Shipowners face a challenge in sorting signal from noise when identifying what digital solutions are worthwhile and applicable for the problems they seek to solve
Shipowners face a challenge in sorting signal from noise when identifying what digital solutions are worthwhile and applicable for the problems they seek to solve
In a webinar organised by Riviera Maritime Media, three experts candidly attempted to sort fact from fiction and provide solid guidance for shipowners considering how they could benefit from digitalising their operations.
Hapag-Lloyd Fleet Support Centre senior director Jörn Springer was joined by MacGregor’s vice president for digital and new business transformation Dennis Mol and director of new service models for digital and new business transformation Daniel Lundberg for the session, which was moderated by Riviera Maritime Media head of content Edwin Lampert.
“Collaboration is crucial to finding the value which is still there and untapped within our business today,” said Mr Springer. Hapag-Lloyd set up a cross-functional initiative aimed at reducing inefficiencies in fuel and cargo intake in 2013, and currently has a team of around 20 people based in Hamburg working on this.
Mr Springer said the payback the company has experienced from its fleet support centre so far has been between four to six times the amount invested in it, adding that the yield per head of the team has increased in recent years.
“The surprise was in how sustainable some of the ideas are in a constantly changing environment,” he said.
“You can apply the same methodology in the same area once or twice but you can also extend that to a lot of areas within the business scope.”
“There is still a very good potential for some of the lower hanging fruit, I have to admit.”
Leverage expertise through collaboration
Collaboration is also key to MacGregor’s approach, said Mr Mol, noting that the company tries to think along its customer’s operational lines to ascertain whether there is business value to be gained by introducing a smart digital solution. He cited saving an hour a day to increase the operational window for an offshore crane; using a faster breakbulk stowage plan to allow ship operators to be more commercially flexible towards their own customers; or boosting car offloading productivity by 50% per full time equivalent per day for roro vessels. “It should be concrete and pragmatic,” he added.
MacGregor will then reach out to customers to validate the idea, sharing information to pragmatically ensure all parties are on board and see the same potential for value creation. Mr Mol added “Hype ends and value starts by joint collaboration with customers, vendors and internally to create value in this digital era.”
Mr Lundberg observed that when talking about digitalisation, hype often occurs when getting fixated on the technologies themselves. This requires asking how the technology can be applied to enable a digital transformation by creating value for the customer. He added that this can be particularly difficult with new technologies that represent unknown territories, as there can be fear – from both customer and supplier – about what applying the technology will mean, ensuring new service models do not cannibalise existing models, and identifying what enablers can be facilitated. This becomes easier as technologies mature, he said, citing examples such as machine learning and artificial intelligence. “The question then becomes how to work with the customer to identify use cases and then see how the technology can be applied to enable those, rather than focusing on the technology itself,” he added.
Using data to optimise processes
Data capture and analysis is proving to be more than just hype, said Mr Springer. “Today there is broad agreement that data capture is the start of enabling analytic enrichment, generating insights and then identifying opportunities,” he noted.
He added that simply being able to generate data is not enough – it needs to be shaped and processed. Addressing the issue of data ownership, Mr Springer used a metaphor where owners of assets that generate data are like would-be homeowners who have a stack of building materials. Just possessing the material is not the same as having a house, he said, adding that an architect – representing companies such as MacGregor who seek to provide digital solutions – and other skilled people are needed to help you to transform the materials into the end result. And on the other side, if somebody wants to build and sell a house, they need to have access to the building materials to construct it in the first place.
“I think we have some good first approaches in finding a way out of that gridlock and finding commercial and legal frameworks to enable usage of data,” he said, adding “The infrastructure, standards and platforms are one vehicle to enable that.”
Mr Lundberg noted that the industry is starting to move forward in collecting and using data in an efficient way and managing it safely. As well as developing common platforms such as DNV GL’s Veracity and Kongsberg’s Kognifai on the supplier side, initiatives are also coming from shipowners and managers.
Maersk, MSC, Hapag-Lloyd and Ocean Network Express established the Digital Container Shipping Association (DCSA) on 10 April this year with the goal of creating common information technology standards to boost efficiency for customers and lines. A further five companies, CMA CGM, Evergreen Line, Hyundai Merchant Marine, Yang Ming and Zim have since joined, bringing DCSA’s membership to nine.
One of the first projects DCSA has embarked on is developing standards to overcome the lack of a common foundation for technical interfaces and data. Speaking to sister title Container Shipping and Trade, Maersk chief technology and information officer Adam Banks noted “A joint set of technical standards will ensure interoperability and enable all parties to concentrate on value-adding differentiation as we move the container shipping industry towards further digitalisation.”
Mr Lundberg added that this is evident in other areas such as the recent announcement that European shipbuilders’ association Euroyards is launching a ship systems’ data standards initiative. Members including Damen, Naval Group and Fincantieri among others, active across vessel types ranging from cruise ships, megayachts, speciality vessels and naval craft, are collaborating on the project.
He added “Companies feel now is the time to collaborate and see if there is something to gain by working together to get a better grasp of the data.”
MacGregor has already developed a technical solution to collect data from equipment, either MacGregor’s own or from other OEMs, which harmonises data gathered so that analysis can be carried out and data cost-efficiently transferred to shore.
Trust is key to collaboration
Mr Mol emphasised the importance of developing long-term relationships with a high level of trust so parties are willing to share information, and analysing that data to improve utilisation. “That is a good way forward, combining competencies together [such as] the vast experience customers have with their ships and we have with our domain of cargo and load handling.”
Data also enables new contract and engagement models in the service area, for example part-financing projects and payment based on performance or usage – similar to the models used for engines in the aviation industry, Mr Mol said. However, there remains work to be done before these can become commonplace, as both supplier and customer need to be sure there is benefit in such an arrangement. The right use cases and the right equipment are required first, Mr Mol added. MacGregor is taking an entrepreneurial approach of being willing to invest in developing interesting technologies and projects itself, he explained. “It is important that we are willing to show a bit of skin in the game as well and take some entrepreneurial steps.”
Mr Springer gave an example of how Hapag-Lloyd has already seen a return on investment from willingness to collaborate and share data. The company was operating several vessels on long-term charter from a third-party owner and went to MacGregor for assistance with changing the lashing pattern to enable loading of more cargo. He noted that while it may seem unusual to invest in outfitting another company’s vessels, Hapag-Lloyd benefited from the yield of additional revenue the changes enabled it to generate from its own customers.
“All three parties win in this example – the enabler was a structured approach to data, identifying the problem and a collaborative approach to solving it.”
“In this area some of the certification and classification took longer than the engineering, implementation, shipping and crew training.”
“One of the dangerous aspects is that you can have good buy-in from the organisation, from the workforce, from management, from funding, but then struggle to be able to deploy and get started with it and you risk losing momentum.”
“But overall, I think it is better to start and be a bit late than not incur those delays in the first place by not starting.”
There is scope for further improvement in data use, he noted, saying “From my perspective we do not use all the data which is out there around cargo handling to the best extent yet.”
However, it is important to apply the right technology in the right situation, and there is no one-size-fits-all approach, Mr Springer added. “The biggest fiction is that you can purchase a silver bullet to [fix] all your problems – that will not happen.”
Mr Mol noted that digitalisation is also impacting on peoples’ home lives, citing examples of how packages dispatched from Amazon can be easily tracked, and that therefore as familiarity builds with these sorts of systems, acceptance of digital technologies in the professional environment of the maritime industry will grow. “I don’t think we can stop technology changing our industry,” he said.
However, he rejects the notion of a large player entirely disrupting the market. Far more likely is smaller players entering the sector with strong technical competence but lacking operational knowledge of how to handle ships and their equipment in rough environments and challenging conditions. “I think it will always be a combination of companies and experiences, but it will not be a big bang with a few companies changing the world within a few years,” he said.
WEBINAR:
Separating fact from fiction: how Hapag-Lloyd have profited from digitalising cargo and load handling operations
Date: 19 November 2019 9:00 AM - 9:45 AM GMT
Participants: Jörn Springer, senior director, Fleet Support Center, Hapag-Lloyd; Denis Mol, vice president, digital and new business transformation, MacGregor; Daniel Lundberg, director, new service models, digital and new business transformation, MacGregor
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