Digitalization and data sharing: making the maritime industry, safer, cleaner and more efficient
The necessary technologies exist but the maritime industry must find ways to overcome its competitive mindset and increase collaboration if it wants to fully realize the operational benefits of digitalization.
Kasper Soegaard & Ian Wheeler
Head of Research; Project Assistant, Global Maritime Forum
"There is no doubt that cross-industry data sharing can help create a safer, cleaner and more efficient maritime industry."
June 28 2019
New digital technologies are bringing major opportunities and challenges to the global economy and to the maritime industry. Some of the opportunities and challenges of digitalization can be addressed at the company level to gain a competitive advantage, such as, reinventing business models or improving efficiency. But some opportunities and challenges transcend any single company and can only be properly addressed through cross-industry collaboration.
To better understand the current state of digitalization and data sharing in the maritime industry and to explore the potential for pre-competitive collaboration using digital technologies and data sharing to make the maritime industry safer, cleaner and more efficient, the Global Maritime Forum gathered representatives from a broad range of maritime sectors for a collaborative workshop on May 27, 2019 at the Swiss Re Centre for Global Dialogue.
This article presents some of the key points made at the workshop, that we hope will inspire further cross-industry collaboration.
We have the technology, but our mindset must evolve
Digital technologies are developing rapidly, and the cost of technology is consistently decreasing. This means that we have access to the technologies needed to digitalize and share data across the maritime industry. However, despite this, the maritime industry is generally considered to have been relatively slow to adopt digital technologies and share data. That said, there are many initiatives and companies in the maritime industry that are looking to change this.
The relatively slow adoption of digital technologies and data sharing in maritime cannot be attributed to a lack of beneficial potential. On the contrary, several identified systemic problems could be solved using digital technologies, thereby, contributing towards making the maritime industry safer, cleaner and more efficient. Therefore, the key question became identifying the underlying causes that make data sharing and collaboration in the maritime industry a challenge and how to overcome them.
One identified factor was the traditional industry mindset, where there has been some scepticism towards digitalization and its potential benefits for the maritime industry. Another barrier is a highly competitive attitude, which makes pre-competitive collaboration with competitors exceedingly difficult. However, these mindsets are shifting as there is a growing belief that digitalization and data sharing can be an enabler of positive and productive change.
Nevertheless, an evolving mindset is not enough to leverage digital technologies. Most maritime leaders and decision-makers are not experts on digitalization, so even though they have the desire to implement digital technologies and are open to data sharing, they will need to bring in new types of talent and skills to effectively do so.
This is a potential challenge, as the maritime industry will have to compete with other – and often higher profile – industries for this digital talent. Moreover, this new generation of younger talent will likely not have the same competitive mindset and desire greater levels of corporate social responsibility from their workplace than is the norm in the maritime industry. However, attracting this talent is not seen as being an insurmountable task for the industry. Many maritime companies are already taking steps towards being more inclusive, finding new ways to attract young talent and working with innovative start-ups, in order to bring the needed digital mindset to their business.
Also, increased digitalization means the maritime industry will have to manage an increase in cyber risks. So, while digitalization can be used to improve safety, it also creates new positions of vulnerability. Thereby, it is necessary to conduct a careful evaluation of the cyber risks, their potential consequences and the best ways of preventing and mitigating them.
Despite the challenges that must be addressed in order to fully reap the benefits of digitalization and data sharing, there was a clear sense that the industry was ready to overcome them and take the next steps towards digitalization and cross industry collaboration.
The benefits of increased industry collaboration on data sharing
The focus of the workshop was on understanding the state of digitalization and data sharing and how it can be used to make the maritime industry safer, cleaner and more efficient. As a result, many concrete ideas for potential actions were generated (see appendix 1 for a summary of the presentations and appendix 2 for a summary of the action ideas generated).
One recurring theme was the gap between the current state of digitalization on board ships and what is technically possible, for instance, using advanced technologies such as AI or autonomous shipping. Today, there are many vessels that lack the basic digital infrastructure in terms of sensors and reliable connectivity, which could be used to improve operational performance using existing digital tools. With the advent of new types of wireless sensor technology, it is now easier to retrofit existing ships and improved connectivity. Therefore, there is a lot of potential for improving performance with limited investments, which in turn builds the foundations for adding more advanced technologies in future.
Another important theme in the discussions was identifying areas in which pre-competitive collaboration around data sharing could create safety, sustainability and efficiency benefits. Looking at the different ideas and discussions, it is possible to identify a handful of potential benefits that cuts across the specific discussed issues.
Creating digital standards related to the exchange of digital information across the value chain improves the potential for digital interoperability and efficiency. There are already a number of initiatives, such as the Digital Container Shipping Association and the International Taskforce Port Call Optimization, that are looking at creating digital standards for the maritime industry. In fact, standardisation is the key first step towards data sharing initiatives and building more advanced solutions.
Benchmarking and increased transparency
The proliferation of sensors and data collection related to safety, emissions and operational efficiency opens up new possibilities to share data, which can be used to increase transparency and create benchmarks around key performance indicators. Such benchmarks can be used to internally improve performance and externally by investors, lenders, insurers and customers, to prioritize companies with environmentally friendly or safer business practices, thereby driving productive industry change.
The spread of sensor and data collection technologies combined with the rapid expansion of computing power and AI makes it possible to analyse very big data sets, which can be used to optimize operations and predict potential risks. A prerequisite for reaping these benefits is having access to large amounts data. In fact, greater amounts of analysable data, across the supply chain, creates better and more comprehensive analytical results. Obtaining this data can be achieved by sharing anonymized data from several operators, which is beginning to take place in several maritime initiatives.
Logistics system optimization
Optimizing a system consisting of independent actors is generally difficult, as the rational action of an individual can lead to suboptimal outcomes for the system unless all involved actors are able to coordinate their actions. Similar challenges can be identified in the maritime industry. However, through industry collaboration, digitally supported data sharing across a relevant set of actors can be used to improve the coordination and efficiency of the whole system. Thereby, reducing waste and driving down operational costs.
Streamlined and trusted information flows
Another potential benefit of digitalization and data sharing is to reduce transaction costs by automating the exchange of information between different parts of the value chain. A common prerequisite for this is the ability to trust and validate the information being exchanged. Technologies such as block chain offer a way of ensuring trust and transparency.
The Way Forward
The discussions not only identified a number of potential benefits from data sharing, but also offered advice for taking the next steps forwards.
In general, it was considered important to first learn from existing initiatives both from the maritime industry and from other industries such as the airline industry, which could be used to identify best practices and avoid duplicating existing initiatives. One key success factor identified was the need for a common language and understanding of the problem at hand to ensure alignment among the involved parties. It was also important that the incentives for participating in the collaboration are clear and proportionate to the resources required.
Moreover, having the data collection performed by a neutral third party and anonymizing the data, was also seen as ways to increase the appetite for data sharing, since it could increase trust and reduce perceived risks. A final consideration was to start with a well-defined problem and a limited group of stakeholders, which would make it easier to build trust and develop a workable solution. Once the proof of concept had been demonstrated, the collaboration could then be expanded by bringing in additional stakeholders and/or addressing related problems.
If this advice is heeded, there is no doubt that cross-industry data sharing can help create a safer, cleaner and more efficient maritime industry, and we look forward to continuing and refining the action ideas identified at the Global Maritime Forum’s Annual Summit in Singapore in October 2019.
This article is based on the discussions and outcomes at a Global Maritime Forum workshop on digitalization and data sharing held on 27 May at the Swiss Re Centre for Global Dialogue in Rüschlikon. We would like to thank all the participants, who took part in the discussions at the digitalization workshop for their active contribution. We would also like to thank Swiss Re Corporate Solutions for hosting the workshop and the Value Web for helping design and facilitate the workshop. The content of the article is the sole responsibility of the authors.