Why Digitalization matters for the Maritime Industry

January 2023.

Maritime digitalization is the application of existing and emerging digital technologies to transform business models in the maritime industry with the intent to push revenue growth. To positively impact shipping and maritime services, digital technologies must push industry revenues in the right direction while also advancing sustainability goals.

What are the benefits of digitalization in the shipping and maritime industry? What are its effects on the value chain, delivery of goods and services, and the global economy which leans heavily on the efforts of this industry? With solutions borne out of persistent challenges, the maritime sector is getting digitized faster than ever. OnePort 365, a Nigerian startup which aims to tackle inefficiencies and other bottlenecks in the African shipping industry, received $5 million in seed funding in April [3]. Similarly, a 2021 World Bank report showed how digital technology adoption across the maritime supply chain would cut off major inefficiencies, streamlining logistics and operations [2].

Digital technologies have gained global acceptability in several domains of the shipping industry and the drive toward digitalization cuts across all regions of the world, due to the numerous benefits they have to offer.

Efficiency for Reliability and Profitability

Efficiency is almost always positively correlated with revenue. This is a major advantage of digitalization. Improvement of the supply chain with modern technologies can drive profits. To promote digitalization for efficiency and resilience, the World Bank together with the International Association of Ports and Harbors (IAPH) released a report in 2021 detailing the impact of modern technologies on efficiency and resilience throughout the supply and logistics chain. Also, the International Maritime Organization has introduced Electronic Data Interchange (EDI) under the Convention on Facilitation of International Maritime Traffic (FAL). The FAL Convention aims to eliminate costly delays and bring international uniformity into the industry. 124 countries have ratified the convention and 30 have implemented it. EDI eliminates errors related to paperwork and information sharing and optimizes the flow of information between stakeholders.

Maritime digital technologies introduce several capabilities for real-time response to events. The shipping industry by nature has not been very reactive, but with stiff competition, survival in the

industry calls for proactive measures and real-time reactionary steps to remain afloat and profitable. For example, real-time information can help track and predict increases in economic activity which could cause delays in shipment and thus increase capacity beforehand. Also, the rise of regulatory demands means that the shipping industry must keep up with more policies and requirements. This invariably means more monitoring, planning and reporting usually within a short timeframe. Maritime technologies increase the ability of fleets to monitor operations, ensuring compliance with evolving regulations and reporting mandatory data to regulators on time. These technologies also allow for changes in route planning and supply chain operations when major events such as large-scale disasters or geopolitical tensions occur. The industry needs a quick response to such changes to prevent accumulated losses, or worse still, the total breakdown of operations which would affect the world economy. Conflicts such as the Russian-Ukraine war already have proven the effects of a geopolitical crisis on the maritime industry and the economy.

Due to the nature of marine work and seafaring, there is a growing shortage of experienced workers in the industry. This has been exacerbated by the COVID pandemic, which has de-popularized jobs that keep one away from home, in favour of closer and remote jobs. The loss of experienced workers in the industry results in lost productivity and revenue. Digital technologies help to fill in this gap by assisting with jobs that have shortages, efficiently boosting productivity at little cost.

For remote tracking, logging, and monitoring operations in the maritime and shipping sector, Fieldbase has introduced the RMonitor, a networked system that enables remote device management. Traditional support and monitoring operations in the past involved visiting the site to address hardware issues. On-site inspections are no longer necessary thanks to remote monitoring solutions, which reduce employee fatigue and recurring expenditures for the firm. The RMonitor enables the real-time detection of damage to assets, adverse conditions and other disruptive issues. It is adaptable and may be customized to fit the requirements of many applications, including the measurement of leakages and harmful gas emissions from companies, dam water levels, pipeline conditions, remote gas supply measurements, remote access control, soil moisture levels, etc. In every situation, users can receive data via a variety of channels, such as text messaging, a mobile app, or a web browser. The Fieldbase customer dashboard receives real-time updates on the system’s functioning.

Sustainability and Conservation

Digital technologies score a hundred in conservation and sustainability efforts. They help monitor and improve environmental performance in order to cut down emissions and protect vulnerable marine ecosystems. Nowadays, regulators are becoming increasingly concerned about environmental issues

and the extent of damage the maritime industry is doing to aquatic and marine ecosystems. As a result, the industry is getting increasingly regulated to ensure sustainable operations and minimize environmental damage to the lowest practical levels. Policies such as disclosure of carbon footprints, emissions and pollution tax, etc., are being implemented by regulators to push the industry in a greener direction. It is almost always the case that the goal is to reduce emissions by 50% by the year 2050. To achieve that goal, regulators likely will enact sweeping policies over short periods of time.

Corporations can leverage digital technologies to implement policies and adhere to increasingly strict environmental regulations while still remaining profitable. The United Nations Conference on Trade and Development has established that optimization of operations by digital technologies leads to reductions in emissions and harmful substances, as well as a reduction in ecosystem damage. Digital technologies that help track emissions and provide real-time monitoring of maritime activities that generate waste are available. Modern efficient electronic and digital systems which use considerably less power are available to reduce power consumption and consequently reduce carbon emissions. Connectivity and route tracking are also very important for sustainable operations. Routes and operations can be planned ahead of time, with efficiency and conservation of fuel in mind. Disruptions such as spillages and leakages are noticed in real time and resolved as quickly as possible. With Fieldbase monitoring and communication systems, one can monitor emissions in real-time allowing management to quickly make decisions to mitigate adverse environmental impact. Metrics such as engine emissions can now be closely watched.

Another key sustainability impact of digitalization in the maritime industry is the elimination of paper processes. The use of paper for process and record purposes has had a large negative impact on the environment. First, the use of paper causes deforestation and paper waste contributes to environmental pollution, Furthermore, the burning of paper waste releases carbon emissions into the atmosphere, contributing to global warming. The problem is worse than one might feel. The Billentis report titled “The e-invoicing journey 2019–2025” estimates the global market’s use of paper invoices at about 500 billion a year [4]. The use of digital information technologies and digital processes can completely eliminate the need for paper invoices, reducing errors, and processing times thus making the maritime industry more sustainable and environmentally friendly. Digital signatures, digital storage and preservation, Cloud computing, etc., are all digital technologies that drive the digitalization of paper processes and thus the low use or even complete elimination of paper.

Safety

A crucial benefit of digitalization is better maritime safety. The use of digital technologies in maritime operations have proven to result in lesser incidents at ports and sea. These technologies digitize, automate and streamline dangerous or difficult processes. At sea, smart navigation systems help avoid collisions and accidents which may occur due to human error. These onboard systems both provide feedback for the crew and provide autonomous navigation when on autopilot. Evergreen Marine’s accident at the Suez Canal in 2021 was caused by strong winds which could easily have been detected by digital monitoring and feedback systems. Of recent, Artificial intelligence has been pushing the limits of these technologies. Deep learning algorithms exist which receive real-time data from smart sensors to output detailed insights, enabling safe navigation. Useful data varies from weather conditions and logistic difficulties to natural disasters, piracy and geopolitical tensions. They produce robust information to guide decision-making. Furthermore, these technologies are paving the way for large unmanned vessels of the future, which can navigate from coast to coast efficiently.

Not just at sea, digital technologies are transforming ashore operations and making them safer. Operations which involve significant safety risks are being taken over by automated systems. Ports such as the Port of Rotterdam have started to implement robotic offloading systems for productivity and added safety. Ports have long been regarded as one of the most hazardous places to work, with several health and safety risks. Having many workers clutter up the quay significantly raises the chances of an accident. Robotic and automated technologies help reduce worker involvement on the quay. Similarly, loading and unloading dangerous and sensitive cargo also involve health risks. Digitally controlled machinery eliminates the risk of injury or poisoning while sensitive or dangerous goods are being moved.

Other digital devices which improve maritime safety are finding increased use in everyday operations. The port of Antwerp partnered with IoT startups to implement digital solutions that improve safety within the port environment. One notable invention is the electronic wearable. This device helps workers maintain required social distancing to prevent the spread of COVID, achieved by enforcing a minimum radius from other wearables. Also, the Unmanned Aerial Vehicle (UAV) more commonly known as the drone, is another innovation making a significant impact on the maritime industry. UAVs are designed to fly without personnel on board, leaving them small and miniaturized. Thus, they have lower complexity and operating costs than regular aircraft. Drones are finding increasing use in logistics and monitoring applications. They help move small-sized critical items quickly within short distances. For monitoring purposes, UAVs are fitted with cameras and can be used to monitor perimeters. UAVs can fly autonomously thus freeing up remote piloting duties so the operator can focus on monitoring. UAVs can mitigate spills, pollution, accidents, piracy and theft, etc.

Fieldbase has developed a digital solution to assist owners and regulators manage employees. It is an online portal which provides access to a database of qualified Nigerian seafarers and maritime experts. The portal helps check crime, and also fraudulent and malicious activity at the workplace. The seafarer register, a comprehensive database of Nigerian seafarers is built with features including a maritime directory, and a rating system for crew members to confirm competency, and validate relevant skills.

Challenges to Digitalization

It is widely acknowledged that digitalization has operational benefits, and legal requirements add to the allure of turning digital. Nevertheless, experts in the maritime industry are treading carefully while discussing the subject. This is due to numerous “bottlenecks” and perceived challenges that accompany digitalization.

First, the path to digitalization is seen as costly and risky business-wise. This perception is a big hindrance to digitalization in an industry where profit margins are low and business owners are hyper-focused on reducing costs anywhere possible. Hardly anyone wants to be the trailblazer, to find out if digital technologies are as true as touted. Many owners are not willing to spend money testing the practicality of digitalization on their assets, logistics and supply chains. However, this doesn’t mean that the benefits of digitalization are only seen on paper. Businesses which have adopted digital technologies are reaping immense benefits. Nevertheless, it must be noted that digital technologies are diverse across a wide domain of applications, and the major fear is of adopting them all at once or too quickly. One by one, each is tested with great caution, until its reliability is proven and steadily it sweeps through the industry.

Second is the issue of data sharing. Data sharing is an important piece of the digitalization value chain. Data sharing directly enables technologies which deliver, or act on real-time events. It is valuable for digital monitoring, planning and safety operations. If real-time operational data from digitally integrated ships is shared and strategically used for big data analysis, benchmarking, and performance optimization across businesses and authorities, the value of the data to the industry’s digital technologies rises dramatically. Unfortunately, a lot of businesses prioritize data protection over open data exchange in the maritime industry. This creates a barrier for the community of sharing and collaboration that could facilitate a seamless shift to digitalization and ultimately offer benefits to the entire sector. Business competition and cybersecurity are often regarded as reasons businesses do not share data.

This brings us to a third challenge which is cybersecurity. Part of the reasons businesses are reluctant to share data in real-time or replace legacy processes and systems with digital solutions is fear of cyber-attacks. This fear is quite justified since the adoption of digital technologies technically increases the risks and impact of cyberattacks. Attacks on critical infrastructure could be devastating to business operations and profitability. Also, business owners fear that digital technologies come with hidden costs such as the cost of setting up and maintaining fail-proof cybersecurity systems. However, with proper preventive planning, the risks of cyberattacks can be greatly reduced. Encrypted and secure digital systems are available and are constantly improving.

Final Thoughts

Digital technologies hold immense benefits for the entire maritime business ecosystem. It is important that the industry makes the leap into digitalization for efficiency, profitability, safety and sustainability.

It is understandable that since the industry is cost savings driven, there would be a slow and cautious approach to digitalizing existing processes that work. Nevertheless, it is important to remind stakeholders of the wide-spanning benefits of digitalization, and thus push business owners out of scepticism. The world is embracing digital technologies and business owners need to keep their investments sustainable in the long run. With the right partners and trusted solutions, it becomes less and less difficult to make the move.

At Fieldbase, we provide a host of solutions and support to make your digital move as seamless as ever. Our engineers will take into consideration the unique requirements of your fleet, and provide cutting-edge wide-ranging, cost-effective solutions that fully satisfy your needs.

Reference

[1]. Definition of Digitalization — IT Glossary | Gartner

[2].?https://pubdocs.worldbank.org/en/773741610730436879/Accelerating-Digitalization-Across-the-Maritime-Supply-Chain.pdf

[3]. Nigeria’s OnePort 365 lands $5M to digitize freight management in Africa ? TechCrunch

[4].?https://www.billentis.com/The_einvoicing_journey_2019-2025.pdf

FieldBase Services, Ltd (FieldBase) is an engineering company that specialises in the use of digital technologies to develop and deliver solutions in the maritime and oil & gas industries. 
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