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  • Melvin Mathews

Predictive analytics and disruption in business

Updated: Jul 18, 2020

Information is vital for business. Relevant information received at the right time has always given a competitive advantage. It is interesting to see how information in the shipping industry has evolved over time – the most vital pieces of information have not significantly changed for centuries. This information includes:

  • How much cargo can the ship carry?

  • When will the ship arrive at the port?

  • How much time is required to load the cargo?

  • When will the ship depart from the port?

  • When will the ship arrive at the next port?

  • How much time is required to unload the cargo?

  • When will the ship sail from the next port?

Accurate predictions to these questions gave local traders a competitive edge when planning storage and transportation of their merchandise. There were many unknown factors which made it difficult to get the answers right and so there was a lot of estimation based on previous experience. However, transfer of information was mainly by word of mouth. Wired communication made it possible to pass information about arrival and departure of ships and cargo much faster between places on land.

With wireless communication, it was possible to communicate with ships at sea. This allowed traders to know where the ships were, to better estimate their arrival at the next port and to know the condition of cargo before arrival. Steam and mechanical propulsion also meant that ships not only needed to carry large amounts of fuel, but there also arose the possibility of breakdowns, and the need for repair and maintenance of machinery. This increased the need for communication from the vessel about its status and perhaps gave birth to the daily noon report.

Fast forward to today

The means of communication have advanced from sending messages by Morse code to receiving messages via email to automated data from sensors. Yet in this modern digital era we continue to rely on the ship’s noon report with no significant changes – except that it’s now more elaborate and detailed. The original purpose of the report remains the same:

  • Position of the ship at noon to know where she is

  • Status of machinery on board to avoid breakdowns

  • Present weather conditions to estimate delays

  • Estimated time of arrival at next port (ETA)

Analysis of data accumulated from noon reports has given insights into such things as inefficiencies, breakdowns and weather patterns that have occurred in the past. This allows not only better extrapolation and estimation of future voyages, but also action to avoid past delays and inefficiencies from being repeated. It does give competitive advantage, but the downside is that one must wait for data analysis to be performed on historical data in order to come up with insights that can be acted upon in the future.

Satellite communication and sensor technology on board has allowed real-time data transmission to and from the vessel. This has led some shipping companies to open marine operations centres that are manned 24/7 and can monitor the company vessels in real-time. The idea is that any deviations and inefficiencies can be identified as they happen and dealt with immediately without significant delay. This certainly gives a competitive advantage over those who don’t have access to real-time data, or a fleet operations centre that can take corrective action in near real-time.

What next?

With onboard broadband connectivity and the data transmission speeds and computational power available today, what is possible is not just real-time analytics, but predictive analytics. Using cutting-edge developments in artificial intelligence, machine learning, neural networks and cognitive computing, a multitude of data from various sources including hindcast data, real-time data and forecast data can be used to predict with a great degree of accuracy deviations and inefficiencies long before they happen. Mobile devices and connectivity ensure enhanced visibility and transparency of critical information that can easily be disseminated to important stakeholders irrespective of where they are.

Sufficient early prediction, warning and simulation give adequate time to mitigate risks and inefficiencies long before they are expected to happen. Predictive analytics is now the real game changer when it comes to competitive advantage. This means that even before the manned ‘marine operations centre’ concept has become mainstream in the shipping industry, they are already obsolete, i.e. being disrupted.

The older the industry, the more difficult it is to change things. There is a time-tested way of doing things, because those methods in the past have always worked, and the majority believe there is barely any reason to change anything unless really required. The world is now connected and digital, the way data is exploited is changing the rules of business rapidly. Data and digital transformation is causing not just disruption of traditional and conservative ways of operating ships, but also the rules of engagement in business.

Will you be the disrupter or be disrupted?

Let me know your thoughts.

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