Digital jungle for shipowners

Data-driven operational efficiencies on existing ships will be necessary to achieve emissions cuts required to reach IMO targets. But a proliferation of new digital solutions in recent years has resulted in an “overwhelming” software market that is difficult to navigate for shipowners, according to Kongsberg Digital.

The number of ship software vendors has increased from around 170 in 2017 when Kongsberg first issued its annual overview of the maritime software landscape to over 550 at last count, despite M&A transactions that have led to some consolidation in this market.

This has left shipowners with the enormous challenge of selecting from a bewildering array of different digital applications from multiple vendors in categories such as vessel performance monitoring, voyage management and optimisation, navigation, cargo & vessel tracking, port operations, logistics and procurement and document handling.

Without benchmarking of different applications in relation to their operational benefits, there is a risk that shipowners can make poorly informed software decisions that can, paradoxically, compromise fleet efficiency gains they are trying to achieve from software intended to support decision-making.

“The software landscape can be very confusing for shipowners, given the overwhelming number of vendors out there, and they are really dependent on data scientists to assess the different solutions existing in the market,” says Kim Evanger, who leads Maritime Partnerships at Kongsberg Digital.

“They must, for example, determine whether to build on an existing legacy platform by adding cloud connectivity or overhaul their fleets with an entirely new digital platform that has greater flexibility to integrate with other solutions.”

‘Relative newcomers’

Lloyd’s Register’s head of marketing for maritime performance services, Mark Warner, says “many shipowners and operators are still relative newcomers to the advantages digital transformation can bring”.

However, industry studies have shown that around 50% of decarbonisation gains required to meet the IMO goal for a 50% reduction in emissions by 2050 will have to come from operational efficiencies on existing ships, apart from new fuel technologies.

These efficiencies are expected to be driven by extant and evolving technologies that use data-driven artificial intelligence (AI) and machine learning to support decision-making in areas such as fuel consumption, engine efficiency, navigation and preventive maintenance.

This has been backed up by the IMO’s Secretary General Kitack Lim who said: “Increased data collection, processing and interconnectivity capabilities enable automated systems to be controlled remotely or through artificial intelligence.

“Increased automation in shipping has the potential to enhance safety, to improve environmental performance, and to ensure more efficient and sustainable shipping.”

Mushrooming digital market

Shipowners are scrambling to expand digitalisation of their fleets to achieve fuel efficiencies for emissions cuts to comply with the IMO’s EEXI (Energy Efficiency Existing Ship Index) and CII (Carbon Intensity Indicator) measures due to come into force over the next two years.

In addition, the prospective implementation of the EU’s Emissions Trading System for shipping from 2023 poses the risk of financial penalties and possible detentions for pollutive vessels plying European waters, while there is also growing commercial pressure for green operations from cargo owners, consumers and financial institutions.

Consequently, a raft of vendors has sprung up in recent years offering a vast number of software systems to cash in on the massive vessel market created by the decarbonisation drive.

The digitalisation trend has been fuelled by the Covid-19 pandemic due to the increased need for remote online working in areas such as crew training, pilotage and surveying, which resulted in average data consumption per vessel increasing from 3.4 to 9.8 gigabytes between January 2020 and March 2021, according to a recent study by UK-based research firm Thetius.

The global maritime digital products and services market was set to reach $159 billion last year – an increase of $24 billion, or 18%, on pre-pandemic estimates – and is expected to more than double to $345 billion by 2030, up from a previous estimate of $279 billion, the study stated.

Data transparency

The current overcrowded maritime software market is a far cry from only six years ago when Swedish tanker owner Stena Bulk embarked on a pioneering digitalisation journey to upgrade systems across its fleet by developing its own software platform for vessel performance management, which has since been spun off into US-based software-as-a-service provider OrbitMI.

Stena Bulk’s sustainability and transformation manager Peter Bjorkborg believes “digital solutions will be totally necessary” due to the increasing need for data transparency to meet regulatory compliance on emissions, class and other requirements, as well as demands from stakeholders such as banks and charterers for green ship operations.

“We realised there were inefficiencies in the way we operated and saw the potential of digital technology to tackle these issues to run our ships more efficiently by combining operational data from different sources into a common platform,” Bjorkborg says.

“At the same time, we foresaw the trend toward decarbonisation would require the industry to shift towards digital systems for data transparency and that this would enable us to become more lightweight, agile and adaptable, rather than being held back by legacy processes and systems.

“Adopting innovative software solutions was a move to future-proof our fleet. While there was a risk and costs involved, there was a sound business case as it would enable us to develop ahead of our competitors. So it also made commercial sense.”

‘Harder to navigate’

He believes the software investment has more than paid off in terms of bunker savings due to rationalised fuel consumption, as well as other efficiency gains, as it has been implemented across its fleet of 74 owned and chartered-in ships. These have been achieved, for example, through data-driven speed adjustments and optimisation of voyage routing to avoid port congestion.

Stena Bulk developed its own solution as there were few such systems available when it started its evolutionary digital journey, but Bjorkborg says “the software market is now much harder to navigate for shipowners” due to the explosion of different shipboard applications in recent years.

“Different platforms have different flavours. So the shipowner needs to determine what benefits he is after and what each system can offer so that it can provide relevant operational data,” he explains.

Stena Bulk has categorised decarbonisation technology into three different areas – traditional ship equipment such as hydrodynamics, propellers and engines; operational technology such as performance monitoring and optimisation; and commercial technology such as optimising protocols and avoiding congestion.

Shift in thinking

Bjorkborg says “all these categories are dependent on having good data for efficient execution and improvement”, for example, relevant weather data for optimal vessel routing as well as AI and machine learning from digitalised systems to improve a ship’s performance over time.

Stena Bulk is now moving in the direction of a shipboard internet of things with the intersection of physical equipment and digital technology that he believes “opens up new opportunities for efficiency gains”.

But he says this will necessitate common standards for system integration, as well as a shift in the industry’s traditional competitive resistance to transparency and data-sharing.

“Shipowners now really do not have a choice as they will need the right digital systems in place. And data-sharing driven by sustainability is potentially an enabler for greater transparency that can yield wider commercial benefits for the entire industry,” he says.

Kongsberg has already taken a big step in the direction of data collaboration with its Kognifai Marketplace that includes a range of different vendors, consuming data from Vessel Insight data infrastructure, as the company seeks to assist shipowners on their digital journey.

‘“We take a system agnostic approach and also want our competitors to join the marketplace as we believe greater collaboration is key to digitalise the industry,” Evanger says.

However, shipping clearly still has a long way to go to establish an API economy that will enable it to reap the full commercial benefits of harnessing and sharing big data.

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