Shipping is the subject of a tech onslaught. takes a deeper look at the two »D«, digitalization and de-carbonization, their implications and the challenge of having a huge number of new technologies on board
When the subject is technology, a widely used phrase, albeit with a multiplicity of meanings, is »Disruption«. Disruption can be[ds_preview] evolutionary, coming from inside the business- examples will include substitution of new fuels for fossil fuels, or reductions in crew size as remote operation allows for control from shore. However, more worrisome for established industry participants, changes can be revolutionary – originating from the outside and causing cargo owners to possibly switch away from vessel transport, reducing demand for seaborne moves. Such developments might include the use of drones or similar devices which may change supply chain patterns, or 3-D printing, which could eliminate demand for certain containerized cargoes.
Because cargoes result from »derived demand«, technological changes underlying a cargo-producing industry could also impact bulk shipping, though not with 3-D fabrication. If Chinese steelmakers found a way to use lower Fe content ore, and filter out impurities, such a development would likely result in diminished tonnages of mineral imports from Brazil and Australia.
Within the evolutionary realm, two powerful influencers, digitalisation and de-carbonization (»D2«) are bringing technological innovations to shipping at a rapid pace. While cost savings motivations were previously the main impetus for technological adaptation, regulatory compliance is increasingly a driver of change.
Roar Adland, Shipping Chair at the Norwegian School of Economics, has looked at digitalisation; he points out: »As an industry, shipping truly is a ‘mean, lean transportation machine’- which is why it is much harder to disrupt, on a large scale, than, say, urban passenger transportation. Hundreds of years of cut throat competition will do that to you.«
Nevertheless, by 2018, digitalisation is impacting all aspects of maritime activities; as »The Internet of Things« (IoT) – where onboard devices and sensors communicate with each other, and report back to the shoreside information hubs. A recent survey commissioned by satellite communications provider Inmarsat found that : »There will be significantly increased automation and operational efficiency through the use of real time data and machine-to-machine communication right across the planet.« Besides the obvious business benefits, regulatory compliance, but also health and safety, were identified as driving companies to adapt greater digitalization (and deploy IoT). Deep inside Inmarsat’s report is a caution: »Supply chains must be connected from end-to-end to operate with maximum efficiency, and if certain areas are not gathering the necessary data to identify these efficiencies, businesses will struggle to use IOT to optimise the supply chain.«
Linked devices aboard vessels present other challenges, not the least of which is cyber security and connectivity failures. The classification societies have moved quickly to grapple with cyber issues; for example, Lloyds Register (LR), after publishing their technical guidance note for Cyber-enabled vessels, explained that, »we can help you to assess the appropriate autonomy levels for your vessel, then advise on which tasks can and should be performed by the system rather than people.«
Another aspect of technology now in its nascent stages, and sure to intensify greatly, is the path towards – »de-carbonisation«. With the International Maritime Organization’s April adoption of an initial strategy that would begin the voyage toward the target of reducing the industry’s GHG emissions by at least 50% by the year 2050 (compared to 2008) with a longer term objective of »…phasing them out entirely.«
MEPC72 points the way towards major aspects of shipping’s technological future. Besides agreeing the 2050 guidance, MEPC committee also discussed a further tighter »Phase 3« of energy efficiency guideposts for new vessels (the Energy Efficiency Design Index, or EEDI) and contemplates a further level of tightening the limits on CO2 emissions, Phase 4. Simply put, the voyage towards 2050, and beyond, will require extreme evolution – the development and maritime adaptation of propulsion technologies and fuel sources not widely used at present in the maritime context.
Some of the new fuels are already gaining traction. LNG, which offers substantial reductions in sulfur emissions (meeting another set of IMO dictates), has been derided by environmental groups as being »temporary« due to its emissions of carbon. A recent report produced by the University Maritime Advisory Services (UMAS) consultancy described industry/ European Union spending on LNG as wasteful, »…a climate dead end…« Instead, it suggested that shipping’s ability to meet the IMO 2050 goals »..is only possible with a switch to increased use of non-fossil fuel sources (hydrogen, ammonia, battery electrification, biofuel…).«
In what direction is the industry journeying? The two recurring D2 themes already intersect, and will do so more in the future, when the conversation turns to another much discussed topic – automation – where digitalization supports the operation and interface of multiple machines. Machine learning and the injection of artificial intelligence enables vessel performance to be optimized in ways that humans (aboard vessels and in command centers ashore) cannot.
Digitalization meets de-carbonisation head-on with another topic discussed at MEPC72, the mandatory reporting of fuel oil consumption, presently for ships of 5,000GT and above. The interaction of the two major D2 themes, will see implications drawn on a company-specific basis. Initially, the IMO will require compliant reports on fuel usage to be produced at year end, with inferences to be drawn on CO2 emission. Over time, remote monitoring, offering real time glimpses into fuel burn, will play a role here.
But the ability of machines to fine-tune the fuel burn from afar is a subset of broader automation questions. A »Tech Trends« report by consultancy Deloitte pays homage to the famous German orchestral conductor Kurt Masur who once commented that »…an orchestra full of stars can be a disaster…« The analysts go on to apply this observation to systems working together, echoing the Inmarsat viewpoint: »Though we have no reason to believe the maestro was speaking metaphorically, his observation does suggest something more universal: Without unity and harmony, discord prevails.« The Deloitte team sums up the dilemma facing business executives looking at technology. They write: »After a decade of domain-specific transformation, one question remains unanswered: How can disruptive technologies work together to achieve larger strategic and operational goals? We are now seeing some forward-thinking organizations approach change more broadly.« They go on to discuss the necessity of integrating digitalisation with »operations« if technological advance will be successful at the enterprise level. Hopefully, all the maritime musicians will be playing from this score.
