44 Opinion

Shipping’s digital conundrum

As the industry considers the direction its digital transition takes, now is the time for standardisation across the industry, writes John Veson

Over the past few years, the shipping industry has heralded the pace of digitalisation and its impact as a catalyst for solving the many challenges it faces; from optimisation and efficiency gains to driving increased transparency and traceability across the supply chain. For an industry that has often been perceived as being somewhat traditional and slow to react to change, the speed of digitalisation and uptake of ‘smart’ technology belies that tag.

However, we are only at the beginning of the digital transition, with further progress being stifled by the myriad of different digital languages being spoken; as shipping considers the direction its digital transition takes there are significant barriers to overcome. Currently, there is no standard way to exchange, interpret information, or effectively speak in a common language across the industry. Indeed, there are huge inconsistencies regarding the names of ports, terminals, berths, specifics in relation to vessels and barges, as well as ETA (Estimated Time of Arrival) calculations. This makes it very difficult to exchange data, as data from different sources do not match up. At the same time, we are becoming increasingly overwhelmed with the sheer volume of data generated, where much of it is disparate and unstructured, making it difficult to separate the signal from the noise. To maximise data usage and analytics, a normalised language needs to be urgently developed. Collaboration across the industry is central to achieving this, with the majority of participants adopting a common standard. Technology can be a critical driver of this; however, it also requires buy-in from industry players, support from regulators and, importantly, connected digital systems, the latter of which is currently lacking in what has historically been a siloed industry. The key is to understand the pain points for specific industry groups around connectivity and plot a course to a new way of operating. For example, ship owners and operators lack structure around data sharing. They want to share information in relation to ETA and Statement of Facts (SoF) in a structured way so they can be more efficient, as well as intentional in sharing specific information with relevant counterparties. Creating an internal digital system that enables an owner to seamlessly view all voyages and data related to those voyages is one thing. However, the vision must be to have an integrated external digital ecosystem – one where owners can exchange information directly with and in the same digital language as charterers, brokers, agents, and other trusted counterparties, sharing specific voyage updates with personalised context at the click of a button. Similarly for charterers, the main pain points revolve around a lack of transparency. They want real-time visibility of shipments and regular, proactive communications with counterparties on where their cargo is. This insight is essential for informed decision making around commodity production and other downstream activities reliant on the cargo being shipped. A connected digital system with a standard language delivers this and consolidates all communications streams into one. The future potential for what can be achieved within the shipping industry is exciting. The direct sharing of information between connected systems will become commonplace, with business being transacted in real time and where data is processed in a structured, scalable and actionable way to facilitate the best possible decision making. Willing participation and collaboration are the key to driving a pace of change that sees new digital technologies – supported by industry-wide protocols and standards – that will lay the foundation for a thriving and sustainable shipping industry.

What makes a maritime centre?

Our special correspondent assesses what it takes to be a maritime hub these days

For a shipowner who has managed to keep his head above water for the past few years and is now struggling to raise funding for a bit of growth or fleet renewal, it can be pretty frustrating to be sat next to an app developer who has just completed their third round of fund raising but still has no discernible prospect of positive cash flow. So why is it that cities around the world aspire to be ‘maritime centres’ and what is it that can tempt shipping companies to relocate ? Governments spend fortunes on promoting cities as maritime centres- tear yourself away from the parties and wander the halls of the Posidonia exhibition and you will be bombarded with information about why particular cities justify you relocating. Recently,

Vancouver’s much promoted bid to become an international maritime centre has stumbled with local and federal governments switching funding to other projects. These government initiatives are largely founded on the belief that a maritime ‘cluster’ can bring high value jobs and benefits to the broader local economy. Easing the immigration process for expatriate workers and tax holidays are all part of the package, but what happens when the civic leaders move on to the next fashionable theme and the incentives start to dry up? Clearly, an incentive package alone is not enough to build a maritime centre. You don’t even need to be by the sea to be a maritime centre - Geneva (pictured) is now the commercial centre of a significant portion of the world’s cargoes, so a maritime history is not necessarily part of the equation, and hanging on to a storied maritime past is not going to see your city thrive in the future. Even up until the early 1980s, shipbrokers would be despatched from their London offices to Hull, Newcastleupon-Tyne, Edinburgh, Glasgow and Liverpool to visit the great shipowners who had plied their trade from these port cities since the 19th century. That’s all in the past now but having a core of shipowners is clearly still the force behind quite a few of the global maritime centres- Piraeus, Tokyo, and to a lesser extent Oslo, Hamburg and Hong Kong rely on the fact that they have a strong owner base that allows them to maintain a vibrant services network. Shipowners may be lured to have representative offices in incentive-laden aspiring maritime centres, but where the commercial control will stay will continue to be determined by the quality of life in a particular city and the cost of living there. It’s an unrealistic dream to believe that your Hong Kong Chinese or Greek shipowner will uproot and move continent unless it’s a much better place to live. Perhaps Singapore and Geneva are the ones who have got it right. They attracted the cargo interests and hence all the ancillary services then followed. That’s a big change from 30 years ago when the owners seemed to have the upper hand, but hardly surprising. Perhaps we are about to see things change again- a recent Splash article lauded the efforts of Singapore, Hamburg, Oslo and Hong Kong in encouraging maritime-related tech start-ups. Maybe where those app developers choose to locate themselves will define where the next maritime centre is.