The move to the cloud is changing the world. Most of the digital products we consume in our daily lives are dependent in some way on cloud services, but what actually is the cloud and how is the technology being used in ship management?
Cloud applications were pioneered by Salesforce. When they launched in 1999, they became the first software product that could be accessed by a web browser without any additional software installation required. Salesforce was, and still is, available for a monthly fee with software updates delivered automatically. This was a major technological and business innovation at the time, with every other competing product requiring users to buy and install software physically delivered on disc, and users being forced to buy expensive software updates separately.
The next major leap forward came with the release of Amazon Web Services. Originally an internal project designed to allow the retail giant to build new business lines without having to configure new servers, it was released to the public in March 2006 and transformed how developers create, host and sell software. Most software released today can be accessed through a web browser, hosting and powering applications through the cloud has been become the default operating model of new technology companies.
One important point to note is that the cloud is just someone else’s computer. When you access services on the cloud, you are using the internet to borrow someone else’s computing power rather than having to invest in your own physical servers. Amazon Web Services and Microsoft Azure rely on huge data centres located around the world that they are effectively renting out to tech companies and individual users.
The data that powers Thetius Insight is physically stored on servers located in Amsterdam, Eemshaven, Singapore, and Iowa. This approach makes it possible to build, deliver, sell, update, and buy software without having to ever invest in any hardware beyond a personal computer and an internet connection.
Migrating ship management to the cloud
From crewing and training to procurement and bunkering, ship management includes all of the support services that allow ships to operate at sea. The sector is mainly comprised of third-party providers, who provide ship management services to ship owners and charters. V-Group and Anglo-Eastern are the largest providers, with Bernhard Schulte, Fleet, and OSM making up the rest of the top five.
Ship management teams require a specific set of technical expertise, including marine engineering, QSHE, navigational competence, project management, training, procurement, and logistics. It also requires a great deal of administration; ships require vast amounts of documentation and certification, as do the seafarers who serve on them.
As with most enterprise sectors, the move to the cloud will take time, but there are some compelling use cases being developed for specific cloud-based services which can be integrated into or replace current processes in the sector. Most of these services focus either on vessel performance, procurement, or crewing and training. They are usually either designed to help users make better decisions regarding performance optimisation or to reduce administration and even automate procurement and crew management processes.
Though there has been growth in the startup sector, it is worth noting that industry leaders V-Group have invested heavily in cloud services through Embark, a project to transform both crew management and KPI reporting throughout the group of companies.
Startups and funding in the space
This is still a nascent sector, with 29 companies on Thetius Insight providing cloud-based services for ship management. That said, the sector has recently gained the attention of the venture community after a Series A investment in Nautilus Labs earlier this year.
$19million USD has been invested in the cloud ship management platforms since 2015, with the majority of startups in the space still at the seed stage.
The mean average seed investment for startups in the space is $303,000. With the mean average venture stage investment at $5,700,000.
Notable use cases and case studies
Procurement and Bunkering
Shipskart offers a streamlined way to order marine stores. With over 25,000 products on the platform, crew members can order stores from a mobile app on board, submit requisition orders to the fleet management team ashore, and have orders delivered to the ship’s next port of call. The platform also provides a suite of tools for analysing and benchmarking spend.
BunkerConnect offers a digital bunker platform and brokerage solution. The solution saves time, reduces transaction fees, and provides data and analytics on bunker spend and quality. Submitting RFQs through Bunker Connect is around 30 minutes faster than traditional methods, and they have been able to reduce total bunker expenses for clients by 1-1.5%.
BunkerEx is an online portal for owners and operators to find their optimal bunker port when planning voyages. Shipping companies miss cheaper bunker options in 3 out of every 10 voyages, adding +$200/day of cost across all trips. Bunkerex provides key market information, negotiate prices and sets up credit lines on the shipowner’s behalf. All correspondence is 100% transparent with a strong focus on price, fuel quality and minimising claims risk. Once a deal is fixed, they provide post-fixture support by liaising with the supplier, master, agent and surveyor to ensure a smooth delivery.
Crewing and Training
Martide provides a cloud-based solution that allows crewing managers to source, evaluate, track, and hire new crew members. They offer an entirely integrated solution for ship-owners, and ship-managers to fully crew a fleet of vessels. The system is purpose-built for small to medium ship-owners and operators, and allows them to control or outsource their crewing processes as much as they want, bringing transparency to the entire crewing process chain.
Tapiit Maritime is a platform for booking maritime training courses. It gives users access to courses, travel, and accommodation in one place. The Tapiit platform works for courses globally, giving seafarers and crewing managers an easy and fast way to manage the logistics of training while minimising costs.
C Teleport is the world’s first fully online marine travel agency. The platform integrates into any crewing software, and books and manages all flights. It even handles communication with crew and agents. The platform operates with no hidden costs and offers full budgetary control.
Nautilus Labs’ platform leverages machine learning-based analytics to help clients to better understand, manage, and market vessels. Shipping companies lose thousands of dollars per day due to error-prone reporting, slow analytics, and siloed decision-making. Nautilus pulls in data from different sources including sensors, manual reports and market information to build a unified fleet intelligence picture, helping clients make the right decisions to improve performance.
SailRouter is a desktop and cloud application that helps ship owners to reduce fuel consumption using machine feedback. Sailrouter uses weather routing and ship parameter optimization, connecting engine performance with ship hydrodynamics. All users, whether onboard or ashore, get access to a dashboard offering insight into current ship performance compared to historical data.
RadiantFleet’s Cloud Suite is an end to end ship management platform offering crewing, procurement, and vessel performance monitoring in one place. Their software helps businesses digitalize their workflows, cut costs and improve budgeting and productivity. They aim to provide their clients with a unique competitive advantage in a challenging market.
This is still an early-stage technology space, with benefits to ship operators and funding by investors yet to be fully realised. It is likely that we will see high levels of growth in the sector after the high profile investment in Nautilus Labs, in the same way that Flexport attracted a great deal of interest in the freight forwarding space after its first venture rounds.
The benefits of reducing administration costs onboard and ashore will likely become a minor driver of adoption of these technologies. With a major driver in demand growth being ongoing efforts by regulators to improve emission reporting in the sector. EU MRV has already proven this, with the enforcement of IMO 2020 likely to add to the reporting requirements. IMO 2020 will also put pressure on a market that is incredibly sensitive to volatile fluctuations in bunker prices, increasing demand for performance optimisation and bunker procurement tools.