Thorleif Thorleifsson

Is data a new king? Without machine readable data there will be no magic

The services provided by the companies within the global shipping clusters or communities are dependent on the world economy. Shipping is directly affected by geopolitical changes and the world order, and the maritime industry has benefited from a globalized trade regime continuously after the Cold war. Increased growth in industrial production and global trade volumes have led to increased transport on the oceans. 

The industry continuously discusses global trade outlooks and questions like; "Will the industry still have independent shipowners, cargo owners, and traders"? "Will, the trade and transport be narrowed within regions and transport nationalized or owned by cargo owners"? 

This will influence the willingness to invest in steel, and since investments in steel require a lot of capital, and vessels ordered today will live for more than 20 + years. In 2021 there are some new topics that will influence ones interest to invest in new-buildings; carbon footprint, connectivity and data sharing between the vessel and the offices.  

Creating a new software should be based on domain competence, understanding of how the industry works today, what are the technical possibilities , how one believes the industry will change and how quickly one thinks that change will happen. We in Maritime Optima have invested to be a long-term player, so I want to share some of the topics we discuss while developing Maritime Optima and our company.

"Connectivity, data and algorithms"

The race for collecting data has just begun, so how will this influence the maritime industry?

How should a company benefit from using its domain knowledge + machine-readable data?

How to create a winning strategy in a more transparent world where the end-users will influence the companies value chain? 

How to convert carbon and environmental footprints into advantages instead of disadvantages and threats when everything is measured and tracked?

We all know that this deep digitalization wave hitting the industry will change the maritime industry forever.

The industry has always had a particular interest in collecting data for different kind of analysis. However, the data was «never meant to be» exchanged between computers. 

The data and information changing hands have been exchanged between humans, on phones, in e-mails and chats, and in meetings or over lunch. Therefore, the commercial side of the maritime industry has had little focus on making the data ready for computers.

So who will be the owners of steel?

During the last 30-40 years, the integrated shipowners have been split into several companies and linked together by legal contracts. We have so many different definition of "owner"; commercial owner, technical owner, disponent owner, TC owner, single-purpose owner, bareboat owner etc. These "owners" are linked together through charterparties and legal contracts.

  • Will this digitalization make integrated shipowners having a renaissance?
  • Will the cargo owners invest in steel and take on different risks due to improved connectivity and affordable prices and sensors ?
  • Will charter parties become less complex, claims "disappear" and replaced with tracking and auto settlements (speed & consumption, laytime, etc.?
  • Will nations become shipowners (China-US etc.) because vessels will be more "techy; (edge computing, sensors, AIS, connectivity) ?
  • Will digitalization kill small and medium-sized companies or create new opportunities for small companies making transparency and the environment to their advantage

What will be the dominant concept?

  • The economy of scale; bigger and more standardized vessels.
  • Specialized shipping customized for specific cargoes where nations own the transport
  • Standardized vessels and more liquidity for investors?
  • Will cargoes be sold CIF than FOB, and will transparency, tech, and connectivity influence

People working on the commercial side have little tech knowledge (software and data science). Will they understand that "Experts in teams" will be a solution ?

Cyberspace, clouds, server hosting, GDPR, US and China and data security, the room for paranoia is large. 

People working on the commercial side have little understanding of the benefits of working in teams. 

Teamwork will be more critical since solid knowledge of how the industry works, the company's business model and value chains, the capability to build sustainable value networks, and a solid understanding of software and data science are rare to find in only one person. 

Efficient teams will be able to build and maintain these capacities as a unified team. However, today there is a lack of team software available for the maritime industry.

The "I don't want to share" attitude dominates the way the commercial side operates today

However they tend "to forget" that many people have made their living out of sharing information for years.

There are brokers, journalists, stock-listed companies, etc., and the broker's business model is still dominated by "share information for free and charge by "no cure no pay."

People are terrified by having their vessels tracked, and some claim "transparency will ruin the industry."

I doubt anyone can stop AIS and GPS tracking from being done, and VHF is also an old technology, so why not make this "new"transparency into your competitive advantages, and it will not only be of value for the cargo owners, it will also benefit the serious ship owners.

No the algorithms will not take your job and business, but they will influence the way you organise your work

APIs + machine-learning + Power BI with Microsoft Power apps = magic. 

People working in the shipping business have always wanted to understand the market better. So when start-ups are promoting, "We know all about machine learning, so if you give us your data, we can show you some magic," that sounds attractive. 

Companies want to test out these services. However, magic doesn't happen very often, and the costs involved are often very high before you might see any value. So these start-ups create fatigue and disillusionment among shipowners and commercial companies.

The ship brokers will still survive!

They will continue creating value worth paying for because they know the business and how it is organized. Ship brokers helps to look for opportunities and are deal-makers, and we want deals (also in the future). However, the value chains will change and the way we work and share information will also change.

Domain/industry knowledge will be the key to unlock the digitized potential. Computers can't replace skilled and professional people and there will be many software platforms. So the brokers might also be "the connectors" between the customers' software platforms. 

Today, many software companies are party-owned by owners or brokers who want their platform to be the "one-and-only platform."

Being owned by a broker or ship-owning company make their platform biased. These "platform software" have unlocked value within the companies they were invented, but they might not be optimal as independent software platforms for many different users which also compete with each other. 

Cash is king –cargo is king… if data supposed to be the new king… the industry is facing a severe "data challenge"

  • Data are still stored in silos in old software and organized inexpensive data warehouses by external consultants. 
  • No standard definitions (owners – beam/breadth – cub capacities in cub/cum? etc.)
  • There are no standard technical definitions nor templates for exchanging vessel data between software platforms or between companies owning the vessel data.
  • A complex "owner structures" have created complex vessel data structures and charterparties which are not made for "data exchange and machine learning." 

There are different types of "vessel data". So who is the correct owner of a vessel's data, and how to share various data? Is it the classification company? The terminal? The captain? the steel owner? Or the commercial risk owner? 

So you are an owner(and a risk-taker) of the steel (vessels), but you don't control (or own) your vessel's data and you don't know who you have shared this data with ? 🤔 Isn't that wired in 2021?

Do you want to purchasing the data belonging to your vessels from externals software companies or do you want to control the data and know who have received your vessel data ?

At least it sounds better to me, to control the vessel data yourself and share it with those you want and have access to a user log showing who has shared what with whom? And wouldn't it be fantastic to reduce the number of e-mails you are sending and receiving? 

Unlocking an organization's digital potential can't only rely on software, devices, and broadband 

This is the winning formula: domain / industry knowledge+ solid understanding of the organization’s business model + machine-readable data + machine learning /reinforced learning +user-friendly software.

Data/information+ machine learning /reinforcement learning) without industry knowledge and understanding the organization’s business model will not create a success.

So it is crucial that everyone working within an organization "understand the company's business model and its value chain." They all need to understand the"whys" for the company's existence, how you sort out our customers' pains, why the customers prefer your services before your competitors, and how to strengthen these advantages by utilizing analysis and knowledge.

The way we work in the offices will be influenced by affordable connectivity between vessels and offices and the growing satellite infrastructure owned by private companies and nations

Real-time connectivity between the vessels and offices is already available at affordable prices. Architecture services and the numbers of edge computers onboard the vessels are growing. Sensors on equipment onboard the ships and the data these sensors collect can be transferred ashore in real-time and at very affordable prices. Bear in mind that it is the owners of the vessels that decide what kind of equipment to be installed onboard the vessels and whom to share that data with!

Transparency, smart handheld devices and social media will connect the consumers to every companies business

Individuals use smart phones with GPS and cameras, and they are already connected in real-time at very affordable prices. They can publish everything they want on social media.

Consumers and media will continue focusing on "zero pollution and protection of nature."So if your vessel pollutes, your vessel and company will soon be on the front page of a newspapers or a Facebook or Twitter page with many followers.

It is mandatory for vessels to carry AIS, and many software products will provide the "real-time picture"

However, collecting, cleaning, storing, and updating AIS data in real-time will be very costly and requires software and data science skills so this type of data in the format ship owners and cargo owners want, might not be available to everyone. 

Bear in mind that AIS protocol was not made for commercial tracking of vessels but for SAR purposes. The AIS protocol therefore include a lot of “commercial spam”, so without knowledge on what you want to solve, how to filter and a team with solid back-end knowledge, the AIS data might not create the value you are looking for. Working with AIS data requires knowledge and you must know its weaknesses and have the skills to cope with them.  

The efficient, cost-effective real-time connectivity solutions between the office and the ship will create demand for new products and solutions. New software and tech solutions will be launched because it will be possible to utilize and monetize "Old tech," for example, the VHF (very high frequency) band. 

The new environmental order will change the shipping industry forever

New IMO regulations and national limits for carbon requires that carbon footprint is documented. The port authorities and classification authorities will be the controlling body when vessels are arriving the ports, and it will be expensive not to comply, and it will not be possible to add a fine/fee in your voyage calculation and continue as usual.

IMO and national authorities will require carbon footprints documentations, environment ballast water treatment systems, new coating, new rutines onboard, new ways to handle garbage, etc. and you will just have to comply because you will be tracked by satellites and you have to report when you entering a port, so either you comply or you have to find yourself a new industry.

There will be high demand for vessels with fuel-efficient engines, vessels consuming less fuel with less carbon footprint, and consuming dual fuel types with several tanks able to switch between different types of fuels. All these new environmental requirements will replace the old vessels. 

Still, it will take time because nations will impose different requirements and react to international regulations differently. Some countries will not follow international rules but set their own rules.

"Always in motion, the future is"

I great the opportunity the new digitalized and more environmental world will create. It will require that individuals becomes more specialized, have tech knowledge and skills for working in cross-disciplinary teams

The future is like the famous quote from the Star Wars movies: "Always in motion, the future is", and we will never be able to predict the future. However, the future is already here, and "Experts in teams" with software, data and data science knowledge able to work together, will bring the solutions and be the winners , similar to the heroes in the StarWars movies. 

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