“Why can’t shipping lines have more efficient documentation processes like airlines?” posed Iain Macpherson, Industry Value Advisor — Travel & Transportation, SAP Asia Pte Ltd to a rapt audience, at the Kopi Chat: Shipping the Smart Way by BLOCK71 Singapore, in collaboration with Symphony Creative Solutions, on 26 January 2018. Iain and Captain Chak Kwok Wai, former advisor of NYK Group South Asia Pte Ltd, shared to a crowd of 120, on the challenges of container shipping and the technologies that would disrupt the shipping industry. Don’t fret if you could not attend the talk, for we’ve summarised the key takeaways below!
Why is Container Shipping worth disrupting?
In the last 50 years, the size of the average container vessel has grown by more than 14 times, due to increasing trade demands, economies of scale and the fuel efficiency of new vessels. Heavy investment into container vessels by carriers and facilities, by the government, combined with a solid stream of trade, will mean the assured growth of containerisation. Thus, ensuring the operating efficiency of container vessels is key.
Challenges of Container Shipping
Stowage planning is an increasingly challenging task due to the rise in vessel capacity and cargo sophistication. Stowage considerations include: stack weight, stress on the vessel, rules on hazardous cargo, port rotation etc. Common stowage-related issues are over-stowing due to tight space, restowing due to International Maritime Dangerous Goods requirements and stack weight; these issues lead to extra handling costs being incurred and the loss of passage time.
Shipping accidents due to dangers in coastal and congested waters as well as open waters, lead to a loss of lives and cargo. It is essential for the container vessels to have safe, smooth and quick passage through the seas.
The shipping industry’s paper trail has a heavy reliance on manual processes, which has given rise to large document centres in China, Phillipines, India etc. There is a lack of flow across documentations, especially from the smaller shipping companies.
Technologies that will disrupt the shipping industry
Big Data and Predictive Analytics
Collecting data sets and applying predictive analytics to them will allow shipping companies to do forecasting and gain deeper insights and trends into the industry. For example, online data can reveal sentiments of the public towards shipping companies, which can guide management decisions. Another example would be using data to predict weather patterns, which can guide navigational decisions.
A.I., Chatbots and Natural Language Processing
These technologies have the potential to empower the customers of shipping companies to service themselves real-time. For instance, a customer could make a cargo booking via a chatbot.
Blockchain technology can simplify and expedite the process of documentation, data management and authorization and also has the benefit of reducing the points of failure. The various parties involved in the documentation process need to be on board with blockchain technology for a widespread implementation to occur.
AR, VR, Robotics and 3D Printing
These technologies can improve the way shipping companies do maintenance and planning. To illustrate, it is slow and expensive to transport ship components for repairs from one location to another. A possible solution to this would be to 3D-print the necessary component on-site (the faulty ship).
Q & A
Is Electronic Bill of Lading workable for all trades (besides shipping)?
The Electronic Bill of Lading surfaced around 5 years ago and there were concerns about data security infringements. But in this day and age, with cybersecurity measures in place, my take is that the Electronic Bill of Lading is definitely workable. — Captain Chak
Blockchain technology is the way to go but the regulatory authorities must come on board. The technology need not be implemented for the whole shipping life cycle from the onset, it can be implemented for segments of it (e.g. port to port, warehouse to port). — Iain
How can start-ups work with SAP to transform the shipping industry?
We work with a large partner network and appreciate the value that start-ups can bring to augment what we do. We tend to be seen as a technology company for large organisations but, in fact, around 80% of our customers are SMEs. There are many opportunities for start-ups in this industry, with focused solutions that would integrate to SAP solutions, to deliver value to our customers with a single source of truth for data which, after all, is the new black gold. The key with any solution is finding the right niche.— Iain
What are the challenges in implementing unmanned vessels?
Theoretically, unmanned vessels are possible. The problem is the environment as it can’t be controlled. Small unmanned vessels on a protected, short route should work fine. But large vessels on deep sea routes with many external factors affecting them will be hard to automate. The technology is there but the environment does not support the total unmanned vessels. For this to become a reality, it has to be in a very fixed environment. The best solution might not be a totally unmanned vessel but a vessel which incorporates the technology but with a skeleton crew to take care of unforeseen situations. — Captain Chak
If you consider that the cost of a large container vessel these days is around US$150 million, and the cost of crewing such a vessel is relatively low, the appetite for unmanned vessels is somewhat limited, given the risks. From a navigational perspective, it’s also about the other vessels out there. If you consider the limited manoeuvrability of large vessels, would an autonomous one really work? That said, the first autonomous vessel is due to go into operation in 2019 but it is going to be on a very small scale, operating in coastal waters over a very short distance. There is also a bit of a moral dilemma with automation and that is the effect it has on employment — it’s something people don’t really like to talk about. From a technology perspective, we see automation and robotics complimenting what human do and providing decision support.— Iain
Given that the shipping industry is rather slow to adopt new solutions, how does a start-up avoid running out of funding while trying to disrupt the industry?
As a start-up it’s about finding that niche solution for a specific segment of the supply chain, whether it’s customs, the freight forwarders or carriers. If you try and cover every part of the supply chain you will struggle. — Iain
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