ShipCrunch

Shipping's big idea: Living with uncertainty

An ambitious effort, to define and share shipping's core skill, begins. Join it.

By Ryan Skinner (email)

Alas, this blog almost died.

Almost.

I work in a different city now, and with companies whose interest is far from those curious concerns of shipowners (most of them, anyway). Today if I say ECDIS or Aframax people look at me funny. They respond "gesundheit." There's no reason to explore shipping anymore. And what should I blog about then?

But. But. But....

How could I abandon shipping so easily? I could not.

There is the sober money that enthrals, in London or Oslo. There are the hungry metropolitans of Manila and Shanghai. Not to mention the garrulous, frank, cunning and generous guys and gals who hold countless strange stories of what really happens in this industry. Cycles within cycles within cycles.

No.

As if to bookend to the Nor-Shipping that much of me was building up to, I feel it oddly appropriate to launch a new, different shipping-shaped enterprise.

This describes that enterprise.

I aim to focus like a laser on the one thing that shipping does so excruciatingly well that any industry can, and must, learn by it.

A business in any industry must apply this kind of focus on what the market wants of its industry, and become so good at it that the business becomes unavoidable - a synonym for its industry.

So what is this skill, this expertise, in the shipping industry? I argue: uncertainty.

Risk.

No industry in the world deals with a larger set of variables on a daily basis than shipping. Even the gaming industry is simply dominos by comparison.

In other words, if businessmen everywhere could learn one thing from the shipping industry it would be this: How to live with, and win by, uncertainty.

I've said it before. I'll say it again, and again, and again. This is shipping's big idea. It's not about how much crap is moved from A to B. Or why it's moved. Or where. Or when. Or on what damned piece of steel. It's about the wobbliness upon which the whole enterprise rests, and which an industry lives and thrives.

Anyone who's ever crossed a border, planned a party, mail-ordered a package, introduced himself to a foreigner or assessed whether a leap was too far, or not, can relate to the big idea, if in a small way.

Shipping's real value lies in professionalizing, and perfecting, an approach to risk and uncertainty. That is a lesson and a skill worth exploring and exploding, for an industry determined to make its presence felt.

So that's just what I aim to do. Explore this big idea, by talking to the kinds of people who are determined to excel at it. The people who take financial risk, political risk, legal risk, and every other kind of risk as seriously as one can take it. Who want to be so good at it, that it marks them, and everyone they touch.

I'll be looking for sources for this project. Do you fit the bill? Let me know. Do you know someone, a person or company, who excels at this skill? Tip me off, or tip them off. This is a topic I'll be returning to in the continuation of this blog, until there's a book-sized piece of knowledge to share.

And then I'll turn it into a book.

SmartShipping - How 'bout it?

Finally, an event dedicated to preaching the beauties of big data to big shipping!

By Ryan Skinner (email)

A couple months ago I was talking to a very clever guy at The Containership Company who was describing for me the challenges of using data to improve ship operations. He basically said: the equations get too complex, too quickly and the solutions aren't sophisticated enough to calculate knock-on effects fleetwide. In short, data's great, but we're not where we can act on it yet.

Contrast this with the pleas from god-knows-how-many entrepreneurs and small businessmen with analytics tools promising shipowners to create massive efficiencies through smarter decisions. If only...., then my man John Konrad (@gCaptain) came through:

One compelling entrepreneur, Tom Stitt of Staxxon (you know, those ingenious folding containers), took the data challenge to the heart of geekville: SXSW Interactive. This annual event in Austin, Texas draws the who's who of nerds and the marketers who cling to them. He wanted the geeks to see shipping as a kind of social media, and apply their algorithms to containers as if they were facebook friends or twitter connections.

Pin a medal on Stitt, somebody. While 99.9% of these coders are more interested in LOL-cats than container traffic, all it takes is to light a fire in the fingertips of one of these dudes and you can change an industry. If Stitt's managed to do just that, we have good things to look forward to.

With all the efforts of the kinds of entrepreneurs I've talked to here at ShipCrunch, the ground may slowly be moving.

With an event this autumn, I'm hoping for an earthquake. I caught wind of a new event from Jon Chaplin of TradeWinds months ago, and now it's a reality: SmartShipping. If I've read the signals from TradeWinds and ShipServ (the team behind it) correctly, they're eager to put the focus on big data. That is, how can we accelerate all of these efforts to use data and analytics to leap ahead, in terms of fleet efficiency?

I particularly fell for the words of ShipServ CEO Paul Østergaard: "I think SmartShipping has nothing to do with size. It's not about being the biggest; it's about being the smartest. In fact, a lot of the technologies we're looking at enable smaller companies to gain some of the scaling advantages of larger companies." Words to warm enterpreneurs' hearts...

Here's the full video:
  

That ShipServ and TradeWinds are behind this can be no accident. What ShipServ is doing to apply data to the supplier side of the industry (traderank, peer review, etc.), TradeWinds seems willing to do for operations. At least, it may be a start for TradeWinds.

It's going down in Singapore in October, and it's apparently where the smartshipping crowd will be. Wish I could be there.

Lloyd's List vs. TradeWinds: Two visions of shipping news

What news do shipping professionals really want? What do they really need? Two answers?

By Ryan Skinner (email)

It's all about this: Be the go-to source of information for the kinds of decision-makers who lead the industry. Any one pitching a story at a Lloyd's List or TradeWinds editor (and I've done it not a few times) will often hear them say: "If it doesn't interest the big shipowner boss, it doesn't interest us."

The shape and speed of what interests big shipowners may be changing, however.

The mother company of Lloyd's List, a pretty large media company called Informa, recently announced its annual results. Note how two aspects of this report play together:

1) "They are still benefiting from cost control measures implemented across the business." - Basically, they've slashed expenses related to news production, among other things.

2) "Informa were concentrating on premium intelligence and increasingly looking at enterprise sales of subscription content." - They're betting on supplying data to businesses.

An induction: Informa cuts Lloyd's List's budget down to less than it needs to survive long-term as a newsroom. It lives off of past glory and decent distribution only long enough to build up its data and decision-support business - Lloyd's List Intelligence. This is where the future lies.

Shipping technology picture by 2020, briefs from DNV

DNV published a nifty book on technology recently. Here are shipping's outtakes.

By Ryan Skinner (email)

This week I was at Høvik HQ and a DNV person shoved a fresh little publication in my hands. The tome's called "Technology Outlook 2020". Its remit was broad, from global megatrends to oil and gas, but there was a sweet spot on maritime technology. Here is the highly, highly condensed version. For the whole enchilada, see below.

The low energy ship
"Multifunctional ship types and or technological advances in drag reduction, propulsion, and materials herald new ship concepts"

• Air bubble lubrication: Uncertainties in the physical mechanisms, and the scaling and technical feasability of this system, need to be solved by 2020. Negative interaction between bubbles and the propellor must be addressed.
• Air cavity systems: 10% fuel consumption decrease is possible. Negative side effects include destabilizing free surface under the hull, and energy loss when bubbles pass through the propellor inflow.
• Hybrid materials: Widespread adoption by 2020 is unlikely, due to high costs, manufacturing and recycling challenges, and fire resistance issues.
• Hybrid propulsors: Though capital costs are high, these can cut fuel costs by 10%, depending on utilization and ship type.
• Ballast water free ships: Even after 2020, ships without ballast water will be more expensive to build and have construction challenges. Competition from onboard treatment and port facilities will be tough.

The green-fueled ship
Implementation of technologies like LNG, biofuel, wind or nuclear face significant technical and economic challenges, and the time frame ranges from a few years for LNG to decades for nuclear.

• Natural gas: Changes in CO2 emissions range from a 20% cut to a net increase. Newbuild costs are on average 10-20% higher than diesel ships. Within 10 years, a considerable share of new ships (particularly short-sea) will use gas fuel.
• Kites: These can substitute up to 2000 kW of propulsion power, and require little of the crew (but can foul deck equipment). Expect to see retrofits over the next 10 years.
• Biofuels: Biodiesel and crude plant oils are most promising, but challenges include fuel instability, corrosion, microbe growth and poor cold flow. Price and availability will probably decide.
• Nuclear: "....will not be commercially available for civilian shipping by 2020." Barriers: nuclear proliferation, investment costs and societal acceptance.

The electric ship
"Supply vessels and ferries with high fluctuations in power demand are the most suitable candidates..."

• Hybrid ships: By 2020, these will mix conventional and superconducting motors and generators, fuel cells and batteries, first to service, passenger and small cargo ships. For larger ships, probably only as auxiliary power.
• Marine fuel cells: Initially, auxiliary power, such as hotel loads, then supplementing propulsion in hybrid electric ships. "During the nexst decade, fully commercial marine fuel cells will become available."
• Batteries: By 2020, a battery pack of 0.4 MWh, with a 4 MW peak load, could weigh 2-4 tonnes and take up one cubic meter. Nano-technology advances may lead to a breakthrough here.
• High-temperature superconductors: These could massively reduce engine size, but require complex cooling technology. Redundancy will be an issue.
• Cold ironing: By 2020, standardised connections will be available in many ports, and on both newbuild and existing ships. Hurdles are sufficient grid capacity on land (for big ports) and infrastructure (for small ports)

The digital ship
"While some e-Navigation technologies are presently in use by front runners in shipping, by 2020 the majority of the fleet will have followed."

• ECDIS: A key e-Navigation technology, coupling to non-navigation systems could extend its potential to port scheduling and customs clearance. Competence on ECDIS will be vital.
• Advanced weather routing: Towards 2020, accuracy and resolution of met-ocean data will be better, along with data collection from ships, and reductions of fuel consumption up to 10% common.
• Piracy detection and deterrence: High-performance radars reaching up to 10 Nm by 2020 will be key. Service providers will use satellite info to provide advanced warning services.
• Ship-port synchronization technology: "By 2020, berth planning algorithms, using satellite tracking and weather routing, will be integrated into ship-port communication systems."

The arctic ship
"Increased demand for seaborne trade in the Arctic will lead to the introduction of larger vessels that require novel icebreaking services."

• Novel icebreakers: Over the next decade, oblique icebreakers (sideways operation in heavy ice) are expected to be widely adopted for Arctic operations.
• Iceload monitoring: These are expected to become prevalent by 2020, so Arctic vessels know when to slow down, and when to find alternate routes, to prevent damage in ice.
• Arctic evacuation vessels: Special lifeboats for evacuation in Arctic conditions will employ an Archimedes' screw concept for movement, with two large, screw-like pontoons on each side of the vessel.
• Ice routing software: Such software will by 2020 provide routing based on ice conditions, from sat images, weather observations, ice charts and weather and ice model forecasts. This will allow navigators to programme ideal routes.
• Ice navigation training simulator: Given the lack of competent personnel, these are expected to gain broader usage. Challenges include modelling ship behaviour in different conditions.

The virtual ship
"To manage the complexity and risk inherent in innovative solutions, there is a drive towards use of advanced, model-based techniques for assessing novel concepts and technologies....from a lifecycle perspective."

• Integrated ship design tools: By 2020, these will support distributed, parallelised and coordinated execution of design tasks using multi-processor architectures and internet infrastructure. A crucial factor will be access to reliable data.
• Model-based ship machinery design: "Modular computer tools will be available to model, simulate and optimise the operation of machinery systems under realistic operational profiles."
• Model-based hull design: By 2020, hull design tools will allow design towards sub-optimal operating conditions, compared to today's systems, which are based on still-water conditions and design loads.
• Large-scale demonstrators: Showcase projects combining industrial and shipowner partners will accelerate innovative technologies to commercialisation.

That's it. If you want the whole book, drop a comment and I'll put it in the post to you! 

 

Playing with shipping's business models

Monetizing what's most important for shipping's buyers. Your product? No! Compliance...

By Ryan Skinner (email)

You should only make money when you create value.

Um, yeah, alright.

Most shipping suppliers ship off their products to customers, then tick the box marked "Created Value". A bill follows.

But in how many cases was any value really created? That is, what is the value of a part beyond the pure cost of producing and delivering the part?

Arguably, many of shipping's suppliers are missing the golden opportunity to provide what shipowners really want: Compliance.

Two anecdotes illustrate this:

1) I'm engaged in a minor bureaucratic situation. My situation doesn't fit like a key into the bolt of the bureaucracy's rules. So I ask them, and ask again. However they answer, I won't get a real answer until my case is decided yes or no. What I would pay for up-front certainty? It's priceless.

2) On behalf of a client, I have asked the market for queries related to a particular area of shipping rules. Not surprisingly, every user's situation was unique; none fit precisely in the rulebook. Thus no one understood whether they might be stopped in port state control, or not.

Businesses hate uncertainty. And shipping companies are, by their very weather-prone and trans-jurisdictional natures, exposed to more uncertainty than most businesses. Eliminating uncertainty must have a very high dollar value for ship managers.

What I'm proposing is something as wild as a compliance guarantee. This kind of thing is being done in different guises. I believe Wilhelmsen offers something of this nature, even if the guarantee has no fiscal teeth. Wartsila seems to more or less argue for managers to outsource propulsion (like Rolls-Royce did in aviation).

It would require some inventive business modeling and an excruciatingly sharp focus on contractual clauses, but this model has merit. Any business needs to focus only on where the customer seeks value; if you do that, you'll only get better and better, in your customers' eyes.

Is there anyone in the business that gives customers a compliance guarantee? I'd love to hear about them, as an example....

For those willing to go down the business model re-development road, I can recommend two references that I have recently built off of:

• Business Model Generation: A manual for thinking afresh about how you do business
• Develop Ideas That Will Disrupt Your Industry

Thou shalt be judged. Harshly. By us. Soon.

Online marketplaces are not anonymous. You will be judged on your performance.

By Ryan Skinner (email)

Remember how the Internet was going to introduce a whole new level of competition and accountability to business transactions? Suddenly, anyone could do business with anyone.

Did it happen? Sort of. Like Knock Nevis, purchasing organizations don't turn on a dime. Even if they could theoretically find ten suppliers in every port, they weren't quite sure what to do with these suppliers.

A survey I completed together with ShipServ and their CMO John Watton last year identified trust as one of the biggest sticking points for shipping e-commerce. Who is this supplier? Is it reliable? Will it deliver? Can it work with my ERP? Serious questions.

Crying for innovation

They're famous for it: Innovators and frustration with "how things are". Here's one.

By Ryan Skinner (email)

I don't know Alex Vari. I've never met him, and I know basically nothing about what he has designed. What I do know is this: He's well-frustrated with conservatism in shipping. It's probably what gives innovators their spark - a bit of frustration, a bit of ingenuity, a bit of "goddamn it if this thing can't be done better".

He sent me a mail titled "marine innovation", and I thought it was a great little heartfelt essay on the state of innovation in shipping. I asked him if I could simply repost his letter here, and he said that I should do it. If you read it, and want to contact Alex directly, you can do so here.

My interest in this topic is that for the last few YEARS now I have been seeking support for a project I have for the development of a TOTALLY new hull design. I believe my design will overcome most of the problems currently faced by power-driven, larger vessels with regard to high and efficient speed.

Without going into the actual design itself, you may be interested to learn of my experiences in this quest. Almost without exception, all of the companies I have contacted so far are unprepared to handle the subject of innovation. They have no procedures in place to handle these types of approaches. In some cases, they are openly hostile when you indicated that there may be another way to look at the problem.

The problem I think is that basically they have no understanding of what innovation really means. Innovation rarely comes from a direction in which you are looking. Changes are usually incremental and we can handle these types of events. Innovation, however, is usually classed as - at best - a disruptive event, and - at worst - a destructive one.

...

It's all very well for the current players to pat each other on the back and carry on with business as usual, saying they are making changes and improvements. They have nicely divided the pie into its segments and are doing nicely, thank you. If, however, someone from outside of the "club", without the accepted credentials, experience, etc., raises the possibility that there may be another way, well, I can tell you from personal experience it's an uphill battle.

I suppose it's only natural. There is even a problem of language. How do you describe something new using old terminology. Craft are either displacement or planing or a bit of both, right? There is, however, another way, but as yet I have no word for it nor can I succinctly describe how it works.

Just a few thoughts about innovation from a frustrated innovator.

What do you fellow innovators think? Is this a common sore point?

The Ultimate Shipping Social Media Primer in 12 easy pieces

 

12 zippy articles to give any shipping professional the ultimate social media head-start

By Ryan Skinner (email)

Over the past two years, I have done my best to cover everything that moves in terms of social media and the shipping industry. This has resulted in 12 posts that, together, form the ultimate shipping social media primer. So, without further ado, here goes:

Social Media Basics

• Top Social Media Entrepreneurs in Shipping: These eight guys are shipping's social media pioneers.
• Biggest enterprise social media brands in shipping: Eight companies that have been doing it right.
• The state of social media in shipping: Five steps to social media in shipping ninja-hood.

Social Media Best Practice

• All-a-twitter: A chat with Lloyd's List's Mark Warner: Not with LL anymore, but good stuff nonetheless.
• A chat with Brett Keil - shipping's LinkedIn superuser: The guy's started shipping's best discussion forum. Respect.
• Shipping blog outreach: It happens. Really. - One shipping guy knows the new PR. Here's what he thinks.
• First-mover opens up in-house expertise to social network: TMC Connect created an online forum. Would they open it?
• Twitter: Special marketing sauce at maritime brokerage: FIS shares their approach to winning with twitter.
• gCaptain and the power of community: a chat with John Konrad: Shipping's blogger godfather opens up....

Social Media Tools

• Shipping in social media: Your twitter starter kit: A touch outdated, but still pretty good. Also see Coracle Voice's Who's Who in shipping twitter
• Six ways to start LinkedIn shipping discussions that succeed: This can be done right, and it can be done wrong. Do it right.
• 5 steps to empower your marine sales force using social media: Some quick and easy tips to big-time success.
• Define your business world: Wikipedia & Shipping: Don't get left behind. Talk about your technology on Wikipedia. Your competitors are already doing it.

Want to know more? Contact me. I love to talk about the topic, and I'm easy to talk to (in other words, I won't beat you over the head with a sales pitch...right away).

Meet the new set of shipping entrepreneurs - Start-up Profile: CPHSE

Web 2.0 has its Ron Conways & Jack Dorseys; shipping's going to see its own serial entrepreneurs.

By Ryan Skinner (email)

For all the wrath that the .com bubble created, it also created something else - something called serial entrepreneurs. These are people who develop new business after new business, or, better yet, a dozen at the same time. Shipping's had its entrepreneurs, mind you, but none that could operate at the speed of web.

For those in shipping who aren't there already, it's time to understand that we're now beginning to see the full import of the information age. It's no longer just the coders who dominate the big IT ideas.

14 Days of Piracy: Visualized thanks to Dipity

New ways to present information bring home the real story: Piracy's a pain that ain't goin' away.

By Ryan Skinner (email)

About two weeks ago, I started monitoring sources of information regarding merchant shipping piracy, and plotting in events and announcements in a timeline, produced by a nice service called Dipity.

Here's the timeline. Zoom in, zoom out, scroll, explore, have fun. Just note that the "location" function doesn't work worth a d*mn (my one real complaint with the service).

Piracy & Merchant Shipping on Dipity.

 

If you want to build on this timeline, feel free. You simply need to register with Dipity and then search for it (you'll also find a link below the timeline above). I'm quite certain I've left it open for people to add their own content.

Thanks to EUNAVFOR, OceanusLIVE, Lloyd's List, Marsec Review and others, who were my main sources for the content of the timeline!