Maritime Transformation starts with Digitalisation

Published on December 6, 2018

Without maritime shipping which enables 90% of world trade, Industry 4.0 will have a gaping hole in its meaning and development. On the other hand, maritime commerce cannot have any form of i4 transformation without first getting itself digitised, to optimise use of the 3 key digital drivers in A.I., Big Data, and Cloud computing.

Then, why is maritime digitalisation even a topic? This is because:

  1. majority of maritime commerce players are SMEs that are yet digitised;
  2. digitalisation does not just happen on its own, it requires a process or a new work flow – this means change;
  3. barriers to change currently are more cultural than technological – as it requires a new mind-set or a new attitude.

That is why in order to achieve a maritime transformation without a major external hand playing its role (like a major disruption coming from tech giants the likes of Alibaba and Amazon), it is more practical for the industry and policy makers to focus at the basic, or digitalisation at operational level. In my humble opinion, in view of the low current adoption rate, this is where best returns within a shortest time are likely to result from a wide-spread digitalisation adoption.

The Maritime Web – mostly not digitised:

This web is just a symbolic diagram of the numerous participants and multiple nodes involved in any maritime shipment. This web exists to keep the expensive ship, its cargo and people on board and multiple operations going as smoothly as possible. Most of these participants are service-providers and ‘time-takers’ in this ‘derived-demand’ business. In other words, they have to ‘stand-by’ all the time which explains the reactive nature in maritime shipping.

Because of its contact with life, property and the environment, it is also highly regulated in many aspects: coupled with banking requirements, many documents and documentations are required. Multiplied by the nodes in the complex web, with few standardised formats, the reliance on people grows. While digitalisation can be a boon, the current efficiently-evolving system was not designed for it. So many of these stakeholders, even some relatively large corporations, are simply not effectively digitised.

Barriers to change is not about technology or digitalisation
So even now that there may be an easier and faster digitised option (like using a lighter to make a flame), some of the players will still say they are doing their work (making fire with sticks) very efficiently. They now become the gatekeepers as their instinctive defense is piqued against Digitalisation, a the change of system.

So, let’s put our efforts and focus on helping companies digitise for now.

This is my small bit in demystifying maritime commerce and innovation, please share this article if you find it helpful. Thank you!

Author’s LinkedIn Profile:

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I invest, mentor and grow a group of startups which specialize and focus on creative maritime commerce innovations and solutions via digitalization, data-science applications, work tools, etc.

I believe for now, ShipsFocus’ maritime venture studio model is an appropriate one to most efficiently and effectively overcome the BIG innovation conundrum.

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INTERVIEW WITH COO, JAMES KIM

What is really unique about Chemical Shipping (vis-à-vis other segments of shipping)?

James: 1) other bulk cargoes like oil, ore, or even container liners move in one direction, chemical cargo has more myriad ways of flows to/fro multiple ports and berths. 2) chemical cargo is not generic: there are hundreds of different types of cargoes and grades by multiple producers, users and traders involved. that leads us to: 3) the hardware: chemical ships have multiple segregations. voyage options and decisions for which cargoes to combine to where and how are much more varied, furthermore 4) while there may be some standardisations, many ships are built for specific needs. with this multiplicity of factors, optimal loadable quantity and performance of a ship can be a BIG VARIANCE. ironically, this also makes for an attraction and a low entry barrier into chemical ship operating as each operator believes in his one-upmanship within that big variance.

How is that uniqueness important in what you and ShipsFocus are doing?

James: maritime shipping faces various issues, like in 1) HR: people with great skills and experience are aging and leaving the industry, while new ones are not catching up fast enough; 2) PR: constraints to improving its image as an industry that has a wide spectrum of jobs ranging from off-shore to land-based; 3) TALENTS: shipping lull in the last decade did not help in attracting talents; 4) 24/7 nature it’s hard to sell ‘work-life balance’; 5) SYSTEMS: experience, know-how and network within a knowledgeable person are not captured systematically over time.

Our role is to fill gaps, bridging 3 major gaps: (1) between the ‘Old’ and ‘New’, (2) more and better use of data (3) optimising the ‘variance’ and efficiency. there are not many people in this unique space, and on such pursuits. to make it work, we have to cater to this uniqueness, using our unique knowhow, experience and network.

Which part of your background is most helpful to what you are doing now?

James: I believe it’s my background as a ship-owner and operator. I was with Hanjin first in VLCC and then Aframax, then to Chemical Tankers. that gave me tremendous opportunities adjusting from one to another. there were so many varieties and details in high frequency I had to know and adjust to. i became sensitive to the uniqueness in Chemical shipping. coincidentally, Hanjin was undertaking a PROCESS INNOVATIONS initiative, and I was required to provide inputs for a chartering and operations system, including on how it should work. unfortunately, users had to work for the system when it was developed, not exactly a system i dreamed of.

What is the biggest challenge in marrying tech and shipping, and what is your specific strength in this respect?

James: mainly it’s people’s fixed mind-set that’s the biggest obstacle. people say they are busy, while tech can help, they are reluctant to adopt such change. it’s a chicken and egg issue. our strength is the ability to cater to the specific and minute details that make chemical shipping unique, and the network we’ve gained trust from previous roles we played as shipbrokers. we get better chances than the tech people to hear the pain points and thus introduce the right solutions.

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