At this year’s Global Liner Shipping & Shipping2030 Asia, we gathered some of the most prominent thought leaders, and asked them to share their views on the hottest topics in shipping and maritime.
Chakib Abi-Saab, Group Chief Technology Officer of the OSM Maritime Group, takes a look at the rate of technology adoption in the industry and how to make it faster.
Watch the video or read the transcript below.
Lili Nguyen: How has technology evolved in the shipping and maritime industry in the Asia Pacific region? What is the role of Singapore in all this?
Chakib Abi-Saab: Technology has evolved fast, but it has been adopted very slowly. One of the big challenges is that industry has this type of mindset that does not allow for fast implementations because the industry is very scared to fail, scared to spend money, and that creates certain challenges.
Singapore plays an extremely important role because without the support of the Maritime Port Authority of Singapore (MPA), several initiatives that are currently happening, would not be happening. If you look at the ecosystem in the maritime industry and the technology industry together, what you see is a series of startup companies pop up, developing technologies that are specific for the maritime industry. This is only happening because the MPA is encouraging, giving grants, helping, supporting, and introducing these organisations to companies like OSM, so that we can partner, and hopefully co-develop or adopt technologies together. [Technologies] which will help us create new cost savings while enabling them to grow in the maritime industry.
LN: Does the use of digital technologies still need to be encouraged? Is the whole supply chain digitising?
CAS: I think the industry absolutely needs encouraging, and I believe that there needs to be more effort not only from authorities like Singapore, which are actually putting a lot of effort in, but from all the organisations and countries as well.
One of the big challenges of getting the entire ecosystem and the supply chain digitised is that a lot of technologies are created in silos. So you create a solution for a particular thing and a different solution for another. There is very few or perhaps no solutions that cover the entire ecosystem. Because these companies develop solutions separately, many times these solutions don’t properly communicate with each other. So a lot of work needs to be done in terms of encouraging organisations to work together, of sharing information, and that can only be done with the support of authorities.
LN: Is the industry imaginative and innovative enough?
CAS: They are innovative, if you are talking about the companies that are creating solutions for the maritime industry. The questions is: ‘Is the industry ready to adopt those imaginative solutions?’
The answer is somewhat in between.
While there are a lot of developments happening, I see two things that are creating a problem in the industry. One, of course, is the change in mentality which needs to happen in the maritime industry to adopt these technologies. But the second one is that in many cases, these solutions, while they are great, are created by IT and technology people. And sometimes these technology people fail to explain [their solutions] in terms that CEOs and organisations understand how they will create competitive advantages for themselves. Because that part of the link is missing, in many cases these new technologies and technology adoption are seen as costs rather than the potential to save costs or a competitive advantage.
In terms of the technologies themselves, yes, these companies are very innovative, but they need to start having a business mindset. Let’s face it, this is not charity, it’s a business. The truth is that if you can’t monetise it, it’s simply not good enough.
LN: How is OSM addressing these innovations?
CAS: We have been quite aggressive. When you come to conferences and you talk to the maritime industry players, you find that everybody’s using buzzwords. While many of these terms sound very interesting and nice, the truth is that only 20% of the companies are actually doing something about it. We are probably in that 20%.
In the last year we have developed a Maritime Innovation Centre here in Singapore, with the support of the MPA, from where we can not only monitor what is happening in our fleet real time, 24 hours, 7 days a week, 365 days year, but now we also have advanced analytics that will enable us to know what is happening in OSM at any particular point financially and operationally. Everyone in the company, who needs it, has access to this information from any device, from anywhere in the world, as long as they have some kind of internet connectivity.
This ability is giving us a chance to start making much better decisions, because when people are travelling, and they need to make fast decisions, which is the new norm, they are making decisions based on facts, not on gut feeling, which is another part of the challenge that we face. People think that because something has happened the same way as the last 20 years, that’s the way it should be today. Things have changed.
But we have addressed that, now we are in the process of implementing several other technologies. In the next 6 months, you will very likely hear in the news that we’ll have new drone services that we intend to offer for inspections and several other services. We are testing augmented reality to enable engineers on the ships to take advantage of our huge knowledge pool on shore.
And of course, the typical players like blockchain as well. At OSM, we do technical management and we also do crew management. And one of the challenges when you do crew management is that this crew each person has certificates. So, imagine if we were able to have these certificates in a blockchain that can be verified anywhere in the world, real time, even if they lose their papers. So, this is the type of efficiencies we are looking at for the future, and the operational centre is what we have built now to address the existing challenges that we have.
LN: In your opinion, what are the main challenges in adopting digital transformation in the maritime industry?
CAS: I can think of several challenges, but I will speak of two major ones.
The first one, which I mentioned earlier, is the mindset change. People need to understand that the paradigm has changed. Technology is no longer a cost or an option. Technology is something that you must adopt in order to gain competitive advantages, in order to do better, faster, and cheaper than others, and if you’re smart enough, in order to build new revenue streams.
The second challenge besides the mindset is that there has to be a change in the people who are actually creating and implementing these technologies. Many people don’t talk about this, but I think the biggest challenge is that you have IT people presenting a solution to a board of directors, to a CEO, or to an executive management team. The problem is that these technicians, as brilliant as they are, speak to these executives in technical terms, and they fail to explain to them in business terms how these technologies will enable the organisation to gain business and to do better by adopting the technologies. Instead, they focus on the benefits of the technology, the speed, the backup, which, frankly, CEOs and boards don’t really care about. They want to know ‘how will my company do better with this technology?’ and ‘how will this affect my bottom line?’
So, unless people in technology start adopting some business knowledge, and become capable of explaining to organisations the benefits of technology, we will continue to have this problem.