Establishing a digital marketplace for storage opportunities

The Tank Tiger tells Tank Storage Magazine why digitalisation in the sector is so important and how it can be implemented to make processes seamless

IN THE DAYS before Airbnb, there was no way to communicate to each interested party the myriad of living spaces with spare capacity, in real time. However, with the advent of online marketplaces, each seller could update their portfolio in real time, and buyers could efficiently query through a large database, across multiple variables, to find what they need. As a result, Airbnb not only made the hospitality industry more efficient, but also expanded it to include opportunities that could not have existed without an online peer-to-peer marketplace. There is an inherent efficiency to a centralised digital network because users can easily filter through it to find specific information, eliminating efforts to maintain up-to-date information across multiple fragmented networks. Similarly, the terminal storage marketplace can also benefit from a digital network.

MAXIMISING OPPORTUNITIES

Prior to The Tank Tiger, there were mostly personal networks maintained by buyers and sellers of storage, which were effective for the routine business of the major industry players. However, newer and smaller businesses faced a large barrier to entry by having to sift through multiple communication channels to find good opportunities. As a result of these fragmented communication channels, many opportunities were lost through the cracks for businesses both big and small. Digitalisation combines these separate networks into a centralised database that allows information to flow in real time from one market participant to the rest of the marketplace. This increased efficiency in communication will give a broader range of storage consumers access to more accurate information about available storage in real time. This can bring more potential customers to the attention of a terminal and, as a result, reduces the amount of time that tanks spend vacant. While market conditions will at times result in unavoidable vacancies, a digital platform can reduce vacancies that were due to disconnects in traditional communication channels.

PERSONALISED PLATFORM

The Tank Tiger’s new digital platform, hosted at mytanktiger.com, attempts to bring these innovations to the terminal storage marketplace. The platform allows terminal storage holders to anonymously list their available capacity and traders are able to post open enquiries for storage space into the market. These opportunities can be queried spatially through an interactive map, or across many variables such as price, capacity, tank types, or access modes to find the right fit. User preferences can also be added to the database so that each user can be notified of relevant marketplace activity in real-time. This allows terminals to quickly sort through potential buyers and iterate through negotiations. As a result, terminals can reduce the time spent on customer acquisition and free up those resources.

SPECULATIVE ACTIVITY

Because market activity on the platform can be digitised and stored, it allows users to discover aggregated market intelligence on price and capacity movements over time. This was an element that was previously exceedingly difficult to acquire in the storage market. Because terminals can control what information is published on the platform, they are able to collaborate more effectively by passively pooling their data together without actively revealing specific pricing or other sensitive information. This can be used to inform bids and accelerate price discovery or even provide a baseline for determining risk in new construction or acquisitions. There could also be other unexplored uses for these datasets that could be used by speculators trading storage space through sublease contracts. Because available capacity can be listed and bid on through the platform for a future date, it is also possible that the forward-looking data could bring new insights about potential inventory levels. Consequently, it informs traders of the underlying commodities stored at those facilities.

CYBERSECURITY AND DIGITALISATION

As with any modern technology, increased digitalisation is not without its trade-offs. The recent attack on Colonial Pipeline is a reminder of the threat to migrating increased business into the digital space. There is a fear that overdigitalisation could leave the storage industry vulnerable to the increasing array of cyber-attacks. Because The Tank Tiger is still early in the digitalisation process, it has attempted to mitigate those risks by keeping the platform as a non-binding matchmaker. This means the potential for damage from cyberattacks is heavily limited, as the platform does not hold any sensitive financial information, nor can it authorise any legal contracts or logistical movements. In addition, there is a growing industry for cyber insurance to help cover damages from cyberattacks and mitigate risk. Even with the added cost of these insurance premiums and the known risks of digitalisation, more industries find themselves in an increasingly digitalised landscape. The Tank Tiger believes that the storage industry will be no exception, and that business will one day be mostly done online.

For more information: www.thetanktiger.com