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Advisers and partners needed for reluctant converts

Maritime businesses continue to believe they run ships better in-house; overcoming traditional attitudes is being made easier as class societies and the providers evolve as advisers and partners

Regulatory pressure has compelled maritime companies to be more data-driven in their culture and organisation; however, there is a bewildering array of applications available

DIGITALISATION is expected to transform the way maritime businesses are run, the skillsets of people working for them, and the relationship between data-driven entities.

Shipping companies with long experience of building in-house teams for all operational needs are likely to find it hard to source all the skills they need from within the industry. In competition for graduates on the open market, shipping is likely to struggle.

This is the basis for a rethinking of the way maritime businesses will be run in future.

Tech companies argue that transformation works best when some of the skills are outsourced — and they are asking maritime customers why they persist in developing in-house teams.

The reason is, it’s the way they know.

Part of the explanation for why third-party shipmanagers have struggled to lift the proportion of vessels beyond the 15%-18% mark is because most operators believe they can run ships better themselves.

In the same way, most vessel operators believe digitalisation can be handled by further recruitment into the IT team, or by building a new team to focus on digital solutions.

The traditional avenue of recruiting from seafarers coming ashore is getting harder to sustain.

At first sight, outsourcing critical elements of a competitive operation to a software business — probably hosted in another country and more than likely without a focus on shipping — does not appeal.

However, the advantages of cloud computing are gaining traction in other industries and should be explored in maritime.

According to a McKinsey & Co report released in 2022, technology industry analysts predict rapid growth in the Software as a Service sector — and expect to see the global market for SaaS products nearing $200bn by 2024.

Advocates of the SaaS business model say it gives users access to powerful technologies without having to stump up huge costs in advance or install expensive hardware.

Providers claim the solutions are both secure and scalable — and can often be tested prior to payment.

The maritime technology market has grown rapidly to meet industry demand for software capable of supporting better decision-making in voyage routeing and fuel consumption to drive lower emissions in line with new regulations, as well as cost savings.

OrbitMI chief executive Ali Riaz has observed that environmental challenges and regulatory pressures have compelled maritime companies to be more data-driven in their culture and organisation.

However, he said, there is a bewildering array of applications available.

"Consequently, there has been little understanding of how to evaluate different applications, so the whole business of software selection has been poorly informed, which has proven a big barrier to adoption,” Mr Riaz said.

So, while the push to transform maritime culture has been forceful, it has been hindered by an insistence that in-house teams do it better, a belief that hiring technological expertise will be too expensive, and confusion about which applications are most suitable.

Confusion calls for clarification.

Among other entities, classification societies have evolved rapidly away from an emphasis on developing technical standards for the design, construction and survey of ships, and carrying out surveys and inspections.

Today, they are also “trusted maritime advisers”, working with clients on digital products and data-driven compliance.

Meanwhile, technology businesses have revised their mission statements to enhance their digital capability from trainers to “trusted partners”.

Besides transforming operations and recruitment, digitalisation has therefore encouraged the growth of advisers and partners. However, the problem is not the technology; it’s the psychology.

Speaking at Posidonia 2022 about how technology would shape the maritime landscape, Signal Group founder Ioannis Martinos opined that personal relationships would remain a bedrock of maritime business, especially in broking.

“There are people — especially in the technology world — who are democratising some of the information,” he said.

“I don’t think that’s a trend that can come to full completion because many of the commodity traders would rather keep the price at which they are selling commodities — and the destination where the commodities are going — secret.”

One month later, in a report looking at Seafarers in the Digital Age, Thetius, a digital consultancy, and Inmarsat, the communications provider, revealed that more than half of respondents agreed their company had a digital transformation strategy.

In addition, one in three mariners now decide their next appointment on the level of access to digital tech — more than the proportion choosing their next ship based on pay.

However, while the overall sentiment remains generally positive, maritime professionals are uneasy about the implications.

Seafarers believe their long-term future is far from assured. Half the survey respondents feared that a quarter of their jobs would be replaced by technology within five years.

In spite of the emergence of trusted partners and advisers, transforming the industry through digital technology will find the human element is the toughest nut to crack.

The future for shipping may well be characterised by “a closer and more intimate co-operation between human and machine”, but there’s work to be done to explain the benefits.

This article is part of Lloyd’s List’s special report on ‘Digitalisation & Data’ to be published in full online this week. Subscribers can access a downloadable PDF by clicking here

Subscribers can also register here for Lloyd’s List’s upcoming webinar ‘Digitalisation as a Service: gimmick or game-changer’ being held on February 15 (14:00 GMT)

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