by Mikael Lind (Research institutes of Sweden (RISE) and International PortCDM Council (IPCDMC)) and André Simha (MSC (Mediterranean Shipping Company SA) and Digital Container Shipping Association (DCSA)
Originally hosted on LinkedIn
Never has the desire for collaboration in the shipping industry been as strong as it is today.
Based on our combined experiences of bringing digitalization and innovations to the maritime and other industries, we can see that the attitude towards collaboration and data sharing has changed dramatically over the last few years. The traditional reluctance or inability to share information across the maritime transportation chain is becoming history. The emerging amount of digitally twinned devices and accessibility to multiple data streams is enabling possibilities for big data analytics and machine learning. The adoption of IOT (Internet of Things) technology for such things as smart containers, and capturing agreements and outcomes from systems of production in systems of records are additional enablers for digital collaboration. The actors are starting to realize the opportunities and benefits of enhanced situational awareness within the maritime supply chain resulting from the utilization of these data sharing possibilities. They start to understand that all those taking part in this paradigm shift will increase their ability to plan and use resources much more efficiently and effectively. And this will result in efficiencies and better outcomes on both the macro and micro levels – in other words benefits for individual actors as well as better performance for the marine transportation chain as a whole.
Maritime is catching up with other transport sectors
Unlike the world’s air transport sector, which has for many years been gaining substantial benefits from collaboration, sea transport has so far tended to operate in the context of a self-organized ecosystem, where each actor acts to a large degree independently whenever they can, often taking decisions that benefit them, with less thought on how those decisions might affect others. This outlook may well stem from the legacy of the Mare Liberum (The Freedom of the Seas) first declared in 1609 by the Dutch jurist and philosopher Grotius, who formulated the principle that the sea was international territory and that all nations were free to use it for seafaring trade. In such an environment where every nation is free to travel to every other nation, and to trade with it, this can easily lead to an attitude of “every man for himself” and as such doesn’t really encourage collaboration.
But as we have witnessed during recent years, there have been changes in the way that maritime operations are taking place. Authorities and fleet operation centers ashore now monitor and advise the captain about various aspects of sea-based operations – for better safety, efficiency and environmental protection. This ranges from monitoring and advising on traffic to watching the performance of onboard machinery. The latest example of monitoring and advice concerns the intensified debate on how to reduce the carbon footprint of ships through enhanced interactions on what happens at sea and what happens when a ship gets to port.
Data sharing enables collaboration
Already today there are instances where shipping companies keep track of digital time stamps for port visits which can then be used for analysis of port and terminal performance throughout the world. There are ports that are adopting the concept of Port Collaborative Decision Making (PortCDM) to bring together all port actors and the ships and to share relevant data for the mutual benefit of all. This is also being extended to Port-to-Port data sharing enhancing the planning horizons for downstream ports which leads to improvements not only for the participating ships and individual port, but also for the maritime ecosystem from a holistic point of view. For some purposes, collaborative data sharing environments are also bringing new block chain applications into the equation, such as block chain approaches for bills of lading.
In order to respond to the agenda for enhanced safety, efficiency, and the desire to preserve the natural environment, collaboration and data sharing within and between organizations is an important element in moving forward. It is all about coordination and the synchronization of the various different activities that all contribute to maritime transportation. This is all enabled by data sharing, building upon agreed standards, providing the ability for all those with authorized access to obtain a clear understanding of the status of various activities in the transportation chain – both as planned events and in their actual execution. This then allows them to better plan and anticipate how their contribution and resources will be used most effectively, both from a micro as well as a macro viewpoint.
This has the consequence that the actors in the self-organized ecosystem that is shipping now have a significant and mutually beneficial possibility to harvest the opportunities of integrating their operations with others. We are seeing more and more examples, such as shipping companies talking to each other, ports starting to coordinate with up- and downstream ports as well as shore centers becoming more integrated with port and ship operations. Hinterland operations are also getting more closely associated and coordinated in how their operations fit together with the ports. In a society where everything is now driven towards just-in-time, resource efficiency, and enhanced environmental concerns, nothing is going to be better than the weakest link, which, without these changes, is all too often the case in the maritime sector.
We see a number of collaboration and data sharing phenomena surfacing in the maritime sector such as,
- Contract issuers, such as BIMCO, now acknowledging the need to move beyond the dyadic charter parties by supporting the integration of ship and port operations
- Regulators, as represented through IMO, emphasizing the need for cross-border collaboration: the World Maritime Day theme for 2017 being: connecting ships, ports and people
- Recently formed associations, such as the International PortCDM Council, Digital Container Shipping Association, CHAINPORT, Smart Maritime NetworksSmart Maritime Networks and Global Industry Alliance providing opportunities for sharing experiences and joining forces for enhanced performance within the shipping sector
- New collaborative clusters created, such as TradeLens coming out of the collaboration between some of the biggest players from the container shipping industry and IBM
- Maritime informatics is now on the development agenda; for example, the European Commission seeking to bring sea traffic management to the same level as the very successful SESAR air traffic management regime that is already in place.
These examples show that actors are becoming aware that it is better to join forces in non-competitive tasks, such as the sharing of data for the benefit of the client and the overall efficiency and reputation of the complete transport system and its actors. This is particularly so, when sea transport may be competing with air or land transport.
Collaboration creates mutual benefits
The shipping ecosystem must build upon collaboration and information sharing – every actor sits on information that could be useful for building a COMMON and mutually beneficial situational awareness picture. To avoid being excluded, each single actor participating in the shipping ecosystem needs to:
- share the benefits with actors that share the same common object of interest
- acknowledge other actor’s capabilities, uniqueness, and need for profitability
- take part in the orchestration of the definition of a common object of interest
Now that collaboration can be enabled technologically relatively easily, the real issue is for those people acting on behalf of organizations, and their willingness and desire to enable digital collaboration. We are beginning to see a change around the world – such that it is not a question of whether you should join in or not – it is really about when and how – or else you risk becoming obsolete.
To be part of the new era of data sharing and mutually beneficial collaboration, actors in the maritime transportation chain may need to upgrade their digital capabilities to enable them to share information and be better informed about upstream and downstream movements and progress enabling each actor to enhance their capabilities in planning and running their operations with much higher precision than is done today.
In 2018, it was reported to UNCTAD that the business case for data sharing in PortCDM shows substantial savings from “green” steaming, route optimization, and faster turnaround times. For port call operators, an initial limited study suggested potential annual savings could be between 7 and 12 billion USD. The financial and environmental benefits to be obtained encompass all commercial shipping traffic, including passenger and cruise ship operations.
Once connected, the results will be better value for the clients of shipping and the ability to better meet the regulatory demands for shipping on safety and environmental sustainability. To meet this challenge, companies and countries need to be engaged. Clients and others in the transportation chain must be kept informed on progress and expected times of delivery so as to meet their expectations.
Don’t miss the boat!
Sea transport carries the bulk of the world’s goods and resources around the globe. Yet, it is nowhere near as efficient or customer-focused as land or air transport – which has made significant steps forward through the use of digitalization and information sharing. The same can now be done for sea transport – and there is something in it for everyone, where we all can join forces towards a sustainable, efficient and profitable future. Are you ready to join in?
About the authors:
Mikael Lind, Associate Professor and Senior strategic research advisor at RISE, has initiated and headed several open innovation initiatives related to ICT for sustainable transports of people and goods including Sea Traffic Management and PortCDM. Lind is also the co-founder of Maritime Informatics, heads the dissemination working group of IPCDMC, and has a part-time employment at Chalmers University of Technology, Sweden
Andre Simha is the Chief Digital & Information Officer of MSC Mediterranean Shipping Company, the second largest container carrier in the world, whose team is responsible for implementing and developing the complex data flow between the company’s headquarters and its agencies around the globe, as well as steering the business towards the digital future of the shipping and logistics sector.