Smart Shipping #2: Shaping the future with Shipping Company 4.0
In this chapter, we explore how the maritime industry can harness lessons from the aviation sector to overcome its unique challenges: driving advancements in operational efficiency, environmental sustainability, and safety standards.
We are ready to continue our insightful journey through Smart Shipping with our concept “Shipping Company 4.0”. Having previously explored how data offers a competitive advantage in the maritime industry, we will shift our focus skyward towards the aviation sector, an industry that we can learn from. This chapter delves into the invaluable lessons from the skies above and their applicability to the maritime world.
We uncover how the digitalization strategies and innovations in aviation have not only enhanced operational efficiency and customer satisfaction but also addressed key challenges similar to those faced by the maritime industry. Let’s explore how these insights can be seamlessly integrated into the shipping sector to further bolster Shipping Company 4.0.
For this purpose, we will revisit the six major challenges that we have already addressed in the “Digital Value Chain” section: Cost pressure, Staff situation, Complexity and efficiency, Environmental protection and sustainability, Cyber Security, and Digital standards. Now, we can provide initial answers.
II. How shipping companies benefit from the experience in the aviation sector
Decreasing costs, improved quality, and increased customer loyalty; All companies in the aviation industry share these same goals. To achieve them, they have focused primarily on comprehensive digitalization, regardless of whether they are airlines, MRO (maintenance, repair, overhaul) operations or air cargo handlers.
With our Shipping Company 4.0 concept, we pass on our experience to the shipping industry:
1. Cost pressure | Any player who wants to remain competitive in the aviation sector is exposed to an increasing pressure to adapt. Throughout history, passengers have always wanted to fly at a reasonable price, but have become increasingly aware of their own carbon footprint in the face of climate change and sustainability. Flexible offers are expected, while the availability of all services must be guaranteed. The flight experience both on the ground and in the air should be comfortable, enjoyable, and friendly.
The consistent digitalization of all processes, from ticket purchases to online check-ins, ensures a smooth and improved customer journey at a lower cost. Shipping companies can benefit from this by putting their customers at the forefront of the digital design process, transforming the operational workflows while increasing customer satisfaction and loyalty.
2. Staff situation | The utilization of digital technologies can enhance the appeal and efficiency of work, concurrently addressing the shortage of skilled workers and society’s escalating demand for meaningful activities coupled with social responsibility and environmental protection. Various assistance systems further aid staff in intricate and repetitive tasks. An illustration of such a system is the integrated Flight Folder (iFF). This system provides pilots with an electronic briefing application to streamline flight operations. The favorable outcomes observed in the aviation industry can be extrapolated to benefit shipping companies.
3. Complexity and efficiency | To handle complexity and enhance efficiency, numerous aspects within the aviation industry have undergone automation, with related processes being digitized. This transformation has resulted in sustained improvements in efficiency, quality, and cost savings, as well as in the establishment of faster, more manageable, and resilient operations. A notable example is AVIATAR, a solution designed for aircraft handling and maintenance. Similar automation and digitalization solutions could be employed by shipping companies to optimize their value creation. Concepts derived from AVIATAR can be adapted and implemented in the shipping industry to achieve similar benefits.
4. Environmental protection and sustainability | In the aviation sector, there has been enormous progress towards climate protection in recent years, from engines and aerodynamics, to reduced carbon emissions in process control. Software solutions have been implemented to enhance transparency regarding emissions, with the consideration that only by accurately determining the cost of CO2 emissions can it be factored into pricing for customers. In a parallel approach, shipping companies can adopt similar strategies to promote transparency and efficiency in their operational processes, incorporating smarter resource management. An illustrative example is the Operations Decision Support Suite, abbreviated as OPSD. This suite consolidates information from various systems pertaining to relevant framework conditions and resources for a flight, encompassing aspects such as weather, airports, aircraft, and crew data. Consequently, the adoption of OPSD enables a more data-driven approach to the entire operational control of airlines, fostering flexibility and resilience.
In addition, it simplifies and accelerates the highly complex decision-making process of flight planners through automated decision-making aids. These decisions lead to a reduction in costs and contribute to increased sustainability, solutions that can be introduced to shipping companies.
5. Cyber Security | Strict security standards and protocols are implemented in aircraft to safeguard passengers and staff, enhancing operational reliability. While shipping companies are currently adopting similar measures, they must increase their investments in IT security to address the anticipated rise in digitalization. The progression towards digital end-to-end logistics specifically presents an escalating challenge for cybersecurity.
Cybersecurity transcends technical aspects and is intricately tied to a specific mindset. Many companies, including those in the shipping industry, often require a shift in thinking. This may involve reinforcing collaboration between public institutions and private companies within the field. Open information sharing is crucial, as critical infrastructure security involves a diverse array of stakeholders and is not the sole responsibility of any single company or organization.
Drawing parallels with aviation, experiences in that sector can be effectively applied to enhance security measures in shipping.
6. Digital standards | The aviation industry is actively becoming more digitalized and uses innovations such as artificial intelligence and the Internet of Things to improve processes and services, a development that is driven by market pressure and customer expectations. As the pressure builds, the airlines’ umbrella organization IATA — founded in 1945 — is strongly pushing standardization, so that digitalization in the aviation sector can be more easily executed. Roughly 300 airlines belong to IATA and represent more than 80 per cent of global air traffic.
With the DCSA, major shipping companies have filled the gap and founded an association in 2019 to take care of the development of common digital standards for the shipping industry. The example of IATA shows that standardization is teamwork, but also essential — which also applies to the DCSA.
Conclusion
As we bring this chapter to a close, we have traversed the valuable lessons learned from the aviation industry and their applicability to maritime operations. Our journey has highlighted how adopting strategies from the skies can yield substantial improvements in cost management, operational efficiency, environmental sustainability, safety standards, and digital standardization within the realm of shipping.
As we look forward, we stand on the cusp of the final leg of our “Smart Shipping” section. In the upcoming chapter, our focus will shift to the practical implementation of these insights. We will delve into the strategic steps essential for shipping companies to successfully embrace digital transformation. This exploration encompasses a thorough examination of how digitalization can be seamlessly integrated into every facet of maritime operations, spanning from ship management to customer service. As well, we will explore how this digital integration can pave the way for the development of new, sustainable business models within the shipping industry.
