Digitalization in shipping

Programme Topics:

Introduction to digitalisation

Digitalization will allow the industry to set a new digital framework of how information can or should be exchanged between different counterparties in the future. Many companies out there want to sit in the front row seat during this digital transformation and currently invest in this kind of technologies as everyone wants to ride the digital wave to set new standards of information exchange within the industry.

Autonomous operations will define industry’s future; however, firstly, it is important to address cyber security issues. Although the industry has already been aware of the risks associated with cyber safety and security and progress has been made so far, shipping needs to make further efforts to build awareness.

Managing software is one of the more important skills seafarers must equip themselves with. Automation doesn’t mean unmanned, on-hand skills are still necessary, especially the experience and skill to fix things when technology fails. Seafarers with a combination of shipping and technological knowledge will likely set themselves apart from those who have failed to advance. Marrying maritime and digital skills is the way to go; and any young person who wants to build a career should make sure to gain and continuously build their competence on technical and commercial capabilities within the digital sphere.

It is well known that one of the most effective arms of automated vessel operation is the paradigm shift in technology that has been made by way of increasing “digitalization” in shipping. Digitalization will boost shipping efficiency and improve related energy use, increase utilization of the current fleet by improving logistics and planning, boost port development, and enhance voyage performance through better weather-routing and use of autopilot. Indirectly, digitalization can enable new business models and better ship operation, with a positive impact on energy use.

Big Data and Industrial Internet of Things in Shipping

In the digitalisation process, the Internet of Things (IoT) is an area that covers technologies including ubiquitous computing, pervasive computing, wired/wireless sensors, networks, and embedded systems, forming a communicating-actuating network of a large amount of things including Radio-Frequency Identification (RFID) tags, mobile phones, sensors, actuators and etc. Industrial IoT (IIoT) has emerged as a sub area which focuses more in safety-critical applications in industries where defects and failures in such applications would often result in dangerous situations even loss of lives, hence a fail safe system is enforced. The design approach of IIoT completely differs from that of a domestic IoT application.

Big Data Analytics (BDA) and Internet of Things (IoT) are rising quickly. The recent emerging Industrial IoT (IIoT), a sub-paradigm of IoT, focuses more in safety-critical industrial applications. Studies showed that the adoption of BDA increase companies’ output and productivity; IoT enables companies to have more information and control in physical re-sources, processes, and environments.

The Internet of Things (IoT) is a new paradigm that covers technologies including ubiquitous computing, pervasive computing, wired/wireless sensors, networks, and embedded systems, forming a communicating-actuating network of a large amount of things including Radio-Frequency IDentification (RFID) tags, mobile phones, sensors, actuators and etc. In this way, physical environment and resources could have presence in the digital world. The result of rapid development of IoT is that the enormous amount of collected data from different sources will have to be processed, analyzed, and visualized in a timely manner, and that is where big data analytics (BDA) will fit in. In fact, BDA and IoT complement each other and develop as a double “helix”.

Smart Ships

When we think about shipping, it is normally big, rusty shipping containers, dockyards and stormy seas. It is not considered to be a high tech industry by most, but the reality is that much like many other industries at the moment, it is having a data revolution.

Imagine a world where the inanimate objects of the shipping industry could talk. What would today’s ships tell us about the stress overweight containers place on their hulls? How would they describe the strain they are put under by certain weather conditions? It sounds the stuff of science fiction, but “talking” ships could be just a few years away. These “smart ships” of the not-so-distant future will be able to “talk” through the use of nanotechnology in paints, coatings and materials, while ultra-sensitive monitoring through the use of acoustic fibers will allow the detection of minute changes in vibrations.

Over the next 10 to 20 years we believe ship intelligence is going to be the driving force that will determine the future of our industry, the type of ships at sea, and the competence levels required from tomorrow’s seafarers.

Autonomous shipping is the future of the maritime industry. The smart ship will revolutionized the landscape of ship design and operations. Remote controlled and autonomous vessels can be designed with a larger cargo capacity, better hydrodynamics and less wind resistance. With no crew to accommodate certain features of today’s ships, for example, the deck house, the crew accommodation and elements of the ventilation, heating and sewage systems can be removed. This will make the ship lighter, cutting energy and fuel consumption, reducing operating and construction costs and facilitating new designs. As a consequence an autonomous general cargo vessel might reduce transport costs by approximately 20% compared to a more traditional vessel.

The Benefits in Efficiency

With the emergence of cloud platforms, collaboration and connectivity technologies, neutral digital networks, advanced analytics platforms, Internet of Things (IoT), Artificial Intelligence (AI) and machine-learning solutions have increased opportunities for companies to embark on some level of digital transformation.

The fundamentals of adopting a digital transformation strategy call for a roadmap to becoming a digital business, and transformation blueprints for each individual shipping line. There’s a need for internal awareness and a change in organizational culture. Ultimately, digital transformation is all about digitally connecting entire operations, eliminating manual processes and paper management, and automating relevant areas where possible. Such a transformation can enable smart carriers to see an uptick in revenue growth and cost savings.

While both technology and digitization strategies are important, the deployment of analytics, automation and AI should be complemented by other measures. Preparing and training the workforce will be an imperative. Customers should be brought onboard at the start of the transformation journey. Speed will be a critical element while new products should focus on enhancing the digital transformation.

Companies with industry expertise and strong capabilities in business transformation and process management can enable ocean carriers to achieve their digitization goals. Such partners can simultaneously focus on the digitization of both customer-facing and internal operations, including smart capacity optimization.

Strong partnerships and cloud-based analytical tools that leverage sophisticated monitoring and AI technologies will undoubtedly help the industry with insights-led decisions to improve every segment of the shipment value cycle — from planning to operations to execution. Standardized processes, streamlined workflows, and analytical and automated efficiencies will create a seamless path to attain a future digital state. As the digital disruption slowly upends traditional business models, the shipping industry should move quickly to keep up with the tide.

Electronic Data Interchange (EDI)

EDI systems were introduced to cut costs, errors and wastage involved in paper based business documents. The early EDI systems were organized around the big purchasers in hub-and-spoke networks for the big automobile companies. The EDI systems were originally built using proprietary technology and networks, and their cost and complexity prohibited many small companies and suppliers from using this technology. The introduction of the internet in the early 1990s changed this, and the e-commerce sector became a viable option for any company with a PC and an internet connection.

Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners. By moving from a paper-based exchange of business document to one that is electronic, businesses enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved relationships with business partners. EDI was first developed in the 1960s with the objective of speeding the movement of shipping and transportation documents. Its application has expanded from enabling the electronic exchange of purchase orders, acknowledgments and invoices to include global procurement and sourcing.

For companies of any size, implementing EDI is necessary for maximum competitiveness and growth. It reduces costs and improves operational performance across your organization. From the start, EDI accelerates data exchange and sharpens accuracy. Your company and your customers benefit from streamlined administration, improved information flow, more accurate accounting, better inventory management, and lower costs. Because electronic transactions are so efficient, customers that use EDI prefer to work with vendors that have EDI systems in place. From financial, operational, and technical perspectives, the right EDI solution makes irrefutable business sense.

Global Smart containers

The use of use new Technology like GPS navigation, electronic sea charts (ECDIS), RFID technologies, AIS and BigData analytics, the support resources in the Port / Terminal where Ship is arriving can be properly utilised. All terminal vehicles, machines and devices that are involved in the transportation, loading and unloading of goods/containers are interconnected and communicate with each other, which is enabled by means of suitable automation technologies. In the case of forward and hinterland transport, the synchronous modality is based on the idea that the optimal transport mode and route combination can be selected based on real-time information.

New technologies and concepts such as Bigdata analytics, Cloud computing, Mobile computing are self-steering processes and services which are more and more penetrating and are becoming increasingly important in economic processes. Applying Big data Analytics on AIS-log files, Weather data, fuel-sampling data, and other performance data of equipment causes lot of changes for the benefits of the stake holder which will take place once these are integrated.

Automation and digitalization are progressing and have changed processes in ship operation and in port handling. Smart container technologies (RFID) and real-time tracking of cargo, for example, increase the transparency on the transport route from the sender to the recipient. Shipping companies are already able to operate their own tracking apps soon, where the location of the container can be determined by means of a GPS signal. By using modern sensor chip technologies, a large number of data are already recorded at sea and analyzed onshore, which allows the optimization of process flows on board as well as in the handling in ports. Further, it reduces waiting times and costs.

Electronic Data exchange for international shipping (FAL)

A new standard relating to the obligation of public authorities to establish systems for the electronic exchange of information is among important changes in the revised Annex to the Facilitation Convention, which entered into force on 1 January 2018.

Mandatory requirements for the electronic exchange of information on cargo, crew and passengers have been adopted by the International Maritime Organization (IMO), as part of a revised and modernized annex to the Convention on Facilitation of International Maritime Traffic (FAL), which aims to harmonize procedures for ship’s arrival, stay and departure from port.

The new standard relating to the obligation of public authorities to establish systems for the electronic exchange of information, within a period of three years after the adoption of the amendments, is among important changes in the revised Annex, which entered into force on 1 January 2018, under the tacit acceptance procedure.

There will be a transitional period of 12 months from the date of the introduction of such systems to make electronic transmission mandatory, during which period paper and electronic documents would be allowed.

The FAL treaty, first adopted in 1965, aims at securing the highest practicable degree of uniformity in formalities and other procedures, including mandatory “Standards” and “Recommended Practices” on formalities, documentary requirements and procedures which should be applied on arrival, stay and departure to the ship itself, and to its crew, passengers, baggage and cargo. These include standardised forms for the maximum information required for the general declaration, cargo declaration, crew list and passenger list; and agreed essential minimum information requirements for the ship’s stores declaration and crew’s effects declaration.

Standardization and harmonization of ship reporting (SOLAS)

Ship reporting systems and reporting requirements are used to provide, gather or exchange information through radio reports. The information is used to provide data for many purposes including search and rescue, vessel traffic services, weather forecasting and prevention of marine pollution.

The existing guidelines and criteria for ship reporting systems were initially adopted in 1994. This guideline outlined the criteria for planning, proposing and implementing adopted ship reporting systems by Contracting Governments. In addition, general principles for ship reporting systems and ship reporting requirements are provided. This further includes guidance for reporting incidents involving dangerous goods, harmful substances and/or marine pollutants.

Automation of ship reporting functions has taken a big step forward with two important decisions by IMO. One concerns the introduction of the electronic exchange of information as a universal, binding requirement for the purpose of facilitating the business of international maritime traffic. The other concerns the standardisation and harmonisation of ship reporting in support of e-navigation developments aimed at simplifying the communication of navigational safety information between ship and shore and its harmonised display on ship bridge equipment. While the two decisions address different needs, their overall objective is the same: to alleviate administrative burdens for shipping and maritime stakeholders in general, as well as within maritime administrations.

IMO’s decision to require mandatory electronic information exchange is embedded in amendments to the annex to the 1965 Convention on Facilitation of International Maritime Traffic (FAL Convention). Developed in an all-out effort to meet modern industry needs, they were adopted by its Facilitation Committee in April (FAL 40). The amendments entered into force on 1 January 2018.