Shipping’s digital conundrum

Shipping’s digital conundrum
April 11, 2022 https://splash247.com/shippings-digital-conundrum/

As shipping considers the direction its digital transition takes, now is the time for standardisation across the industry, writes John Veson, the CEO of Veson Nautical.

Over the past few years, the shipping industry has heralded the pace of digitalisation and its impact as a catalyst for solving the many challenges it faces; from optimisation and efficiency gains to driving increased transparency and traceability across the supply chain. For an industry that has often been perceived as being somewhat traditional and slow to react to change, the speed of digitalisation and uptake of ‘smart’ technology belies that tag.

However, we are only at the beginning of the digital transition, with further progress being stifled by the myriad of different digital languages being spoken; as shipping considers the direction its digital transition takes there are significant barriers to overcome.

Currently, there is no standard way to exchange, interpret information, or effectively speak in a common language across the industry. Indeed, there are huge inconsistencies regarding the names of ports, terminals, berths, specifics in relation to vessels and barges, as well as ETA (Estimated Time of Arrival) calculations. This makes it very difficult to exchange data, as data from different sources do not match up. At the same time, we are becoming increasingly overwhelmed with the sheer volume of data generated, where much of it is disparate and unstructured, making it difficult to separate the signal from the noise.

To maximise data usage and analytics, a normalised language needs to be urgently developed.

Collaboration across the industry is central to achieving this, with the majority of participants adopting a common standard. Technology can be a critical driver of this; however, it also requires buy-in from industry players, support from regulators and, importantly, connected digital systems, the latter of which is currently lacking in what has historically been a siloed industry.

The key is to understand the pain points for specific industry groups around connectivity and plot a course to a new way of operating. For example, ship owners and operators lack structure around data sharing. They want to share information in relation to ETA and Statement of Facts (SoF) in a structured way so they can be more efficient, as well as intentional in sharing specific information with relevant counterparties. Creating an internal digital system that enables an owner to seamlessly view all voyages and data related to those voyages is one thing. However, the vision must be to have an integrated external digital ecosystem – one where owners can exchange information directly with and in the same digital language as charterers, brokers, agents, and other trusted counterparties, sharing specific voyage updates with personalised context at the click of a button.

Similarly for charterers, the main pain points revolve around a lack of transparency. They want real-time visibility of shipments and regular, proactive communications with counterparties on where their cargo is.

This insight is essential for informed decision making around commodity production and other downstream activities reliant on the cargo being shipped. A connected digital system with a standard language delivers this and consolidates all communications streams into one.

The future potential for what can be achieved within the shipping industry is exciting. The direct sharing of information between connected systems will become commonplace, with business being transacted in real time and where data is processed in a structured, scalable and actionable way to facilitate the best possible decision making. Willing participation and collaboration are the key to driving a pace of change that sees new digital technologies – supported by industry-wide protocols and standards – that will lay the foundation for a thriving and sustainable shipping industry.