Earlier this year I was invited by e-procurement platform ShipServ to address its user-conference taking place in Singapore about what is a growing area of importance for today’s shipping industry.
As Vice President of the Singapore Shipping Association and Executive Director of Corporate Development at Pacific International Lines, the interests of the shipowner, operator and manager are very close to my heart. “The Singapore Vision of Smart Shipping” was the theme of my speech—but what I would like to emphasise is “What the shipping industry needs to consider in order to be successful in the business tomorrow”.
Planning for tomorrow forces us to consider how change and advancement will alter the way we run our business in the years and decades ahead. It also suggests that maybe we aren’t as successful as we would like to think we are at the moment and that we need technological change, and the benefits of lessons learnt from the past eight years, to move the industry onto the next level.
Whatever the conclusion, shipping is going through a significant period of change at the moment with the drive for new thought-out efficiencies and cost controls firmly at the top of every boardroom agenda.
Efficiencies are the name of the game because the shipping markets still have a long way to go before they can present shipowners with any noticeable return on their investment. So it is clear that companies need to be more innovative in their approach and they need to embrace new technology to help drive costs down and optimise the performance of their sea-going assets.
We have been, and will be, hearing a lot being said about Big Data – with a trillion sensors gathering data everywhere (satellite systems, drones, wearables, cameras, autonomous vessels), this is the way the industry has to go and is going. We need to satisfy our appetite for wanting to know everything at anytime and anywhere, and we need to analyse that data for answers and insights. By 2025, the “Internet of Everything” will exceed 100 billion connected devices, each with multiple sensors collecting data. This will lead to a trillion-sensor economy driving a data revolution beyond our imagination.
We will experience a global connectivity to every human on Earth at speeds exceeding one megabit per second. The future is not logging on any longer, but it is about having access to constantly streamed data including between ship and shore. Costs of data use and transport will reduce, making it viable to harvest data from vessels in operation and turn it into decision making tools on the vessel, ashore or anywhere else imaginable.
I foresee that live streaming of data between sea and shore will become the norm in the near future. Using algorithms, routine and predictable tasks would be handled by machines, whereby human intervention will be required only to manage exceptions. Ships will become more automated and digitalised; perhaps even unmanned in some limited circumstances. As for the offshore industry and subsea, it is already becoming increasingly automated where operations are too dangerous for the crew. Dangerous environments, such as dealing with toxic chemicals, extreme temperatures, heights or depths would become relatively easy to handle with the use of robots and drones. Shipping must learn and adapt, and is doing so.
A large container vessel today has some 2,000 sensors on board. Using data from its Automatic Identification System (AIS), monitoring vessel speed, location at port and at sea, routes and exceptional events to deliver performance reports on carrier reliability, carrier alliance performance, and comparisons of sister vessels on the same routes is all possible today. This is an evolutionary change from the traditional ‘the master knows his vessel best’ approach, which still persists in many sectors.
Bunker fuel, even at today’s relatively low prices, is a major expense for a shipping company. Speed, distance and trim affect the costs, and determining optimum routes involves a complex interplay of factors including weather, season, ocean currents, and timing.
With these visualisations available on board and ashore, vessel operators have actionable insights to better manage costs, efficiency and altogether optimise the economic use of their fleet. We have only just scratched the surface in harnessing the capability of data analytics. The future will bring untold opportunities to the maritime industry and successful shipping enterprises in the future will be harnessing the potential of Big Data, without doubt.
But let us not forget our roots as an industry and as a supplier and employer. Yes there is a notion that ships in the future will not need crew, but that is decades away, if it happens at all, we still need to attract new blood into the industry. We need to work with our regulators, investors and customers to make shipping the cutting edge, state-of-the-art industry we know it is so we can attract the right talent to its doors. Tomorrow’s successful enterprises need this.
What I am really saying is that, as an industry, we need to engage other stakeholders better – whether it is with the regulators or academia, we should all be working hard to improve the educational aspects of shipping. The Copenhagen Business School is now providing what I believe is the first MBA with a shipping focus that has an exchange program with the Singapore Management University.
More of this should be done and the industry needs to show a willingness for executives to engage with the universities and colleges to help ‘explain’ our industry. The upside is clear to see.
The industry also needs to show a greater willingness to work with and support associations actively engaged in the interests of the industry—that means practitioners working with and supporting their national and international associations much more. This is an important point because the industry is supported by these associations—whether regional, national or international—and whilst their members are supportive of the work they do, full engagement is essential if companies are to get the correct operating environment.
Putting best practice aside, innovation and thought leadership are the names of tomorrow’s game and the industry needs that level of blue sky thinking.
As a closing thought, I would also like to put some pressure on the regulators both national and international to improve their game to keep pace with the evolution of the smart industry. Smart regulation should be a mutual aspiration.
The development of regulation needs much greater governmental ownership of risk assessment and cost benefit analysis to avoid unintended consequences and to bring future regulation into effect quickly.
Images courtesy © Getty Images/SSA
This article appeared in the October 2016 issue of Futurenautics.