Recent surveys show that only a fairly small percentage of shipping executives believe their companies have made the most of digitalisation by turning data into effective action. It’s easy to understand why. As Lloyd’s Register notes: “Maritime is fragmented with many companies developing solutions and then trying to find the problem, instead of solving the problem directly. We now have a jigsaw puzzle of niche solutions that don’t quite hit the mark.”
The pandemic acted as a catalyst by presenting problems that had to be addressed quickly and effectively within the confines of lockdowns and restrictions. The result was a rapid uptake of digital solutions over the last couple of years such as pilotage services provided via video link and vessel surveys conducted remotely online.
In its report ‘A Changed World: The state of digital transformation in a post-COVID-19 maritime industry’ published last year, Thetius / Inmarsat highlights the large increase in the adoption of digital tools. Investment in digital technologies increased by 85% in 2021, and by 2030 it is expected to reach $345bn, up from an earlier forecast of $279bn.
It’s easy to imagine the container shipping industry putting big money into digitalisation. A.P. Moller - Maersk delivered record earnings in 2021, up 55%. Despite the supply chain disruptions, container shipping has been experiencing exceptional market conditions.
The dry bulk market is also strong. According to Simpson Spence Young’s 2022 Outlook Report, vessel earnings across all main bulker sizes buoyed to 13-year highs last year. To quote Lloyd’s Register again: “Most of the major trades – such as coal, grain and minor bulks – are set to grow while iron ore is expected to be more or less stable.”
The tanker market, in contrast, has suffered, and this could continue further in the future if new COVID-19 variants again see global travel markets slump, taking oil demand with them.
But market forces are only part of the picture. Shipping, like all transport and supply chain industries, faces increasing regulatory and social pressure to reduce carbon emissions. While some commentators indicate that the tanker market is trailing other sectors in its adoption of digitalisation, there are notable exceptions. For example, ZeroNorth - a spin-off from Maersk Tankers established in 2020 – whose Optimise platform has been used by Maersk Tankers’ fleet since June 2019, generating savings of $8m in its first year alone.
In tough market conditions, digitalisation has a key role to play in improving ship safety and productivity, whilst reducing fuel costs and emissions. Crucially for the transport and logistics sectors, it can also provide employees with tools to collaborate with colleagues globally.
The next generation of project professionals is wired to embrace technology. They will drive digitalisation beyond the current adoption the pandemic made a necessity. And, as success ultimately depends on people, for organisations to truly benefit from digitalisation, progressive management teams need to have a clear understanding of technology, be it integration, data governance, cyber security or modern solutions such as block chain and Artificial Intelligence. New recruits just starting their careers have grown up with the Internet. They are digitally literate and already proving integral to shaping company culture and harnessing of the power of digitalisation.
After a wave of mergers and acquisitions in many shipping segments, businesses still operating are asking for information, facts, data and reports to give executives the insights they need to make informed business decisions – decisions critical to their survival, to their next contract, or to their overall strategy.
GAC Group has responded by expanding its systems and services. We invested early in creating an accurate data model of GAC’s business – a significant investment for an incumbent global business. This data model is now paying dividends in many ways, one of which is the ability to operate as a data transfer business with the flexibility to adapt to market changes, just as Uber did during the pandemic when it pivoted from taxi to food delivery services.
One example of GAC’s ability to respond to changing conditions relates to spare parts. In the past, information on the status of spare parts was held by marine logistics providers responsible for picking, storing, consolidating and delivering them to vessels and offshore platforms. Now, asset owners and operators want status reports in their own systems, giving them greater operational control and enabling them to identify and challenge poor supply chain performance, leading to greater productivity and safety. Shifting from “on demand” to a “just in case” situation, businesses now want to have control of their stock – just in case.
GAC’s new digitalisation services add to the support we already provide to shipping and logistics companies as they strive to succeed in a post-pandemic market full of opportunities and challenges.
Martin Wallgren is Chief Information Officer at GAC Group
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