Maritime convergence, or how COVID-19 pulled the future forward
Updated: Nov 6, 2020
Remember not so long ago, when the most compelling issues occupying the maritime industry were IMO 2020 compliance, emissions and then sustainability? Back then, sustainability only seemed like a problem for corporate communications and the compliance departments.
Remote working? Business continued to be transacted mainly through brokers and at physical trade events - let someone else worry about things like the “transformation of the workforce.” As for data sharing, technology and digital transformation…most of the maritime industry kept a cool distance.
Then came the coronavirus.
The COVID-19 pandemic has been a global public health catastrophe as well as a significant business disruptor, specifically as an accelerator of change. (1) Others concur, saying that the coronavirus has “pulled the future forward” maybe by as much as ten years.
Pulling the future forward
Scott Galloway, professor at NYU’s Stern School of Business describes this phenomenon explicitly regarding the US retail sector:
“The percentage of retail done on digital channels has gone up one percent each year. And as of 2020 it was at 18%, and then in eight weeks it went to 28%! We had a decade in eight weeks.” (emphasis added)
COVID-19 appears to have pulled the maritime industry’s future forward as well. For maritime, an industry that has lagged others in many aspects of global business - these accelerations have hit simultaneously. Consequently, what we see more than acceleration, we see convergence. As you’ll see, with convergence, everything is everything.
COVID-19 Convergence: Everything is everything
ed the future forward
Take sustainability for instance, achieving sustainability requires the convergence of nearly all parts of a shipping organization. Let’s follow the value chain:
Improving operational efficiency is often a compelling starting point for sustainability. As David González, founder of the data visualization firm Vizzuality puts it, “some of the largest and cheapest gains could come from operational data-based strategies, such as weather routing, or route optimization that can, in fact, generate far more fuel savings than their implementation cost”. Indeed, more efficiently run vessels consume fewer bunkers, which reduces emissions which, in turn, reduces costs and expands margins, potentially funding those data driven strategies easily.
To operate more efficiently, you need to empower your teams with data: From ports, weather feeds, existing internal systems, from noon reports, on-board sensors and digital twins, to name a few sources. For that, you need software tools to process and interpret all that data so departments can take effective action.
Putting data to work, remotely
With globally dispersed staff working from home, how can you put all that data to work? For that you need digital technologies that deliver insights to smart phones and laptops so remotely working commercial teams can materially impact a voyage (i.e. for example reduce consumption) whenever they can, and from wherever they are. End-users will include the technical management team which ensures that hardware functions properly and on-shore vessel operators who must optimize itinerary - predict port congestion and guide vessels safely through rough seas for efficient arrival.
In the same way, that same data - about voyages, fleets, speed, consumption - feeds the task of regulatory compliance and reporting as well as the due diligence of so-called “green” investors guided by the Poseidon Principles who demand transparency into vessel efficiency and emissions.
Hence, are we talking about sustainability anymore? Yes, we are. But follow the value chain of sustainability and before long we are talking about almost EVERYTHING: Inputs to the P&L, how to maximize margins, digital transformation, performance optimization, managing a remote workforce, regulation and compliance, even ship finance. This is what is meant by convergence. This convergence will not just evaporate organizational silos, but also bring about massive transformation in how the industry will operate in the future.
Are we seeing the early signs of a "Big Bang" moment in the maritime industry?
Let me know your thoughts.
(Republished - https://bit.ly/3p602ab)