By: Aditya Gandhi, Director- Technology, Sapient Global Markets
Connected Data is the new fuel to propel the growth of shipping industry
Over the years, technological advancements has led to success of many industries like BFSI, healthcare, transportation, retail etc. This has diverted cost benefits to other connected industries and resulted in turning the market more competitive and transparent. On the other hand, the shipping industry is yet to see a large-scale transformation. Its evolution, as happening with others, is yet to be seen.
Marred by challenges such as infrastructure constraints, imbalanced trade flows, tightening customer demands and a hypercompetitive environment, the shipping industry is threatened by status quo. Similar to what has transformed the other industries, lies the key to shipping industry’s answer to its problems – Connected Data.
Each day, the shipping lines carry enormous volumes of cargo. This might be in the form of oil and petroleum products, large containers, commodities etc. These operations generate vast amounts of raw data in terms of the volume of freight, shipping time and details about the vessel such as position, fuel consumption or even finding the right ship for cargo. Easy access to this data and analytics on top of it can generate new insights and help improve asset utilization and safety. Critical processes such as chartering, vetting, operations, voyage operations etc. can become simpler and easier to handle by leveraging the available data resources.
Let’s look at few examples of how analytics can help vessel operations. A large Australian port generates near-real-time data on incoming and outgoing vessels and cargo, manage berth assignments and collect tariffs. They manage to do all this while ships are still in harbour, enabling the port to run a more efficient and profitable harbour using business analytics. Another example is analytics on speed vs fuel consumption. Pre vs post maintenance, fuel consumption can vary by as much as 25% for a given vessel speed. Active monitoring and analytics on fuel consumption can give inputs on optimal speed to run at and what is the best time to do maintenance to keep a tight control over costs.
If we look at the process of vetting – organizations get useful information for vetting from inspection companies, terminals, port authorities and operator self-assessment. The information includes inputs like past causalities, detentions, performance etc. and this needs to be interpret for impact on various risk factors like pollution, safety and navigation. The first step in this journey is making this data digitally available. This may require working with vendors to standardize data format or using techniques like optical image recognition and natural language processing to auto parse unstructured content received in pdfs from inspection companies and port authorities. The next step is to build a predictive model that can use this information to predict the risk using techniques like machine learning. Final step is benchmarking this information against industry standards and internal controls to provide decision support for vetting.
Another aspect that leads to significant inefficiencies in the value chain is processing of key documents like bill of lading, port clearance certificates etc. These are extremely manual activities that are repeated at multiple stages by different counterparties leading to poor data quality, duplication of effort and eventually delayed payments and need for reconciliation. Getting all this information on a blockchain can increase the speed and accuracy of this data and make is transparently available to all the relevant stakeholders.
Maritime companies should not shy away from utilizing the power of data at its disposal. In India alone, where the cargo traffic is expected to reach 1,758 million metric tonnes by the end of 2017 as specified by the Ministry of Shipping, technological transformation should be used as a way to evolve as well as intensify business manifold.
Digitization of the value chain and analytics to generate insights are essential for shipping companies to remain competitive and to build a sustainable future.