Outlook 2018: Understanding technology’s siren song

The shipping industry will increasingly collect and analyse its data to optimise efficiency. Pictured
The shipping industry will increasingly collect and analyse its data to optimise efficiency. Pictured

More cyber attacks on ships and shipping-related companies are certain, DNV GL technology group director Pierre Sames told IHS Markit on 29 November. The very same day, shipping brokerage Clarksons revealed it had fallen victim to a hack.

Sames is not an oracle. Neither was he pulling a prediction from the air. Rather, he is convinced that the shipping industry remains under-prepared for any potential cyber attacks that can happen as a result of vessels’ increased connectivity. When it comes to how technology will affect shipping in 2018, this is a pivotal issue to watch.

“Another hack is inevitable because we are not prepared as an industry,” he warned, adding that shipping would need another data breach to speed up the development of its protective systems. The need for such protection is growing as companies are pushing ahead with significant upgrades to connectivity for vessels as they seek to leverage the benefits of electronic data and vessel optimisation programmes.

These systems can be expensive to retrofit in older vessels and some believe that the application of new technology will be a key differentiator, which could lead to ship operators being ranked in several tiers based on the level of electronic optimisation and security their vessels possess.

Counterintuitively, Sames argued that it was the larger companies that are better connected that face greater risk of cyber attacks. “If you operate an older ship with outdated industrial equipment on the vessel, then it is impossible to secure [yourself], but your best protection is that you’re not an attractive target,” Sames said.

Even if it is better to remain in the ‘analogue world’ from a security point of view, the draw of the cyber world is a siren call to the shipping industry, irresistible simply because the benefits are too great to ignore.

However, converting fleets to achieve the connectivity necessary to optimise operations can be cost-prohibitive. As a result, most companies will connect to a third-party shared platform, such as the Veracity platform offered by DNV GL. Other platforms are in motion as well, including Wärtsilä’s Smart Marine Ecosystem and products being developed by Siemens, Kongsberg, GE, and ABB.

Hideyuki Ando, senior general manager of the maritime technology division at Monohakobi Technology Institute (MTI), part of the NYK Group, told IHS Markit, “Optimisation of fleet operations covers both energy efficiency and safety. Big Data will play a key role in the pursuit of optimised operations. And artificial intelligence will be used for data analytics more, while data from the [internet of things] will be more available. But the most important thing will be if shipping companies themselves can pinpoint the problems.

“Shipping is a rich semantics domain, so it is very difficult for external consultants and data scientists to identify the right issues to solve. People internally in shipping themselves have to lead innovations,” Ando added.

Shipping industry giant Maersk has already had these internal debates and decided that it needs to be in control of all its own data, with a plan to have a wide-ranging system. For this reason, the Danish company is building a proprietary platform and looking to connect all of the company’s vessels.

Niels Bruus, Maersk’s head of future solutions in the department of fleet management and technology, was reluctant to put a figure on the cost. Even so, he told IHS Markit, “The overall investment is significant, given that we have 270 owned ships and then there are the [newly acquired] Hamburg Süd ships too.” In total, including its time-chartered vessels, Maersk could be implementing solutions aboard 700 ships.

Bruus believes new technological developments will undoubtedly create a significant differentiation between the connected operators and those that have not managed to upgrade their systems. “In developing these systems, it is not our model to use the tools to control the crew. Our reality is to use the data to collaborate better between ship and shore, so that we can support decisions on the vessels and suggest the crew do certain things,” he said.

Under development with partners, Maersk’s platform is based on Microsoft Azure, a cloud-based system. It will collect and analyse data from flow meters and sensors currently being fitted to the fleet in a programme that will take up to three years to complete.

Maersk began its connectivity programme by looking for three critical elements: data flow, data evaluation and accuracy, and IT infrastructure. “We came up short on all three,” Bruus said.

By developing its own system, Maersk will be able to identify and add the elements that it needs for its own purposes. One of these add-ons is what Maersk calls ‘Port Stay Pit Stop’, which will offer live data related to a vessel’s port calls. The major elements that will be added to the initial platform will be vessel operation optimisation data and analysis and voyage data optimisation.

Maersk’s vision is to integrate its vessel-optimisation systems with its customer-service applications, creating an optimised system across the board.

In terms of interactions with cargo customers, “you will see an intensified footprint in new online-enabled business models”, said Carsten Frank Olsen, head of e-commerce and segmentation for Maersk Line.

“A good example of this is ship.maersk.com, where we are serving a much more focused customer experience for a certain segment of our customers, where the entire process from price to booking is instant. In addition to this, the enablement of global trade digitisation, through Blockchain, will also become very visible, moving towards an industry-wide visibility and document-digitisation infrastructure. While already happening, I think you will also see the API [application protocol interface, which allows communications between various software] economy taking off for real in the SCM [supply-chain management] industry.”

Maersk Line and its customers already handle the vast majority of shipments electronically and the company is now looking at the next generation of engagement: serving the user’s ‘digital journey’, which is no longer generic, but is more in line with customer needs. “In other words, we will emerge in the customer’s process where and when relevant,” Olsen explained.

An example of this will be the Danish operator’s self-service portal my.maerskline.com, which will be simplified to deliver greater flexibility and ease of use. “Today, it is mostly a ‘multi-stop’ and partly manual experience if you, as a customer, wish to add additional services to your ocean transport. This will no longer be the case [in 2018],” Olsen said.

Maersk believes its customers are moving away from using single channels with Maersk Transport and Logistics. “As part of the journey we are already on, we are working with customers to build omni-channel experiences,” Olsen said. “An example could be enabling customers to get a rate and book instantly in one channel, re-use these data to enable the shipping documentation process in a second channel, and then handle all downstream processes in a third channel, but based on the same data and without having to ‘hand carry’ data or documents between systems.”

However, Ando at NYK pointed out that there were challenges when it came to developing a single solution for all players to tap into. “I think, at the end of the day, there are many systems existing and they will interface with each other to exchange necessary information and data,” he said. “I don’t think there can be a single universal system that will cover every aspect of global logistics chains, because people cannot design such a huge system. Imagine the complexity of the data model to represent all aspects of all the logistics chain. And I cannot imagine who will pay for it. Each system needs to be designed with a bounded rationality.”

Marco Ryan, chief digital officer and executive vice-president at Wärtsilä, agreed with Ando. “There is not going to be one platform. It won’t happen. No one owns assets end-to-end,” he said.

Technological advances do not have to be sweeping. They can also take small steps. Ryan pointed to one small part of the logistics chain that Wärtsilä has already identified as needing a fix: ports do not know when a ship is going to leave the facility. The solution: through its sensors, Wärtsilä can tell when a ship has fired up its engine and inform the port when it happens. “It is a simple data-sharing process,” Ryan explained. “We know when the engine starts up and there is no commercial value in this information [so there is no breach of data confidentiality], but it makes the end-to-end logistics chain more efficient, adding value for the industry.”

Such small advances will ultimately add up to big benefits. When the engine starts, the optimisation systems will kick in. In order to prevent unpredicted downtime and reduce maintenance costs, condition monitoring of vital equipment through images, vibration monitoring, and sensors in collaboration with manufacturers will be crucial. For this, companies will need robust and reliable software, all of which must be integrated to help prevent collisions, reduce the workload on crew, and enable shoreside support.

According to Ando, “Optimisation of a ship design includes high-level automation. The level of automation of each system, such as propulsion, navigation, power management, and ventilation, will proceed step by step. Each system has to endure reliabilities of function, software, data, communication, man-machine system, and cyber resilience.”

Underpinning all of these technological developments is what Ando calls a ‘cyber-resilient’ ship – which goes back to how Sames at DNV GL is likely to be correct in predicting more cyber attacks. To reap technological rewards, systems and processes must be in place to protect the ships, ports, cargo-booking tools, and other systems.

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