Maritime Tech 2020 Outlook

15 January 2020
Maritime Tech 2020 Outlook

Maritime tech is picking up steam in 2020, but not without obstacles. While the number of startups looking to push the industry forward is rising, one challenge they face is a lack of visibility to VC’s. EPS’ Head of Open Innovation, Gil Ofer, gives his insights on the areas of opportunity, and the potential challenges, facing maritime tech in 2020 and beyond in the latest Splash 247 article.

 Optimisation to drive technology advancement in 2020

Expect a year of mini-breakthroughs rather than wholesale change when it comes to the maritime tech outlook for 2020.

The fragmented nature of the tech providers and the naturally conservative, cost-conscious shipowning set will put the brakes on any huge technology changes, according to a Splash survey carried out today with leading owners, managers, consultants and entrepreneurs.

In today’s era of high fuel costs, vessel optimisation ranks highest among this year’s predicted maritime technology developments.

“The obvious first driver this year is technology that can delivery genuine fuel savings, lower emissions and better vessel performance, since fuel prices are likely to continue to be higher in the long term and volatile in the short term,” says Tore Morten Olsen, president of maritime at Marlink.

In support of that, Olsen says simplified data collection for efficiency and compliance; owners need systems that can remotely connect bridge system data with communications infrastructure to give them access to a vessel data dashboard on a per vessel basis.

“Artificial intelligence (AI) can be used to harness both shipboard and external data to optimise vessel performance and thus reduce excess fuel consumption and, consequently, emissions,” says Gil Ofer, head of open innovation at Eastern Pacific Shipping.

To see the most significant gains from AI, however, Ofer points out that the use of high-frequency data coming from sensors will be necessary, and as such, the Internet of Things (IoT) will be a top theme for the year, Ofer predicts.

Manish Singh, the newly installed CEO of Videotel and Seagull, agrees with Ofer, arguing that 2020 could herald the real adoption of the Internet of Maritime Things, as he describes it, with stronger and cheaper connectivity to ships, MESH networks onboard, greater use of sensor technology, vessel position and operational data, which will deliver significant new digital tools.

For Alexander Saverys, CEO of Belgian shipping giant CMB and one of the industry’s hydrogen pioneers, fuel developments are unsurprisingly his top pick for the year ahead.

“I’m not expecting any major large-scale breakthroughs because a lot of research is still in its early stages,” Saverys tells Splash, saying he anticipates “smaller, but nevertheless meaningful breakthroughs”, which will serve as valuable testbeds in the development of larger applications.

Like other owners polled, the CMB boss says his company is focusing hard this year on improved digital fleet performance monitoring. “The higher the fuel cost, the higher the potential savings,” he says.

Morten Lind-Olsen, CEO of Dualog, picks up on this widely held perception that digital fleet performance monitoring will grow and grow this year. This is in no small part down to the impact of increased bandwidth at sea, he points out.

“We’re seeing the creation of the integrated digital ship,” he says. “This is partly linked to the bandwidth issue, but as I see it there is a huge focus on increased business efficiency through consolidated ships operations.”

This goes all the way from automating human/manual interaction through digital solutions to much more machine to machine interaction like IoT data and sensors and DB exchanges, Olsen explains, something that will drive more analysis and systematised planning and exchange of data on the shore side.

Olsen’s predictions are not dissimilar to Henrik Hyldahn’s, the CEO, ShipServ, who tells Splash: “In 2020, the continued upgrading in IT infrastructure within shipping will create the platform to accelerate the use of data and analytics, which provides owners and operators with real transparency to analyse their organisations and business models, driving efficiencies and optimising performance and profitability. In line with this, throughout the year we will also see further progression in automation, which will lay the foundation for cognitive systems and intuitive interfaces, which – from a procurement perspective – will be a key element in its ongoing digitalisation.”

In Hong Kong, William Fairclough, the managing director of Wah Kwong Maritime Transport Holdings, reckons 2020 will be the year where Big Data changes the business of shipping with a host of competing platforms coming online promising to deliver unprecedented insight into the movement of cargoes around

“I think 2020 is the year when Big Data will start to be seriously offered to shipping companies by a number of different companies,” Fairclough says, pointing out that it is no coincidence that many of these projects are reaching the market at the same time – the cost curve and development time are factors generally shared by everyone.

“There may be some differences between the offerings but there will be many overlaps too,” Fairclough says, adding: “They are all looking to change the way we process information relating to things like voyage data, charter parties, operational messages, market data, pooling and chartering. There are basically multiple platforms all claiming to do various parts of this all coming to market at the same time”

Fairclough goes on to list tools created by AXS Marine, Sea by Clarksons, Ocean Freight Exchange, Signal, Shipnext, MSI Horizon, and VesselsValue’s new Trade tool, all having the potential to change the way owners fix their vessels.

“Some will thrive, others probably won’t. It will be their ability to adapt and remain cheap – and relevant – that will separate the winners from the losers,” says the Wah Kwong boss.

Turning specifically to the liner trades, Thomas Bagge, CEO of the Digital Container Shipping Association, reckons this year will see a continued acceleration of smart container usage, greater adoption of blockchain-enabled platforms and like Ofer at Eastern Pacific, increased use of AI.

“What would hold the industry back from leveraging technology to achieve breakthrough results is if we repeat the same patterns of behaviour from the past,” Bagge says, in comments echoed by many interviewed by Splash today. “To move the industry forward,” he continues, “we need to collaborate on basic elements, similar to what has occurred in many other industries. When we are willing to change the way we work and proactively collaborate, we, as an industry, will truly benefit from technological advancements.”

Splash columnist Kris Kosmala agrees with Bagge that this year in the liner space it will be all about incremental changes rather than transformative technologies.

As to what will hold the shipping industry as a whole back from taking the plunge with greater tech adoption, Carl Schou, president and CEO of Wilhelmsen Ship Management, cites the all too familiar refrain of the conservative nature of the industry and the cost versus risk rewards.

The markets will need to pick up for a period of time to swell owners’ coffers before they’re willing to part with their cash for new technologies, argues Thomas Reckefuss, managing director of Thomas Schulte Ship Management.

“The last quarter in 2019 wasn’t as good as anticipated, therefore shipowners are and will be again more reluctant to invest into new developments or newbuildings,” Reckefuss reckons.

For Frank Coles, CEO of the Wallem Group, the biggest hurdle is the sheer breadth of technology companies touting their products to what is actually a comparatively small audience.

“In maritime, technology is brought to market in a fragmented, uncoordinated and non-standard manner. This is the single biggest hindrance to proper advancement of digitalisation in the maritime industry,” Coles says.

The Wallem head argues that there is little motivation from the large engine manufacturers to move into a standardised environment.  Likewise, he says there is little motivation for most innovators to collaborate with the other solutions providers. 

The fragmentation argument is indeed the biggest hurdle maritime tech faces, agrees Eastern Pacific’s Ofer. Another stymie is a lack of seed funds, says Ofer, a man who last year helped found a maritime tech startup incubator in Singapore 

“The pool of top-tier, risk-taking venture capital funds that have maritime tech on their radar is severely limited,” Ofer says, a statement backed up by a report from UK consultancy Thetius published yesterday, which showed that if one discounted Softbank’s massive one-off $1bn investment in Flexport, venture funding in maritime tech actually declined by 24% last year.

“Start-ups are usually forced to raise money from strategic partners such as shipowners, shipmanagers, yards, class societies, and the rest of the actors involved in commercial maritime. But it’s the fragmentation of our industry and the risk-averse, traditional mentality of these typically family-run businesses that make the task of raising money for maritime tech such a big hurdle,” Ofer points out. 

“For the industry that carries the world on its shoulders, it is essentially niche in the number of ships, and has way too many suppliers.  This means that it is hard to create a standard, or encourage collaboration,” Wallem’s Coles says, a point of view shared by Videotel’s Singh, who concludes: “The maritime sector will need to go past the not invented here syndrome and work with peers and competitors to collaboratively roll out new standards across the sector.”