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Digital tsunami threatens to wipe many out

Digital tsunami threatens to wipe many out

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I am afraid to tell you that I think too many shipowners and ship financiers have little or no understanding of what the future holds for our industry. Whether its unmanned ships, cyber this or digital that, the industry media might be full of the buzzwords of transformation shipping is set to go through, but those at the sharp end, the owners and bankers, in the main are paying lip service at best to this revolution, something that could ultimately wipe many out of business if they fail to join the digital dots.

This sea blindness to change reminds me of when containers started. A lot of people just ignored them and seven years later they were out of business.

Ships are becoming outdated so fast to the point whereby they can be out of date by the time they deliver from the yard. This is something we have never experienced before, and surely should be of concern to the banking brigade funding these brand new multi-million dollar relics. However, over the past decade the banks have lost so much shipping expertise that many of them don’t know the aft from the stern. They also have little understanding of how the technological revolution hitting the sector will change the fortunes for so many.

Shipowners have become essentially taxi drivers. Those that will prosper going forward are the ones who work out how to add value. An Uber in shipping?

One big question that remains to be answered – and could slow the pace of change – is who will be brave enough to finance the most pioneering ship concepts.

Japan’s Nippon Yusen Kaisha (NYK), for instance, has announced it is planning to carry out an unmanned transpacific containership voyage by 2019. Will that be a ship any bank will finance? Banks are naturally cautious in such instances, as they do not know the regulatory environment yet. The International Maritime Organization – like so many in shipping – is struggling to keep up with the pace of change.

Most of these new inventions will have to take on equity requirements and most people I speak to – whether owners or bankers – are adopting a wait-and-see approach before investing. It seems you, dear reader, agree with this sentiment. I note on the back page of this issue that more than 80% of voters in an online survey believe payback will have to be demonstrated before owners invest in new, disruptive technologies.

Still, for all this talk of change, it remains a fact shipping is playing catch up with many other sectors. By way of an example, I was invited into a KLM cockpit on a flight to Oslo not so long ago. The pilot was very excited because, for once, he was allowed to land manually. It’ll be a very, very long time, I’d suggest, before we see a master’s eyes light up on the bridge of a ship for a similar reason.

This article first appeared in the latest issue of Maritime CEO magazine, published this month. Splash readers can access the full magazine for free by clicking here.

 

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Dagfinn Lunde

Dagfinn Lunde, previously head of DnB New York (90-95), Head of INTERTANKO (95-00), and on the board of DVB responsible for the shipping and offshore division from 2000 until end of 2013. He is now a board member of Advantage Tankers, Dynamic Drilling and Maxi Shipping and co-founder of DagMar Navigation Ltd.

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5 Comments

  1. Vivek
    October 9, 2017 at 9:20 am

    Digital is also not something which will fall from sky, a huge man force is required to make machines work on its own and business to run in most transparent way, may be digital is adding to the numbers instead of wiping out. yes, debatable.!!

    Uber on roads shall be a learning for shipping on how to optimize the machine and achieve maximum while damaging the environment in minimal manner. Adding value to a business shall not be focus, businessman or in this case rather the shipowners, those who will survive, will definitely create the value in complete supply chain, the value chain.

  2. Vivek
    October 9, 2017 at 9:42 am

    Digital is something which won’t fall from sky, to make a machine to work on its own and business to run in most transparent way, there will be more man power required to create it, than to run the show as of today.! Is it really wiping out or creating in.!! Yes.! debatable

    Uber on road shall be a learning for Shipping to maximize the machine utilization and minimize the environmental damage

  3. Robert Gordon
    October 9, 2017 at 10:20 pm

    My own experience as a ship’s pilot in Canada is that most large ship Master’s couldn’t berth a ship safely and without damage if their lives depended on it. Why? It’s simple. Most of them haven’t been trained to do it. The exceptions today are the Masters of high tech cruise ships who have been trained and the pilot stands aside to let them berth their own ship. Soon, a software programme will do it and probably better. The P&I Clubs will be happy as FFO claims will certainly diminish. I am quite sure that aviation insurers will be able to confirm this. Goodbye human element!

  4. Dave Walker
    October 11, 2017 at 3:31 pm

    These are all great points and raise many questions. We will all be wrapped up in the machine somehow, although we can’t say how deeply, or at what level anymore.

    I’ve attempted to illustrate a possible future for shipping in my article “Drone Ships, Convoys and the Modular Vessel” on http://www.supermar.info

    1. Sam Chambers
      Sam Chambers
      October 11, 2017 at 9:16 pm

      Dave — said article is loading as we speak onto this very site — I really enjoyed it!