Shipping companies will adopt IoT to reduce fuel costs and improve regulatory compliance, but are concerned about security
Shipping companies anticipate spending US$2.5M on average implementing internet of things (IoT) technology during the next three years, connecting onboard systems to shore for data analytics to reduce fuel consumption, improve regulation compliance and navigational safety.
This investmest forecast comes from a report, produced by Vanson Bourne, into industrial IoT adoption in maritime as part of the Inmarsat Research Programme 2018, prepared after speaking with 125 vessel operating companies*. Inmarsat Maritime vice president for applications Stein Oro said the owners were asked their views on IoT technology, its adoption and barriers to implementation. They were classed as either IoT laggards, starters, progressives or leaders depending on their approach to the technologies.
Researchers found 35% of respondents thought themselves leaders in IoT, another 32% considered themselves IoT starters, 28% laggards and 5% progressives. Shipowners' need for reducing fuel costs is driving investment, with 56% of maritime respondents either using or trialling smart asset monitoring.
Environmental compliance is also driving IoT adoption in shipping, said Mr Oro. Around 47% of respondents are already using IoT for monitoring fuel use for both commercial and regulatory requirements. “This will rise to 100% by 2023,” he predicted.
Another driver of adopting IoT technology is route planning, with 57% of vessel operators saying they are using or trialling voyage optimisation services. Reducing operating costs is driving owners’ investments, with a third of responders expecting IoT solutions to deliver 10-20% cost savings within five years. However, 14% do not expect any savings, leaving 53% expecting savings of less than 10%.
Another of the reports findings is that maritime does not have the skillset for implementing IoT technology, with 46% of respondents believing they are laggards in having the skills required. Another 25% are progressives, 15% starters and 14% leaders.
“So many need more of these skilled people to adopt IoT,” said Mr Oro. 42% of respondents said their organisation would benefit from additional IoT skills. Another barrier cited, by 20% of shipowners, was lack of communications capacity.
This is important as 69% said they rely on satellite connectivity for IoT-based solutions, while 66% said they use radio-based networks. “Satellite communications enables real-time monitoring of equipment on ships and data transmissions from ships,” said Mr Oro.
He said security of IoT was also a concern to maritime with shipowners worried about data storage methods, network security, mishandling or misuse of data and targeted attacks. 87% of respondents said their protection against data mishandling could be improved, while 72% said their organisation’s processes to combat data theft or malicious damage to hardware or software could be stronger.
Despite the perceived barriers and security concerns, on average, shipping companies expect to gain 14% cost savings from IoT-based solutions and are willing to invest on average US$2.4M to achieve this. Around a quarter of respondents expect to invest more than US$3M over the next five years. About 55% of respondents consider themselves as progressive in IoT investment, 35% starters and around 10% laggards.
The research demonstrated that shipping lags behind other sectors in the implementation of IoT technology, said Mr Oro. Around 30% of responders said shipping lags behind other sectors in terms of IoT adoption.
How will the maritime sector invest in IoT?
Laggards – 10%
Starters – 35%
Progressives - 0
Leaders – 55%
Average investment in three years: US$2.5M
24% expect to invest >US$3M
What is the maritime sector’s overall readiness?
Starters – 33%
Progressives – 25%
Leaders – 15%
How mature is maritime in relation to IoT adoption?
Laggards – 28%
Starters – 32%
Progressives – 5%
Leaders – 35%
Respondents using IoT for monitoring fuel
47% in 2018
100% in 2023
Does the maritime sector have the skills it needs for IoT?
Laggards – 46%
Starters – 15%
Progressives – 25%
Leaders – 14%
How mature is the maritime sector’s approach to IoT security?
Laggards – 22%
Starters – 55%
Progressives – 23%
Leaders – 0
* Of these respondents, 92 operate on average 23 commercial ships. Another 33 owners of fishing vessels responded, operating on average eight vessels.