Digital adaptation in shipping is taking off dramatically ahead of IMO 2020, trend report indicates

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‘Every difficulty is an opportunity in disguise’, a known quote says and this approach is very familiar for those who share years of experience in the shipping industry.

During difficult times, in order to survive and remain competitive, companies need to invest in new ways of working culture and new technologies, Steffen Knodt, Director of Digital Ventures at Wartsila, explains in an interesting interview with ShippingWatch.

Recently, the expected IMO 2020 sulfur regulations and the long-lasting tough market conditions have urged people to seek for new solutions and opportunities. As a result a new industry mindset has been created, which focuses on higher transparency, optimisation, innovation and digitalisation, Knodt explains. More and more people realise the importance for enhancing transparency, forming new partnerships and thinking digitally in order to make their business more efficient, he adds.

A recent report on trends in the shipping industry, prepared by innovation firm Rainmaking and Danish Ship Finance, leads to the same conclusion. Despite the fact that shipping is very slow to adopt new innovations, nowadays companies deal with digitalisation and data sharing in a more advanced way than what they did a few years ago, the report concludes. This is probably due to the fact that shipping markets have been sluggish in recent years, Christopher Rex, Head of Innovation and Research at Danish Ship Finance explains.

The recent boost of innovation and digitalisation in shipping can also be realised by the number of startups that appeared recently. Despite the high barriers of entry, Rainmaking and Danish Ship Finance, in their trend report, encountered 160 startup companies working on digital technologies in the shipping industry. The survey also showed that financing for startups experienced a significant growth during 2018, where 68 percent of young companies’ capital was raised.

Despite this new rising trend, digitalisation in shipping is still premature and it has a long way to go.  “The industry is still not as far ahead as other industries” Knodt says. Adding that more partnerships in the industry are needed in order to overcome inefficiencies.

With the use of digital technologies, the shipping industry can be benefited with huge cost savings. For example, Maersk has estimated that the industry can save billions of dollars by exchanging shipping/cargo documents through a blockchain platform as well as to achieve reduced paperwork, more efficient processes and improved trust and transparency with the companies’ trading partners.

Despite the fact that the industry is still at the start of this journey, Knodt expects a future with more shared IT platforms and more data sharing. However, he adds, since the shipping industry has been sluggish for a long time now, positivism is required for such innovative investments to get materialised.

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