FROM BUZZING BEES TO MAKING HONEY

Everywhere we look the buzzword bees are working overtime. There are claims of disaster and disruption to ships, owners, the maritime industry and of cyber-attacks and impending unmanned ships.  In the last three years the event and conference agendas have saturated the ear with every buzzword on technology in the dictionary, and some not in the dictionary. In one sense the net effect has been positive.  Everyone is aware and is talking about it.  The less positive part of the discussion is that we continue to operate in the same infrastructure and attitudes, so it remains business as usual. To get to the next step, we need to change the structure, the model and at the attitudes.  We need to stop layering new ideas on a creaking model.

Our conversations are around fragmented technology solutions.  Applications that are not connected and do not work with each other.  The industry remains siloed, fragmented and poorly structured to enable an efficient eco system.  Nothing is cohesive connected to enable each part to work together in a slick business process.

So I would like to discuss the structure, and a high level logical approach to the elements of the situation.  I do not think you can speak about one area of the maritime industry and shipping business, without understanding the impact of the other elements. Indeed you cannot change it without doing so.  I think we need to understand how the operations, the navigation, logistics and other segments might play together.  They do not operate in a vacuum, even if we treat them that way.

So let’s look how we get from the buzzing bees in our fragmented world into the land of honey.  From the wildly different approaches to a standardized or organized world.  Let’s start by agreeing technology is an enabler and not a reason or a driver.  In fact there is some fundamental structural issues we need to resolve first.

Automation

What is technology going to enable? We are discussing the business of shipping, and the role of maritime in the transportation and trade.  So we are talking about the operations of ships in a safe and efficient manner with an environmental overview.

To me, whether the ship is manned, remotely operated, automated or fully autonomous is almost irrelevant.  We start from what is the right model for shipping and the particular vessels and trade. Can a business case be made for the type of operation being promoted, and this means the complete picture.  

It could be that an automated ship, monitored from ashore, with a reduced crew makes the most sense for most scenarios.  It would seem to be logical from a safety, economics and efficiency etc. point of view.  I am not sure the case is made for anything yet.  It is clear however we need an infrastructure to support operations with a variety of operational states, and we are far from this picture as a reality.  Unmanned, remote operations in a controlled operation in a fjord is easy to see.  You get on board every night for maintenance etc..  It does not make sense for every scenario and I am not sure it ever will.

For some, the operational state will matter in relation to the eco system and how the eco system treats the ships.  For instance, responsibility, insurance, regulations etc.. But I do not view this to be as complex as some would deem it to be.  It is an area that will evolve and will leave the regulators etc. plenty of time to write, rewrite definitions and rules. Meanwhile technology will have gone even further ahead.

Why am I relaxed about this?  Consider the current behaviors of the ship and shore.  There is already considerable communications, discussion and even influence from the shore.  Yet the ship remains ultimately responsible.  There is no reason why this should not evolve more in the current regulatory framework.  In an automated state with a crew, nothing changes, in a remotely operated ship, it may depend on if it is manned or not.  In an autonomous ship it’s pretty simple, the operator ashore has the authority.  We are only talking about something aviation deals with today?  The problem is attitude and this out dated idea that collaboration and shared behaviors cannot work in maritime.

Regulation or innovation

As I have alluded to already innovation will always lead regulation.  It is hard to regulate something that does not exist.  Even harder when it is not really understood and always regulated in a fragmented manner.  Innovation and technology in maritime like other areas is moving apace and even the most agile regulator would not be able to keep up.  Especially the way maritime creates rules and manages the establishment today.

At its heart is an attitude that carved by a “yes but” culture. While this has probably served the industry well to date it will not work in the new world.   We cannot have people who live in a CAVE culture create the new world.  Being a “citizen against virtually everything” does not enable change.  It has held up change in the regulatory, the operational and most other segments of maritime.  Tradition is one thing, but taking a lowest cost approach to safety is not the way forwards.

Yet of a much more worrying or critical importance is the manner in which decisions and regulations are implemented.  From concept to debate, from rule writing to implementation it is a swirl of compromise.  We are left with the camel that was supposed to be a racehorse.  We should “do right” and not “appease lobbyists”. In the new world this will have to be the way forwards, transformation and digitalization will not work otherwise and neither will cyber security.

We have to move from the archaic spaghetti structures into a more agile and standardized design and approach to regulation and operations. If not instead of innovation and evolution there will be disruption as new model overtake the current stakeholders.

Business environment

In trying to get to the honey, one of the problems today is the overlapping complexity of the various stakeholders.  When we talk about the solutions on offer we often forget who is supposed to benefit from the solution.  In truth the industry technology companies have some responsibility here.  They often produce a product that does not address the stakeholders needs or do not explain it properly.  Not all technology or solution applies to each stakeholder.  I think this is also changing dramatically as well.

Historically we have had the overlap between owner, operator and cargo/trader.  This is changing and becoming more pronounced in some segments.  Domain expertise is becoming a competitive advantage.  The growing trend of more leased assets and less owned assets is one example, also the consolidation of the ship managers market. The separation of the owner of the asset from the charterer and operator has existed for many years, but it is enhanced in the need for specialization and when it does not make sense in the business model.  Oil and gas and the large commodity companies have for many years steered away from owning their own ships.  

However this works out, as technology and systems allow for better analysis of performance, decision support, operations and navigation there is likely to be greater transparency, which means more accountability and a need for more domain expertise to manage the knowledge. 

Logistics and cargo have no desire to own or manage the asset, neither do the leasing or banks have a desire to operate the ship or find the cargo. Ship management and operations is where the paradigm shift is likely to benefit the most from technology.  However it must be done in a cohesive, connected way and not in a fragmented IoT manner.

Maritime is looking for the next revolution in safety and efficiency to remain relevant and for the owners and operates to create a USP for their business as they compete for business.  This is how technology can be applied to change the business model and used to provide the customer with a quality service.

Aviation

One way to consider change is to compare to other similar business and industry.  The aviation industry can point to several areas where maritime can learn.  These points while obviously not directly the same they do answer many questions on how to innovate versus getting disrupted.

In aviation the airlines office, the dispatcher, plays a large role in flight planning and routing.  To the extent that the dispatcher has done a lot of the work before the pilot reviews the route.  Dispatch also plays a role in sharing flight plans with ATC and other airports.  The office is largely responsible for the manifest, the cargo handling etc..

Yet the pilot remains ultimately responsible.  However the pilot unlike the master is not burdened with paperwork that is old fashioned and could easily be electronic.

This is even the case whilst being directed and flying under ATC guidance.  Again in the navigation environment the pilot remains ultimately responsible.  Does this sound familiar.  Except maritime looks for excuses as to why this cannot work in maritime and why we do not needed shared decisions support.  Its either incredibly arrogant or very old fashioned, and maybe both.

Aviation has also for some time operated leased engines with monitored conditions from the ground.  The engine manufacturer taking responsibility for uptime and spares etc.. I am not saying we are at the point of leasing a main engine, but we are certainly at the point of proper CBM from ashore with monitoring.

Once you are open to listening and thinking without a yes but CAVE mindset, it is clear that fundamental principles can be learnt and applied.  These principles would also support the creation of the right infrastructure for the automated, unmanned ships etc..

On the human factor, training in another are where aviation had adopted a much more standarised management of certification and competence training.  There is a respect element, with better skills training and preparedness for automated plane in a reduced manning state.  They even have unmanned planes!  

Maritime Eco System

Maritime needs to create a new business model, but it also needs a new structure and a new approach to operations.  The reason is not because we have cool technology and cloud based services.  The reason is to keep maritime transportation safe, relevant and efficient.  As it exists today it is neither as safe as it should be. Nor is it as efficient to the level it could be.

It does not really matter which segment you are referring to, the cargo owner, the customer wants a high level of service, safety and efficiency.  In addition the operator does not want anything to go wrong to create bad publicity. In the modern world of amateur video reporting nothing is likely to remain secret for very long.  So competition creates a need to operate efficiently.  Avoiding incidents and regulations drives the additional need for safety and being environmentally friendly.

Cruise ships have passengers, they do not want have delays, but they also do not want oil pollution or any other bad publicity. The oil and gas market has worked on this factor for many years and operated at a higher level of safety, quality and training.  The larger commodity charterers also do not want any of this bad publicity.  Overall there is a growing demand for a higher level of operational excellence.

Using aviation as a guide it is not hard to see how this can evolve as an eco-system with higher quality, better collaboration and an infrastructure that will enable this new model.  Taking a top down view it is logical and relatively easy to see how the elements could evolve and work together.  At this point it is apparent to me that unmanned ships is ahead of the curve.  We have to begin at the creation of the eco system to enable the safe passage and monitoring of the new operational state of the various vessels.  Ports, coast lines and seas will need a better monitoring platform before you could imagine many countries allowing international passage of the types of vessels the buzzing bees speak about.

We need a proper approach to fleet operations with collaborative transparency and situational awareness.  This means a fresh approach to how we work together at all levels of the industry.

For instance, we need a proper ship traffic control environment, with associated support guidance.  This is on a navigational decisions support level, but also on a shared information level.  The STM program is a step forwards in this regard but it needs to be moved forwards and proliferated across the world.

We do have some owners and operators doing tracking and monitoring and analysis in fleet operations centers ashore. However most sites I have seen are not connected in terms of the various applications.  Each screen shows a separate application and does not provide an enterprise optimized picture.  Some of the same companies still get paper reports from the ship.  We have some way to go in this regard.

Why do we still need the master sending paper reports, and even sending copies of manifests etc. to ports.  This should be the office dispatch operation, in a connected system it would be simple.  We continue to layer new equipment and technology on top of these old traditions and process and it is illogical.

Voyage planning and other navigational behaviors can easily have a collaborative approach to decision making, after all it is an extension of BRM.  While we maintain the arrogance of a CAVE mentality it will be slow, but the continued FOSSIL approach is going to change and those who do not adapt will find they lose the competitive advantage.  

Bridge design, and systems training could and should be much improved.  An optimized approach would see a total picture, not just a serial singular point of failure or decision point.  The crew need to be treated as a value and not a cost.  As we move forwards the new eco system will have a structured approach, coordinated, connected, transparent and standardized.  Then we can move the maritime transport industry to a high reliability state, with higher level of safe, efficient and green values.

Optimization

Assuming a more collaborative and integrated structure. Also assuming a high degree of automation and shore operational transparency and support within an eco-system, then we need an improved approach to rule making and the overall structure of the establishment.  We have to streamline the approach to how we create the eco system.  We have to aim for a quality environment and not a broad guideline which is open to interpretation and abuse.  We have to aim for quality not compromise.

Optimization is a buzz word in the industry today.  It is the new feature word in many conferences and in many discussions.  Yet when you look at the agendas it is a host of fragmented tools to provide an insight to part of the ships operations and there is not an integrated approach. Many of the so called optimization tools are standalone applications that solve only one part of the optimized puzzle.  A ship is a system of systems and this needs to be interconnected to fully optimize its operations.  Then in order to fully benefit from the technology available today we should be optimizing the fleet.  Only then can you benefit from the shared knowledge and anomaly actions and behaviors to understand the business and the ships performance.

The current system where the industry invests in standalone technology and applications that do not work together does not create an optimal operation or efficiency.  This applies to training, to equipment installation and to use of the technology.  Obviously this also applies to a new structure of fleet operations and to any sort of automation or reduced manning scenarios.  

Cybersecurity

In some ways this is my favorite topic.  It is because it is the most misunderstood and misrepresented in our industry.  Yet it impacts safe operations, efficiency operations, communications and generally the wellbeing of the complete eco system.  

The fundamentals of a proper cyber security policy uses the same principles as a high reliability organization.  Applying a high quality approach, minimum risk to management ensures a higher degree of cyber security in the same way as it does to a safe and efficient business operation.  

Anytime a human interrupts the chain of the data flow we have a potential cyber risk.  The human factor represents the highest risk.  Yet we essentially pay lip service to providing human awareness and training for those involved in the operations.  The growing cyber risk demands that the business operate at the highest level of reliability, where no error is acceptable, yet in maritime we operate at the opposite level.

Cybersecurity like any transformational change must be led from the top.  If management is not engaged and provide the guidance, then it will likely fail.  It will definitely only have limited effect. Cyber security is much more than a note to staff, it is a complete culture change.  This is the same as the change facing the industry and requirement to adjust to the changing impact of technology and a new model of business. The attitudes, structure, approach and processes must change to ensure the change is successful.

I know of one large shipping company who was severely impacted in a cyber-attack on its logistics operation. This cost many millions in business and impacted its operations.  Projects were delayed and all hands were put on fixing the cyber breech in the logistics arm of the business.  Yet one year on, the business continues to have weak cyber security behaviors in maritime operations.  They insist on thumb drive chart updates.  The hold on line auctions for least cost purchasing of airtime, ECDIS and the fragmented purchase of applications.  Any discussion of a connected approach is met with rejection. Commodity purchasing is seen as the most effective business efficiency.   One day the costs of the weakness in cyber could have far reaching implications way beyond the savings in an online auction.  This is what I mean by high risk versus high quality management of operations and cybersecurity.

ECDIS and chart deliveries have created a considerable source of debate.  Some vendors openly promote the delivery of charts by thumb drive, trying to sat this is safer than getting your updates directly over the satellite.

What would you prefer?  Standard charts uploaded from one computer to another and then a thumb drive. Or encrypted SENC’s, delivered by a Class approved system, using a VPN, directly into the ECDIS via a firewall.

Training of staff, repeated training, with a no blame culture and clear procedures and open reporting of issues is required.  We do not need more brochures and guidelines from Class, CIRM or BIMCO.  We need management leadership.  Having a cyber secure HRO environment will also be required for the future operational effectiveness.

Human Factor

In the ever changing pressures of the maritime market the knowledge, capability, professionalism and training of the human factor is critical.  For the owner it is still largely a cost but for the operator it is a value. Certainly ship mangers understand the value for theirs is a resource quality business.  For those who think training is expensive try calculating the costs of an incident.

There is much that could be done and needs to be done for the future of maritime operations in terms of the human factor.  We have to optimize the human to machine interface. This applies on the bridge, between ship and shore, and even with training.  In all aspects we apply a serial approach and not an enterprise or holistic approach to the problem.

Like cybersecurity, the eco system, technology and the operational processes, the human factor plays a critical role across the safety and efficiency of the fleet.  Training needs to be enhanced to fit with the new process and use of technology. It should be training in the complete environment, including ship and shore. At the very least it should be training that covers the bridge as unit and not just s single piece of equipment.  As we move to new automated systems or remote operations, new training will have to be introduced to fit the model. The training and skills should fit with the standardized, collaborative designs and processes.  

From my view point the case for unmanned ships is not made. There are significant challenges in infrastructure and attitudes, never mind the business case.  Which means the human factor is going to be critical for some time, especially in managing the transition into a new environment and operational model of automation and ship to shore interaction.  We will see new skills and training and behaviors as we move to the collaborative approach to management of the vessel and operations. These are also more in line with the millennials and Gen X approach to work and life. 

In my view highly skilled ship management is the likely outcome.  Domain expertise in the operational analysis, operations and systems of enterprise shipping. This by definition will require well trained humans in the chain as the asset of the business.  The business model and the customer will decide the level of ship husbandry, but the execution will be provided by the skilled humans.

Stakeholders

Much of this discussion has centered around the ship, the owners and operators.  Essentially the operations of the ship from pilot station to pilot station.  This is because the maritime operations part of the eco system lags behind the logistics and cargo efficiency.  In ports investments have been made in modern automated cranes and vehicles etc..  There are computers and systems to help load ships and move cargo.

Yet the multiple stakeholders in many ports do not operate in a most efficient manner to turn ships around, and many if not most ports lack inter port collaboration in terms of communications of ship movements.

Better tools for pilots, better port to port data sharing and better operator to port communications and process could all come from embracing change and technology, not fighting it.  

We already see remote operated tugs and smart docking systems. Some of these projects I wonder about the business cases unless we also see the overall port being modernized and have a complete rethink of operations, navigation and infrastructure in the port and its operations.  Here I distinguish between the logistics side of the port and the navigational and efficiency of the ship movements.  There is much to do to improve the navigational and ship operations efficiency.

Conclusion

Obviously ships are highly efficient in moving large quantities over long distances.  In a world that needs this done in a more environmentally friendly way this is not enough anymore.  Nor will it suffice in a fragmented and highly competitive marketplace.  The world trade dynamics are changing and so must the maritime operations shipping model.

So, do we go autonomous, wait for the IMO MASS rules and let Class and the various associations bumble their way to the answer in terms of structure and design?  I don’t think this is practicable.  We do not have the structure, crews or ships to make this happen in a hurry anyway.  While the technology is here to make much of the eco system, the attitudes have to change and acceptance of the business model and efficiencies have to be proven properly for the ship owner to understand the value.  Those that do so fully will have a head start and should benefit from the proper use of technology to enhance safety and efficiency. However it needs to be done with the full picture in mind.  It needs to consider cyber security, the ship to shore collaboration and the human factor requirements.

Charterers, cargo, logistics have made progress in adoption of technology in their own areas in including unmanned vehicles and cranes etc..  If they now start to make more demands on operators and owners to provide a greener, more efficient ship model, this could help drive the change.

As the growing bank ownership changes it is possible the owners will be the ones who take the lead in requiring a more responsible environment approach, as well as a safer efficient operation.

One thing for certain is that the managers have the skills and resources to implement that changes provided their customers will help support the changes.

Automation and remote monitoring will evolve as the efficiency and safety of the operations evolves.  Adjacent to this will be the advancement of fleet optimization. Moving from a fragmented applications environment on a ship by ship basis to an enterprise design and operation.

As joint decision making and shared information and collaboration evolves it does not need to be hindered by the regulatory environment at this point.  The ship will remain the ultimate decision maker in operational and navigational decisions.  This does not preclude the management of the data flows to the various stakeholders being managed from ashore.  Indeed safety demands it should be.

That said, the regulatory framework needs an overhaul. The decision making and objectives of the various behaviors.  The current style of endless compromise discussions and fragmented approaches to technology will not be workable in the next business model and with the advancement of technology.

The roles of the players is likely to change with more separation between the stakeholders in terms of their focus and expertise and this will create a demand for change, for more transparency and KPI’s being monitored.

Maritime can do a lot worse than use aviation as a baseline model.  Some of the core elements are critical and this includes the need for a HRO model would seem to be a pre requisite for the future.

Digitalization and transformation cannot be achieved without an overhaul of the attitudes and business models and processes.  Applying technology alone to a business problem is likely to fail and lead to more risk, less safety and efficiency.

The human factor is key and it is crucial going forwards that we approach the changes in a holistic collaborative manner.  We have to appreciate the scale of the change required and the interplay between the many parts and stakeholders in the industry.

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