For an industry so vital to the global economy, carrying about 90 percent of world trade, shipping has been slow to embrace digital innovation. To a large extent, ships today are floating islands, lacking the high-speed Internet connection landlubbers take for granted. Typically, captains send a daily report to shore with basic information about their speed and fuel consumption and keep handwritten log books. Onshore, ship managers sign chartering contracts based on templates that haven’t changed in a hundred years and a port-to-port business model that hasn’t changed in decades.
This sluggishness is not because of an aversion to technology–from radar to GPS, ship managers have long adapted technology to improve performance. Rather, it is due to the nature of the industry. Modern ships are huge, expensive investments that take a long time to build, prohibiting rapid iteration and risky experimentation. Plus, most aspects of shipping are highly regulated by international bodies to enforce safety and environmental standards. For these reasons, the shipping industry has high inertia to changing course.
Nevertheless, new challenges are prompting such a change. Global warming is placing increasing scrutiny on the sector’s emissions, and not just from activists but also from investors, customers, and legislators. Alternative cleaner fuel technologies like Liquified Natural Gas (LNG) and Liquified Petroleum Gas (LPG) promise significant reductions. And, of course, the Covid-19 pandemic is creating new issues. Unprecedented international travel restrictions have left crew members stranded on ships for prolonged periods. Meanwhile, a global recession has increased the impetus for improving efficiency.
There is a silver lining to these challenges: thanks to a perfect storm of maturing technologies, which other sectors have already begun to adopt, the time is ripe for change. Advances in sensors and robotics on the hardware side, and machine learning and blockchain on the software side, are making possible a new vision for the future of shipping: one of improved fleet efficiency, reduced emissions, and better conditions for crew.
In collaboration with Techstars, a global startup accelerator, Eastern Pacific Shipping is incubating companies that will shape this future. Some of these initiatives are particularly relevant for a Covid-19 stricken world: using drones to deliver care packages from shore to distant ships, developing Virtual Reality for industrial training that removes the need to travel to a physical academy, and leveraging blockchain to certify the reliability of health declarations for disembarking crew.
Other startups are focused on improving fleet performance: implementing onboard sensors to optimize route planning and predict when machinery will need maintenance, or turbocharging cameras with Artificial Intelligence to monitor crew safety and manage inventories. Still others are developing tools to upgrade on-shore processes like digital record-keeping and insurance underwriting.
And these ventures are just the beginning of the sector’s digital tack. In the near future, ambitious maritime entrepreneurs may leverage quantum computing to solve intractable optimization problems and deploy low-orbit nanosatellites to improve data granularity for ships.
EPS is just selecting the final cohort for this year’s Maritime Accelerator, to join our program from November until February 2021.
The shipping industry, like the vessels it manages, may be slow to change course. But when it finally does, it does so with 200,000 tonnes momentum.