Navigating the Future: How Digitalisation is Transforming the Maritime Industry

Digitalisation in the shipping industry involves the implementation and integration of various technologies to enhance the efficiency of supply chain operations. Historically, all trade activities in the shipping sector were conducted manually, resulting in numerous obstacles and inefficiencies.

However, today things are on the path of rapid change. By incorporating a combination of various technologies in shipping, such as artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), blockchain, and big data analytics, amongst others, the agility and efficiency of the supply chain have significantly improved.

From route optimization, collision avoidance and fire detection, to behaviour-based safety, AI is ubiquitous in its application and is used widely in varying degrees across the maritime sector. AI refers to the simulation of human intelligence in machines that are programmed to think, learn, and make decisions. AI encompasses a broad range of technologies, including machine learning, natural language processing, and computer vision.

While many view the use of AI in the shipping industry as a significant step towards enhanced efficiency, safety, and sustainability, its complete potential is still being discovered. Nonetheless, the successful adoption of AI in shipping presents challenges related to costs, technical issues, procedures, and ethical considerations. To address the risks and fully harness the benefits of AI, it is crucial to combine AI-based systems with strong human oversight and ethical guidelines.

• Electronic data interchange – The shipping process typically involves managing various documents such as invoices, receipts, and bills of lading. Traditionally, these had to be printed and manually sent to the relevant parties, which could be time-consuming and costly. EDI aims to make the documentation process paperless by digitizing it allowing shippers and shipping companies to exchange all necessary documents electronically, saving time, reducing documentation costs, and enhancing supply chain efficiency. EDI utilizes several advanced technologies to enhance its functionality and ensure efficient and secure data transfer. Key technologies incorporated into EDI include AI, blockchain, encryption and security technologies, standards and protocols (such as ANSI X12, UN/EDIFACT, and XML-based standards), and cloud computing, amongst others.
• Voyage Optimisation – By analyzing historical voyage data, shipping companies can optimize routes to save fuel, reduce travel time, and enhance safety.AI-driven vessel voyage optimisation can improve vessel efficiency by 6.9% and reduce fleet emissions by over 170,000 tonnes
• Autonomous Ships – They incorporate and utilize technological advancements such as AI and machine learning, advanced sensors and IoT, big data analytics and cloud computing to enhance efficiency, safety, and sustainability in shipping operations. The autonomous ship market is projected to grow from $6.1 billion in 2020 to $13.8 billion by 2030, at a compound annual growth rate (CAGR) of 7.0%. The Yara Birkeland is the world’s first fully electric and autonomous container ship.

Big Data Analytics is playing a transformative role in the maritime industry by enabling more informed decision-making and enhancing operational efficiencies – including prescriptive and predictive equipment maintenance, route and voyage optimization, fleet performance management, cargo movements, managing port operations, and monitoring emissions to ensure environmental compliance.

• Maintenance Predictions: Predictive analytics can forecast when a ship or its components will need maintenance, allowing for proactive servicing that prevents costly breakdowns.
• Cargo Tracking and Management: Big data analytics helps in tracking cargo in real-time, ensuring timely deliveries, and improving overall supply chain management.

IoT refers to the network of physical objects/devices embedded with sensors, software, and other technologies to connect and exchange data with other devices and systems over the internet to provide connectivity, data collection, and communication.

• Vessel Tracking: IoT sensors enable the real-time tracking of vessel locations, improving route planning and cargo management. Real-time tracking and monitoring through IoT devices can enhance safety by detecting potential hazards and unauthorized access, significantly reducing operational risks
• Container Monitoring & Tracking: Sensors track the condition of ship equipment, predicting failures to prevent downtime. IoT sensors enable predictive maintenance by monitoring equipment conditions, thus preventing failures and reducing downtime. Radio Frequency Identification (RFID) tags on containers allow shippers to track goods in transit. These tags send data to RFID readers, which is processed by software and displayed on mobile devices and computers.
• Fuel Consumption Optimization: IoT devices analyze engine performance and optimize fuel usage, leading to substantial cost savings and reduced emissions.

Worth mentioning here is how applications and software utilizing AI and other technologies are helping improve efficiencies in —

• Crew mental wellbeing: There are shipping industry-specific applications that utilize AI, gamification and data analytics to monitor behavioural risks, provide situational awareness, alerts and recommendations to improve crew performance and safety. Marshal Ship Management too utilizes such a mobile app that focuses on the cognitive, behavioural and emotional aspects of mental health. We have seen a steady increase in the uptake of the app and its features by our crews as they continue to get support from it in regulating their stress, engagement in wellbeing exercises, tracking and monitoring their sleep cycles, and positive reinforcement in their day-to-day activities.
• Training and development: By leveraging digital technologies the maritime industry can enhance the efficiency, quality and accessibility, and effectiveness of training programmes, ensuring that seafarers and maritime professionals are well-prepared to meet the demands of modern maritime operations. Some key digital technologies that are being utilized include – E-Learning platforms, Virtual Reality (VR) and Augmented Reality (AR), simulators, Learning Management Systems (LMS), Mobile Learning (M-Learning), gamification, and so on. Marshal Ship Management uses cutting edge, immersive technologies such as Virtual Reality (VR) and 360-degree cloud-based technologies (CBT) creating experiences that are as rich and complex as the real-world scenarios they emulate.
  • Studies have shown that e-learning and simulation-based training can improve knowledge retention by up to 25% compared to traditional methods. The global market for maritime training simulators is expected to reach $1.32 billion by 2025, growing at a compound annual growth rate (CAGR) of 7.6% from 2020.
• Crew performance tracking: To facilitate optimum crew utilization and to ensure that all crew members are working at their full potential, AI can be used to track and evaluate crew performance data, such as time spent on tasks and efficiency levels. This data can help identify areas where crew members may require further training and support.
• Crew selection: With technological advancement, it is now proving to be increasingly cost and time saving, and more efficient, for crewing companies to use AI algorithms to help with crew selection. These can help analyse past performance data to arrive at well-informed decisions regarding best-suited candidates for open positions.

This technology is revolutionizing the shipping industry by enhancing transparency, reducing costs, and improving efficiency. Digitizing paperwork through blockchain could save the shipping sector a total of $38 million per year by reducing administrative and operational costs. Here are some key examples demonstrating its impact:

• During a 12-month trial, Maersk and IBM found that blockchain technology reduced the transit time of a shipment by 40%, saving thousands of dollars in costs
• Traditional paper-based Bills of Lading (B/Ls) are prone to delays and fraud. Blockchain allows for the digitization of these documents, reducing administrative holdups and the risk of fraud. This has resulted in significant savings and increased efficiency in port and customs operations
• ‘Smart Contracts’ automate transactions, reducing the need for manual input and verification, and leading to faster and more secure payment processes. For instance, smart contracts can automatically release payments upon the delivery of goods, minimizing risks associated with non-payment and exchange rate fluctuations.

Refers to Scalable and flexible data storage and delivery of computing services —including servers, storage, databases, networking, software, and analytics—over the internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.

As of 2023, over 70% of shipping companies have adopted cloud computing to some extent, driven by the need for digital transformation and operational efficiency.

Companies leveraging cloud computing have reported up to a 20% increase in operational efficiency and a 15% reduction in operational costs.

The global maritime cloud computing market is expected to reach $3.5 billion by 2026, growing at a compound annual growth rate (CAGR) of 12.7% from 2021.

According to a report by Baltic and International Maritime Council (BIMCO), there has been a 400% increase in attempted cyber-attacks on the maritime industry since the onset of the COVID-19 pandemic. The average cost of a cyber-attack on a shipping company can range from $50,000 to $10 million, depending on the severity and nature of the attack.

The shipping industry increasingly relies on advanced digital technologies to safeguard against cyber threats. Various technologies including AI, ML, blockchain, network security systems, Endpoint Detection and Response (EDR), encryption technologies, Security Information and Event Management (SIEM) are being employed to this end. AI and ML algorithms analyze vast amounts of data to detect anomalies and predict potential cyber threats. According to the International Maritime Organization (IMO), 58% of maritime companies plan to implement AI-driven cybersecurity measures by 2025.

Shipping companies increasingly conduct regular cybersecurity risk assessments and provide training for crew and staff on identifying and responding to cyber threats. By implementing robust cybersecurity measures, such as – network segmentation, firewalls and intrusion detection systems (IDS), regular software updates and patch management, access control and identity management, encryption, etc. systems, networks, and data can be protected from cyber-attacks, unauthorized access and data breaches.

These are virtual replicas of physical assets, such as ships, ports, or entire shipping networks. These digital representations mirror the real-world counterparts in real-time by using data from sensors and other sources, allowing for detailed monitoring, analysis, and optimization. These help in predicting equipment failures, increasing Operational Efficiency, improving safety, reducing costs and helping with optimisation of energy and reduction of emissions.

Enhancing Operational Efficiency:

Implementing digital solutions can help reduce operational costs by up to 20% and increase overall efficiency by approximately 15-25%. Digital tools such as AI, IoT and automation streamline various maritime operations, from navigation to cargo handling and crew wellbeing. These technologies reduce manual intervention, minimize errors, and enhance the speed and accuracy of tasks.

Supply Chain Optimization:

The advent of smart ports, equipped with automated cranes and vehicles, has revolutionized cargo handling and port operations. These advancements lead to quicker turnaround times and increased terminal capacity, directly benefiting crew operations and reducing waiting periods. Digitalized ports can reduce container dwell times by 20-30% and increase terminal capacity by 10-20%.

Improving Safety and Security:

Usage of IoT sensors and big data analytics enable real-time tracking of vessel condition, significantly helping anticipate and prevent equipment failures and accidents. Predictive maintenance and route optimisation reduce downtime and operational costs. Companies that adopt digitalisation with predictive maintenance and real-time monitoring have reported up to a 30% reduction in accidents and mechanical failures.

Facilitating Regulatory Compliance:

Electronic documentation and blockchain can reduce compliance-related costs by up to 15% and ensure faster and more accurate regulatory reporting.

Maritime digitalisation simplifies compliance with international regulations by ensuring reduced errors in paperwork and customs processes and secure documentation. Blockchain technology provides a tamper-proof method for managing records and transactions.

This also streamlines administrative tasks and speeds up crew onboarding and offboarding procedures, ensuring that clients receive prompt and efficient services.

Faster and More Reliable Deliveries:

Delays can be minimized through better route planning and real-time monitoring utilizing digital technologies. For the crew, this can mean more predictable schedules and less time spent waiting at ports, which translates to improved morale and productivity.

Improved Customer Service:

Delays can be minimized through better route planning and real-time monitoring utilizing digital technologies. For the crew, this can mean more predictable schedules and less time spent waiting at ports, which translates to improved morale and productivity.

Driving Global Economic Growth:

The maritime industry, powered by digital advancements, contributes approximately USD 500 billion annually to the global economy. With around 90% of global trade relying on maritime transport, digitalisation plays a crucial role in enhancing trade efficiency. Digitalisation improves the efficiency of global trade by reducing transit times, lowering costs, and enhancing the reliability of maritime transport. This supports economic growth by facilitating smoother and faster international trade.

Enhancing Environmental Sustainability:

Digital technologies help optimize fuel consumption and reduce emissions through better route planning and energy management systems. AI-driven analytics can identify the most efficient routes and operational practices to minimize environmental impact. Companies utilizing digital solutions for energy management report up to a 30% reduction in CO2 emissions.

Digitalisation is a cornerstone for the future of the maritime industry. It drives operational efficiency, enhances safety and security, facilitates regulatory compliance, supports environmental sustainability, boosts global trade, improves customer service, and fosters innovation. By embracing digitalisation, the maritime industry not only improves its operational capabilities but also contributes significantly to the global economy and sustainable development.

As the industry navigates the future, the importance of digital technologies will only continue to grow, making it imperative for maritime companies to adopt and integrate these advancements into their operations.