Panos Theodossopoulos, PhD, the Chief Digital Officer of Oceanking, shares valuable insights on the transformative power of digitalization in the shipping industry, driving efficiency, safety, and cost-effectiveness through technologies like IoT, cloud computing, big data, and AI.
The following content was originally published on nafsgreen.gr
In the era of decarbonization, apart from the alternative fuels, alternative propulsion principles and other design/technical measures, the industry is also looking at operational actions and improvements towards reaching the required targets.
In that context, digitalization is one of our most valuable allies since it offers optimization capabilities that could only be reached using advanced computing methodologies.
Even though the terms digitalization and smart shipping, might mean different things to different people, they all relate to a disruptive wave that brings significant advancements and improvements in various aspects of our industry, enhancing efficiency and productivity, safety, transparency and cost-effectiveness.
Technologies relevant to this disruptive wave include the Internet of Things (IoT), high-speed communications, edge as well as cloud computing and of course big data, artificial intelligence, and machine learning.
All major actors in the maritime industry are embracing these new digital technologies into their operations and practices. Shipping companies, classification societies, equipment manufacturers, various service providers and many more are already riding the wave to a greater or lesser extent.
More specifically, shipping companies are seeing benefits spanning all the way from routine office operations and administrative tasks, to improved cooperation between vessel & shore office, energy efficiency improvements and consequent emissions reductions at vessel/fleet level. Further, voyage and route optimization platforms and just-in-time arrival tools or cargo tracking are becoming standard practice. More recently, asset lifetime management of on-board equipment and systems leading to breakdown avoidance and reduced downtime via improved condition-based maintenance is gaining traction.
Digital platforms and systems also facilitate smoother trade and compliance processes by automating documentation, customs clearance, and regulatory compliance. Electronic data interchange systems, blockchain technology, and digitized documentation enable secure and efficient exchange of information among various stakeholders, reducing paperwork, delays, and the risk of errors.
All of the above are pieces of the puzzle that leads to autonomy (not to be confused with unmanned operation), increasing at the same time, safety and optimization of on-board crew resources and time.
Another area where digitalization technologies act as a major disruptive force is in the commercial relation between the shipowner and the charterer, especially in the context of time-charter parties (TCP’s). Transparency brought by digitalization and more aligned incentives between owners and time charterers may remove the focus on claims and encourage collaboration to improve vessel efficiency. Time Charter Party (TCP) terms may eventually financially reward owners for making improvements to the vessel and may further incentivize maintaining a specified CII grade, with joint accountability between Owners and Charterers. Finally, new and improved Voyage Charter Party terms might make Virtual Arrivals, Just-in-Time Arrivals, and similar schemes viable and broadly adopted modus operandi, eliminating the status quo of Sail-Fast-Then-Wait (SFTW) sailing behaviour.
Furthermore, apart from the obvious internal benefits and cost savings, digital technologies are also a huge helping hand in navigating through the ESG journey that the industry is embarking on, both because they de jure promote sustainability, but also because they inherently strengthen the governance muscle of the ship operator, which in turn plays a critical role in mitigating operational risk.
It is clear from the above that most departments within the shipping company are impacted, namely Technical, Operations, Commercial/Chartering, Purchasing, Crewing, etc. Technology however brings with it change management and culture changes, affecting in turn the human element, both in terms of acceptance and adoption, but also in terms of the reskilling and upskilling necessary to cope with these new concepts and capabilities. Familiarization is necessary at all levels and roles, to be followed by formal and continuous training.
Lastly, the main drivers and barriers of adoption of the new digitalization wave should also be addressed.
On the drivers’ side, it seems that the new regulatory requirements even though do not require the use of, they certainly “promote” digitalization in a top-down way. The same happens bottom-up, by the increasing number of vertical technology solutions present in the market addressing real needs of shipping companies.
The main barriers are currently the not so clear return-on-investment (ROI) especially for shipowners, followed by the lack of trained on-board crew and shore office personnel as well as the fear of cyber risk. Finally, the lack of standardization often makes the adoption of digital tools more expensive than it should be and that is an area that both regulators and technology vendors should address.
Overall, digitalization is a powerful tool that revolutionizes the shipping industry, offering numerous benefits in terms of efficiency, cost reduction, safety, and adaptability. It enables shipping companies to navigate the complex challenges of the modern global trade landscape and deliver goods more effectively, reliably, and sustainably. For these reasons, we expect an increased adoption of digital solutions in the next 3-5 years. By combining decarbonization efforts with digitalization, the shipping industry can work towards a more sustainable and efficient future, reducing its environmental impact while embracing the benefits of digital technologies.