Suggestions from a Marine Economist to Make One’s (Shipping) Company… Digital! ()
1. Introduction
The companies have, long ago, realized that what places them among the champions is their more effective and efficient decision making (Graph I1).
The above rules are also valid for shipping companies, if their managers apply additionally an activity known as “best timing” (Goulielmos, 2021a) ! The “best decision-making” stage, however, comes after an important 1st stage, which is the “preparation”! The purpose of the “preparation” is “to supply” company’s management with the (required) information, for him/her to be able to take the best decisions! This can be done better… the digital way, as we will show.
Moreover, management defined who the manager is! He/she is company’s person who decides (Robbins & Coulter, 2018) , including the sentimental female-managers! Moreover, the decision-making, almost always, solves a problem! Thus, “decision making” is the main function of management! In addition, any technology, which enables managers to improve this endeavor, is welcome.
Moreover, managers, often, try to make a choice between 1 or 2 minimum alternatives. Management, naturally, is a profession facing a number of “obstacles”. The obstacles are usually related to manager’s effort to achieve a desired goal, a purpose, or to implement a directional plan (Shipping)!
To defend, however, the value of a “competitive decision-making, in business”, including the efficient & effective timing for shipping, we believe, is like bringing coal to Newcastle!
• Classical management versus digital management
Is classical management different than the digital one?
• Has digital management to… handle “Big Data”-BD?
There is the case where the sales, on line, can be 175,000 per second2016 (in “Alibaba”-China)! How a manager can make sense of that? But what are BD?
• BD are the “vast”, “quantifiable” information, analyzable only by highly sophisticated data processing means”.
It is desirable, at the individual company’s level, for a small number of ships, say from 30 to 50, to be displayed on a map, in actual time, replacing the “pin-manual-plastic world map” of the old days…?
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Graph I1. The champion companies apply. Source: author.
The above paradigm of “Alibaba” showed, however, exactly the need of handling BD! Worth noting is that this area is where the mathematical models, the predictive algorithms & the AI software, in measuring & monitoring people & machines, are used!
It is true that Management did not rush into adopting digitalization in all its crucial functions: Leading, Organizing, Controlling/Feedback, Basics of Managing in today’s Workplace, but Planning, by 2018. Digitalization holds only a part in what are identified as “contemporary issues in planning” (Robbins & Coulter, 2018, p. 300-304), and of course in communications.
2. Aim and Structure
The central aim of this work is to show how “digitalization”, offering 11 (5 + 6)1 so far2019 services, can help (shipping) companies to decide more effectively & efficiently! Τhis, tantamount means, to show how managers solve a problem, the digital way!
The paper is cast in 9 parts as follows, after literature review & methodology. Part I dealt with an axiom: “the knowledge increases one’s power & the suitable data raises one’s knowledge”; Part II dealt with the “Cloud” Computing; Part III dealt with the recent technology in the service of shipping; Part IV dealt with what Shipping Companies are doing nowend2023; Part V dealt with certain agonies of the World economies; Part VI dealt with the fact that EU-28 falls back in innovation-expenditure vis-à-vis its competitors; Part VII dealt with the Agonies of USA & China; Part VIII dealt with an important question: “Does digitalization mean transformation & adoption of the digital technologies? Part IX dealt with an epilogue. Finally, we concluded.
3. Literature Review
Goulielmos (2020a, 2020b) dealt with the “digital revolution” & its impact on the management of the sipping companies as well its perspectives. Calderon-Monge & Ribeiro-Soriano (2023) argued that, in 2018, the digitally transformed firms covered $13.5 b of the global GDP & by 2023 this increased almost 4 times to $53.3 b! Based on 119 publications between 2018 & 2022 the emphasis has been placed on Management, Marketing, Finance & Accounting.
Calderon-Monge & Ribeiro-Soriano (2023) argued further that Europe leads the way in the number of published review articles on digitalization, over 28 global countries between 2018 & 2022, with the 50% to belong to England, Italy, Germany & France.
Australia & N Zealand followed with 15%, while N America & Canada held 13%, India 8.2% & China 5%! One cannot be specific about digital management because 7 areas have to be added together: supply chain management, logistics, manufacturing, human resources management, knowledge management, business management & entrepreneurship.
Methodology explaining the technical jargon2
Our first feeling, with digitalization, is the obvious need3 for a glossary! Here, we presented in some depth only 2 terms, given the space we have: the “Platform” & the “Cloud4”!
• The “Cloud” refers to storing & accessing data on the Internet.
• The cloud is also an “Internet metaphor” (https://www.pcmag.com/, 17/04/2015).
The cloud, in its first reading, leads one’s mind to meteorological phenomena, connected perhaps with how to cause… rainfalls!
• A “platform” is a combination of “software & technology” for the companies to unify & streamline their business operations, & their IT systems (Graph 1).
As shown, there are 4 targets, very important for management! The question now is:
• To be, or become, digital?
A company can be digital by design or transformed into one. In both cases the “digital software & hardware” are required! The “letting” company can decide, in advance, from a menu, what information needs, provided that this has the following properties (Graph 2).
The above capabilities clearly enable management to make a big step forward!
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Graph 1. The targets for using a digital platform. Source: author; data from Ross (2019) .
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Graph 2. The properties of a digital information. Source: author.
The further big advantage, we believe, is that the digital services can be “rented” (& stopped), one by one! The scope of the “renting” company is to be able to offer, (to its customers/charterers), a number of what are called (digital) offerings5.
For shipping important areas are also ship’s safety & security! In a6 Greek shipping digital transformation roadmap, a ship-owner has to manage digitally both: ship’s Quality (covering: ships’/tankers’ safety, risk assessment, international safety management code-ISM & ship’s operations) & safety (covering also: crew management plus the 3 first items from quality)!
• By DO it is meant “information-enriched” solutions (Graph 3)!
As shown, this points-out clearly that DOs are used towards achieving efficiency.
• Understanding the digital philosophy!
For a company to benefit from the digital “revolution”, it is useful to understand its philosophy. This takes first into account the fact-unnoticed till certain years ago, that “knowledge7 & information-K & I”, are continuously piling-up out there! K & I are indeed produced by hundreds of relevant doers8, worldwide every moment.
But, the operational K & I are also “laid-up” surely inside the company & certainly inside the vessel! The question that cropped-up was, naturally, how to obtain & exploit K & I for company’s benefit? In other words (Graph 4):
& with a final view to enable managers to take better decisions!
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Graph 4. Obtaining & exploiting K & I for company’s benefit. Source: author.
• The “Lego” philosophy
Ross et al., (2019) , mentioned, a “LEGO movie” (p. 57), to explain how a company has to understand a digital platform! Their paradigm is of course a metaphor, where the various “Lego” bricks carry data/information etc., which a manager can obtain.
Thus, a new term has appeared called “componentization” closely related to digitalization! Without components, surely nothing can be built-up, & without digitalization, no rapid, new, results can be ever derived… Even by using the same “bricks”, which we already have, but arranged differently, as the case may be, so that to achieve more efficient & effective decisions! So, the digital companies have really to (Graph 5):
Thus, a solution can quickly be assembled, from existing re-usable parts, given that a track of them is kept-up. Where? Naturally in… company’s “digital platform” (Graph 6)!
• Company’s digital platform
As shown, a digital platform is, nothing more than, a company’s … warehouse! But the components, we mentioned, are, really… slices of a code, having specific9 tasks! The digital platform-DP has to provide (Graph 7 and Graph 8).
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Graph 5. The obligations of a digital company are to. Source: author; data from Ross, op. cit.
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Graph 6. A Digital Platform, of re-usable components, in the Cloud, is. Source: author.
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Graph 7. The obligations… of company’s digital platform! Source: author.
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Graph 8. A DP has to enable the company to. Source: author.
Also:
Of course the purchase & the collection of data from sensors, smart devices & other web services, (very important for shipping), will have to10 be done, so that to build, or buy, certain re-usable APIs (à applications of programming interfaces).
• The APIs are enabled software components having a code (Graph 9) in:
4. Part I: “The Knowledge Increases One’s Power & the Suitable Data Raises One’s Knowledge”
Companies, increasingly, the last 6 years at least-have based their strategy for change-including their planning function-on data (Robbins-Coulter, 2018, p. 302). Such a strategy relied on what is known as “business intelligence” (Graph 10).
The BI has focused on: 1) what is going-on inside the company, including the important area known as “employees’ motivation” & 2) in what exactly one’s competitors is doing! The adoption e.g., of a new technology by one’s competitors, perhaps digital, is a main indication of a potential threat, & of an effort of them to improve their performance!
Technology nowadays provides: “3 digital tools11” (Graph 11)!
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Graph 9. The job of the APIs. Source: author.
The digital tools, which were applied first by management, were destined to support company’s planning function.
“The internet of things” also emerged, really, something of another rather very strange term! à This means that certain “things”, from one’s everyday life, can provide, as well, store, data, concerning one’s “performance”, in the Internet.
5. Part II: The Cloud Computing
According to “Eurostat”, the % of the Greek companies using “Cloud”2023 was 22%, vis-à-vis 17%2020. In the EU-28, the % was almost double: 42%2023 compared with 36%2020! The “Cloud computing12”, as this is its proper name, is à “a rentable internet application, i.e., a service, using hardware & software, in a set-up information center providing a place for storage”.
Such software services are called apropos à “software, for sale, as a service” –”SaaS”, as this is what really is. The cloud-center need not be near the final user, but it has to be equipped so that to serve its user(s) automatically, fast & easy.
Always the business world realized the importance of information, & its technology, although “computerization” initially was not easily understood by the top managers, who were also reluctant by its rather high cost & complexity! The importance of the flexibility of the “original vast computing systems” to change was not as desired & the so called “Enterprise Resources Systems” ERS13 i.e., the software systems handled the entire functions of a company.
The first & widespread applications were, and still14 are, in the areas of Accounting, Human resources management-HRM, including crew, the payrolls, the MGA, etc., in an area called “MRP15, manufacturing resource planning”.
The personal computers diffused indeed the advantages of technology to almost all middle managers/operators & eventually to ship’s officers, providing to them their own “computer personal station”, adding speed to their actions & other benefits.
The Cloud computing & its benefits, presented above, depends entirely on having full access to the Internet. This creates problems, if connectivity is impossible, difficult or discontinuous, through the existing communication system of the satellites. We come to this now as far as shipping is concerned.
6. Part III: The Recent Technology in the Service of Shipping
Vessel’s difficulty to enjoy digitalization in full, as in her shore office, was & still is, we believe, but to a lesser degree as time goes-by, her degree of accessibility to Internet, beyond the e-mail service. The e-mail remains still central of course, as well the AI-pin… If our generation wishes to be proud for something, this is the area of communications!
However, a further hopeful innovation came from the so called “MICE-1”, the “nano-satellite” or “CubeSat”2023! This “nano-satellite” provides not only the capability of communication from/to ships, everywhere, including in the so called “blind spots”, but also shows the route of the vessel…!
In addition, one “nano-satellite” is able to communicate with another, using the laser technology. Given the small size of a “CubeSat”, (10 × 20 × 40 cm), there may be as many as 16, at the same time, (requiring from 16 to 24 m Euro of course), so that their broadcasting to be continuous, i.e., in every few minutes!
Moreover, the “DUTHSat-2” can spot a “sea pollution” caused in a marine accident &/or by ship’s “bilge waters”. In addition, the “Optisat cube sat” uses a laser “flying terminal” for a faster than hitherto data transmission! Another innovation, which is mentioned below, concerns ship’s main engine alternative-fuel (Goulielmos, 2021b) .
Shipping, hopes by 2027, & by using vessel’s “high frequency data collection systems”, BD, AI, “the smarter class notations”, (in all new buildings), & the new platforms, (plus taking into account the “CII” & “ETS” rules; & the “flow meters”), to reduce ships’ greenhouse gas emissions. This project to a certain degree is based on the degree of the connectivity of office with vessel, & in the possibility to give orders from a distance & see also their implementation!
7. Part IV: What Shipping Companies Are Doing Now-End 2023?
This part shows what exact initiatives certain pioneering shipping companies have taken in end 2023, their planning time & thus to form an idea what is going on now among shipping companies, their digital consultants & their Class. We expect of course the rest of the companies to follow those that took the first steps. We know from experience that the adoption of new technologies by maritime companies is slower and appears first in the multinational companies in the country.
A shipping company has first to ask the help of one provider of digital technologies, and why not & of its Class. Classes have worked-out new “notations” now, following the recent developments in the so called “shipping digitalization”!
As mentioned above, the first step is to have better/improved data, so that the effectiveness of the shipping companies to increase -with a view to reduce gases’ emissions due to the greenhouse effect, which is the urgent part of what we have to do!
Such a project as the above, as mentioned, needs a platform of data collection, monitoring certain ship functions & subsystems, & using technologies of the type of the “Internet of things”. Obviously, from the above, we need sensors on board in order to know in real time at least:
The above data has to be analyzed, using also “artificial neural networks” & a (relevant) platform, providing also suggestions so that to improve the situation, & to make certain prognoses, inside the IMO regulations!
The targets are: the energy effectiveness of the vessel; improving ship’s speed; having weather prognoses, & emissions’ follow-up; improving the connectivity ship-office, & to give orders from a distance & follow-up their execution, as mentioned; high frequency data, till 2027, & analytics, as well flow meters, are required. One’s charter parties to have rules for the CII & the ETS!
We have next to digress! This is so because a company, & even more, a shipping company, needs a peaceful international environment to grow where no local wars will be present like the Russia-Ukraine or Israel-Palestine one or attacks from Hufi Jordanian pirates.
8. Part V: Certain Agonies of the World Economies
The agonies of the global economies are not about how to connect ships to the Internet, but how to save the planet from its aggressive climate & from the cropping-up, one after the other, of local wars/& terrorism!
Many, however, look forward for the coming “Paradise on Earth”, to be created by… “Artificial Intelligence”, AI, our new God or devil! One must admit that “Eva”, an AI application for detecting COVID-19, helped Greek authorities to spot a double number of travelers of high risk, showing no symptoms! The world spent already more than $23 b for the applications of the AI.
Of course, the robots, another digital service, will no doubt “steal” working positions from humans, but there are, out there, many dangerous & automated tasks to be assigned to them, including tasks on board the vessel! Remember that a number of crew members, & people from the repair yards personnel, died, by entering in closed spaces, where the forces of the “explosion triangle” were present!
Apropos, a Greek start-up company, embarked in making “things” from “carbon-fibers” using the robots! The idea is to make things from lighter materials, stronger, & cheaper, if possible. The lighter dimension means to use more efficient materials. We believe that the research in replacing older building/manufacturing/chemical materials, etc. with new, is one of the important developments of the human ingenuity. Imagine a ship madE, in whole or in parts, by carbon fibers how lighter is going to be… & how cheaper!
Robots work also in the old textile works, & not only, & in all hand-made old professions using the 3D printers/3D scanning & laser & 3D knitting! Furniture can also be produced by robots. Here is the human brain to excel in all types of handcrafting!
We return, however, to the agonies of our “home” à Europe.
8.1. The Agonies of the EU-27
Today, the EU-27 has 7 agonies: 1) to diminish, by 2030, the further destruction of its climate; 2) to stop the loss of its competitiveness! 3) To manage the immigration flows. 4) To “see” the end of the “Russia-Ukraine” war & that between “Israel & Palestine”. 5) To reduce inflation to 2%. 6) To become independent from the Russian gas, & 7) to re-introduce the pre-COVID-19, “stability agreement” for members’ debts, even if certain expenses for defense and natural disasters are going to be excluded!
IMO, the international maritime organization, is also in line with the above 1st endeavor, by adopting, in 202307 (80th MEPC), the GHG strategy towards de-carbonizing international shipping by 2030 for ships of over 5000 GT (IMO DCS).
8.2. The “Green Transition”
The prime & urgent endeavor today in EU-27 is to save Europe, and then to save the Planet! This is identified with the reduction, or even future elimination, of the consumption of the polluting fuels-like those of oil, coal (and lignite) & gas! EU-28 wishes to start urgently its so called “Green Transition”.
The COP28–as expected-provided no drastic solution/decision on the climatic destruction, which takes place in various forms now & for some time. Worth noting is that the convention recognized who is the responsible for the climatic destruction! Of course we are aware that no country, producing an energy, mean is going to decide to give-up its production, unless its price falls & stays to zero. The COP28 decided: 1) the building-up of a fund of $700 for the support of the climatic sensitive countries – an amount which is considered inadequate. 2) All countries to increase 3 times the energy production from RSE in next 7 years. 3) To go away from fossil fuels (transition away from, but not phasing out). The most pessimists do not expect the global temperature to stay at an increase of up to 2.8% C, but emissions must be reduced by 43%2030 & 60%2035 vis-à-vis2019 (where CO2 emissions = 0).
Extremely strange is that nobody mentioned the way Sun produces energy! As we all know USA, followed by Europe, have taken the first steps towards the above endeavor & when this will become effective, no other fuel is going to be needed! Very interesting is the fact that the entire initiative is controlled by the USA government and is not sold as yet to a private company…
8.3. Is ammonia the Fuel We Expected?
The “Marine engine manufacturers” announced, “a voice shouting in the desert”, however, that they constructed “a dual-fuel engine”, operating on… ammonia! Worth noting is also that the “China Merchant Energy Shipping” ordered the 1st VLCC in “Dalian Shipbuilding Co” built to use methanol as her fuel.
8.4. Is the Green Hydrogen the Fuel We Expected?
One major target for saving the EU-28 climate… is the use of the “Green Hydrogen-GH”. The progress here is quite hopeful. In the EU-282022, hydrogen produced as non-green, using natural gas, & satisfying only 2% of the energy needs, (used also in chemical products-in plastics & fertilizers). In 2023 & thereafter, the effort is towards using more GH.
The problem is that while humans can produce “green energy” in a continuous manner & in increasing quantities, as time goes-by, & independently from its demand, they have somehow… to store it! One solution is the batteries, but they are too heavy, and not as many as needed; the past, or even the present, solution, is oil & gas, but everybody believes that their use is coming to an end, at least first for oil -in foreseeable future, & then for natural gas, in the distant future…
8.5. Will the “Fuel Cells” Save the Planet?
Hopefully, the “fuel cells”, meaning “the engines, which transform hydrogen into clean electric power, using electrolysis”, have appeared! These engines can be installed also on ships to provide the required amount of energy to move vessel forward & to supply the electric power she needs, making the cost of “fuel & diesel oil”… almost zero! Excellent!
Given that the “hydrogen engines16”, of 120 MW power each, are lighter & smaller than the existing fuel tanks, & the double electricity-generating diesel ship plants, they will free space for cargo & thus they will provide more profit… Very interesting for both shipbuilding & shipping!
But is the green transition inexpensive?
8.6. The Cost (of the Top 12 Ferry-Boat World Companies) to Become Greener
Shipping has to comply with the EU-28 target to become… “fit for 55”, meaning to reduce the “carbon dioxide emissions” by 55% by 2030! A large company, managing 45 ships–ferry boats-connecting Greece with Italy & Morocco/Spain, estimatedend2023 to need Euro 1.06 b to become greener! The company’s green transition was plannedend2023 in 3 stages, requiring 6 years as follows (Graph 12).
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Graph 12. The stages for a shipping company to become Greener2023-2029. Source: author.
As shown, the green transition is not without a considerable cost, requiring about 23,000 Euro per passenger, or the total proceeds for more than 1 year (which were 710 m Euro2022). Given that the 12 top world ferry-boat companies transported 386,7912022 passengers, they are going to need about 9 b Euro to become greener!
Equally important is the following issue.
9. Part VI: EU-28 Falls Back in Innovations Expenditure Vis-à-Vis Its Competitors!
The Director of the “European Investment Bank”Oct.2023, stated his concern in a Greek press interview, for the EU “reluctance”, quantified by the low (=2%) of the GDP of the EU-27, to invest in innovation, vis-à-vis its competitors in N America & Asia!
Figure 1 presents the number of the start-up companies2020, usually in the high technology sectors, having a capitalization of $1 b & over, which spent about $149 b globally, from which 68 b (46%) by the Chinese & only 43 b by EU-7 (29%)! Worth noting is that the 70% of them (704 start-ups) emerged in USA (52%) & in China (243; 18%), while 12% only in EU-7 (146)!
The European more acute problem, however, is not so much its fewer start-ups, but the competition exerted from USA, which2022 “donated” $369 b “tax exemptions” & “subsidies” for green investments, if they were carried-out there! As a result 2 grant EU-4 companies will invest $1.5 b in USA & one will get $1.3 b subsidy from the S Carolina state…
9.1. The Low “Time Deposits Interest Rates” in EU-20
Moreover, the APY interest rate in USA was 4.3%28/11/2023, above all EU-20 interest rates (Figure 2)!
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Figure 1. The number of the start-up companies of 1 b investment & over, globally2020. Source: author; data from “Kathimerini” journal19/11/2023.
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Figure 2. Average rate of interest of a time deposit up to 12 months, in EU-202022. Source: author; data from “Kathimerini”, weekly journal.
The result of this low performance of the banking system, in EU-20, by offering lower interest rates than USA, will cause the European capital to be attracted by the USA banks, making the economic situation, even worse! One would expect the “rate of interest” policy to have been uniform among the EU-20, but it is not!
9.2. Is EU-28 Back to Its Austerity Program01/01/2024?
The ECNov.2023 commented on the preliminary composition of the EU-27 Budget2024! Twelve (44%) countries are expected to show a deficit, from 3.1%, (Latvia) to 6.5% (Slovakia), of their GDP, above the 3% maximum, which was set at the pre covid-19 period, 4 years ago. Germany asks now for 1% p.a. (new) reduction in all debts! Only 4 (15%) countries will have a surplus from 0.1% (Portugal) to 2.1% (Cyprus)! Eleven countries (41%) will fall inside the COVID-19 limit: 0.7% for Sweden & 3% for Bulgaria. France will have 4.4% deficit; Italy 4.4% deficit & Germany 1.6% surplus!
10. Part VII: The Agonies of USA & China
Their leaders were skeptical about AI during their recent meetingNov. 2023 in San Francisco! The human brain can think of 1 idea per second, but the “ChatGPT”, an AI product, can enable human brain to achieve 200 ideas per second! A recent conference, which took place 27th Nov. 2023 in Las Vegas, named “RE: Invent”, a new branch of AI emerged called “Genetic AI”. An assistant of this is the “Amazon Q”, which permits to create content in the form of a text, sound, picture or video, in companies’ service in the cloud, to reply to business questions!
About 7000 Chinese firms do business in USA, having invested more than $130 b, & supplied Americans with about 230,000 labor positions. Moreover, China dominated in the production of nickel, of solar panels & still holds a serious part of the American debt, while important is also the Chinese production of microchips.
We have to congratulate the above 2 countries, in our opinion: 1) USA, for producing “food” & “clothing”, at quantities & prices attainable by its labor class, at least at the time I visited USA, & 2) China, for producing products which the world labor class can buy! We may add here UK caring for, at the least at the time I used to write there my doctoral thesis, its citizens to be able to obtain a car & a house (on mortgage)!
Worth noting is that the direct Chinese foreign investment in USA-FDI, as well its capital inflow, peaked-up at about $66 - $68 b2016 (Figure 3).
Only one year2016 can be considered the good one, & the last one, for the Chinese FDI & capital inflow into USA. The USA capital inflow in China, respectively, peaked-up later2019 with $13 b & the FDI peaked-up with $30.5 b2018. Then, both countries withdrew from these activities, affecting the whole world & Germany in particular!
Germany today has to find ways for its Government to be able to borrow to spend money for the “green transition”! Germans have put Euro 60 b aside, destined for the Pandemic, but not used, but their Constitutional Court did not allow Government in using them! The German infrastructure needs renovation, underlined that also by the IMF, long ago… Our personal opinion is to consider the decisions of the Courts, which have no “economists as judges”, irrelevant.
Worth noting is that the planned German Green investments of Euro 104 b will not be carried-out by the German companies, if Government does not spend also the above amount! Germany will have a debt 65% of the GDP2024, while the Euro zone has 90%, USA 121% & Japan 260%2023! Germany is a victim of its debt policy, meaning the “iron maintenance” for the Government to borrow only 0.35% of its GDP!
We return now to digital reality!
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Figure 3. The Chinese direct investments in USA including capital inflows2010-2020. Source: data from “Kathimerini” weekly Journal26/11/2023.
11. Part VIII: Does Digitalization Mean Transformation & Adoption of Digital Technologies?
For a non-digital company to become digital, it has to change, & at the same time to adopt (rent) all or part of the, at the present eleven available, digital technologies (Graph 13).
The digital menu, as shown, is extensive, & is based on 3 capabilities (Graph 14).
As shown, the data, which a shipping company needs, should be available everywhere & at the moment is needed! This includes the time when the vessel is travelling in the oceans, where communications cannot be equally feasible as at shore!
11.1. Connectivity
The full connectivity of the vessel mainly to shore office is an important digital maritime target! This is why we mentioned above the “cube sat MICE-1”. In fact, connectivity means à to be able to connect one’s computer to the Internet, attaining at least 5 targets (Graph 15):
The above 5 targets are planned to be achieved in full17 in EU-28 by 2030 (https://digital-strategy.ec.europa.eu/en/policies/connectivity), given that the Pandemic (Goulielmos, 2020c) speeded-up this procedure… But apart from this,
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Graph 15. The 5 targets of connectivity. Source: Author.
the access to K & I is an important service of connectivity, e.g., for one to be able to listen to news, attending classes, acquiring skills, seeking advice, watching markets, selling products, having (free) Wi-Fi hotspots, and 5G networks (https://digital-strategy.ec.europa.eu/en/policies/satellite-broadband)!
11.2. Can There Be a Digital Vessel?
We know that the Captain, on board a commercial vessel, is in need of an important amount of information, concerning his/her “Voyage Plan” (Graph 16) à storable in the Cloud!
Ship’s loading is ship’s 1/2 production; the other ½, is ship’s unloading, and the… whole, 1/1, is her efficient & effective navigation, which is indeed assisted by the digital means! Without the proper navigation neither loading, nor discharging, can ever be done, however!
11.3. The Maritime Digital Tools
The shipping companies letting digital services can have & use the following 9 digital tools (Graph 17):
Te proper treatment of most of the above items are the result of a long maritime experience, expressed also in about 50 office circulars, (i.e., written instructions from the office to the vessel), which the digital means can revitalize & present visually, on demand & codified in the Cloud!
We will not fail to mention the important area of the “charter party”, which has to be presented digitally, together with all relevant warnings, accumulated there also by experience & by BIMCO’s publication “check before fixing”! Shipping is an amalgam of a highly empirical, as well theoretical, knowledge!
11.4. Vessel’s Actual Speed
The simple, but essential, knowledge, e.g., of vessel’s actual speed18, derived accurately from data, using digital methods, will save a number of claims on vessel, and disputes between the ship & her charterer, given weather conditions. This will increase ship’s reliability, if the speed stated is accurate & close to reality!
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Graph 16. The voyage plan. Source: author.
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Graph 17. The 9 digital tools needed for a voyage plan & beyond2023. (*) This is the most important of all. Source: author.
The “digital software houses” provide means to calculate also the optimum speed & the voyage estimated loss or profit!
11.5. Vessel’s Expected Profit or Loss
Many believe that shipping is a very dangerous business, because a manager charters his/her vessel, hoping, & crossing his/her fingers, for a positive result at the end of the voyage! This is not true, as the in-house brokers calculate carefully the profit that is expected to be derived & then they submit it to the ship-owner to decide, perhaps between 2 alternative charters! The experienced ship-owner will choose the one charter, which, most probably, will provide the higher net profit, within the “supply & demand” limits of course.
The reliability of the above calculations is very important here, because the information entering in them concerns, e.g., what is the per day $ cost of the vessel? What are her fuel & diesel consumptions & what prices company has to pay (given an agreement)? How many days the vessel needs to unload & what are the port expenses, the canal dues, etc.
The digital means surely provide a positive & important service here & only for this particular service is worthwhile to rent it! In the past, many “voyage estimated results” were wrong, because the in-house broker had old information about say, what are the Suez Canal dues, or what vessel’s speed is after her delivery from the shipyard certain years ago!
Many times the brokers miscalculated vessel’s days in the sea, and at the port & the voyage result instead of being a profit, was a loss! Of course a digital comparison between the calculated profit & the actual one in the cloud still remains imperative for the in-house brokers to learn from their mistakes.
11.6. The Voyage Plan in the Cloud
The information (Graph 16), concerning 14 vital chapters of vessel’s loading activity, and in particular her best preparation towards it, has to be available on demand, both to the office operator & to ship’s officers… logically & safely, in company’s Cloud! For the above, & not only, a growing number of companies, are2019 rely on other companies to rent -among other services, & a number of what are called “simplified critical business processes”, together with the relevant “data security”.
In shipping, the cloud connectivity, has to be with every port, & with BIMCO, & with others, who provide vital “port information”; with Agents primarily, with tug & boat firms & providers of such services, together with their prices; with weather broadcasters & sea-condition reporters; with those informing about the ports strikes & days & hours of operation ( & holidays), the port regulations & the cases of port ice, with those published the port ship guides on entry & so on…
Nowadays, the weather to be met by the vessel, in next 7, 10 days, is possible to be known in advance & her Captain can thus be prepared-knowing the weak points of his/her vessel, so that to avoid the risk of a potential marine accident, due to expected severe weather conditions (Goulielmos & Gatzoli, 2012) , resorting, in time, to a refugee port!
It would be also much easier to choose, on cost & on efficiency grounds & on previous history, ship’s Agent from among the many agencies existing there… & presented… in the Cloud … These data will also free shipping company from gathering & updating similar ones in-house as hitherto…
Moreover, the Cloud can gather together the many, as much as say 30, IT units in a large shipping company of say over 30 ships! Imagine having on line, & on camera, information, including voice & picture, live, about an occurring marine accident-transmittable to the company’s marine engineers & insurance people by a “CubeSat”!
To write to the Cloud, instead of a “memo to file”, as we used to d0, is… recommended to the Port Captains, the Superintendent Engineers, & all company’s people attending, inspecting & visiting a company’s vessel19! This includes vessel’s construction or repairing & dry-docking. The relevant reports to be written to the cloud immediately, as the relevant action is taking place, so that to be available, with videos, pictures, plans, etc., to all interested in the company.
12. Part IX: The Epilogue
Companies, in general, & shipping companies -in particular, have by now to be re-designed… for a future success, called “digital success”! But the process, called “digital transformation”, outlined above, is a long journey, because the re-design concerns the manner by which the entire company has worked so far!
It seems that the talents, the skills, the processes, the systems & the roles of an existing company, which have proved to be the means of its past success, are now, & thus tomorrow, irrelevant (Ross et al., 2019) !
A transformation process is thus, no doubt, required (Graph 18) as follow:
Four building blocks, however, towards a digital transformation are required (Graph 19).
Vessel’s Maintenance
An important maritime (digital) chapter is vessel’s maintenance, we believe! The digital philosophy, we reckon, is apropos fit for this important side of the shipping business! The ship’s items, which are maintainable, are indeed many, & are both operational like the main engine, the power stations, the boiler, the electric systems, and others, & non operational like ship’s metal body, cargo spaces/holds, gear, ballast & fuel tanks, and other items subject to age’s influence. Here, “Internet of things” & “the analytics” can improve maintenance, for all ship’s equipments, following the digital “Planned maintenance system” (PMS).
There is a good idea to allow vessel’s charterers to “see” the “ship’s maintenance strategy”/history, before fixing her, in the cloud! Planned maintenance adds confidence to ship’s services & allows over-aged ships to trade (over 10 - 15 years of age)! The proper ship’s maintenance deducts also the fear from the charterers for a probable marine accident. The “mobility” technologies can also allow crew to turn-on a light, or unlock a door, or unlock the medicine cupboard, the alcohol & cigarette lockers, or a refrigerator’s door, or to allow entry into ship’s kitchen, ship’s laboratory & ship’s spare parts, etc. remotely with an AI-pin…
Important, however, are the digital tools for the crew welfare & that of the office personnel, especially for those companies that provide loans, extra pension schemes, medical assistance & participation in company’s profits.
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Graph 18. The transformation Process. Source: author; data from Ross, op.cit.
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Graph 19. The 4 building blocks towards a digital transformation. Source: author; data from Ross, op.cit.
When I was an office HR manager in a large shipping company, I proposed to management the “anti-cyclical life cycle treatment” of company’s personnel! This policy meant, for company’s personnel, after a number of years working in the company, to consider them say as a “permanent” staff. Then, given that when a person is young, round his/her 30 s-is lacking a car and a house etc., & when is old, over his/her 50 s, has already built an adequate property, which… however, cannot be… used, I asked the company to fill the “life gaps”…
In other words, to frame the financial needs of both crew & office permanent personnel, with long term loans in terms of their life events -buying a car, getting married, buying a house, having kids, planning retirement, being deployed, using mobile & other digital technologies!
13. Conclusion
Many have written about digitalization, but almost no one has defined it! Digitalization indeed uses a better/faster technology; it provides a new type of communications & it means a new way of doing business!
But a (digital) intervention has to be done after a good judgment” & “always to protect… humans from technology”, because the “technology & the machines should always be servants to humans20, & never be, or become, Masters!”
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Table 1. Managers’ demands from digital revolution the following services.
Source: author.
Of course, digitalization is not an end in itself, i.e., to make the internal shipping company & its vessels digital. The target has to be mainly the company’s charterers’ … (digital) satisfaction, from vessel’s services, i.e., those who pay!
The obvious advantage of the cloud is to have the required data on demand, in real time & updated, directly from their authenticated/responsible sources, to everybody, interested & entitled, in the vessel & in the company!
For shipping is essential the “diffusion of information”, as in the pre-cloud epoch information vital for someone was known by someone else & arrived to him/her, in great delay, if at all!
In management, one has to try to apply the rule: “whatever one does & whatever money one spends, as a manager, he/she has to achieve a higher efficiency & effectiveness” than hitherto! E.g., a perfect “digital organizing” is useless, if does not serve the above axiom. Moreover, digitalization may be remarkable in the eyes of both charterers & competitors, because this show-off surely brings external admiration, but it does not bring profits, but additional cost!
A manager understanding the digital philosophy, has clearly to go one step further than the stage of the “components’ accumulation”. à i.e., to apply lots of imagination… in using the components… as those are made suitable to build a lot of different solutions, as the case may be, in other words they are multi-purpose!
“Renting” the relevant K & I is like a manager, our metaphor, visiting an open market, where digital services are there, displayed, together with their hardware & software (& their rent). The shipping manager standing there is wondering: “if I let this service, I could know how & when & why one of my big charterers has been really satisfied, for sure (on data), from company’s ship’s services”! This is really something excellent!
The companies were, & are nowadays, in need of more & better data! The data thus became, without realizing it, a business coefficient of production! Managers need, however, specific services (Table 1), certain of which are provided.
The Russia-Ukraine2022- war caused… indeed a positive result for the EU-28, i.e., to try not to depend on “Russian natural gas”, by 2030, by 45% on its total energy needs! Russia of course does not care, as long as large markets for its gas, like e.g., the Chinese, remain open, despite the EU-28 furtherNov.2023 sanctions.
The mobile phone, no doubt, greatly improved communications. The operators are the first people, being the middle managers, in a shipping company, to learn what is going on board & what is happening in the port-information which has to be stored at once in the Cloud. “The prompt knowledge means prompt action, and the prompt re-action, means a better satisfied charterer, as well increased efficiency & effectiveness to the company!”
NOTES
1Social media, Mobile, Analytics, Cloud & the Internet of Things = SMACIT.
2This part has greatly benefited by the work of Ross et al., (2019) .
3The difficult technical terminology, etc., mentioned above, is one apparent reason to train both office’s & vessel’s staff! This, apropos, is “undertaken” by the specialized companies in the digital business.
4Worth noting is that a number of companies let Cloud’s services & provide their knowhow in the building of a (digital) “platform” for a shipping company.
5Since we do not like this term, we used the term “digital offers”-DOs.
6The most digitalized shipping companies in Greece are on average medium sized of 10 vessels each…
7Worth noting is that the digital data has to be ubiquitous & free of guesses! We do not assume what our charterers/customers want, or who they are or whether they were loyal… the data collected will inform us. A shipping company e.g., may contact its big charterer & agree extra safety precautions, (beyond ISM Code), write them-up in the cloud to be seen by all companies’ tankers!
8From companies, customers, clients, politicians, users, investors, authors, scientists, organizations, people in doing & saying things on Internet, the press, the news…
9E.g., retrieving charterer’s account balances; specifying directions to a location (e.g., a port); calculating the probability of an equipment failure-from sensor readings, important for shipping; accumulating a customer’s order in a shopping cart; confirming a user’s identity, important for ship’s security; & presenting performance results in a dashboard! These components are placed in company’s DP to become available to those developing the new offers, using certain APIs!
10It is obvious this task for Captain & Chief Engineer.
11For management, digital tools are also: the Excel; the (on line services known as) analytics; & the “social media” (ànetworks connecting computers & people together)! In about 1995 managers were unaware of the fact that the “e-mail”, the “smart phone” and “the Internet” will be used during work! By 2018 managers were also pre-occupied seriously with the “social media” à meaning “the electronic communications, which create online communities, sharing ideas, information & exchanging messages, etc.”
12The cloud is also distinguished in public, hybrid & private: public, being a utility available to the wide public for a rent, & in private, when one refers to the “in-house” cloud computing & in hybrid if this is both private & public.
13The ERS adapted.
14The Greek maritime digital market providesend2023 a transformation roadmap with hardware & software, etc., for the following 21 functionsà: “Company’s management & performance; vessel’s utilization; compliance; emissions control (*) - de-carbonization (*) - blue shipping (*); quality & safety; risk management; crew welfare/management; collaboration - transparency - procurement; maritime KPLs & new-building management”. & the digital: “business intelligence, analytics, cloud migration/security, information management, on board communication”. (*) concerning sea environment. A quite serious body of applications following also IMO’s legislation. This menu surly can be expanded.
15There was the “large computer batch system” in a dedicated, and of a proper temperature, room! The ERS were destined to be supplemented by the “personal computers”, certain years afterwards, not without resistance.
16These engines use fuel-transmitters of oxygen, like methanol, derived from carbon-dioxide; or bio-methanol, produced from biomass; or green methanol.
17In UK this is planned 3 years later, by 2033.
18Vessel’s speed, which one may consider as fixed & well-known, is variable! This is determined by the weather/the winds, the waves, the bottom’s ship condition, in ballast or not, on office instructions, on bunkers quality, on main engine condition & its performance, etc. The ship’s speed is recorded down on the charter party, and any deviation from that, creates a claim.
19The older practice was to write a report after returning home, by also seeking a willing secretary to typewrite it, accompanied by a number of photographs of vessel’s, usually her roasted parts, in an album.
20USA & China during the meeting of their top governors15/11/2023 talked about the AI dangers; the dangers from not reducing the use of fossil fuels, (releasing methanol), by 2030; & from not increasing 3 times the use of the RSE; &… about not reducing the use of the 2014-emerged drug, “fentanyl”, in USA, alleged to be imported from Mexico, China and India…!