By Freelance journalist and copywriter Nicholas Newman https://www.nicnewmanoxford.com/
Digitisation has the power to transform the shipping industry, from the design and construction of ships, to the contracts and logistics of payments and custom clearance. Wholesale application of digitisation technologies (including robotics, internet-of-things, and block-chain) could change the face of the global shipping industry, enabling smart operations, e- navigation and perhaps, in the not- too- distant future, automated unmanned ships.
Block-chain is a digitised, distributed public ledger technology, able to record transactions as they occur in successive blocks. This technology has the potential to transform maritime insurance and perhaps, even more significantly, in an age of globalisation, custom clearing and documentation. Maersk, the Danish shipping giant, recently completed a 20-week block-chain proof-of-concept trial for securely sharing shipping data for maritime insurance in collaboration with management consultancy EY, Microsoft and ship brokerage firm, Willis Towers Watson alongside several insurance businesses reports, Fortune September 2017.
Customs clearance for imports and exports could be trans-formative in terms of speed and cost. Marine Transport International estimates that block-chain technology could save $300 in custom clearance costs in terms of labour and processing associated documents for each consignment. Since one ultra-large container ship can carry up to 18,000 boxes, block-chain could save $5.4 million on each shipment. Rotterdam, Europe’s largest port, is part of a logistics consortium employing block-chain to share knowledge of logistics over the next two years. At sea, Damco, Maersk’s supply chain solutions company, has shipped flowers from Kenya, oranges from California, and pineapples from Colombia to the Port of Rotterdam, with the consignment’s transactions logged via block chain.
These examples illustrate the various ways in which digitization is being employed in the shipping industry and, just as in other industries; the biggest benefits accrue to those organisations that apply this technology throughout their value chain. Companies that fail to employ this transformative technology will fall behind and could soon pass into history.
Digitisation OF SHIPBUILDING AND OPERATIONS
In the near future ships will be constructed more quickly and at lower cost in robotic shipyards. Already, key processes, from profile cutting and panel welding, all the way to the pipe shop, are being automated. A good example comes from Dutch robot- maker Kranendonk, which is supplying shipbuilders with intelligent and CAD-connected robots involved in welding and cutting processes throughout the shipyard. As for the future, digitisation is likely to bring major changes in how ships are built operated and managed.
Industry adoption of this technology will lead to a shakeout in the shipbuilding sector. There could be fewer shipbuilders and operations could change towards more of a global hub and spoke operation, in which a few big players with larger ships compete on the long hauls between major regional hub ports such as Rotterdam and Singapore. However, the ships serving short hauls, for example, linking main hubs to local ports like London and Dublin will tend to be much smaller. Such developments are likely to result in major overhaul of the industry especially in both the container and cruise liner sectors.
No need for broadband communications
In terms of ship operations, increasing digitisation of shipping is automating communications, processes and functions. The arrival of internet of things technology when applied to a ship’s equipment and processes creates a smart ship in which the main functions and processes are automated. Digital communications allows for the transmission, in real time of data of the ship’s operations to shore. Already, container ship operators, United Arab Shipping Co and Maersk Line are linking networks of sensors on their ships to onshore servers and analysing the condition and performance of their on-board systems. Likewise, Siemens commercial ship automation systems facilitate continuous monitoring and reliable control of all relevant on-board processes.
One thing is certain, smarter operations can reduce the opportunity for human’s mistakes and, at the same time, improve risk management. This should mean less business for shipping insurance and legal experts.
Digitalisation has been applied in allied sectors. For instance, for ship navigation traffic control in the Singapore Straits and the English Channel, digitalisation is already bringing more efficient and safe passage of ships in these very busy locations.
Ship equipment suppliers, are bolting on data analytic packages to their equipment to allow customers to make pro-active maintenance decisions.
For some in the industry, digitization will enable sheer scale will deliver competitive advantage, whilst for others, it will enable firms to compete on the level of service and capability.
A new BUSINESS MODEL?
Digitisation offers new opportunities for managing and operating different aspects of the shipping industry value chain. Owners of automated ships could employ management companies to handle the business and operations of the ship, or management companies could lease automated ships on their own account.