The maritime sector is struggling to achieve the significantly increased levels of efficiency it has promised to deliver as part of its commitment to a cleaner, greener industry.

“It has become clear that technology on its own can’t possibly deliver all the necessary gains”

Maritime has set out on the path to a digitalised future, focusing on next-generation technology. In terms of early progress, technology has certainly made a discernible difference. However, it has become clear that technology on its own can’t possibly deliver all the necessary gains.

Partly this is because technology has been applied in a fragmentary fashion. Innovative companies with vision and positive leadership have been quick to digitalise, and this is recognised by the industry as disruptive – it will force change across those parts of the business these companies deal with. But the full impact of digitalisation will be hindered by the fact that few companies have the financial and human resources to fully take this development on board.

And partly the impact will be lessened by resistance to change at every level of business up to the board room itself. While younger workers are comfortable with technology, and with the change brought about by new technology, decision-makers at senior level mostly push back against costly – and risky – change.

And for these reasons, increased levels of maritime efficiency are held back. Not by the technology itself, but by fear of what technology can change.

Technology is, however, not the only driver of efficiency. Two other elements must be considered: the dynamic regulatory environment, and the human resource element. Both are critical to increased levels of efficiency, although both are seen as ‘problems’ when compared with the ‘solution’ of technology.

Regulation is the framework within which the maritime sector exists. It is not static; it changes, sometimes in unforeseen ways, sometimes in ways that alter the direction of travel. The 2020 sulphur cap and the Ballast Water Treatment convention are examples of the latter that have been resisted by many in shipping for years.

“Without a set of rules that translate the global community’s expectations into maritime action, shipping would become a free-for-all”

Without doubt, the process by which maritime arrives at its regulatory environment could be streamlined. Indeed, some argue that lengthy delays to written statements are damaging the industry’s ability to respond to pressure for change. However, without a set of rules that translate the global community’s expectations into maritime action, shipping would quickly take on the equivalent of a free-for-all, a Wild West, in which the unscrupulous would triumph.

Shipping efficiency cannot be considered without reflecting on the regulatory environment the industry is expected to respect. That’s not to argue that change to the way regulation is made, and applied, is unnecessary. Not only is it necessary, it is long overdue.

Similarly, efficiency in shipping should recognise the continued importance of the human element. Like the regulatory environment, the human element is dynamic. As new technology becomes accepted in maritime – through remote monitoring, data analytics, and connectedness with the broader logistics supply chain both upstream and downstream – so the skills expected of seafarers and shore-based operational staff must change.

Much of the tedious paperwork, the outdated reporting requirements, the need to monitor levels and emissions will all be done with the aid of technology. This has been driven by the aviation sector, and there is pressure on maritime to follow.

However, the extension of this technology-led revolution to fully autonomous merchant shipping is now thought unlikely to be the shape of the industry for many years. ‘Unmanned’ is no longer thought to be the business model of the future. Instead a more balanced approach by which the human element will be trained to understand the strengths and limitations of machines, and machines will be trained to understand what humans do well and where the mistakes are made, is a more acceptable model.

“Humans do some things well, such as managing risk; today’s technology, as good as it is, can’t manage risk”

This balanced approach has implications for efficiency. One of the reasons for taking seafarers off ships was the cost of humans and the risks they bring to any venture. Observation has determined that 80% of errors at sea are caused by humans. But that fails to acknowledge, as the aviation sector is keen to share, that humans do some things well, such as managing risk. Today’s technology, as good as it is, can’t manage risk.

So greater efficiency in shipping should not be equated to increased levels of investment in technology. It must respect the contributions of a sympathetic regulatory environment and an upskilled sea- and shore-based workforce. And the best results will come when the tension within this trinity is understood by the chief executive, his senior financial, operational, and digital colleagues, and stakeholders in the maritime venture.

This is disruptive at every level. It challenges the way shipping works; it offers some solutions but also demands some hard thinking by the leaders of the maritime industry. Even so, the three elements of efficiency, taken together, will set the foundations of a cleaner, greener oceans industry the next generations will aspire to join.

In a series of Business briefings beginning in Singapore, Lloyd’s List explores each of these elements in turn, and concludes with a pulling together of the threads. An expert panel will share on why next-generation technology, a sympathetic regulatory environment, and an upskilled human workforce each has a key role to play, and how they can drive greater efficiency when working together. Lloyd’s List chief correspondent Richard Clayton will moderate the event, and will report the main findings soon after.

Register now for attendance at this Lloyd’s List Business briefing to be held during Singapore Maritime Week