Opportunities for digitisation in Maritime Logistics

Image for post
Image for post
Start-ups explaining how their innovative solutions have improved productivity by automating manual processes, in the field of maritime logistics.

In the words of Mr Jeremy Nixon, Global CEO of Ocean Network Express (ONE) , with regard to the opportunities for digitisation in the field of maritime logistics: “We have an enormous amount of data, lots of data points, how do we use that data? We have many opportunities for machine learning, being able to predict trade cycles, weather patterns, seasonality factors — how weather can affect consumer markets and subsequently, the effect on demand. If we can digitise the large amount of paperwork (e.g. Bills of Lading, Letters of Credit) and make the information available via a network that all partners can access, we will be able to reduce costs, speed up processes and also make them more accurate. We’ve got Robotic Process Automation, labor costs are high, particularly in the container terminals so we are starting to see them becoming automated. We have driver-less cranes taking cargo on and off the ships, stacks automation and driver-less vehicles within the terminals. There are opportunities in the next 20 years whereby, for example, a container could be loaded in Vietnam with an autonomous truck going to a terminal, the container is loaded autonomously without any human intervention, where the vessel could even be fully automated or perhaps with a significant reduction in the number of crew needed to man it. The vessel would cross the ocean and fulfill the whole cycle on the other side.”

“ There are opportunities to optimise maritime and port processes from the standpoints of the customers and service providers. For example, customers would like their vessels to berth on arrival, carry out the loading/unloading efficiently, and get their marine services/supplies fast. The service providers would like their assets (quay cranes, tug boats) to be highly utilised. Could these two objectives be converged or optimised in some ways?” said Mr Thomas Ting, Deputy Director of the Maritime and Port Authority’s Research and Technology and Industry Development Division, at the Kopi Chat Deep Dive with Symphony Creative Solutions at BLOCK71 Singapore.

Joining him at the session on the opportunities for and trends of digitisation in the Maritime Logistics field and the subsequent panel discussion were Prof. Mark Goh, Director (Industry Research), The Logistics Institute — Asia Pacific (moderator of the discussion), Mr Christopher Lim, Co-founder of Glee Trees Pte Ltd and Mr Jeremy Nixon.

Mr Thomas Ting also covered the upcoming disruptive technologies & new business models:

  1. E-commerce platforms — Major e-commerce players such as Alibaba, Amazon and Walmart are starting to disrupt the shipping space, as they strive to take greater control over logistics and directly over transportation. For example, Maersk, a Danish major shipping line, has partnered with Alibaba to allow users to book ships online. The move is part of Maersk’s strategy to put digital services at the heart of the groups’ transformation into an integrated transport and logistics giant.
  2. Sharing Economy — Amazon is building an app which will make it easier for truck drivers to find shippers that need goods moved, much like the way Uber connects cab drivers with riders. It would also eliminate the need for a third-party broker, who typically charges a ~15% commission for doing the middleman work.
  3. Blockchain — Walmart’s pilot project in Q1 2017 to to leverage distributed ledger technology to track and trace pork in China and produce in the U.S, two high volume product categories with large markets.
  4. Internet of Things(IOT) — Sensors and IT technologies are facilitating the introduction of new applications at sea (e.g. cargo tracking via maritime ICT cloud), a gamechanger for the maritime industry.
  5. Automation & Autonomous Systems — Remotely controlled and autonomous ships represent a fundamental change in shipping over the next decade and are driving the digital transformation in the sector.
  6. Big Data Analytics — ABB is bringing predictive capabilities of big data for shipping industry with the latest update of Remote Diagnostic Services.

If you didn’t manage to attend the session, read the following section for the key takeaways! Or watch the livestream here!

Q&A

  1. What is the biggest challenge of innovating a traditional sector?

We handle a massive amount of data from various partners, who are using a lot of old legacy systems. My old company NYK has about 14,000 staff around the world, about two-thirds of them are in back offices handling data transfer. Ten years ago, they would all be working off-shore. There are a lot of cost-savings if we can do everything quicker and faster. — Jeremy

2. How do shipping and logistics companies integrate data across different systems today?

Typically, different systems are integrated via APIs and databases. However, the shipping and logistics companies may not have access to the databases and APIs of multiple maritime I.T. systems. So, we have come up with Robotic Process Automation (RPA) software that is enhanced with A.I., which will “see” the screen like an operator or clerk, “read” the data through natural language processing (NLP) and connect the information in a format that can be understood by multiple I.T. systems. We can do exception handling- by computer vision that can detect different types of images, and machine learning to determine if we are on the right screen or copying the correct data. Our software also includes functions to connect with APIs and databases as required. — Christopher

3. The concept of RPA does not seem new. Are you going backwards in technology? (This was a follow-up question from 2.)

It is about solving a customer’s pain, whether you are using old or new technology. For example, the technology for autonomous vehicles is not really new… planes have had it since 20 years ago (for auto-piloting), and now people are bringing this technology to the cars. I’d say it’s important to choose the right technology to solve the right problem at a cost that the customer can accept. — Christopher.

4. One of the challenges is the lack of wifi on ships, which restricts the availability of up-to-date info. How can this be solved?

There is a breakthrough in which we can put a chip in every container so wherever it is in the world, it can be tracked. On the land side, we can do geo-fencing etc. We already have the ability to take the data to the satellite system; how it works is that the ship has a local network which is connected to all the containers and the ship can feed these information to the satellite, so it is possible to obtain information on each container. The issue is that shipping lines do not always own all the ships they manage and hence, they might not have visibility of those ships. — Jeremy

5. What is the opinion of ship owners about implementing the IoT in their fleet? Are concerns about cybersecurity a factor influencing the quick adaptation of the remote controlled technology?

Our vessels have a lot of IoT connectivity, we are monitoring engines, machine performance real-time and sharing it with the manufacturers. There is a shift from plant-based maintenance to conditioned-based maintenance. — Jeremy.

6. What are the best opportunities for sharing economy platforms in shipping? Some start-ups have tried trucks, containers or ships but have not gained much traction.

My observation is that the regulatory agencies are taking a light touch to emerging/disruptive technologies. If we want to encourage innovation, then we cannot have a heavy hand (regulations) at the very first instance. There are bike sharing or other new business models emerging, I think the flowers could be allowed to blossom before we determine whether there is a real problem, then we deal with it. If your start-up wants to delve into platform, consider who are the incumbents and where are the gaps, and whether you have unique technologies and value proposition. To start a market place, there is a need to understand the problems and business processes, get buy-in from pilot users and suppliers. — Thomas

7. Will MPA play a role to encourage start-ups to surpass the incumbents for a flourishing ecosystem? (to Thomas)

There will always be new players coming on board and it is for the market to sort out the winners. We are not adverse to new players entering the scene and there are also cases where new entrants/start-ups collaborate with the incumbents as we seen in smart port challenge and other events. — Thomas

8. Are there any game changing solutions that could replace the shipping vessel?

Yes, there are 2 reasons why, we are still in peak oil at the moment but we are going to move away to more sustainable technology and it will be cheaper in the longer term. And secondly, building bigger and bigger ships is the completely wrong thing to do. An increasing volume of items needs to be shipped, quicker and faster continuously, but big ships basically move cargo in pulses of large volumes. The trend of big ships is present only because of the oil crisis and the need to save bunker fuel, although it completely goes against the logic of the industry. — Jeremy

Then we must ask “Is there a new technology to move things faster and cheaper?” I think it is possible that the disruption might come from hyperloop or rail. We need to look at technologies that will help to move things faster and cheaper, beyond the shipping industry. — Christopher.

Smart/autonomous ships, as we start seeing in other sectors, may profoundly change the concept of operations for maritime industry. 3D-printing or additive manufacturing, with more items produced locally might impact future supply chain configuration. Perhaps the immediate and biggest opportunity in maritime lies in digitalisation of processes and services. — Thomas

Are you an entrepreneur working on a cool product and looking for more than just a co-working space ? Do apply for a hotdesk here and become part of the exciting community that we offer at BLOCK71 Singapore.

For more great entrepreneur themed articles delivered weekly to your inbox, subscribe to the BLOCK71 newsletter here!

Written by

NUS Enterprise nurtures entrepreneurial talents with global mindsets, while advancing innovation and entrepreneurship at Asia’s leading university.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store