14 Jan '18 The Analytical Maturity of 2018, Maritime is Heading into a Fourth Revolution
Welcome to 2018, a year where the data revolution really starts to make a valuable impact in shipping.
The shipping industry is, according to many, heading into a fourth revolution. It has been doing so for a number of years now. Speakers at some of the largest industry events around the globe have been telling us about disruption and change, painting a picture of a perfect storm of technology, regulation and environmental awareness. 2018 is the year that is set to strengthen this change.
What this comes down to, in business terms, is having the capability to recognise the early signs of risks and opportunities. The shipowner or operator is then in a position to act proactively.
With multimillion dollar assets this is not easy, but it is not impossible. A sustainable approach to fleet performance management, at the basic level, is key to change management. No shipowner or operator will be able to say they have an environmentally sustainable approach to business if they do not have an economically sustainable one. Data-driven decision making is key to this.
If an operator does not understand its fleet dynamics, awareness of performance, or where improvements can be gained, then it is in a much harder position to make operational decisions. This is even more important when such decisions are being made in a landscape of changing fuel supply, regulation and market dynamics.
Fleet investment, renewal or upgrade needs to be based on correct, real-time information, so measuring vessel performance, whatever the vessel, is an important step to making the right investment into a future fleet.
Environmental regulation and technological influences are two parts of the dynamic triangle linked to operational performance. The other is the market dynamics.
Competition is likely to increase in 2018, though by how much is hard to guess. In its new year review, Clarkson’s Research said that there had been strong trade volumes in 2017, representing a record sale and purchase year. With a more dynamic second-hand market, buyers will be looking for vessels that will meet the pending regulations. Prices are rising, though certainly not to the heights seen a decade ago, and so is global trade.
As an example, five-year-old capesizes have risen in value by 38%. There are ongoing improvements in the bulker (rates jumped 77% year-on-year) and containership markets, but challenges remain in the tanker, gas and offshore sectors, particularly around pending environmental regulations.
“After a sluggish few years, an improving world economy helped global seaborne trade to bounce back strongly in 2017, growing by 4.1% to 11.6bn tonnes, the fastest rate of growth since 2012. Demolition fell back to 35m dwt (tankers up 348% and bulkers down 50%) but trade still outpaced fleet growth (3.3%);” wrote Clarkson’s in a New Year post.
The British brokers also point to the continued trend of consolidation that has been sweeping some markets and how demolition prices have risen as fewer vessels are sent to the breakers.
Our suggestion is to look for vessels with performance data – notably smart, actionable, real-time data.
Vessels with the ability to add this kind of data to your fleet dynamic will be important. If you are going into the second-hand market in 2018, buy wise, buy smart and buy with a view to performance data and superior actionable analytics being a key part of your 2018 strategy.
Director of Sales