The Orange Sofa Discussion – Posidonia 2016


 

Below are my take-aways and notes from the Orange Sofa discussion held at Posidonia on Tuesday 8 June, and led by Kate Adamson, Futurist, and founder of Futurenautics.


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Notes:
The event was in two sections: a key-note speech from Kate Adamson, followed by discussions with guests on the Orange (the sponsor) sofa.
Guests:

Christopher Rex, Danish Ship Financ
Grigoris Zarifopoulos, Google
Michel Verbist, Orange
Martin Buhl, ShipServ
Andrew Faiola, Intelsat
Athanasios Tzioumas, Hellenic Radio Services
Yannis Papaefthymiou, Furuno Hellas

Key Note Speech

There are “mega-trends” at play which are having profound affects on shipping. High speed data comms via satellite will allow a real-time exponential exploitation of information from ships. This will allow companies to move sideways across industries, in the manner of disruptive companies such as, Google, Amazon, and achieve growth that is no longer linear, but exponential, as in Moore’s Law.

The raise of disruptive companies in shipping is already evident, and she quoted ShipServe and VesselsValues, adding that there was a VesselsValue representative in the audience (me). But for the large part, shipping remains dysfunctional, and is failing to recognise the changes brought about by the mega-trends. Regulation is one example Ms Adamson gave where shipping is failing. The IMO is the nominal regulator, but the US Coast Guard (USGC) proposes to introduce mandatory cyber security for ships entering US waters. Failure to comply would mean no entry. In Ms Adamson’s view, if this is made law, the EU would swiftly follow with its own version. But IMO is far behind in drafting any regulation on the matter.

The introduction of high speed data satellites will allow the exploitation of the huge amount of data available from ships. Most ships built since 2012, have hundreds of sensors onboard, from monitoring fuel pressure and temperature to the crew smartphones accessing the onboard Internet. There is huge potential exploit this data in the same way that vessel tracking is a derivative of the broadcast of AIS data. High speed data satellites enable engine manufacturers to send software patches direct to the ship, instead of posting CDs. Rolls-Royce and WARTSILA are producing packages where the sensor data is analysed internally by algorithms and aggregated information sent back to shoreside dashboards, to enable the shore-side monitoring of the engine. Apparently, this methodology is well established in the oil and gas industry, where a single geologist can remotely monitors up to six fields from the office.

To take this one step further, imagine shipping having real time transparency. Insurance rates could be varied by the hour, depending on the position of the ship and other ships (or value depending on the version of the maintenance patches – editor). One step further and we have fully-automatic unmanned ships (the US Navy launched one this year). The changes are exponential, and will come sideways from disrupters from outside shipping. The shipping industry is asking who will be the Uber of shipping – it will probably be Uber.

Orange Sofa
First onto the Orange sofa was Christopher Rex, the head of shipping research at the Danish Ship Finance Bank, and a monitor of the phenomena known as industry 4.0. He described this as local production using 3D printing and robotics. The impact on the main beneficiary of globalisation in the last two decades, China, would be enormous. What would have been global GDP growth in the last boom cycle without the massive movement of manufacturing to China? How will shipping cope without cheap Chinese exports to ship? According to one study, local 3D printing and robotics would reduce shipping of containers globally by 37%, and air freight by 45%.

Mr Rex was then joined on the Orange Sofa by Grigoris Zarifopoulos from Google, who explained that Google sees the internet as electricity – it is necessary and everywhere. What Google wants to be is like the toothbrush, something everyone uses everyday. He noted that shipping seems incredibly disfunctional, but there is little Google can add directly. Google solves B2C problems. Describe the problem and the ideal solution, and Google will throw resources to create the product. But it was harder to see this in shipping except at the level of consumer traceability. Tagging goods throughout the chain would satisfy consumer desire for traceability, and fulfil Googles motto of dont’ do evil.

Martin Buhl of ShipServe described the role of “disruption companies” as solving the customers pain point. They have recently introduced ShipServe Match, which uses analytics on the 17 years of data to produce information on the best suppliers of items. High speed satellite coms will be a driver of this data.

Audience Discussion:

One key point that came out of the general discussions is that shipping may have already reached an inflection point of linear growth to exponential growth of data driven services. Several audience members (who unfortunately did not introduce themselves) from comms and charter software companies spoke about the immense dissatisfaction shippers have with shipping companies and brokers. They are finding clients among the large consumers of shipping services (the Wal-Marts, Cargills, and BPs) to go around the traditional shipping intermediaries.

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About Craig Jallal
A shipping analyst whose feels the need to comment on the industry.

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