Nazery Khalid discusses the impact of the wave of changes triggered by Industry 4.0 on the merchant shipping sector
New wave sweeping
The wave of the revolution known as Industry 4.0 is slowly but surely making an impact on the marine industry. As the wave gathers momentum, it has caused many changes to the industry’s landscape and will continue to shape and reshape it in the years ahead.
This revolution is triggered by the convergence of information technology and telecommunications, two fields which have been undergoing rapid advancements and stunning innovation in recent decades. The proliferation of Internet-enabled devices has allowed people around the world to connect instantly and share huge amounts of data online. This has triggered seismic changes in the way we interact, shop, learn, play, obtain and share information and many other activities. It has also influenced significantly how businesses, industries and trade are carried out.
Advents in areas such as Internet of Things, Big Data Analytics, integrated systems, artificial intelligence (AI), virtual reality (VR), blockchain technology, smart manufacturing, robotics and machine learning, among many others, are key components driving this revolution. They have enabled all kinds of machines, equipment and systems to ‘talk to one another’ seamlessly and instantly.
This has resulted in much improved connectivity and convergence among parties along maritime supply chains and industries across borders and enhanced productivity and efficiency all around. It has allowed e-commerce to flourish with the advent of e-payment platforms, more online business transactions can take place faster at greater volumes in a more secured environment and at cheaper cost. Importers, exporters, port operators, shipowners, regulatory bodies, logistics service providers and many other players along the seaborne trade supply chain can n ow be connected virtually and have access to the same info of consignments in which they are parties to.
Shipping industry and the digital revolution
Industry 4.0 is also having an imprint on the merchant shipping sector which facilitates an estimated 90% of global trade. This sector is at the forefront of many activities which are essential to the global economy. It facilitates the carriage of cargos of all kinds, port operations, offshore hydrocarbon exploration and production (E&P), fishery and marine tourism, among others.
Although not usually commanding the kind of public attention enjoyed but many economic activities, shipping has also not been spared from the impact of the seismic waves unleashed by the digital revolution. It is already being subjected to the wind of disruptive changes caused by Industry 4.0.
There are many areas in which one can find the application of elements of Industry 4.0. On board ships, the use of hi-tech equipment, systems and solutions such as satellite-based navigation aids and electronic charts is increasing. Sophisticated sensors are used to collect emissions data and fuel consumption, and assess ship performance. In the field of naval architecture, the use of computer aided design of vessels is on the rise.
Elsewhere, autonomous vehicles are increasingly deployed for the inspection of ships’ hull. Realtime integrated fleet management and cargo tracking systems are used to help shipowners and other parties along the maritime supply chain to be linked at all times and share information about ships’ voyages and the cargos onboard. Shipowners also benefit from the use of Internet of Things and Big Data Analytics to track the location of ships, plan routes, allocate resources, and forecast the time and cost of maintenance of their ships through predictive analysis.
The use of immersive VR-enabled marine services and 3D printing of small spare parts onboard is also on the rise. Prototypes of autonomous ships are already in the pipeline and it would not be too long down the road that we would be seeing crewless ships being deployed. Solutions, equipment and jobs which did not exist a few short years ago within the industry are now available, thanks to new inventions and innovation in Industry 4.0.
Stepping up a notch
As the digital revolution continues to disrupt and make an indelible impact on the way trade and business are conducted, players in the marine industry must keep abreast with the changes it unleashes. They need to step up their game a notch or two and assess how they can overcome the challenges and leverage on the opportunities that Industry 4.0 presents.
Being practitioners in a sector which is a pivotal facilitator of the global trade and economy, the need for them to do so cannot be overemphasized. In an industry not known to be quick to innovate and adapt to changes at the drop of a coin, shipowners should be forward-thinking and proactive to ride with wave of the digital revolution and evaluate and anticipate how it is impacting shipping and its stakeholders.
Malaysia has in place a digital roadmap in the form of a National Industry 4.0 Policy Framework. The framework sets the direction for the country to embark on a path of an innovation driven economy propelled by high income activities, with digitalization and automation acting as the driving force.
Local shipowners would do well to align their direction to fit within the context of the directions and objectives set in the framework. There is no turning back the clock to the old ways of doing things amid the growing strength of the digital waves. Those who fail to adopt and ride with the waves unleashed by Industry 4.0 do so run the risk of being left behind by the sweeping changes it triggers. Once the powerful, disruptive forces of the digital revolution hit the shipping in full force, they will rattle those who are ill-prepared for its impacts and drown them into irrelevance.
Adjusting and adapting
In this regard, it is crucial that efforts are being made to raise the awareness of shipowners and shipping sector stakeholders about Industry 4.0 and how it affects seaborne trade and the merchant shipping landscape. There must be a structured and concerted effort among the shipping stakeholders – namely shipping associations, Government agencies, importers / exporters and supporting industries – to raise awareness and develop a solid understanding of what the digital revolution entails and the issues, challenges, threats and opportunities it presents.
Developing skilled workforce to operate within the digital realm key to prepare the maritime industry players for the new digital world order. This is especially important in the context of meeting growing need for tech-savvy, skilled workforce in the Industry 4.0 environment to undertake activities such as port operations, shipping, shipbuilding / ship repair, supply chain management and many others.
To this end, industry players must step up efforts to work with higher learning institutions and TVET (technical and vocational educational training) institutes in their efforts to produce industry-relevant, hi-tech capable graduates. In addition, re-skilling and up-skilling are crucial to boost the capabilities of existing workforce to undertake highly skilled activities and jobs that are emerging and will emerge in the marine industry in the digital economy. Shipping companies must walk the talk to invest in human capital to prepare their workforce to operate and thrive in the digital realm.
On the part of the Government, it has an important role to play to ensure the ‘digital readiness’ of the marine industries and the overall trade ecosystem of the nation. This entails putting in place supporting policies and providing incentives for infrastructure development to facilitate accessibility to reliable, uninterrupted and reasonably priced high-speed Internet connection. To enable shipping companies and other stakeholders such as port operators, insurance companies, logistics players and cargo owners to be connected to track ships in-voyage and the cargos transported by ships, such Internet connectivity is pivotal.
On that score, it is essential that players along the maritime supply chains have access to infrastructures such as fiber optic network and smart technologies held by internationally acknowledged digital standards. This will provide the conducive environment for interoperability and seamless integration of activities and among shareholders within the maritime industry value chains and ecosystem.
Equally important is addressing issues concerning risks, protection, privacy, robustness, integrity and confidentiality of data. Ensuring data security is crucial to enable stakeholders in the maritime industry to be connected seamlessly at all times, and share voluminous amount of data among them without any fear of data breach or impediment.
Riding the wave of the digital revolution
The dramatically changing landscape of the marine industry spawned by the intensive use of ICT and convergence of smart machines calls for out-of-the-box thinking among marine industry players to adjust to it. Lucrative and exciting business and career opportunities await those with initiative and foresight to adjust to and ride the game-changing wave of Industry 4.0 and capitalize on the changes it brings.
As the world goes through profound and potentially irreversible changes through the effects of Industry 4.0, stakeholders in the marine industry must be ready to change the way they do business and even structure their human capital and organizations accordingly. Only by doing so will they be able to operate within an increasingly digitalized and technologically dependent economy.
Digital operations will soon become the norm rather than exception and even dominate standard operating procedures in the marine industry as connectivity amongst stakeholders, assets, systems, operations and sub-sectors increases within this vast industry. No stakeholder should be left behind or overwhelmed by the challenges triggered by the wave of digital transformation and be left behind by the opportunities it presents.
With all the stakeholders working in close collaboration, it would make it easy to formulate an achievable, measurable roadmap and plan of actions for the marine industry to thrive in the digital economy and for industry players to carry out activities high-tech efficiently, safely, securely and at reasonable cost.
Nazery Khalid is a well-known commentator of the marine industry and an Adjunct Professor at Universiti Malaysia Terengganu.
He can be contacted at [email protected]