Ready, willing, and able to go digital

How digital is the shipping industry?

The most digitally enabled operators in the shipping industry are a decade ahead, compared to the late digital bloomers. The question is: what makes some take the leap and others drag their feet?

Text: Marianne Alfsen Photo: 123rf

In preparation for the development of the next generation fleet performance monitoring system, SkyLight, Jan Wilhelmsson, Vice President Commercial Shipping in Eniram – a Wärtsilä company developing energy management and vessel performance systems, - spent six months meeting with 50 shipping operators around the world – to map needs, ambitions, and expectations in their digitalisation process.

“That led to some interesting insights about how different operators have approached digitalisation and what challenges they have met,” he says.

Ready, willing, and able to go digital2
The Eniram Skylight 2.0 adds nautical maps, weather,
and route implementation to aid predictive analysis.
        

Vast differences

On a general level, Wilhelmsson found that there are surprisingly vast differences between individual operators even within segments of the industry.

“I find it quite interesting that in such a highly competitive business, there is more than a decade between the early adopters and the least digitally enabled operators,” he says, adding that, he, early on in the process learned not to make any assumptions as to who was ahead and who was not.

“With good margin, the cruise industry is years ahead in implementing advanced solutions for data collection, real-time optimisation and remote monitoring. This is probably attributed to a combination of the owner-operator type long-term thinking, a high level of propulsion complexity and the fact that the vessels themselves may cost a USD one billion to build. This easily justifies investing in the latest high end technology,” says Wilhelmsson.

While the cruise industry seems to be universally on track to real digital transformation, the cargo segment is more of a mixed bag. However, a handful of container liners, mostly owner- operated vessels, are way ahead of the rest when it comes to equipping their ships with real- time data collection and optimisation.

“The container segment as a whole have, come quite far on the shore side, in terms of creating Fleet Operations Centres, where the new data and visibility it creates, can be acted upon. It has, however, been ten years since the pioneers started, and only now the late ones are getting up and running,” Wilhelmsson points out.
  

Stuck in the Dark Ages?

In the wet and dry bulk segment, the difference between the early adopters and those lagging behind is even more visible.

Wilhelmsson describes his finds in this segment as ‘counterintuitive’. This is because many operators are yet to latch on to the technological evolution and discussions with customers indicate that there is still room for improving the understanding of digital opportunities in the industry.

However, Wilhelmsson found digital stewardship where he least expected it:

“A good example was a medium-sized dry bulk operator, where every technical aspect on board was integrated and linked real-time to a data centre on shore. But not just that, data was also fed efficiently back to the business side.”
    

Three categories of digital evolution

“To better understand the differences, we broke down the industry in three categories of digital evolution,” explains Wilhelmsson:

1) Satisfied operators: Those who have made deliberate efforts to digitalise, and have been successful, efficiently implementing the latest technology to create real monetary value for their business.

2) Unsatisfied operators: Those who have moved deliberately ahead with digitalisation, but still do not believe they have achieved return on their investments or met their own expectations.

3) Non-engaged operators: Those who haven’t yet understood new technology or digitalisation and operate their businesses by traditional manual reporting, communication, and record keeping.
   

Why so different?

Digging deeper into the first category, those who have tried and succeeded, Wilhelmsson found several common traits:

First of all, they tend to have top management with a strong commitment to and interest in moving ahead with technology to support the business. Secondly they have involved experts, with experience from similar work. Thirdly, they do not look at digitalisation as a project limited to IT- and technical departments, but rather a process permeating the entire organisation and all aspects of their business. And last, but not unsurprisingly, those who have succeeded, started early. They also gave themselves ample time to execute the changes.

When it comes to the second category, those who are not satisfied, Wilhelmsson is a bit more cautious in pointing out causality:

“Getting stuck is easy, and there are many reasons for things not working out,” he underlines, adding, however, that he encountered some illustrating common experiences by ‘unsatisfied operators’:

While digitalising, they have gathered a huge amount of data, but they struggle to break it down into something they can use. Others feel they have spent the time and the money on a solution, and now they are done, ignoring the fact that digitalisation is a continuous process, characterised by fast-paced development of new technologies. You are basically never quite done.
  

“We are special”

Lastly, many believe they need customised solutions because their processes are unique. That is rarely the case, however. Wilhelmsson is not alone in underlining that the digital road ahead goes through co-operation, eco-system thinking, and sharing across the industry.

“I have seen 15 to 20 different variations of in-house built manual ship-to-shore reporting solutions, basically all doing the same thing,”

As for the last group, the ‘non-engaged operators’, they tend to believe their business is different from everybody else’s, too complex to automate, and choose to wait it out. They get on board only when all is tried and tested by others. In other words: too little, too late.
  

Connectivity and digitalisation

“Connectivity and digitalisation will most likely be as disruptive for commercial shipping processes as shifting from sail to power and break bulk to containers,” Wilhelmsson sums up, adding that there is a long way to go for huge parts of the shipping industry:

“If you look at the world fleet of cargo vessels today, only a small portion is fully connected, beyond simple e-mail and dial-up capabilities. This is the main reason why digitalisation, until now, has had very little impact. In almost all comparable industries, paradigm shifts have occurred as connectivity has made alternatives possible.”

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