Digitalisation survey identifies owners’ enthusiasm for new tech – along with the common need for a solid business case to justify investment
Of survey respondents have already explored the use of integrated digital solutions to solve their challenges
Two-thirds of shipping companies have started on their digital journey, according to a survey conducted by Informa Engage on behalf of Wärtsilä Marine Business. With the support of positive leadership within their companies, respondents pointed to an emphasis on fleet management data analysis and digital technology to aid vessel operations and security issues.
In line with the fact that the maritime industry at large is only just embarking on its digital transformation journey, stats show that tepid satisfaction is felt for the solutions available today, although 69% are exploring these.
The main issues at the top of the agenda for ship owners, operators, and managers alike pertain to the implications of increasing fuel and operating costs, ongoing volatility in the freight markets, and an urgent need to tackle growing safety, security, health, and environmental concerns.
Respondents in the container shipping sector indicated that operating costs are the most pressing challenge (30%), with market volatility the biggest headache for the tanker (29%) and offshore (22%) segments, while concerns over securing qualified and experienced crews takes pole position for businesses in the dry bulk sector (21%).
Encouragingly, digital solutions were specified as the main target for investment to address these challenges. Ship owners and operators placed digital technology at the top of the list, with all shipping segments turning to digitalisation. Some 27% of tanker shipping respondents indicated that data-driven technology was the clear priority for them, although containers, dry bulk, and offshore respondents were not far behind.
Investment in crew and shoreside training was also highlighted, and no doubt some of this training would involve upskilling to make optimal use of the digital hardware and software.
Asked to identify which digital solutions their businesses have invested in so far, the top three were related to vessel operations, with cyber security only selected by 14% of respondents. The more specialised solutions – predictive maintenance, artificial intelligence, keeping an electronic log book, digital twinning, and blockchain – were chosen by between 11% and 3%.
The segmental split was revealing. Perhaps spooked by Maersk’s NotPetya attack in mid-2017, respondents from container shipping had a stronger appetite for cyber security solutions (17%); dry bulk and tanker respondents are more into the analysis of fleet management data (23% and 22% respectively); while offshore vessels were also making use of predictive maintenance and digital twin solutions (both 20% of respondents).
As an indication of how seriously digitalisation is taken by senior management teams, more than half of respondents indicated that digital solutions were very important (52%), or even extremely important (12%), to the senior leadership team. Only 5% did not think digitalisation was a useful option in the toolbox.
But, while 69% of all respondents said they are exploring the use of digital technology to upgrade performance and efficiency, users had mixed views about the experience. Two-thirds (67%) described themselves as only moderately satisfied with the outcome, while a further 12% were outright dissatisfied. Fewer than one in five respondents praised digitalisation highly for its ability to significantly reduce risks and costs.
Ship owners’ level of moderate satisfaction (69%) in using digital technology was surpassed by respondents in shoreside professional services (73%). The greatest volume of checks against ‘very satisfied’ and ‘extremely satisfied’ users hailed from ship managers (combined 30%), with one manager sharing the observation that “improvement in productivity is immediate”.
Reasons for feeling only moderate satisfaction concern the costs involved and the lack of standardisation across digital solutions. Users are looking for the benefits of digital solutions and how they solve challenges faced by the shipping and marine industry as a whole.
Deep diving into the barriers to digital adoption, the survey asked for the key reasons for the slow uptake of next-generation technology. The biggest hurdle identified by respondents was the lack of integration with existing equipment (23%), followed by lack of knowledgeable people within the business (18%), and uncertainty about which option is the best fit for the company’s business. While there were concerns over financing and payback periods, these were not seen as among the major obstacles.
By segment, 25% of respondents in tanker shipping thought lack of integration was key, while shortage of necessary skills was close behind at 20%. For container shipping, uncertainty about the best option was high, and cyber security issues ranked top for offshore, alongside lack of finance in a stressed market and lack of integration with existing technology.
When asked to outline why these obstacles were chosen, respondents offered a wide range of concerns, among which were anxiety concerning the installation costs for solutions likely to become obsolete in a short time, the need for continuous training of sea and shore staff, limited financial resources for untested technology, and issues with changing requirements of compliance.
A second tier of questions focused on the future fuels strategies adopted by respondents’ companies. Two-thirds of respondents said a strategy had already been chosen, with compliant low-sulphur fuel a strong favourite (58%). Some 20% said heavy fuel oil/scrubbers was the option chosen by their company; with alternative solutions adopted where local regulations demanded.
Almost four out of five offshore respondents (78%) have adopted a fuel strategy, with availability of fuels (29%) and engines ready for certain fuels given as reasons. For container and dry bulk shipping, local emission requirements were the driver of fuel strategy decisions.
This Informa Engage/Wärtsilä Marine Business survey gathered responses from senior management (C-suite) and from a very long list of specialists, managers, former ship officers, heads of department, consultants, and analysts. The diversity of opinions and comments reflected the wide scope and levels of roles involved in one or more aspects of digital technology across the shipping industry. That, in itself, reveals a key requirement for successful widescale implementation of new technology: the need for standardisation and gaining the buy-in from multiple levels within shipping.
“While shipping is hungry for digital solutions to fix practical problems, defining the benefits and proving the ROI is key”
Despite shipping executives’ enthusiasm for digitalisation, 64% of answers gleaned from the survey showed a degree of scepticism among owners, operators, and managers of ships. While they are hungry for digital solutions to practical problems – and would be prepared to invest in the right solution if it was offered – it remains critical that the benefits of investment are clear to the customer. Even the maritime media has a role in helping the industry understand the strengths and weaknesses of the solutions put forward.
The conclusion: those who take the time and effort to embrace digital technology in a mature and intelligent way will gain a competitive edge against those who focus on the hurdles.
Click here to register for our 'Taking the next steps in digital transformation' webinar on 23rd May 2019.