Sea News Magazine Issue 1 2019 by seanews

Sea News Issue 1 2019

Big Data gears up Innovation in shipping Change is coming: AI Tackling empty containers

Also in this issue • Scrubbers • Artificial Intelligence • Nanotechnology • SHIPNEXT

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With our bandwidth-inclusive service you can now collect, transfer, share and analyse your onboard sensor data in an instant. Join us in the maritime digital revolution with Fleet Data.

Powering global connectivity inmarsat.com/ﬂeet-data

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EDITOR’S COLUMN

INNOVATIONS/REGULATIONS

Editor’s Column Welcome to the latest edition of Sea News’ digital magazine which arrives as the maritime world starts to look seriously at the digital transformations making significant changes to the way it operates. In this issue we look at the leading digital innovations and processes, from AI through to blockchains and how Big Data has a lot to offer the shipping world in terms of analysing large sets of data. There is strong belief in how artificial intelligence (AI) is being seen as the next level in terms of technological elevation: the ability to generate better data to predict delivery process times and helping ship owners to reduce fuel consumption. But it’s not all about digital technology: we take a look at how nanotechnology is having a positive and very rewarding impact on the shipping world from tracking freight, enhancing power supplies and helping reduce costs through new coatings for ship hulls. It may be in its early stages but it has a lot to offer the maritime world. Talking of hardware in maritime terms, we have a feature on sustainability and the introduction of collapsible containers. Containers are one of the cornerstones of the shipping world and sustainability also crops up in feature we have on shipping and a call to arms from the United Nations. Finally amid a number of very informative interviews in this edition we look at how digital freight forwarders are changing the shipping world. A lot to get through and well worth the effort this month.

Sue Terpilowski OBE, Senior Managing Editor

Sea News All rights reserved. Sea News reserves all copyright-related rights, typically including the right to publish the work, to make derivative works of it, to distribute it, to make profit from it, to license a number of these rights to other people, and to forbid these uses by any unauthorized people, thus being entitled to take legal action against infringement.

Online www.seanews.co.uk

ISSUE 1 2019

Shahjahan Ahmed Publisher shah.ahmed@seanews.co.uk

Mike Godfrey Associate Editor mike.godfrey@seanews.co.uk

Sue Terpilowski OBE Senior Managing Editor sue.terpilowski@seanews.co.uk

Ben Durston Designer studio@seanews.co.uk

Baibhav Mishra Associate Editor baibhav.mishra@seanews.co.uk

Advertising advertising@seanews.co.uk

Facebook www.facebook.com/SeaNews1

Twitter www.twitter.com/SeaNews11

Subscriptions subscriptions@seanews.co.uk

Sea News

INNOVATIONS/REGULATIONS

CONTENTS

Contents THE MOVE TO BIG DATA

INNOVATION

Big Data: significance and scope in the shipping industry

FEATURES EMISSIONS/SULPHUR

ISSUE 1 2019

Innovations within shipping and logistics industry

INNOVATION

4 Looking beyond the obvious 6

Scrubbers: an economically viable option to take on the sulphur cap

AI: The game changing innovation in the shipping Industry

SUSTAINABILITY 8 How to monitor plastics in the oceans 9 Green still a reliable colour

Sea News

24 Maritime autonomy: A bridge too far

BIMCO says efficiency gains will be key to meeting IMOâ&#x20AC;&#x2122;s CO2 targets

Power brainstorm: ports, maritime and logistics innovators at an evening in Tel Aviv by the sea

Green Hydrogen to become affordable alternative by 2035, DNV GL study finds

Five amazing ways nanotechnology is changing the shipping industry

Sustainability in the ocean freight market: make room for the collapsable container

34 How digital freight forwarders have been changing the shipping game

16 Sustainable shipping: meaning and challenges

INNOVATION

Alexander Varvarenko, CEO and Founder, SHIPNEXT using blockchain technology

INNOVATION

Avoid empty 28 container moves

and save environmental costs in shipping

Cover Image (Image Courtesy: Pixabay)

ISSUE 1 2019

SHIPMONEY You Move Cargo and People. We Move Money.

Maritime Payment Solutions. Simplified. CREW PAYMENTS

Solutions for payroll, cash to master and wire payments sent to crew member bank accounts.

CORPORATE PAYMENTS

Solutions for international transfers to pay suppliers, ven d ors , an d agen c i es.

www.ShipMoneyCorporate.com +1 954 990 5429

FEATURE

LOOKING BEYOND THE OBVIOUS

EMISSIONS/SULPHUR

Looking beyond the obvious There is a balance between a cost-effective and a workable solution, however, in the case of fuel treatment, the pay-off is not only in the cost and effectiveness of the treatments but also in the added bonus of increased engine protection and performance. Olivier Baiwir, Managing Director at Aderco International SA reports.

uel treatment is a continuous and highly efficient solution to the forthcoming IMO global sulphur cap: it is poured directly into storage tanks prior to bunkering and can also be added directly into fuel tanks to reduce comingling risks, regenerate the current sludge into usable fuel and clean out contaminants before taking on the new low-sulphur fuel. Unlike other methods of compliance for 2020, fuel treatments are highly effective in maintaining and protecting marine diesel engines. Aderco remains a world leader in fuel treatments and our additives are a continuous solution to the cap and the smart way towards compliance.

Sea News

Aderco has been supplying fuel treatments to the maritime sector for over 35 years and we understand the needs of ship owners, ship managers and operators. The repeated advice to our customers is that the flushing and cleaning of tanks prior to bunkering new fuel is the most imperative of the tasks needed to be tackled. Even the slightest amount of high-sulphur fuel remaining in a tank will mean non-compliance. Using fuel treatment from our recommended date of June this year should provide the necessary flushing and cleaning in readiness for the new fuel. Some in the maritime industry perceive the start of the cap as being nearly a year away. This

ISSUE 1 2019

LOOKING BEYOND THE OBVIOUS

FEATURE EMISSIONS/SULPHUR

needs a major rethink for those who believe that, due to the fact that flushing and complete cleaning of tanks using fuel treatment will require a good six months of fuel treatment use. Unlike other provisions it is a simple matter of pouring the treatment into tanks. So by this March ship owners, ship managers and operators need to be lining up their treatments in preparation for the end of 2019 when they will be bunkering the new fuels. Often new customers are staggered by the simplicity of fuel treatments and their effectiveness: the additional bonus of engine protection is often forgotten in these cases. It is only a fuel treatment that offers this secondary advantage because it interacts directly with the fuel. With the concerns of

ISSUE 1 2019

new bunkering and new fuel mixtures in the early part of 2020, it makes a great deal of sense to depend on a treatment that can work with both the mechanical and liquid interactions of marine engines. It would be remiss not to mention the financial aspects of fuel treatments which are substantially more financially attractive than any other solution available to ship owners. The obvious need is to get ready for compliance with the global sulphur cap in 2020. The more pressing issue is to have a comprehensive plan ready for compliance. The smart way towards compliance starts in the tank and it starts with Aderco.

Sea News

FEATURE

SCRUBBERS: AN ECONOMICALLY VIABLE OPTION TO TAKE ON THE SULPHUR CAP

EMISSIONS/SULPHUR

Scrubbers: an economically viable option to take on the sulphur cap With the IMO Sulphur Cap 2020 on the horizon, pressure on ship-owners to find ways to comply with the new regulations, is mounting at an exponential rate. Baibhav Mishra, Associate Editor reports.

ut of the limited feasible options to limit the emission of sulphur, scrubbers are turning out to be a favourite for the ship-owners due to cost and convenience.

This growing popularity was clearly visible at the

Sea News

12th annual MARE Forum held in November 2018 at Houston as the delegates from maritime and shipping industry were witnessed weighing upon the usage of scrubbers as a potential option in meeting the tightening environmental issues.

ISSUE 1 2019

SCRUBBERS: AN ECONOMICALLY VIABLE OPTION TO TAKE ON THE SULPHUR CAP

FEATURE EMISSIONS/SULPHUR

However, with more than 10 countries, including China, Singapore, Abu Dhabi, California, Germany and more, banning the open-loop scrubbers, it looks like not everything is as it seems. Although, a rise in the installation of the scrubbers was seen in 2018 and a similar forecast is predicted by S&P Global Platts Analytics and 2018-2024 Global Marine Scrubber System Market Report, whether to scrub or not is still a lingering question. The main benefit of using the scrubbers is that ships with scrubbers can continue to run on the cheaper bunker fuel. This would help the ship-owners in reducing the cost involved in switching to expensive low-sulphur fuels like LNG or hydrogen fuel. Replacing the current bunker fuel is an expensive process as not only the fuels are costlier but a whole new fuel-system has to be installed to make the ships sail efficiently using the low-sulphur fuels. In addition to being the cost-effective solution to tackle the sulphur content capping, many independent pieces of research have suggested that scrubbers are also effective in removing the particulate matter and black carbon. This benefit is believed to encourage the ship-owners, who trade via the Arctic region where black-carbon emission poses a great environmental threat, to install scrubbers. However, the adverse effect of the scrubbers that is the discharge of wastewater in the sea through open-loop scrubbers has not gone unnoticed. Thorough scrutiny has been carried out regarding the environmental impact of the open-loop scrubbers; nevertheless, the majority of the ship-owners are still interested to work the way out with scrubbers.

ISSUE 1 2019

Hybrid-scrubbers are the newest introduction and are believed to tackle the issue of open-loop scrubbers to a great extent. The hybrid-scrubbers are designed to switch into close-loop mode allowing the ship-owners to carry on with the installation of scrubbers in the vessels without switching to the compliant fuels. This hybrid breed can be and is being utilized by the ship-owners at places where waste water discharge is banned. Moreover, with Maersk shifting its stand from being a non-participant to the installation of scrubber technology, to changing its course and adopting the scrubber technology, there remains no doubt that installation of scrubber technology is about to be accelerated. This acceleration is also visible from the reports Issued by S&P Global Platts stating the number of scrubbers installed and ordered by the end of November 2018 to be 1,948 units. The report also suggested hastening of the installation of scrubbers by 2020 and reach up to approximately 2,278.A similar growing trend was showcased by 2018-2024 Global Marine Scrubber Systems Market Report. IMO 2020 has no doubt created ripples across the maritime sector. However, with an economically viable option like scrubbers, the approaching â&#x20AC;&#x2DC;regulationsâ&#x20AC;&#x2122; now can be taken as an opportunity to modify the maritime and shipping industry till low-cost compatible fuels are available.

Sea News

FEATURE

HOW TO MONITOR PLASTICS IN THE OCEAN

SUSTAINABILITY

How to monitor plastics in the oceans A new set of publicly-available guidelines for monitoring plastics and microplastics in the oceans will help harmonize how scientists and others assess the scale of the marine plastic litter problem. Baibhav Mishra, Associate Editor reports.

The guidelines include common definitions for categories of marine litter and plastics, examples of size and shape, how to design monitoring and assessment programmes, sampling and surveys. Sections cover citizen science programmes â&#x20AC;&#x201C; which involve members of the public in marine litter surveying and research. There are detailed chapters on monitoring sea surface floating plastic and plastic on the seafloor. The full set of guidelines is available to download freeof-charge from the GESAMP website here.

new set of publicly-available guidelines for monitoring plastics and microplastics in the oceans will help harmonize how scientists and others assess the scale of the marine plastic litter problem. The Guidelines for the monitoring and assessment of plastic litter and microplastics in the ocean have been published by the Joint Group of Experts on the Scientific Aspects of Marine Environmental Protection (GESAMP), a body that advises the United Nations system on the scientific aspects of marine environmental protection. The guidelines cover what to sample, how to sample it and how to record and assess plastics in the oceans and on the shoreline, including establishing baseline surveys. They include recommendations, advice and practical guidance, for establishing programmes to monitor and assess the distribution and abundance of plastic litter, also referred to as plastic debris, in the ocean.

Sea News

The guidelines can be used by national, intergovernmental and international organisations with responsibilities for managing the social, economic and ecological consequences of land- and sea-based human-activities on the marine environment. The guidelines are a response to the hitherto lack of an internationally agreed methodology to report on the distribution and abundance of marine plastic litter and microplastics and directly contribute to the UN SDG Goal 14 on the oceans. Specifically, the guidelines are a response to target 14.1: By 2025, prevent and significantly reduce marine pollution of all kinds, in particular from land-based activities, including plastic debris and nutrient pollution. Visit www.gesamp.org/publications/guidelines-forthe-monitoring-and-assessment-of-plastic-litter-inthe-ocean for more information.

ISSUE 1 2019

GREEN STILL A RELIABLE COLOUR

FEATURE SUSTAINABILITY

Green still a reliable colour Green initiatives come in all financial shapes and sizes because it takes hard cash these days to push the boundaries of environmental concern that little bit further on. Sue Terpilowski, Senior Managing Editor reports.

and this scheme is aimed at fuel projects that reduce CO2 emissions by at least 50% or more percent. Always a forward thinking port, Rotterdam is showing the way in Europe and beyond to other ports such as Hamburg, Barcelona, Antwerp, Los Angeles, Long Beach and Vancouver. These are all part of the World Ports Climate Action Program, launched in September 2018 to get these ports working together on projects to reduce the shipping sector’s contribution to global warming.

here is no doubt there is a will to fall in line with environmental regulations and future plans and some recent port initiatives have shown how far the maritime sector is progressing. The Port of Rotterdam Authority has allocated around €5m for funding via its Incentive Scheme ClimateFriendly Shipping and it is available to shippers, shipping companies, engine manufacturers, service providers, along with fuel manufacturers and suppliers in an effort to promote projects that make use of low-carbon or zero-carbon fuels delivered into the Rotterdam port area. This is all about CO2 emissions

ISSUE 1 2019

As the global IMO sulphur cap 2020 draws closer the focus is on the shipping world: how will they tackle further reductions in emissions to make the industry cleaner? But the race is on to develop online tools capable of measuring emissions around the port. From a public perception angle, greater scrutiny and concern will be on ports than most shipping as their work is mostly out at sea. While there is talk of drones and other ‘sniffing devices’ for shipping and concerns over non-compliant fuels and emissions, the issues of cleaning up ports should be just as important. Electric operations for shipping and ports are on the increase and commercial pressures are as much to be thankful for as the environmental crusaders. Back in Europe the first batch of electric barges for use on European waterways is apparently nearing completion: New York is also pushing ahead with energy and power for the port and the thriving hinterland using wind power. The initiatives are out there. Even the smallest campaigns for recycling and clean-ups of ports can go a long way to convincing the world that the maritime sector understands what is needed to remain green.

Sea News

FEATURE

BIMCO SAYS EFFICIENCY GAINS WILL BE KEY TO MEETING IMO’S CO2 TARGETS

SUSTAINABILITY

BIMCO says efficiency gains will be key to meeting IMO’s CO2 targets BIMCO’s Deputy Secretary General, Lars Robert Pedersen, has issued a strong message on the shipping industry’s commitment to tackling CO2 emissions. Jacques Moss, Content Marketing Manager at KNect365 Energy reports.

peaking at the Green Ship Technology Europe conference in Copenhagen on March 20th, Pedersen told attendees that the industry needs to do more to address climate change, while cautioning that the IMO’s forecast of rapidly rising emissions without regulatory intervention may be overstated. Released in 2014, the IMO’s third greenhouse gas study caused consternation among shipping companies after it concluded that a business as usual (BAU) approach could lead to an increase in maritime CO2 emissions of as much as 250% by 2050. Pedersen told attendees that BIMCO was “dismayed” by the conclusions of the study. But subsequent research has shown that the IMO’s forecast contained assumptions which make the challenge of reducing emissions seem more difficult to meet. The IMO’s GHG reduction targets, adopted at MEPC 72 last year, call for a reduction in GHG emissions on 2008 levels of at least 40% by 2030, and 70% by 2050. According to Pedersen, gains in operational efficiency and differences in the way trade develops in future could place the shipping industry on a much stronger footing to meet these targets than anticipated by the IMO. “The important thing here is not that everything is fine, and we don’t need to do more,” Pedersen told the conference. Instead he urged the industry to move proactively to reach a target which it has every reason to believe is achievable. What makes the IMO’s BAU predictions problematic is that they are based on historic data. Pedersen argues that

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the assumption that increases in shipping emissions will continue to track rising global GDP is misplaced. “I believe we can only globalise once,” he said. “In the future we will only see a continued expansion of traded tonnes, while any expansion of traded distances will actually level off.” His assertion is backed by the classification society DNV GL, who predict that global transport demand will peak at 78,000 109 tonne-mile in 2040, before falling off to 76,000 109 tonne-mile by 2050. There are also some low-hanging fruit available which could help to bring rapid reductions in carbon intensity - such as reducing the time vessels spend idling outside ports. These kinds of efficiency-based solutions will be attractive to shipping companies because their commercial impact can only be beneficial. “Such solutions neither require more ships nor fewer ships, only less fuel to transport the same cargo on the same ships,” Pedersen said. Moving forward, a more innovative approach will be required to meet the 2030 target of a 40% decrease in maritime emissions, including the development of economical zero-carbon fuels. “We believe there is a need for the IMO to consider a programme of substantial and sustained research and development to make these solutions available by the 2030 timeframe,” Pedersen said. More thoroughgoing R&D could also prevent regulators from making decisions without understanding their full commercial implications, Pedersen explained.

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he t n i 0 o 2 to j % 0 5 . 2 e r d h . u t n s a f h l o e s p l t u u view pac me f s t i i m d t i i n s Vi ws a n the r mar o o f ne e p t a a c b e r d u h lp u s

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GREEN HYDROGEN TO BECOME AFFORDABLE ALTERNATIVE BY 2035, DNV GL STUDY FINDS

SUSTAINABILITY

Green Hydrogen to become affordable alternative by 2035, DNV GL study finds Research paper ‘Hydrogen in the electricity value chain’ concludes that production of hydrogen from electrolysis will become competitive with production from natural gas. Sue Terpilowski, Senior Managing Editor reports.

ydrogen produced from renewable energy will become an economic energy carrier to complement electricity and accelerate the decarbonization of industrial feedstock and heat, as well as providing long-term storage solutions. These are the key findings of DNV GL’s research paper ‘Hydrogen in the electricity value chain’. The results provide an encouraging outlook for the acceleration of the energy transition, as hydrogen

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is a unique energy carrier with no carbon emissions that can be used for long-term storage and heating applications. By using electricity generated from renewable sources such as wind and solar energy, the resulting energy carrier is carbon-free ‘green’ hydrogen The economically viable use of green hydrogen becomes feasible due to the increasing penetration of wind and solar power in the years to come. DNV

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GREEN HYDROGEN TO BECOME AFFORDABLE ALTERNATIVE BY 2035, DNV GL STUDY FINDS

FEATURE SUSTAINABILITY

GL’s Energy Transition Outlook forecasts that solar PV, wind energy and hydropower will account for 80% of global electricity production in 2050. As this capacity increases, opportunities to utilize its low-cost electricity are becoming feasible to avoid curtailment: initially conversion into heat then (daily) battery storage and eventually conversion into green hydrogen. The prerequisite for hydrogen to become an economically viable energy carrier are two-fold: Firstly, the prospect of increasing times with low-cost electricity caused by an oversupply of available energy due to the sharp rise of renewable energy sources. Secondly, use cases for hydrogen applications are expected to be in support of low-carbon options. If those parameters are set, the production of hydrogen from electricity can compete with natural-gas based hydrogen production and provides a viable commercial business option for numerous applications, starting with industrial hydrogen feedstock. DNV GL’s energy experts conclude that the main reasons for the economic feasibility of hydrogen between 2030 – 2050 are driven by three key developments: •

The cost of electrolysers will go down caused by learning curve experiences and the cost of asset developments which is expected to decrease. Production by electrolysis from ‘surplus’ or lowcost electricity from renewables is an option for producing low-carbon hydrogen with no related carbon emissions.

•

Time periods when low or zero cost prices for

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electricity are available will increase due to the rise of renewables, generating a surplus of energy available to the power grid. •

Penalization of carbon emissions in the coming years industries are expected to see a shift away from carbon-heavy activities e.g. due to introduction of carbon tax and incentives for low-carbon solutions.

“The prospect of delivering affordable hydrogen applications in the mid-term future provides a very encouraging signal to accelerate the global energy transition,” said Lucy Craig, Vice President of Technology and Innovation at DNV GL – Energy. “Our research demonstrates that green hydrogen provides an optimal use for surplus electricity, which we expect to see in the years to come due to the rapid rise of renewable energy. In combination with electrolysis, hydrogen proves to be an economically feasible solution for the decarbonization of the heat and storage sector.” DNV GL’s researchers made a distinction between hydrogen production using surplus electricity generation from renewables and peak electricity generation, applying hydrogen as a fuel. This distinction is based on the underlying belief that the role of hydrogen in the electricity system competes with alternative solutions to the challenges of the energy transition and the increasing penetration of variable renewable energy systems.

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FEATURE

SUSTAINABILITY IN THE OCEAN FREIGHT MARKET: MAKE ROOM FOR THE COLLAPSIBLE CONTAINER

SUSTAINABILITY

Sustainability in the ocean freight market: make room for the collapsable container Sustainability has become a strategic focus for the ocean freight market. Representing 2.4% of global CO2 emissions, the UNâ&#x20AC;&#x2122;s International Maritime Organization (IMO) forecasts CO2 emissions from ocean vessels to rise between 50% and 250% by 2050. As a result, the IMO is requiring merchant ships to cut the amount of sulfur emitted into the atmosphere by 2020. Nicholas Press, Managing Director & CEO, CEC Systems reports.

aersk, the largest ocean vessel operator, has taken the requirement to heart and announced its goal to reach carbon neutrality by 2050. To achieve this goal,

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carbon neutral vessels must be commercially viable by 2030. The goal is expected to be achieved by a mix of new innovations and the adaption of new as well as physical technologies. However, 2030 is an aggressive

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SUSTAINABILITY IN THE OCEAN FREIGHT MARKET: MAKE ROOM FOR THE COLLAPSIBLE CONTAINER

FEATURE SUSTAINABILITY

target for an industry that has been traditionally slow to respond to change. Not only is Maersk looking to invest in sustainable vessels but also sustainable containers. Traditionally, shipping lines have had containers fitted with tropical hardwood floors. It takes two cubic meters of hardwood to produce floors for three 40 foot containers. The container industry uses approximately 1.2-1.5 million cubic meters of hardwood annually to meet the demand for new containers. Despite the high usage of wood, it is not ideal as it adds additional quarantine cost but with the high price of steel, it is somewhat necessary to reduce the cost of the container itself. As of January 2011, all Maersk containers have floors made of timber from sources employing responsible forestry practices or non-wood alternatives such as bamboo and recycled plastic. Any tropical hardwood used will be certified by the Forest Stewardship Council (FSC). Within the first four months of the policy change, Maersk Line purchased 64,000 containers that comply with the policy. Over the next five years, Maersk Line will purchase approximately 3 million containers (TEU), more than doubling its current container fleet. Certified floors will be in all Maersk Line containers within 18 years, the typical lifetime of a container. While Maersk may be leading the ocean freight market in terms of sustainability actions, other sustainable measures as they relate to containers have taken place for a number of years. Most notably reusing shipping containers and turning them into buildings. This can lower the usage of bricks and cement as the production of cement is a major source of CO2. It could also help to reduce the usage of steel. Reusing a container could help to save about 3500 kilograms of steel. A noted example is Starbucks’ Greener Stores initiative which utilizes shipping containers as stores. Through these store formats, Starbucks is able to reuse reclaimed materials throughout the design. The latest such store recently opened in Taiwan and joins over 45 prefabricated modular stores located in the U.S. As sustainability plays a bigger role in the ocean freight market, collapsible containers should be a key component for achieving sustainable goals. Even though Maersk, for example, requires responsible forestry practices or non-wood alternatives for the flooring of its containers, the container itself remains basically the same, rigid and a space-taker instead of a space-saver.

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Not only does the physical aspects of the container need to be considered but also how empty ones are managed. Empty containers cost the shipping industry about $20 billion per year. At any given time, about one-third that are in circulation are empty, with the average container spending nearly half its life idle. The growth in global trade has resulted in large global trade deficits in which some countries import more than they export and vice versa. As a result, 1 in 5 containers being shipped is empty - a problem that will only grow as trade increases. One of the benefits of collapsible containers is the space that is saved on vessels particularly when transported empty. The empty containers are retracted and stacked thus allowing for improved vessel travel. Additional environmental benefits of collapsible containers include: •

Less C02 emissions through fewer trucks, train and ship movements

•

Less road and rail congestion means less wear and tear to major infrastructure

•

Fewer ships needed means less impact on the environment

•

Less space needed for the storage of empties

However, despite such containers being made of 100% steel including the floor, experiments are underway to test future iterations with composite materials in order to reduce the amount of steel; but there are limitations to this. The industry and certification bodies need to be prepared to work in and around the regulations and adjust to cater for new systems including revising regulations to allow for the use of composite materials. As a byproduct, when considering the use of recycled containers as buildings, imagine how easily and quickly a collapsible container could be transported and set up for such buildings as pop-up stores as well as housing for those in need. Regardless, sustainability practices in the ocean freight market are certainly welcomed but the collapsible container should be included in an individual company’s strategy as well as industry and certification bodies. As ports and transport evolve, so too should the container.

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SUSTAINABLE SHIPPING: MEANING AND CHALLENGES

SUSTAINABILITY

Sustainable shipping: meaning and challenges Humanity trades extensively via sea. The role played by the oceans in increasing the world trade has been significant and is bound to grow over the coming centuries. With 90% of the world trade being carried through oceans, the fact that the shipping industry makes an integrated part of our lives cannot be denied. Baibhav Mishra, Associate Editor reports.

wing to this fact, it has now become indispensable to keep the oceans healthy and productive at the same time. The rising social and environmental concerns have pushed the maritime sector to take a more sustainable approach in the way it moves forward the trade. A universal call to act to ensure the prosperity of the maritime sector along with humanity and nature came into force in 2016 in the form of United Nations Sustainable Development Goals. The 17 interconnected targets focus on tackling the concerns related to poverty, protection of the planet

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and establishing world peace and prosperity. Out of these 17 goals, the following are the 6 significant points that have left a major impact on the functioning of the shipping industry. 1-UN SDG 6: The UN SDG 6 goal focuses on the availability and sustainable management of water and sanitation 2-UN SDG7: The next important target under Sustainable Development Goals to make modern energy available to all in an affordable, reliable and sustainable way. 3-UN SDG 8: The SDG 8 targets to provide decent

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SUSTAINABLE SHIPPING: MEANING AND CHALLENGES

FEATURE SUSTAINABILITY

employment and ensure sustainable economic growth across the globe. 4-UN SDG9: Under SDG 9, the shipping industry is aiming for sustainable industrialization by building strong infrastructure, and work upon the innovations that would further help in promoting sustainable industrialization. 5-UN SDG 13: Under this goal, the shipping industry is looking forward to taking significant and immediate actions to counter environmental and climatic issues. 6-UN SDG 14: The intent of this goal is to conserve the oceans, seas and other marine resources for a tenable development. What Are Key Challenges Towards Sustainable Shipping? Undeniably sustainable shipping is the future; however, there are some major challenges to attain this. For instance, on one hand, technological advancements like digitization, integration, and automation can help the shipping industry in optimizing operations, but at the same time it poses threats to data protection and cybersecurity. The requirement for the shipping industry to combat these technological threats is to adopt more transparent, humane and personalized measures.

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Secondly, even as the shipping industry is adapting to an eco-friendly mode extensively, it is still responsible for the greenhouse gas emissions accountable for major climatic changes. The shipping industry has still a long way to go in order to achieve sustainable development that incorporates ways to reduce GHGs and other pollutants (into the ocean and air). The third challenge is to attract and retain the quality staff, while still considering gender equality, new mind and skill sets, and leadership aspects. The major challenge possessed by the higher management is to convince the staff members of the importance they hold in attaining the goal of sustainable shipping. Lastly, along with sustainable development that focuses on social and environmental concerns, there should be a workable profit-model for stakeholders as well. The sustainable development is the new buzzword and attracts a lot of attention as this approach not only reacts to social and environmental changes but also leads to uninterrupted growth of the industry in the long run. The vital point to grasp here is to consider sustainable development not just as a milestone, but as a journey towards a better future for the industry and humanity.

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FEATURE

BIG DATA: SIGNIFICANCE AND SCOPE IN THE SHIPPING INDUSTRY

THE MOVE TO BIG DATA

Big Data: significance and scope in the shipping industry Recently, a buzz word is making rounds in the shipping industry - Big Data. This otherwise slow-moving industry on the technological front can be seen quickly gearing up to avail the advantages that this latest trend has to offer. Baibhav Mishra, Associate Editor reports.

efore Big Data came into the picture, traditional technology was utilized by the organizations to analyse large sets of data, collected from conventional sources like warehouses, distributing nodes etc. However, with the entry of Big Data, it is now easier to carry out analytics of not only the large sets of data flowing in from traditional sources but also take into account and analyse the non-traditional data at real-time nodes and also in batches.

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The non-traditional data incorporates data existing in the form of text, audios, videos, image or present in any other source related to the business while the traditional data includes the data that can be accounted in order to calculate the profit or loss margins from the voyage. Fuel costs, transit time, wages, revenue etc are the sources from where traditional data is pulled for analysis. Now the question arises that whether the non-

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BIG DATA: SIGNIFICANCE AND SCOPE IN THE SHIPPING INDUSTRY

FEATURE THE MOVE TO BIG DATA

traditional data is quantifiable or not? Well, the honest answer to this question is that some non-traditional data is quantifiable while some are not. However, when the data is in a non-quantifiable state, Big Data helps in suggesting the preventive measures that can be taken to tackle the issue by analysing the data and drawing patterns from the data. For instance, Big Data can pull out the information on costs and viable routes in case of a storm at the sea, allowing the management to take the required decision on alteration of the route. Similarly, sensor information can be utilized to maximum advantage and issue can be resolved even before it happens. Big Data also finds crucial implication in vessel operations. Immediate decisions can be made for the berth and terminal allocations on the basis of information gathered via GPS, device sensors or control panels. Predictive analysis, which plays a crucial role in increasing the operational efficiency of the industry along with ensuring timely delivery, is now a lot easier and convenient with Big Data. In addition, tracking of the cargo, maintenance of security and privacy also gets established in the desired manner through Big Data Analysis.

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Big Data offers many significant applications in the shipping industry. However, in order to harness the Big Data concept to its full potential, the first and most important thing is to decide the problem that needs to be addressed from the collection of traditional and non-traditional data. This simplifies the process of analysis and it becomes easier to devise better resolution to the standing issues. As per the current trends and usages offered by Big Data, it is quite sure that Big Data is going to find significant scope in the future of the shipping industry as well. For instance, the data collected from the sensors on the vessels can offer essential information for the better and improved designing of the ships in the future. Also, the testing of the models could be carried out without physically developing them, thereby saving on cost, time and resources. There remains no doubt that the advanced dataprocessing and analysis method using the Big Data will prove crucial in the development of the maritime sector worldwide, which in turn will enhance the global economy.

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FEATURE

INNOVATIONS WITHIN SHIPPING AND LOGISTICS INDUSTRY

INNOVATION

Innovations within shipping and logistics industry The shipping and logistics industry has witnessed remarkable change, driven by evolving customer expectations and digital transformation ranging from the invention of shipping containers in the 1950’s to using Artificial Intelligence (AI) and data analytics to ensure a safe and efficient global supply chain. Steve Felder, Managing Director for Maersk – South Asia reports.

raditionally, maritime trade and logistics has been a brick and mortar industry, where running administrative paperwork cost a fifth of shifting goods (ref: World Economic Forum), thereby making the supply chain more expensive for exporters and importers. For example, according to the UN, if there is complete digitisation of trade paperwork, it could raise the exports from Asia-Pacific countries by $257 billion a year – a substantial gain for the exporters in the region.

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While the adoption of digital technologies has picked up within the shipping and logistics industry, it is still in the early stages of digital transformation, where most of the players use technology to manage back-end operations. The use of new age technologies such as AI, data analytics and blockchain are starting to be pursued by larger players to attain higher efficiency, accountability and develop end-to-end solutions. However, the free flow of data and automation also brings risk such as data abuse and data crime that

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INNOVATIONS WITHIN SHIPPING AND LOGISTICS INDUSTRY

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through extended use of API’s and EDI’s and simplify the overall logistics process with a single window, solution driven approach TradeLens, a blockchain innovation developed jointly by Maersk and IBM has paved the way for paperless efficiencies in freight forwarding and trade finance. Currently, 94 organizations across the globe have incorporated this technology in their businesses. Some of the capabilities delivered on include arrival time of vessels and their gate-ins, commercial invoices and other such bills, as well as custom releases. has posed a challenge in the implementation of digital technologies across all sectors. So it has to be managed with watertight governance. Exploring new opportunities with innovative and intelligent solutions works in tandem with understanding the needs of the customers. As the largest containerised trade provider, Maersk has implemented end-to-end supply chain solutions in the form of Remote Container Management (a system that allows customers to know the location and atmospheric condition of their refrigerated cargo) and the Maersk app (which provides ease of accessibility by providing real time shipping information to customers and help them manage shipments including tracking cargo). In addition, we have also simplified the digital processes – customers can use the web platform of Maersk.com for instant booking and online payments to improve efficiency. For instance, with the launch of Self Service Instant Booking feature customers can instantly confirm and proceed with their bookings, in contrast to having to wait for hours to complete the processing. Through the SSIB feature, Maersk set a standard in the industry at large owing to innovative product. This feature gave impetus to diminish workloads and greater efficiency in terms of management of the supply chain. SSIB is available for long term and short term bookings and ensures complete transparency on pricing. Furthermore, customers have visibility and preference over the vessels employed and depots with empty containers they can opt to use, adding value to the service provided by us. Above all, there is assurance that the booking will not be cancelled at a later stage. We are working with a number of our customers on Blockchain solutions, to simplify and secure their supply chains, and reduce the amount of paperwork, connect the various pieces of their supply chains

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To support our global digital drive and confront our toughest operational and commercial challenges, we have established a digital arm in Bengaluru. With over 250+ employees at the centre, Maersk’s engineering journey is on the fast track. Developing and building on analytics, machine learning, and AI, this centre is propelling data engineering, automation of processes and product engineering. OceanPro is an accelerator programme initiated by Maersk to enhance technological innovation through working with start-ups. OceanPro is a 120 day intensive programme which hopes to develop solutions with start-ups for improved customer engagement and ease management operations by leveraging AI, IoT, Blockchain and Advanced Text Analytics. The digital transformation at Maersk is not only limited to serving the customer and commercial front; the operational performance of more than 700 container ships and 4 million containers are transformed into insights across a cloud computing platform. Maersk Line has also teamed up with IBM to collaborate on a blockchain enabled platform – entitled TradeLens - designed to promote more efficient and secure global trade. While more than $4 trillion in goods are shipped each year, the ocean shipping industry transports more than 80 percent of the goods consumers use daily. Digitization will help to control trading and operational risks in one place, and improve business efficiencies for seamless global trade. In future, digital technologies will streamline not just the shipping industry but the overall supply chain like ships will inform ports what are in which container before docking for faster unloading of cargo to telematics systems in trucks will inform drivers when and where containers will be unloaded to reduce waiting times and bottlenecks in ports.

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FEATURE

AI: THE GAME CHANGING INNOVATION IN THE SHIPPING INDUSTRY

INNOVATION

AI: The game changing innovation in the shipping Industry Artificial Intelligence is nothing less than a miracle of computer science. This extended branch of computer science focuses on building smart machines that are capable of performing human-like tasks like decision-making, speech recognition etc. Baibhav Mishra, Associate Editor reports.

he prominent feature of AI, which is making it the future of industries, is that through AI, machines can be trained to perform certain tasks by processing large amounts of data and also draw patterns from the processed data. Today, AI is transforming almost every industry. Right from finance and banking sector to health care, retail/Etail, higher education, energy and utilities, AI is marking its prominent place in all the leading

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industries and now is all set to transform another major industry- Maritime. The maritime sector is responsible for carrying out 90% of the world trade and is in dire need of technological elevation, which the AI is capable of providing. Hence, when it comes to technological innovations for the maritime sector, Artificial Intelligence is earning the reputation of being a prime technology.

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AI: THE GAME CHANGING INNOVATION IN THE SHIPPING INDUSTRY

FEATURE INNOVATION

Here, we have listed top 8 ways in which Artificial Intelligence and Automation are already changing the landscape of the maritime sector: 1. Artificial Intelligence and automation are speeding up the delivery process throughout the shipping channel. Even the retailers are now looking forward to utilizing AI to further distribute the products, thereby shortening the delivery time and also saving on the cost. 2. It has now become easier and accurate to predict the estimated time of arrival of the containers at the ports and also calculate the risks involved along with forecasting the spotting trends. 3. AI has refined the existing process of analysis by eliminating the inefficiencies, errors or duplications in the data. In addition, any conflict can now be predetermined and prevented because of the automated processes. 4. AI is also helping ship-owners by reducing fuel consumption and maintenance costs through cloud application. 5. AI is assisting in optimizing the terminal operations alongside planning. 6. With the help of AI, it is now easier to mimic human perception and cognitive abilities, thus offering an easy way of controlling operations and types of equipment on-board without any requirement of actual human interference.

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7. AI and automation are also providing effective and immediate solutions in cases of natural emergencies or other adverse situations that may hamper the whole process and supplychain. 8. AI-based innovations are also allowing the interrelated data to flow-in from diverse sectors. Also, the cross-technology is offering a convenient usage of data in different formats. With giants like Rolls-Royce, Maersk, Kalmar, and others showing a keen interest in the further evolution of Artificial Intelligence and Automation in the shipping industry, it is safe to say that in coming ages AI and Automation will be the ruling technologies. In addition, AI is only going to upgrade the armoury of the maritime sector by structuring the data accurately during the challenging times in the near future, thereby enabling the industry with better and cost-effective solutions. Considered to be a slow-moving, traditional-inapproach and fragmented sector, the shipping industry is now eyeing at some major technological innovations based on AI. In fact, the coming era may witness the creation of an entirely transformed shipping industry that will offer greater economic, environmental and social advantage.

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FEATURE

MARITIME AUTONOMY: A BRIDGE TOO FAR

INNOVATION

Maritime autonomy: A bridge too far What is the difference between autonomous shipping and automated shipping? Well, the lines between the two terms are blurring fast but it is prudent to know that autonomy will bring a sea change to the global maritime sector and it is automation that will enable it. Payal Bhattar, Freelance Editor reports.

magine several ships en route from departure port ‘A’ to arrive at different ports around the world, each at a given time. These ships have no captain or crew on board and can navigate, dock, load, unload and refuel on their own and are maintained by sensors, robots and drones. The ships are navigated and controlled by computers from a fully automated port with no human intervention or interaction. The operating system of each vessel makes decisions and takes actions based on the situation it is in. That’s ‘autonomous shipping’ and it is very different from automated ships. “The difference between the two is dictated by the degree of human intervention. An automated vessel does not have the level of intelligence or independence that an autonomous one has. The

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range between manual - automated - autonomous tends to be a sliding scale of different capabilities of man vs machine. Autonomous is on the side where the vessel makes sufficiently complex decisions on its own and has zero human intervention,” explains Melvin Mathews, Director - New Businesses, Wärtsilä. Redefining ‘shipshape’ In May last year, the International Maritime Organization (IMO) defined a ‘Maritime Autonomous Surface Ship (MASS)’ as a ship, which to a varying degree, can operate independently of human interaction. It enlisted several non-hierarchical degrees of autonomy that a ship could have for the duration of a single voyage as: a) Ship with automated processes and decision support: Seafarers are on board to operate and control

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MARITIME AUTONOMY: A BRIDGE TOO FAR

FEATURE INNOVATION

shipboard systems and functions. Some operations may be automated. b) Remotely controlled ship with seafarers on board: The ship is controlled and operated from another location, but seafarers are on board. c)Remotely controlled ship without seafarers on board: The ship is controlled and operated from another location. There are no seafarers on board. d) Fully autonomous ship: The operating system of the ship is able to make decisions and determine actions by itself. “Autonomous shipping will continue to evolve over the next 15–30 years. In the future, ship traffic control will move to the shore and a standardised framework very similar to what we have in aviation today will likely be established. This level of co-ordination will be needed in maritime. Planes are almost fully controlled by auto-pilot and in this sense, they are autonomous despite the fact that they still have crew on board to balance the risks in emergency cases. We cannot fully eliminate the human factor at sea, that’s not the objective either, but I do foresee a similar future for shipping,” says Vladimir Ponomarev, Vice President Solutions at Wärtsilä Voyage. “The way how the fleet will be operated will be different. Operations of autonomous ships will be located in the fleet management office and there will be few people depending on the size of the fleet who will take decision. They will be required to navigate through a lot of data. The major difference will be in the level of responsibility of ships. Today one man is responsible for one ship, in the future one man will be responsible for 100s of ships,” he elaborates. Man vs machine BIMCO, the world’s largest international shipping association is of the view that so far there hasn’t been a realistic business case for autonomous ships because the cost of building an autonomous ship is far more expensive when compared with traditional shipping. It believes that Seafarers have an important monitoring role as far as power supply and engines are concerned and replacing them with condition monitoring sensors, that have so far not been very reliable, may not be the best idea. Aron Sorensen, Head of Maritime Technology and Regulation, BIMCO says,

up from ashore it is difficult to envisage how all the operational and maintenance duties currently carried out by crew can be solved. Many examples could be mentioned: Sensors that detect flooding can for example start pumps automatically, but how will the systems be able to find the cause of the water ingress and stop the leak?” BIMCO states, ‘fully autonomous (unmanned) ships in international voyages will take a long time to become a reality. Apart from the fact that new technology is needed and there needs to be a business case, other challenges are lack of regulation, insurance, and market acceptance. We have already seen projects of unmanned ships being planned in national waters, however, as these so far have been heavily subsidised, it is not clear if they build on a viable business case’. Sailing towards autopilot Despite the fact that autonomous shipping could become a reality only in the distant future many shipping companies, technology start-ups and ports have begun sailing towards it. For instance, Wärtsilä is exploring remote control ships and autonomous ships via integration with a port system, a navigation & control system and a fleet operation system to help automate decision making for the ship. The company has also tied up with the Maritime and Port Authority of Singapore to promote maritime technologies and test an advanced intelligent manoeuvring system to avoid collisions based on computerised logic. “Autonomous ships will first appear where there is a significant risk to human life at places where using robots is safer than using human beings. And then it will come to areas where it is easier to control operations and ensure safety of traffic like coast-toshore navigation, ferries sailing on pre-defined routes and small cargo ships operating on cargo terminals. Ship management companies using autonomous ships will also be using their own terminals and ports,” explains Ponomarev. Experts say that even though the divide between ‘automation’ and ‘autonomous’ is gradually shrinking, by their very nature the two terms cannot be considered one and the same. This means that we are in the age of accelerated automation but we are several years away from autonomous shipping in its purest form.

“Even with the most advanced automation, technical approach to shipping, complete redundancy, and back

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FEATURE

POWER BRAINSTORM: PORTS, MARITIME AND LOGISTICS INNOVATORS

INNOVATION

Power brainstorm: ports, maritime and logistics innovators at an evening in Tel Aviv by the sea Early 2017 it was just a vision. When Nir Gartzman and I first conceived theDOCK Innovation Hub it was merely a concept – leveraging Israel’s hi-tech ecosystem to contribute to the global port, maritime and logistics space. Hannan Carmeli, Founder & CEO of theDOCK Innovation Hub reports.

hat concept was formalized to a vision, theDOCK was founded and engaged in execution of that vision.

18 months later, in an autumn evening a couple of weeks ago, a unique gathering took place. Some 20 executives from a dozen leading global organizations in the space sat around the table overlooking the eastern coast of the Mediterranean Sea with the objective to discuss joint areas of interest – Port, Maritime and Logistics Innovation. This was part of a three day gathering which included a panel dedicated to the Maritime sector in the Smart Mobility 2018 Summit in Tel-Aviv, as well as the Roundtable session and a Demo Day which culminated Wave 1 of theDOCK’s acceleration program. The Roundtable was hosted by Allalouf & Co. Shipping Ltd. – a prominent Israeli representative of leading international shipping lines with offices in Tel Aviv. Present at this table were Wartsila, Maersk, Lloyd’s Register, Damen Shipyards, MSC Cruises, Grimaldi Lines, PSA unboxed, Port of Barcelona, Port of Haifa, Marlink, OneSea, Fameline, Cogoport and more. These

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international leading organizations were represented by executives who serve as bridges between the operational/business aspects of their global companies and the innovation and opportunities offered by creative startups addressing the industry. Amongst topics discussed were such as: •

Sharing of data along the logistic value chain

•

Port communities and the current state of disconnect amongst themselves

•

Prospects of concepts such as STM (Ship Traffic Management) to deliver more efficient operation

•

Smart and Connected vessels and impact on the players in the sector.

The roundtable members agreed that one of the most challenging factors is the lack of data sharing and transparency between the various players and the need to find ways to overcome such. Specifically by looking at potential trusted intermediaries which might very well end up being virtual ones (i.e. Blockchain technology etc.). The Port of Barcelona representative claimed that

ISSUE 1 2019

POWER BRAINSTORM: PORTS, MARITIME AND LOGISTICS INNOVATORS

FEATURE INNOVATION

stake holders within the port community do share information which is critical for their cooperation (such as trucks, train, ship, berth coordination and the like); however, each port has its own port community system where those systems do not interact with each other. Unlike air traffic control, there are no current standards for such cooperation and the myriad of stake holders makes such cooperation extremely difficult. Other speakers related to the STM project underway by the IMO, and the prospects of agreeing a concept that major industry players will adopt and find ways to implement and commercialize. One of the speakers added that aviation was introduced 100 years ago only, hence the sector is relatively easy to undergo change and adopt new regulation and technology. Maritime sector on the other hand exists for thousands of years which renders changes and new concepts more difficult to adopt. Maersk’s representative explained that the company has undergone a successful set of changes providing transparency to its internal IT systems. This improved customer service (i.e. introduction of online booking systems etc.) also allowed the company to assess bottlenecks and improve the overall customer experience. He continued and argued that there is no magic solution to the trust issue and no accelerator or intermediary could serve as a trusted middle point, as each player strives to own and control the data and is reluctant to release such control to others. Port of Haifa’s representative added that converting a government owned port to a smarter one is challenging not so much because of technology: rather motivations and priorities have to change, and this can only be achieved by looking for a strategic investor and going through privatization of the terminal operations. Unions and culture issues pose challenges which need be addressed. A representative of the investment community with special interest in maritime technologies indicated that free market concepts as well as competition play a role in adoption of technology. Trends such as shared economy as well as technologies such as Blockchain offer innovation opportunities to the sector. Participants from Wartsila and Marlink commented that innovation adoption is a journey., Technologies such as Artificial Intelligence and Machine Learning have vast potential. Gradual adoption though is more likely and smart vessels could be introduced with a

ISSUE 1 2019

focus on safety aspects, for example, before we will get to see a complete autonomous ship. Still commenting on the prospects of smarter vessels (and later autonomous), a representative from Damen Shipyards added that it was likely tugboats, ferries and dredgers will be the first to get complete automation before other sea going vessels do. Consensus between the roundtable participants was evident around the comment that “we either drive disruption ourselves or otherwise we will get disrupted”. This statement seemed to have underlined the visitors’ arrival in Israel – the startup nation, and their collaboration with theDOCK. The last part of the session was dedicated to the benefit of cross company and cross sector collaboration, and to what extent does it help the participants to discuss innovation across terminal operators, shippers, shipyards, manufacturers and others. It was agreed that such cross-pollination in the form of joint discussions (like the roundtable) help establish a view of what “best practices” in soliciting innovation look like and what type of day-to-day activities it requires. Tendency for each organization is to go its own way in scouting for interesting technologies, engaging with creative startups etc., and sitting around one table helps learn what others are doing in that respect. This cross pollination was evident throughout the entire visit of the international executives to Israel. On top of the one-on-one meetings with startups set up by theDOCK as per each organizations’ business challenges and needs, the interaction and engagement among the executives was extremely helpful and inspiring. Another topic discussed related to the very nature of cooperating with startups. Of interest were the benefits of engaging in open innovation and scouting for new technologies and ideas outside one’s local organization or community. Exposure to startups allows maritime market leaders to experience out-ofthe-box thinking and solutions. Sometimes this might seem to be disconnected from operational realities but most participants believed that many times it triggers thinking outside the common concepts and practices. Wrapping up the roundtable session, many of the participants exchanged contact details to allow continuing the conversations sparked during the breaks, with the purpose to connect, collaborate and build tomorrow’s future of the maritime industry.

Sea News 27

FEATURE

AVOID EMPTY CONTAINER MOVES AND SAVE ENVIRONMENTAL COSTS IN SHIPPING

INNOVATION

Avoid empty container moves and save environmental costs in shipping It is a common scenario in container logistics: A carrier has 100 empty boxes in Hamburg that must be transported to China for export cargo. None of the carrier’s northern European customers’ needs these containers to ship goods to China. So, the carrier must pay USD 500 per container (mainly fees charged by terminals and trucking companies), to transport its empty boxes from Hamburg to Shanghai. Florian Frese, Marketing Lead, Container xChange reports

n average, the CO2 emission per container handled from China to Europe amounts to 1.913 kg. Combining these numbers with the fact that every third container is shipped empty on the seas, it becomes evident that the environment is experiencing excessive and unnecessary pollution.

28 Sea News

There is room for improvements in these numbers and carriers can decrease their environmental footprint significantly. This would not only apply to carbon dioxide but also other greenhouse gases dangerous to marine – and bird life. Impact of the empty container repositioning problem Containers are methods of moving goods globally from

ISSUE 1 2019

AVOID EMPTY CONTAINER MOVES AND SAVE ENVIRONMENTAL COSTS IN SHIPPING

FEATURE INNOVATION

exporting countries to importing. After unloading the full container, a new return transport stretch has to be found, as moving an empty container costs almost the same as moving a full one. A large number of containers are repositioned empty every year because of failed attempts to find a new transport stretch. This is at an industry wide cost of $15-$20bn annually, according to BCG. Not to mention the unnecessary pollution associated. Arising from a mixture of structural trade imbalances and liner and network inefficiency, a lot is to be done about the latter, but not much to do with trade imbalances. Being the most important source of global empty container accumulation, trade imbalances happens when countries’ trade balances are either in significant surplus or deficit. Systematic accumulation of containers will take place when a region imports more than it exports, while regions that export more than they import will face container shortages. As noted, roughly one-third of repositioning costs relate to carrier-specific imbalances. A carrier whose customers are scattered among port and inland destinations within a given country or whose portfolio of export and import business within the country is imbalanced will likely end up having to move empty containers. Sales forces contribute to imbalances by focusing on increasing head-haul volume, rather than optimizing overall container flows across services. Issues within a carrier’s network, such as delays and the absence of direct vessel or inland network links between locations served, can also promote imbalances and make them harder to correct. Moreover, most carriers are not able to forecast their positioning needs with sufficient accuracy to fully optimize flows before imbalances arise.

repositioned empty every year. With the aforementioned amount of emission per container, this amounts to 12,243,200 kg of CO2 every year, just to reposition empty containers. Container xChange offers a solution for empty container repositioning. Technology is beginning to tackle the problem. Launched in 2017 as a spin-off of Boston Consulting Group, xChange created a neutral online market of empty containers that members can use to match loads and third-party equipment for one-way container moves. “The benefit of the platform is that you are not limited to your personal network, you can engage with more than 250 companies right now,” Florian Frese (Marketing Lead) said. Users sign a multi-party interchange agreement that speeds up the contracting process by days or weeks. xChange has more than 250 users on its platform, including ocean carriers, container leasing companies, container traders, non-vessel-operating common carriers and freight forwarders. The service covers 2,500 locations worldwide and offers more than 300,000 moves every week. Users set their own rates and terms and conditions such as the container value and damage protection plan. Users search the listing for containers in locations where they are needed and with a destination close to where the container owner would like the boxes to end up. Over time the system learns an individual’s search patterns. “Once the system gets to know the customer, we can approach them proactively. Container xChange is a one-stop shop for SOC containers and empty container repositioning covering container tracking, insurance, payment handling and many other services,” Frese said.

It is estimated that more than 6.4 million TEUs are

ISSUE 1 2019

Sea News 29

FEATURE

FIVE AMAZING WAYS NANOTECHNOLOGY IS CHANGING THE SHIPPING INDUSTRY

INNOVATION

Five amazing ways nanotechnology is changing the shipping industry As technology evolves, industries evolve with it. A clear example of how innovation can positively affect an industry is to look at the capabilities of Nanotechnology, and its impact on the shipping industry. Adel-Alexander Aldilemi, Content Writer at Valuer.Ai, reports

or the average Joe, nanotechnology sounds like something out of this world. According to the Oxford Dictionary, Nanotechnology refers to ‘’the branch of technology that deals with dimensions and tolerances of less than 100 nanometers, especially

30 Sea News

the manipulation of individual atoms and molecules.’’ Nanotechnology has the ability to improve several areas within a single industry. Whether it’s for security purposes or safer transportation of cargo,

ISSUE 1 2019

FIVE AMAZING WAYS NANOTECHNOLOGY IS CHANGING THE SHIPPING INDUSTRY

FEATURE INNOVATION

nanotechnology’s got your back. Here are five amazing ways, nanotechnology is changing the shipping industry. Safer transportation According to a reviewed study, changing the structure of a material on a nanoscale allows for changes of their characteristics. These changes can increase the hardness, the elasticity at high temperatures, improve breaking strength and increase the fracture toughness of the steel used for the ship. These changes contribute to safer transport for cargo. For instance, by using nanoscale manipulation or a ‘’nanocoating’’ to increase the durability of welds on a ship, it minimizes the need for repairs and replacements. As regular metals deteriorate a lot quicker when faced with environmental factors such as the ocean, applying an anti-corrosion nano-coating also protects the vessel from rusting. While still being in the research and development stage, the tests done by applying nanotech to strengthen aluminum, for instance, were promising in that they were able to increase the strength by over 150% in comparison to untreated aluminum, showing potential for later uses on a real vessel. Pollution prevention Unfortunately, when dealing with huge vessels, pollution is bound to happen. The open ocean is one of the harshest environments that metals can endure. But over time, biofouling - the accumulation of damaging organisms (such as algae) that attach themselves onto the vessel - becomes an issue. It can add weight and increase the drag of the ship. This significantly reduces fuel efficiency which in turn leads to increased fuel consumption and greenhouse gas emissions. Most algae and barnacle killers are toxic and harmful to the environment. If a company wants to adhere to CSR policies, then companies operating with large vessels need to find a way to prevent biofouling from happening in the first place, but also prevent further environmental damage. Incorporating nanotechnology in a non-stick coating is not only effective in preventing foreign organisms from sticking to the ship, it is also a better alternative to the previously used non-stick coating agent tributyltin that has been banned for its extremely toxic properties. The nano slippery coating has the extra benefit of reducing drag, which means the ships can sail with more efficiency and less energy.

ISSUE 1 2019

Utilizing nanotechnology in the coating to prevent biofouling, is still being tested. However, the tests have been done, both at Sydney Harbor, and much harsher marine environments, with both examples, still showing a significant efficiency in resisting fouling. Security measures A more dangerous aspect of the shipping industry is the possibility of a weapon and drug smuggling on to the cargo. As each shipping delivery goes through various checkpoints before reaching its final destination, terrorists and drug smugglers have an opportunity to use the cargo as a modern day Trojan horse. Nanotechnology could be applied in different ways to increase the security while transporting freight. For instance, by coating the nanosensors with a conductive coating that can detect energetic particles, it can alert the security team of the presence of materials that have been smuggled in. Nanotechnology could also be used in the form of tracking devices. Similar to that of a chip used on animals, nanotechnology has the potential to track the movement of freight from each of the checkpoints and means of transportation, providing a constant ‘’updated position’’. By using nano-sensors in seal tags, it could also be used to alert the senders of any potential tampering of goods. Just like the previous ways, applying nanotechnology into security measures is still in its infant stage, however, The National Nanotechnology initiative, which is a federal research and development program, sees the potential of applying nanotechnology to this part of the industry. Enhanced power supply All ships carry additional generators onboard to ensure that there is an uninterrupted power supply (UPS) ready

Sea News 31

FEATURE

FIVE AMAZING WAYS NANOTECHNOLOGY IS CHANGING THE SHIPPING INDUSTRY

INNOVATION

technology, as opposed to conventional methods. As mentioned before, nanotechnology provides better alternatives for previously used methods which improve cost-efficiency.

in case of a power failure. In case the primary generator ceases to function, a battery that has been enhanced with nanotechnology can be used to provide UPS to the vessel until the secondary generator comes online. Nanotechnology has the capability of improving batteries in several ways. By using a special nano coating, it has the potential to increase the number of charges from just thousands to several hundreds of thousands, potentially eliminating the need for a replacement battery. Adding silicon coated nanotubes to the insides of a battery increases the capacity by as much as 10 times. Nanotechnology is still very much in its infant stage, even with the examples of battery research, these have yet to be used by actual vessels. However, researchers have shown that there is potential usage in the modifications done to the nanotech applied batteries. Cost-efficiency Another great thing about nanotechnology is the cost efficiency that comes along with applying this type of

For instance, as nano-coating reduces the amount of drag and protects the ship from environmental damage, it reduces the costs that are associated with removing biofouling and repairing the damage that the environment has caused on the ship. The benefits of nanotechnology on improved battery life also removes the need for purchasing extra energy supplies, as they are able to use the current batteries for an extended period of time. The potential use of tracking with nanotechnology on shipping products also reduces hefty fees associated with lost goods. Conclusion Nanotechnology has the capability of revolutionizing the shipping industry in a variety of different ways. While the listed examples are in their early stages in terms of development and research, they do show potential for amazing usage in the industry. And the results that have been observed clearly shows how far weâ&#x20AC;&#x2122;ll get in a couple of decades with this type of technology. Itâ&#x20AC;&#x2122;s hard to predict what the future will look like, but chances are, things are going to be significantly different within a decade or two, with the use of nanotechnology. Author: Adel-Alexander Aldilemi is a content writer at Valuer. Ai. He considers himself an avid traveler, as he has lived across two continents and is currently studying humanities at Copenhagen University.

32 Sea News

ISSUE 1 2019

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FEATURE

HOW DIGITAL FREIGHT FORWARDERS HAVE BEEN CHANGING THE SHIPPING GAME

INNOVATION

How digital freight forwarders have been changing the shipping game Freight forwarding has become an integral part of the whole supply chain process. Not all BCOs are equipped to handle their shipments without the assistance of a freight forwarder. Hariesh Manaadiar, Author of award-winning educational blog – ‘Shipping and Freight Resource’ reports

reight forwarders have been following more or less the same processes over the years especially relating to bookings and documentation.

Now a breed of young, smart and bright entrepreneurs is disrupting this traditional industry and, in the process, giving the traditional freight forwarders a run for their money. They call themselves “digital freight forwarders”.

34 Sea News

So, what is the strategy for the digital freight forwarder to succeed? As the physical process of shipping has more or less remained the same from the period of sailboats to now, these digital freight forwarders have identified that there are several repetitive activities which can be automated to save time, money and effort for the BCO or for the forwarder itself. Aided by the latest technological developments, these

ISSUE 1 2019

HOW DIGITAL FREIGHT FORWARDERS HAVE BEEN CHANGING THE SHIPPING GAME

FEATURE INNOVATION

digital freight forwarders have secured the services of the cream of the crop of techs and programmers to map and automate processes which will help to avoid these repetitions.

freight forwarder can bring transparency in pricing and reduce complexity in price calculations, whereas traditional forwarders still depend on manual workings.

They aim to change the business models from a manual, fixed, labor-intensive and expensive model to one that is nimble, effectual and systemized.

This gives the customer the ability and possibility of securing a lower overall cost for their shipments.

The digital freight forwarders are creating digital platforms which aim to create a new competitive landscape which will place more control in the hands of the customer. One of the aims of the digital freight forwarder and digital platform is to speed up the processes such as rate negotiations, bookings, matching freight capacity, getting rates in real time and all other associated activities which allows the customer to make decisions relating to shipping quickly and more effectively than before which be a crucial advantage in this industry. The big advantage for a digital freight forwarder is that, as a start-up, they literally have a blank canvas on which to paint their plan and path in terms of the technical access, programs, codes, and all other tech access to create a unique UX. This access also allows the digital freight forwarders to create more sophisticated and clear marketing strategies compared to the traditional forwarder’s “adin-a-shipping-magazine” marketing strategy. The digital freight forwarders seem to be able to create better brand value with a better pitch in promoting their value propositions to the customers. These digital freight forwarders have the opportunity and wherewithal to attract like-minded talent and, they seem to have better reception in the market place as the freight market has been starved of innovation for a very long time. The advent of smart devices (phones, tablets etc) and exponential increase in accessibility to tech for the average human being is a big advantage in this arena for the digital freight forwarder. All these aspects of a digital freight forwarder seem to be very attractive to angel investors and venture capitalists who seem to have no trouble funding these start-ups and seemingly endless funding is a further motivating factor for the digital freight forwarders. So how is this different from traditional freight forwarders? Through the effective use of technology, a digital

ISSUE 1 2019

Digitalisation also brings in Business Intelligence as an integral part of the business and the systems designed and developed by these digital freight forwarders are capable of producing reports and powerful analytics which empower businesses to identify logistics and supply chain optimization opportunities. Is the model sustainable? The innovations in shipping and freight are just starting – Big Data, IoT, Blockchain, Smart containers. Naturally, it will take time for the new breed to dig their claws into the market and start to take over market share from the dinosaurs in the industry and naturally, not everyone will survive or sustain. But there is certainly room in the market for co-existence. These new opportunities being presented to the shippers are quite exciting for them as they can see many benefits in this, namely easier access to the market, increased visibility of the products and services available in the market, possible lower costs. The BCOs also have a chance to verify and compare services of the digital freight forwarders against the traditional freight forwarders they are used to. But there will surely be a question of sustainability and who will survive even among the digital freight forwarders. The traditional forwarders who have survived the market for decades are sure to fight back and bring in their own brand of marketing and technology to support their businesses. Such competition will naturally bring with it, increased pressure on the margins and securing market share but in the end, superior service coupled with smart technology and strategic pricing may just be the deciding factor on who will survive. Would be interesting to watch. (Shipping and Freight Resource helps readers to learn and understand about the complex businesses of Shipping, Freight, Maritime, Logistics, and Trade. Hariesh can be contacted on manaadiar@ shippingandfreightresource.com)

Sea News 35

INTERVIEW

ALEXANDER VARVARENKO, CEO AND FOUNDER, SHIPNEXT

INNOVATION

Alexander Varvarenko, CEO and Founder, SHIPNEXT SHIPNEXT is a blockchain-driven digital shipping marketplace and a reverse trading platform which uses natural language processing, machine learning, linear programing, AI and big data analysis for instant Cargo-to-Ship matching. Sea News reports SN: What is the underlying framework that has allowed SHIPNEXT to operate successfully as a Centralized Digital Shipping Marketplace? AV: SHIPNEXT is an algorithm based solution that allows instant Cargo-to-Ship matching. In other words, no matter what cargo you have to ship, heavy, oversized, dry-bulk or other, SHIPNEXT instantly matches it to the best shipping solution. Imagine a huge amount of big-data to be processed before such match can be found. We are talking about all the international navigational restrictions, port-treated data, drafts, availability of cranes, ship-related data, hold and hatch dimensions, shipâ&#x20AC;&#x2122;s open position, correct location and more. And all this is being continuously processed, based on real-time data, to provide an instant solution. Because SHIPNEXT is based on an automated algorithm based process, it is transparent and scalable. It does not favour any particular ship-owner or carrier, and help avoid hours and days of routine search.

ea News (SN) interviewed Alexander Varvarenko (AV), CEO and Founder, SHIPNEXT about the way SHIPNEXT is distinguishing and positioning itself in an ever-changing and dynamic industry and how the focus on quality has paid off.

36 Sea News

SN: What problems of the shipping industry are you trying to address through SHIPNEXT Solutions? AV: Imagine the work of any manager in the Logistics department of a forwarding company, Shipping or Shipbrokering company. He receives hundreds, if not thousands of emails each day. Every e-mail, especially if it refers to searching for an optimal shipping solution requires long term searches, calls and exchange of messages between numerous multi-lingual parties, across different time zones. A lot

ISSUE 1 2019

ALEXANDER VARVARENKO, CEO AND FOUNDER, SHIPNEXT

INTERVIEW INNOVATION

of time is spent on information search. Negotiations and charter-party management also consumes time. All this is automated with SHIPNEXT, helping all the companies and their managers be faster, more efficient and avoid human error. As a result of “reverse freight auctioning” cargo owners save up-to 5-10% in freight. Our research showed that companies that hold such auctions benefit from reduced freight spending. SN: Internal Mail Processing and ‘Smart’ E-mail Solutions constitute key features of SHIPNEXT Connect. What are the benefits SHIPNEXT users can get from these features? AV: Imagine the amount of data each logistics/ chartering manager or shipbroker has to search, collect and process before either finding a suitable shipping solution. Or, on the other hand, the amount of restrictions, data, and calculations that has to be handled by the carrier prior making a freight indication. All this data is already processed by SHIPNEXT, which contains all the restrictions in ports around the globe, Port D/A expenses, bunker prices, Ship’s internal and external dimensions, ship’s positions and technical description. This, and much more, allows the best shipping solutions, in case the user is a broker or a trader. Or the most suitable cargo in case our user is a shipping company, be literally attached to every incoming e-mail as soon as it hits your inbox. On the other note, today a growing number of shippers (Tata Group, BHP Billiton, Uralkali, Rio Tinto and others) launch their individual freight auction sites. SHIPNEXT helps these individual solutions be much

ISSUE 1 2019

more efficient by instantly connecting them to the most suitable ships in position or solutions. And this would mean less time spent by shipping companies “jumping” from one reverse trading site to the other. By connecting them to SHIPNET’s unique algorithm, the whole freight trading process becomes a thousand times faster and more efficient. In 2019 SHIPNEXT will allow clients get instant Freight comparison between shipping in break-bulk, dry-bulk or in containers. SN: How does the recently launched feature- ‘Freight Index’ assists the SHIPNEXT users? AV: FREIGHT Index allows our users receive an instant freight indications, generated on basis of the current balance of ships and cargo in position. The efficiency of this process continuously grows, as the data-flow through SHIPNEXT grows. This became possible by digitalizing the whole process of processing the incoming randomly written emails, matching them to the most suitable ships in position and calculating the voyage costs, before generating an average freight index. This resembles more the instant price indication you receive before ordering an “Uber” taxi. On the other hand this process, integrated in the supply chain, could allow evaluation of when best to ship your cargo. And what should be the size of shipment lots. Imagine the whole variety of combinations and research such evaluation would include if it was done the old traditional way? SHIPNEXT, on the other hand, does it instantly and bases it on real-time data. Last but not least, is the possibility we open to various commodity exchanges. They combine commodity

Sea News 37

INTERVIEW

ALEXANDER VARVARENKO, CEO AND FOUNDER, SHIPNEXT

INNOVATION

prices with our SHIPNEXT Freight index to allow traders make correct judgements prior to making trade deals. SN: How do you plan to implement the second phase of SHIPNEXT project, the Decentralized Transportation Network and what significant components SHIPNEXT is going to cover under this phase? AV: SHIPNEXT is already working on the integration of its algorithm into the delivery schedule of one large exporter. This optimizes their work while choosing the most suitable ships among their preferred carriers. The process includes digital freight-trading, charter party management, electronic bills of lading and, eventually, integration of freight payment and insurance based of execution of Smart-contracts. All this creates a safe, reliable and flawless interoperability between an exporter/shipper, carrier, bank, insurance companies, stevedoring company and other parties related to supply chain. When companies, are already running in such algorithms, (include reliable carriers), they, at some point, may and will be interconnected. This way they can optimize their trade, and, because it will be based on an algorithm, this would avoid trade wars. This way, for example, would help reliable carriers avoid ballast runs. By interconnecting individual supply chains, the world network helps build reliability of data, since its validity will be supported by distributed ledger. Such interoperability will help make the whole ecosystem decentralized. SN: When can we expect the SHIPNEXT supply Chain to become fully operational? AV: We expect such interpretability become possible by 2021. The first companies to benefit from this could be those who ship cargo from one of their factories in country A, to another of their factories in company B. Such closed circles eliminate long discussions around the bill of lading remarks, and, usually, includes stable cargo flows, charter party terms and conditions. ArcelorMittal and similar-size companies could be the first to benefit, when and if they decide to pursue block-chain technology. SN: The International Marine Organization has come up with new regulations on Sulphur and Carbon emissions. Do any of the SHIPNEXT solutions address the environmental issues faced by shipping industry? AV: Scrubbers certainly are one of the options to reduce emissions. However this process raises

38 Sea News

concerns of waste utilization on shore, let alone the cost of producing scrubbers and the extra pollution it causes. We do, however, still see carriers do long ballast hauls. Ships going in ballast from Middle East to load cargo in the Black Sea are, unfortunately, still a common scene. And one of the reasons is a lack of transparency. Just take for example the old way taxis used to work. Each time you would want to order a taxi, you would have to go through numerous options in Yellow Pages, call the taxi service you picked, and then wait till it travels the distance to pick you up. Today, led solutions like Uber, Lyft and many others, minimized the waiting time, help reduce the cost of travel and minimize emissions. SHIPNEXT promotes the same process in Shipping. It is not just about optimization of fleet capacity. It is about a more time- and cost efficient cargo delivery. And of course, reduced fuel emissions. SN: Ambrosus has recently partnered with SHIPNEXT. There were some other important strategic alliances formed in 2018. Are there any other alliances that we may envisage in the coming year? AV: SHIPNEXT is now building interconnectivity between port and stevedoring companies. this would allow both the port/terminal of loading and the port/ terminal of discharge, build a real-time data flow between the ship, and help introduce a more efficient berthing schedule and cargo-delivery plan. Such interoperability between the port planning solutions and ship operations helps synchronize the work of land transport (pre- and on-carriage). SHIPNEXT is now also preparing agreements with some of the worldâ&#x20AC;&#x2122;s major shippers/exporters to interconnect their individual reverse trading sites with the global fleet. This will signify a turning point in international shipping. Last but not least, SHIPNEXT has already received requests of several shipping companies and brokers to help integrate SHIPNEXT algorithms, as plug-ins, on their emailing software (Gmail and other). This would allow them stay interconnected with various reverse trading platforms and sites, and increase the efficiency of their managers.

ISSUE 1 2019

Sea News Issue 1 2018

Green Issue

Cover Story Global Warming and the Maritime Industry

Also in this issue • CO2 Emissions • Green Initiatives • Sustainability at APL • The Sulphur Setback • Wartsila - Making Waves with Green Shipping

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