI) is considered as a crucial technology for mitigating risk related to bill of lading according to the IT industry representatives. Besides, SI might be helpful in loading risk management since it can enhance communication between the ports and vessels regarding the cargos in shipments. Thereby, it can eliminate calibration errors. Furthermore, SI is important for minimising risks for payment related, product price fluctuation, regulatory compliance, and many other risks owing to the enabling communication between different systems and components within or between organisations. Sanchez et al. (2020) supports our findings by highlighting that system integration enhances communication between different entities, enabling control and monitoring, which are crucial for effective risk management. This statement may explain why one of the IT industry representatives referred to this technology as one of the most important among all nine pillars. 5.3.2 Applicable Technologies for Managing External Risks It’s revealed that Cloud Computing (CC) has no critical importance for all identified external risks in this study. But it’s important for managing risks such as demand fluctuation together with Big Data Analytics. It can be used for processing operational data and mitigating the risk of complex operation processes in global ocean transportation. Part of the CC technologies can also mitigate cyber-attacks. It can support weather forecasts with data from harvested IoT data as well. Accidents and collision prevention is enabled by the data from the Cloud platform. Furthermore, CC is an important technology for mitigating the impact associated with political unrest and conflict through for example re-locating IT infrastructure and reducing impact of the exchange rate by employing local labour in cheap countries, as well as detecting potential organised crimes. Valacich and Schneider (2018) describe that the Internet is used as the platform for applications which reside in the cloud with data enabled by web technologies. It allows users to have access to the applications and data from anywhere at any time. CC can also enable business analytics of huge amounts of big data generated by mobile service, IoT, and users of social networks (ibid). Additionally, CC can contribute to increasing competitiveness for ocean freight forwarders with its advantage of storage platform for 76 operational, tactical, and strategic data utilised for Big Data Analytics, since it can enhance service quality, scalability, and quicker to market, according to the IT expertises participated in this study. Raza et al. (2023) state that CC has been pervasive in recent years and an enabler for authorised users having access to online platforms from different devices at the same time and using real-time services including networks, servers, storage, and applications. However, it would be a challenge in terms of data exchange between organisations (ibid). As for Big Data Analytics (BDA), it can detect abnormal phenomena that imply political unrest and conflict, or other potential disruptions with the help of its valuable insights. In combination with CC, organised crimes can be detected. Moreover, it can contribute to mitigating the effect of rate fluctuations. It can also support consumer behaviour analytics across countries and cultures, which is vital for managing the risk of stringent competition within the industry. Apart from these, the IT expertises also mentioned that BDA can support identifying labour market trends related risks. Erboz (2017) highlights that BDA is applicable for fault and risk detection by adopting predictive algorithms. Li at et. (2022) repeat the importance of using BDA for logistics firms to reduce supply chain uncertainty. On the other hand, the researchers also encourage integration for data sharing between logistics firms and their SC partners. Maersk is one of the best practice companies within the shipping industry, using big data in operations for monitoring COVID-19 trends and improving its digital platforms. This contributes to a good performance in the operations and thus good quality of customer service provided (no delay in goods delivery during the Pandemic). Moving to Internet of Things (IoT), the IT expertises mentioned that IoT can assist in securing sealed containers. IoT can also support in establishing autonomous fleets of vehicles that can minimise the risk of labour shortage in the logistics industry.Beside, IoT might be helpful to mitigate the risk of queues in the port terminals owing to its real time information on container locations collected. It can also achieve significant fuel economy. Further, IoT is important for alleviating the risk of terrorism attempt and vital for mitigating the risk of extreme weather as smart devices can be used for remote sensing and monitoring among others. It can also support tracking and tracing of shipments. The better visibility and control enable risk mitigation of accidents at ports, vessels, and queues in port terminals. Valacich and Schneider (2018) point out that IoT enables better supply chain monitoring, enhanced efficiency and productivity among others. Raza et al. (2023) state that logistics centres can monitor cargo handling and operation with the help of IoT so that prompt action(s) can be taken if accidents have arised. 77 Besides, real-time data updates on position, speed, and direction can be collected through sensors equipped in vessels. This valuable data source facilitates predictive analytics for shipping firms. Moreover, location detection and tracking technologies (RFID and GPS) can address the fragmentation problem in maritime logistics networks in which too many actors are involved from different time zones. Furthermore, the improved tracking capability of IoT contributes to better visibility and lower transaction costs for container shipping firms. The enhanced connectivity and visibility can also support decision-making for all involved stakeholders, reducing loss of goods, better inventory management, minimising demand forecast error, shortening order processing times and so on. Maersk Line has benefited from IoT sensors. With the data collected from the sensors, Maersk can enhance fuel economy, optimise routes and empty containers, and monitor reefer containers (ibid). Petersen et al. (2018) share a similar view on IoT’s benefits. IoT, especially the widespread use of cheap sensors, will drive the applications of Blockchain in Supply Chain and Logistics greatly. In combination with Robots, IoT can be important for mitigating risks of pirate trades and organised crimes according to the IT expertises participated in this study. Utilising robots instead of humans (e.g. the captain of the ship) can be a solution for minimising risks of piracy. Though, it might not be the case when it comes to complex situations in which robots can’t respond effectively towards unpredictable human behaviour. When it comes to Strikes (for example, strikes at a port), robots can be a solution - replacing human labour. Yet, it’s crucial to ensure certain restrictions for robots so as to avoid any rebelling against their creators. Additionally, using robots driving trucks can manage the risks of truck driver shortage, which can assist in minimising the risk of queues in the port terminals. Furthermore, accidents at ports or ships can also be minimised thanks to autonomous navigation, planning and monitoring through the robotic systems. Moreover, robotics is significant for risk mitigation and recovery after natural disasters occurred. AI is important for mitigating risk associated with the complex operation processes in the global ocean transportation as AI can analyse patterns, make predictions, and optimise processes. Erboz (2017) points out that Robots and AI are used to handle complex tasks in industries. Yaacoub et al. (2021) affirm that Robots are used in fields such as disaster relief, construction industry, military etc. to carry out tasks such as goods delivery, environmental monitoring, counter-terrorism, anti-piracy, production, crisis management etc (ibid). However, as mentioned previously, the greater extent of digitalization and automation, the more vulnerable to be cyber-attacked. Yaacoub et at. (2021) highlight that 78 advanced robot systems are facing threats of cyber-attacks (ibid). Thus, it’s vital to equip companies’ IT systems/infrastructures with cyber security measures. Cyber security is important for risk management associated with the complexity of operation processes in global ocean transportation. In terms of risks such as organised crimes, sea piracy, and terrorist attacks, Cyber security is a critical technological tool for companies to minimise risks of confidential data leakage, especially when cyber-attacks are increasing today, according to the IT expertises. Tusher et al. (2022) mention that autonomous ships are more vulnerable to cyber-attacks. Raza et al. (2023) highlight that cyber security is one of the concerns when it comes to adopting digital technologies in shipping and logistics. The more modern vessels, the more vulnerable to cyber-attacks. Misra et al. (2020) describe that data leakage is threatening companies when using digital technologies such as CC, IoT and Big Data. Data platforms, wireless sensor networks, business management systems etc can be vulnerable for cyber-attacks (ibid). Looking at AM, it’s considered as an important technology to mitigate risks of stringent competition with the industry due to its capability of efficiency enhancement. It can also assist in terms of import and export restrictions since 3D printing on-site avoids cross-border transportation. Teweldebrhan et al. (2022) describe that the cargo transportation industry will be highly affected and believe that AM will revolutionise the maritime and shipping industry since AM will result in reduction of the transportation of finished products and increase of the shipping volume of raw materials. The logistics service providers shall prepare for the incoming change when AM is widespreadly adopted in future (ibid). In terms of Intelligent Simulation (IS), it’s considered as a valuable tool for understanding how systems operate and for identifying bottlenecks. It’s critical for mitigating risks associated with bad weather and impact on cargo so as to prevent accidents at ports and ships. Besides, it’s an important tool for addressing risks relating to natural disasters, epidemics, accidents at ports and/or ships, and queues in port terminals, especially in combination with use of Augmented Reality. De Paula Ferreira et al. (2020) describe that IS is a powerful technological tool for designing plannings and exploratory models with aim of improving decision-making process. It’s applicable for both science and industries such as SCM, industrial engineering, or operations. By adopting this technology, companies can assess risks, costs, difficulties with new product adoption, effects on operational efficiency, and keeping the company in 79 accordance with industrial development. Digital tweens are the major simulation based tool which is critical for risk management. As mentioned above, Augmented Reality (AR) can be used in collaboration with IS to address risks such as accidents at port/ships, queues in port terminals, etc. The IT expertises emphasised that the combination of AR and IS can be used for scenario planning to avoid accidents and collisions. AR itself can provide captains of ships with better visibility so that potential barriers and collision risks can be easily identified. Templin et al. (2022) highlight that some applications of AR are available for the maritime industry. However, it requires up-to-date and accurate data on the present circumstance on the water, navigable routes, and positions of danger zones with shallows, stones etc. for an efficient navigation and safe sailing on the sea (ibid). The last pillar - System Integration is significantly important for communication between shipping firms and other parties. Application Programming Interface (API) can be used for seamless communications. SI is important for managing risks associated with labour shortage and queues at port terminals through optimisation of routes and driver schedules. In addition, SI is critical when coping with the risk associated with complex operations within the sea freight forwarding industry because its application can enhance efficiency in operations. It is also critical for managing policy intervention related risks as it increases transparency and improves policy formulation for the industry. Overall, SI enhances access to insights that can mitigate most of the identified external risks at different levels, according to the IT expertises participated in this study. Sanchez et al. (2020) highlight that SI enables connection, communication, coordination and collaboration between people, data, services and objects. Horizontal SI facilitates interaction of multiple companies for a good collaboration towards the common goal. Vertical SI allows interaction, communication, and collaboration within the organisation (ibid). 80 Chapter 6. Conclusion In this chapter, the findings are to be summarised, and the two research questions that were stated in Chapter 1 are to be answered. Additionally, theoretical and practical implications will be highlighted. This study has sought to provide a deeper understanding of what types of risks sea freight forwarding companies have experienced and/or are concerned about in the recent four years, and whether the technologies of the current Industry Revolution can be applicable for managing the risks for freight forwarders in the maritime logistics industry, in order to contribute to enriching the studies on risk management in sea freight forwarding operations and the technological solutions for mitigating/managing the specific risks that sea freight forwarders encounter in the era of the current Industry revolution, and narrowing the gap between practice and science in terms of the knowledge of Industry 4.0. The findings of our study demonstrate four major risks that are the most critical for sea freight forwarders from an internal perspective, i.e. the vulnerability of the logistics system, cost- related risks associated with cargo abandonment, changing customer expectations of quality, service, and price, as well as payment-related risks. Apart from these four risks, we have also found that risks such as Financial constraints, Bill of lading related risks, and Product price fluctuation due to capacity shortage are potentially critical for the freight forwarders in the shipping industry. Additionally, two of the representatives add in loading risk as a potential critical risk, which differentiates from the literature. From an external perspective, Conflict and political unrest, Demand and Exchange rate fluctuations, Strikes, Data confidentiality and security, Cyber-attacks, Natural disasters, Epidemics, Accidents at ports and/or ships, Vessel traffic accidents on waters/seas, and queues in port terminals are considered as the most critical risks for sea freight forwarders based on both empirical study and the literature research. Moreover, there are another five risks that can be potentially critical, i.e. Import and export restrictions, Stringent competition within the industry, Reputational risks, Inadequacy of transport infrastructure, and labour shortage. Apart from these risks identified similarly in the literature and the empirical research, the point of view on fuel price/energy cost is completely different between the academic and empirical field. Many researchers consider fuel price/energy cost as a significant risk for logistics service providers in the shipping industry. Oppositely, the industry representatives do not have that 81 sense. One of them even reveals that high fuel prices can generate higher margins for the freight forwarding companies. All nine pillars of Industrial Revolution technologies can be applicable for risk management/ mitigation in the sea freight forwarding industry at different levels. Certain technologies are more effective in addressing risks than others. Our findings show that Big Data Analysis and Cyber Security are the top technologies that address many of both internal and external risks at a critical level. However, all technologies have potential to contribute to risk management in the sea freight forwarding industry. Additionally, combining a variety of technologies can further enhance risk management capabilities. For example, CC might be seen as a platform where large amounts of data are stored, while BDA enables analytics of this data for effective risk management. The study's findings clearly show that both internal and external risks can be managed to varying extents by employing different technologies. Theoretical and Practical Implications This study has contributed to providing a systematic overview of the most critical internal and external risks recurred in sea freight forwarding operations and the corresponding technological solutions for risk mitigation/management for sea freight forwarders, which can be added to the existing literature and thus enrich the studies in this field. In addition, our findings can also inspire the managers who strive for managing risks in the shipping industry. As mentioned above, BDA and Cyber Security are the most critical pillars for addressing both internal and external risks identified in this study. These two pillars are also considered as critical technologies in terms of operations and risk management in maritime logistics by academic researchers. However, CC, IoT and SI are applicable for addressing many different external risks even though they are not considered as critical pillars, according to this study. By contrast, these three pillars are critical tools in operations and risk management in maritime logistics, according to science. Uniquely, AM (3D printing) catches extremely little attention from IT industry representatives in this study while the academics believe that this technology will drastically affect the maritime and shipping industry when it is widespreadly adopted in future. It’s suggested accordingly that logistics service providers shall prepare for the incoming big change (Teweldebrhan et al., 2022). It indicates that there is still a gap between practice and science when it comes to the knowledge of Industry 4.0. Moreover, Blockchain is considered as an effective and critical technology for the shipping industry in science. Many 82 academics state that it’s a trend towards implementation of blockchain in the shipping industry. Though, challenges such as trust for data sharing between partners, a missing common blockchain platform uniting all users, and laws exist at the current stage. These must be overcome prior to adoption of blockchain (Raza et al. 2023; Zhao et al. 2022; Petersen et al., 2018; Irannezhad and Faroqi 2021; Albrecht 2020). The IT expertises shared the same view. They affirmed the advantage of blockchain and the tendency of this technology. Chapter 7. Limitations and future research The chapter will encompass the limitations encountered during the study and provide practical proposals for future research. In the discussion section, several risks are named as critical. Throughout those risks, it is difficult to determine which risk would be most damaging for the industry since these risks can have varying impacts on operations and financial performance. To address it, potential future research could involve statistical analysis in order to calculate the costs and identify the most damaging risks. The probability of occurrence could also be measured, enabling the rating and prioritisation of the most crucial risks. While our study's results generally align with our initial expectations, we also uncovered discrepancies between our findings and the literature. This suggests that the sea freight forwarding industry may lack comprehensive awareness of emerging and current risks, potentially overlooking some of them. These differences highlight the importance of future research to investigate these gaps. We suggest continuous, ongoing monitoring and evaluation of the risks that change over the time due to different forces. Our findings on the effect of the 9 pillars of Industry 4.0 on the risks might be used for developing new approaches and strategies for risk mitigation in the sea freight forwarding industry. While the technologies of the Industrial Revolution have a large potential to minimise risks, they can also exacerbate existing risks and introduce new ones. See the example in Section 4.3.4.2 of the findings, where it was illustrated that the use of the robots might minimise the risk of piracy but, on the other hand, create uncertainty in regards to the effectiveness of the robot response in complex situations. Recognising these limitations and unforeseen consequences of technological implementation, we encourage researchers to delve deeper into the technologies considered for risk mitigation to evaluate and examine potential vulnerabilities 83 and trade-offs associated with their implementation. This would ultimately assist the ocean freight forwarding industry in developing effective risk management strategies by leveraging the pillars of Industry 4.0. 84 APPENDIX Appendix A: Tables of Risks in Sea Freight Forwarding - Literature Review Findings Internal risks (4P) Project Related Financial constraints (Panjehfouladgaran & Lim, 2020; Govindan & Chaudhuri, 2016) High dependence on intensive use of IT and higher skilled human capital (Gruchmann et al., 2020) Practices Submission of inappropriate documentation to customs (Chou, 2016; Manadiiar, 2020) Bill of lading related risks (Chou, 2016; Manadiaar, 2020; Leung, 2007; Roemer, 2021; Irannezhad and Faroqi 2021) Legal liability due to negligence and poor practices that caused the loss, damage, and delays (Manaadiriar, 2020; Panjehfouladgaran & Lim, 2020; Wang et al., 2020) Logistics system's vulnerability (Tubis & Wojciechowska 2021; Panjehfouladgaran & Lim 2020; Manners-Bell 2017) Participant Cooperation risk / Partner performance risk (Chou, 2016; Malkus, 2018) Abandonment of the cargo (Manaadiriar, 2020; Storrs-Fox, 2021) Changing customer expectations of quality, service, and price (Wang et al. 2020; Raza et al. 2023; Casaca & Marlow 2009) Regulatory compliance (Panjehfouladgaran & Lim, 2020; Pająk, 2019; Urciuoli & Hintsa 2020; Park and Park, 2018) High dependence on 1PL to 3PL business partners due to no own assets (Gruchmann et al., 2020) Procurement Product price fluctuation due to capacity shortage (High freight rates for transportation) (Alper & Tekin, 2017; Li et al. 2022; Mehmann & Teuteberg 2018; Panjehfouladgaran & Lim, 2020; Thuermer, 2021) Payment related risk (Thuermer, 2021; Liebl, Hartmann and Feisel, 2016; Kouvelis and Xu, 2021; Daher, Hausmann, and Wölfel, 2022) Table 1: Internal Risks categorised by 4P. 85 External risks (PESTEL) Political Conflict and political unrest (Panjehfouladgaran & Lim, 2020; Roscoe et al., 2020; Paraskevadakis & Ifeoluwa 2022) Import & export restrictions (Hollweg & Wong 2009; Paraskevadakis & Ifeoluwa 2022) Pirate trade & sea piracy and organised crime (Chalk, 2008) Terrorism attempts (Chalk, 2008; Park and Park, 2018) Economic Demand fluctuation (Maersk, 2022, WTO, 2022; C. H. Robinson, 2023) Exchange rate fluctuations (Chou, 2016) Fuel price/energy cost (Raza et al., 2023; Manners-Bell, 2017; Khan et al., 2021; UNCTAD, 2022; Anes et al., 2022) Stringent competition within the industry (Chiriatti et al. 2022; Engström 2004) Complex operation process in global ocean transportation (Raza et al., 2023; Gruchmann et al., 2020) Social Reputational risks (Jain, 2022; Maersk, 2022; Multaharju & Lintukangas, 2017; Roehrich et al., 2014) International relationships, community relations, culture, dependency and opportunism (Ghemawat 2001; Antia et al. 2007) Strikes (Rogerson, et al., 2022; Loh et al., 2017) Technological Data confidentiality and security (Gruchmann et al., 2020; Govindan & Chaudhuri, 2016; Raza et al., 2023; Misra et al., 2020) Attacks on modern SC and logistics systems/networks (Tusher et.al., 2022) Over-reliance on information and communication networks; increasing reliance on cyber-physical systems (Manners-Bell, 2017; Tusher et al., 2022) Environmental Natural disasters (McFarlane and Norris 2006; Kwesi-Buor et al., 2019; Lam et al., 2019; Wang et al., 2020; Urciuoli & Hintsa 2020; C.H. Robinson, 2023) 86 Weather conditions (Kwesi-Buor, Menachof & Talas 2019; Bennett et al. 2020; Urciuoli & Hintsa 2020) Epidemics (e.g. Covid-19) (Paraskevadakis & Ifeoluwa, 2022; Li et al. 2022; Gu and Liu, 2023; Khan et al., 2021) Accidents at ports/ships, vessel traffic accidents (Lam et al., 2019; C.H. Robinson, 2023) Inadequacy of infrastructure (Gu and Liu, 2023; Chiriatti et al. 2022; Robinson, 2023) Labour (e.g. driver shortage) (Paraskevadakis & Ifeoluwa 2022; Chiriatti et al. 2022) Queues in port terminals (Pope et al., 1995; Paraskevadakis & Ifeoluwa 2022; Chiriatti et al., 2022) Legal Policy interventions (Wang et al., 2020; Casaca & Marlow 2009; Paraskevadakis & Ifeoluwa, 2022) Environmental regulations (Xu and Xu, 2022; Tan and Ryan, 2022; DHL, 2023) Table 2: External Risks categorised by PESTEL. 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