That ‘Cloud’ on the horizon is closer than it looks.
The container shipping industry faces many challenges, particularly when it comes to increasing uncertainty in the global political and economic environment. The issues between the US and China over trade relations and Brexit in Europe are testing the industry, plus increased regulations and market fluctuations are having a big impact.
How container shipping companies operate now and in the future is changing and staying ahead of the curve is crucial for survival. Predictions suggest there will be far less container shipping in the future as the trend for consolidation continues. Smaller operators are being pushed out as larger global carriers take over. Last year it was suggested that the 10 largest operators control 60-70% of the global capacity.
Further consolidations are expected in 2019. The trend towards more goods being bought and produced locally, rather than coming from China, means there is likely to be far less container shipping needed in the future. Technologies such as 3D printing are also having an effect as they enable companies, for example engine manufacturers, to produce engines locally rather than shipping them from elsewhere.
As a result container shipping companies need to look at innovative ways to become more efficient and streamline their operations to remain competitive. With 90% of all cargo being delivered across the oceans, technology has a vital role to play in connecting vessels and office teams. Technology can help cut costs and facilitate process optimization and is something companies should embrace.
The Future of Shipping Technology
Technology is reshaping the container shipping business, helping to improve efficiency and streamline processes. One of the hot topics just now is ‘smart shipping’ – highly automated or autonomous vessels. The Clyde Co and IMareEST Technology in Shipping Report found that most respondents forecast the introduction of smart shipping in the next 10 to 15 years.
Companies such as Rolls-Royce even suggest autonomous shipping is the future of the maritime industry. They say it’s as disruptive as the smartphone and the smart ship will revolutionize the landscape of ship design and operations. And yet, some though are taking a ‘wait and see’ approach when it comes to adopting smart shipping technologies and it could be some years before the true impact of this on the container shipping industry is known.
On the other hand, while the industry has been described by some as operating in the “stone age,” there are signs this is changing as cargo companies look to other industries for inspiration. One technology in particular that has had a big impact on business in the past ten years and is now causing big waves in the container shipping industry is the Cloud.
The cloud facilitates the access of business data and applications from anywhere at any time and with any mobile device. Investing in cloud technology is improving collaboration between teams on shore and at sea and creating a connected workplace culture that supports strategic business goals. Increasingly, container shipping companies are recognizing this can bring tremendous benefits to their operations.
One of the main advantages for companies who are technology wary because of the perceived costs and lack of knowledge within their crews is that cloud software doesn’t require big expense on new infrastructure. It’s straightforward and easy to implement, plus staff don’t need to have advanced IT skills as shipping cloud software is intuitive and requires minimal training.
The recent Technology in Shipping Report highlighted that the skill set and competencies of crew to use new technologies was a concern when it came to smart shipping. This has also been a concern with the cloud and some companies have been hesitant to implement it. It’s true to say that companies willing to adapt their processes and procedures, hire tech-savvy staff and take advantage of technology to change the way they work, will benefit the most. However, the lack of technology skills needn’t be a barrier for companies looking to streamline operations through the cloud.
How the cloud is changing operations
A report by the Seafarers International Research Centre found that at least a part of the effective operation of a modern vessel is determined by the quality of the relationships between shoreside personnel and sea staff. The report recommended companies take steps to address the gulf between ship and shore personnel in order to improve ship-shore relations.
Cloud-based software is enabling companies to do just this and optimize the management of their entire fleet, automate their processes, improve their communications, increase their business performance, improve operational efficiencies and drive down costs. A major benefit is the improved communication between staff on board ships and those in head office. Whether that’s crew planning, the execution of payroll or the evaluation of seamen, digital data is always up-to-date and available where it is needed.
Without the cloud, it would be difficult for crews, head office teams and other parties to keep up to date with processes and other management and administrative issues, making companies less agile and able to deal with issues immediately. In today’s fast-paced business world, this is a definite disadvantage.
Cloud solutions also enable companies to reduce overheads by having smaller offices around the world instead of one large office. For instance, instead of sending employees to travel across the world to carry out jobs such as on-board inspections, having a cloud solution means ships can hire external personnel locally who can log in, carry out jobs and send the results direct to those that need it.
A major challenge for container companies currently is the integration of systems and processes from different departments to a central data source. The same information might get requested several times from the captain, which forces him to respond manually to each request.
As to tasks being carried out by both land and sea teams, a lack of integration has previously meant less transparency across the business. The cloud is resolving this. It’s enabling information to be centralized in one place and made accessible no matter where staff is based. It is ensuring that systems and processes are integrated and data silos removed – allowing operators to gain a complete 360-degree overview of their fleet and entire operations.
Most importantly the cloud is changing how information is exchanged and accessed. There is no more need to send emails back and forth, requesting or forwarding information. Data that is entered at one end is automatically available to everybody else using a cloud-based solution. Information is available in real-time regardless of time or location, reducing time spent on administration.
This is a big change for an industry that still uses a lot of clipboards to take down information and manually transfer to Excel to send on to ship managers. Collecting data for instance on board this way is very ‘admin’ heavy but the cloud enables this to be done using mobile technology which can then be accessed anywhere in the world.
Often data and documents are saved on multiple servers too that are not connected to vessels, so there are difficulties accessing and finding relevant documents. With the cloud all vessels and shore teams are connected so information can be easily filed and accessed by the entire company.
The cloud is also helping automate and improve tasks such as purchasing and stock planning, as well as complying with regulations such as keeping track of waste, sewage and sludge disposal. Even staff wellbeing can be addressed using cloud applications, as crew shifts and rest periods can be tracked to ensure companies comply with industry guidelines and standards.
A key benefit of using cloud applications is that they are constantly updated and improved as new technologies become available. These updates are automatically installed with no need for manual effort and can help container shipping companies’ future proof their business.
With the container shipping industry becoming increasingly competitive, it is imperative that companies innovate now to reduce costs and improve efficiencies. Adopting the cloud is one way to do this.
Cloud platforms are increasingly affordable and accessible and enable companies to implement smarter, faster and more effective processes to streamline their operations and remain competitive. The cloud is changing the way container companies work and is one technology that any company with an eye on the future needs to embrace.
After graduating with a degree in Business Informatics, Alexander Buchmann worked for software company Trigonon at the Hansa Treuhand, where he first gained an insight into the internal processes of shipping companies.He founded Hanseaticsoft in 2009 and developed Cloud Fleet Manager. Today Hanseaticsoft has more than 30 employees and develops software solutions for shipping companies. Since March 2017, Lloyd's Register as held a share in the software company.
This article first appeared in the MARCH/APRIL edition of Maritime Logistics Professional magazine.
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