Marine Propulsion caught up with Caterpillar business development manager Bert Ritscher for a Q&A ahead of his appearance at the European Marine Intelligence Conference in Hamburg near the end of May.
Mr Ritscher said, in his experience, the shipping industry remained cautious about the uptake of new technologies, but that the tide is turning.
Marine Propulsion: How big is the marine intelligence market in terms of vessels or dollars, and how does it segment, in your opinion?
BR: Whether you look at vessels or revenue, it is impossible to put a number on the analytics or intelligence market.
The reason is a solid analytics platform covers such a broad scope of content, or systems, on different vessel classes that you cannot say it is a one-to-one ratio. One vessel does not equal one analytics package. We have vessels with over 250 analytics models and others with only four.
The revenue question is probably as hard to answer as the size of the market. Gainsharing is a fair way to take a solid analytics program showing real savings and pay for performance. However, this can be risky if the gainsharing amount is dramatically large or both parties cannot determine a baseline.
A more conservative business model is the service subscription, which seems to be the most comfortable place for now, with some exceptions.
MP: In some of your case studies, you cite total vessel monitoring technology as having the potential to save millions in operating costs and repairs. Does monitoring and prediction have the highest potential for cost savings among digital technologies in the near term, or do others offer greater savings?
BR: It does have a very high potential. One area is the savings that can be made to optimise operational procedures by providing insight on how equipment is truly operating in comparison to other equipment, vessels, and even fleets of vessels.
Another area of savings is to avoid catastrophic breakdowns of major systems. No one wants to speak about them, but we all know that they happen from time to time and the repair or replacement of equipment and unexpected downtime costs are extremely high. Technology is helping reduce and sometimes even eliminate risk, while increasing efficiency in operations, equipment, and safety – which can bring significant cost savings to the end user.
MP: How is Caterpillar leveraging the potential for savings and profit in the shipping industry in its own business plans?
BR: We want to start building more gainsharing models with customers. This way, our demonstrated performance directly relates – in profit through savings for our customers and revenue to Caterpillar, Inc. We always see value because both agreements, service or gainsharing, bring the customer closer to the Caterpillar dealer network and enable us to play to our strengths.
MP: Where is shipping with respect to other industries in incorporating these innovative and disruptive technologies?
BR: A lot of times, shipping is compared with the aerospace industry in terms of using smart technologies to enable CBM (Condition-Based Maintenance). Aerospace is way ahead of marine – by more than just a few years – and there are many roadblocks deterring the marine industry [from catching up]. The high cost of offboarding the data and shipbuilding designs are a few of the struggles. Also, standardisation is not a common practice, either at the point of selection of assets or in data interfaces.
MP: What can be done to break free from the shackles of conservatism in the shipping industry, in order to rapidly increase innovation and adoption of new technology?
Good question; as mentioned earlier, the shipping industry is still very conservative in adopting new technologies, we still see customers being afraid of too many electronics on their critical assets like engines and propulsion. This can only be solved through quality of innovation, robust engineering, more standardisation of data interfaces and competitive pressure from the early adoptors of new technology, when they are using and are actually seeing an advantage in operation.
MP: When are we likely to see widespread uptake of these transformational digital technologies in shipping?
BR: It will come, for sure, but I do not have a crystal ball that can answer when.
In the last two years, the messages and feedback we have been hearing from our customers has changed from "Why do we need such technology? Why is it good for my organisation? And, what is the value?” to "What is the right solution for my business? How can we make the transition as easy as possible? Who has the best concept and what kind of supplier is best for us?".