Ships should be the centre of digital transformation

October 1, 2019

The process of digitalisation in shipping, has become obvious to anyone with an interest in the subject, is more akin to a marathon than the 100 metres. The more cynical might mutter that to date there has been more hot air expended than money saved, but the need to lower fuel consumption, reduce emissions and improve competitive position remain a powerful combination.

Bigger operators lead the way in pressing for this combination of benefits, not least because both their customers and shareholders are pushing them to do so. But even for them, as Ari Marjamaa explains, improving, let along transforming operations, is tough when you have a day job.

“The issue for many owners is that the ability to adapt to technological change is hampered by running a major day to day business; it can be too much of an ask. There are lots of good ideas around but it’s tricky to put them into a bigger context and make stuff happen,” he says.

Marjamaa previously held the digital transformation role in the executive management group at Swedish-Norwegian carrier Wallenius Wilhelmsen, tasked with drawing the two shipping operations together. Now CEO of Raa Labs, backed by WW and the Wilhelmsen Group, he has a mandate that is ‘frustratingly wide and comfortingly simple’: accelerate adaption to technological and digital changes with the target of transforming the owners’ organisations. “How we do that is up to us,” he adds with a chuckle.

Raa Labs is at any given time running between 5 and 10 initiatives around information, data applications, machine learning and digitalisation of vessels. Marjamaa says one of the key tasks is to put ship data at the centre, deploying software and apps back to vessel and in order to empower the crew.

To make a start, Raa Labs created the ShipOS platform, a combination of code, assets and digital infrastructure; based he says on the realisation that “the majority of digital initiatives are made with the back towards the vessel. The result informs people onshore, but we haven’t done enough to the people onboard”.

Better, he thinks to put the vessel at the centre and empower crew to make better decisions. This somewhat goes against the orthodoxy that either managers shouldn’t interfere or are powerless to intervene with what happens onboard ship. Not so, in Marjamaa’s experience. His team’s engagement suggests that the crew are interested in getting support, so that they have the ability to do their jobs better.

The problem has traditionally been one of poor communication which results in finger-pointing rather than a proactive approach. “Crews want to do their best, to burn less fuel and in our experience they welcome changes or improvements you can propose. Are they critical and demanding? Absolutely, but also very positive to new tools. In a way we are underestimating the ability and willingness of crews to do as good a job as possible. People want to do a good job.”

To make that job easier his team has looked at using technology to take tasks from the vessel that can be better done onshore such as documentation or compliance issues normally completed during a port call when they are already busy. “Onboard ship, wherever we can we simplify is welcome. In many ways the resistance is often bigger on the shoreside,” he adds.

The Wilhelmsen Group’s vision as a shaper in the maritime industry led his backers to suggest that in his spare time, he might offer similar services to third party customers and that he try to work more broadly to drive aligned industry standards.

This makes sense when you consider that the vast majority of shipping companies are ultra-lean organisations that don’t have capability to do much beyond their core operations but Marjamaa says “they do listen and understand the need to adapt, so they are reaching out to us as a source of capacity, domain knowledge and technical competence”.
The second challenge is that as soon as you get onboard ship it’s likely that nothing is as you expect. The lack of data standardisation creates inherent incompatibility because the industry hasn’t as a rule thought about data as a resource that runs across systems but is instead tailored to niche problems.

Though he considers Raa Labs a start-up too, he thinks this is why some newcomers hit a wall when trying to solve shipping problems that look simple on a whiteboard. “A vessel has none of that compatibility that can connect data from A to B and there isn’t anywhere to deploy the software. The start-ups we meet end up putting hardware on the vessel because there’s no environment to run applications”.

Marjamaa says he meets a lot of ‘brilliant companies’ that have version 1.0 or a single company pilot but which have realised there’s no way to scale across the industry so the opportunity for innovation is lost.

The standardisation required to move the needle will require a seismic shift, not just in terms of how OEMs co-operate but how owners harvest the results. Marjamaa says some owners tell him that they don’t have any data from their vessels or, if they do, they are not even sure if they own it. “OEMs tell them they can get it for a cost, but I would argue that whomever pays the bill ultimately owns the data and should be able to access and share it in a way that suits their needs,” he says

Like any good digital evangelist, Marjamaa has an iPhone allegory. It’s easy he says, to focus on the hardware, but this ignores the fact that 40% of iPhone revenues come from the App Store, where Apple created a structure that allows data to flow. “When you combine data elements then you can innovate, that’s what we’re looking for in shipping; a platform that enables us to start innovating.”

He is convinced there is an increased awareness of the need for change and that more owners want to get a handle on the challenge. “Access to data is going to become a competitive advantage. What happens if you are a 5 to 10 ship company and you don’t have enough data? You won’t have the strength to be able to adapt; less data means lower efficiency and you may not be able to compete because it’s likely you have already turned all the buttons and pulled all the levers to get costs down to the lowest level.”

So the marathon continues, though with a refreshingly realistic approach. Marjamaa concedes that WW and Wilhelmsen may be ahead of the competition but that owners are generally aware they will have to adapt; increasing safety and quality of services and driving costs down.

“Success is pretty easy to measure; if you are reducing fuel bills then you are reducing emissions, so the targets are pretty explicit. We are very focussed on being tangible. There are lots of fancy solutions out there, but if they don’t do the trick or if it doesn’t make sense to continue down a certain path, we’ll change. There are so many things we can spend time and effort on.”