FILTER POSTS SHOW ALL AVIATION MARITIME
FILTER POSTS SHOW ALL AVIATION MARITIME

Evolution of Maritime Smart Shipping Strategies

Over the last few months, the topic of smart shipping and the various purposes of maritime IoT has been receiving increased media attention. A key point to remember is these terms mean different things to different people within the shipping ecosystem.

I will attempt to shed some light upon these….The uses of smart shipping technology for a ship owner, to a charterer, a ship manager, or an operator will vary significantly. One is primarily maintaining the asset’s value and utilisation as best as possible, another may to simply enable the vessel to reach its destination as quick and cost effectively, or another to maintain optimal performance of vessel operations.

Companies providing solutions will vary in their approach to each segment and how they convey their solutions. Software control of major marine equipment has been with us for over 30 years and with the capacity of microchips and memory increasing so has the sophistication and proliferation of that control so much so that, beyond the galley kitchen, it is rare to find some aspect or equipment of modern ships that is not monitored and/or controlled by a microprocessor. Connecting these to a shore-based intelligence (artificial or otherwise) is a sensible step.

Within maritime digital application vendors, the race is wide open, and how companies target potential customer group differs. One notable observation, from myself, is that everyone seems to be focused on the merchant market and the time to build up a critical mass of dominance in this area will lengthy.

Solutions within the maritime connectivity service provider market are also building and we are seeing some clear frontrunners, particularly Inmarsat and KVH Industries.

However, what some people may not realise is the strength, and clever strategies deployed by marine OEMs. In this piece, I wanted to give a clear overview of the key players in this part of the ecosystem.

In the case of marine OEMs, these firms have quickly envisage the potential for connected vessels with new operations of innovation or cost savings, and adjusted their businesses accordingly.

This has been a case from moving CAPEX business models for machinery to SaaS model for value added services or service included within the purchase of equipment.

This means the owners of the connectivity solution onboard the vessel need to allocate or allow some capacity for equipment machineries.

Recently, I interviewed Wärtsilä in regards to Fleet Operations Solution for voyage planning and fleet performance management.

The firm offers an entry point to an element of its smart shipping service with Navi-Planner which incorporates a modular approach; the first being “tracking and awareness”. In some cases, no upfront payments are required for installing a module onboard. Obviously to fully utilise the Warstila’s smart shipping solutions, radar and bridge sensors are necessary.

The primary object of the tool is allow an operator or charterer to understand their fleets in real-time, see planned routes, contingent deviations and forecast vessel/fleet schedules. Connectivity is key and VSAT, and even MSS connectivity needs sufficient bandwidth for use. Interestingly, Wärtsilä is offering customers the connectivity capabilities (like a service provider) as part of its fleet operation solutions, however, how many vessels they’ve equipped as a service provider is unknown. My guess is less than 500 but more than 100. (However, I should add this is only a portion of Wärtsilä’s smart shipping portfolio, and customers brought from the Eniram acquisition, vessel traffic services and others means Wärtsilä has a hefty number of vessel subscriptions.).

Monthly fees for Navi-Planner increase with additional modules of compliance reporting, voyage and ports and also hull-monitoring and engine supervision are included. The compliance and reporting module is particularly useful for charterers, hull and engine module for ship owners to extoll the productivity of their asset and voyage and ports solution for any companies looking to augment their logistics capabilities.

While Wärtsilä has been pushing focused services of a vessel’s functionality, ABB, with its ABB Ability™ offering has been gathering pace. In another interview with Antto Shemeikka, Vice President Digital Services, ABB Marine & Ports, the company has seen an increased interest in its digital maritime technology over the last 18 months.

Moreover, ABB also launched its ABB Ability™ Genix Industrial Analytics and AI Suite to aid in decision making. The firm believes with the greater use of vessel operational data, combined with its AI and analytics feature, included in ABB Ability™ Genix, a reduction of fuel consumption by up to ten per cent is possible. Furthermore, the technology has other benefits such as maintenance savings which utilises condition-based monitoring and early identification of potential malfunctions. All these factors can improve vessel uptime and reduce essential service visits to vessels by as much as 30 per cent.

ABB has refrained from getting too involved in whether the vessel has connectivity, and providing this if not. It is unclear why the company has chosen not to get too involved in this area as connectivity is vital for its solutions Valour’s take is in the case of Wärtsilä, that decision was probably thrust upon them. Wärtsilä has a significant market in after-sales. Its primary products are great big heavy marine diesel engines which need regular overhauls. Most ships won’t have the crew numbers for this activity so will call in a Wärtsilä team or one of the licensed providers to strip the engines. Many of these ships are older models and, in order to increase that side of their business, they will have offered extended warranty provided the ship engines can report into a Wärtsilä base, so it was in their commercial interest to hook up with a connectivity supplier. ABB ‘s marine business is primarily electronic solutions and digital offerings, which traditionally have a smaller after-sales market than other vessel systems. For example, distribution and control systems are rarely overhauled.

ABB has recently developed  a new module within its ABB Ability™ Marine Advisory – OCTOPUS for the EU-funded ATLANTIS project that provides actionable insights to help onshore operators optimise the planning of missions from port to wind farm, cut transfer times between land and wind farms, and reduce vessel waiting time and working times on-site.

The potential for this new module goes beyond a original sector. ABB’s vision is to develop the module to serve multiple sectors, such as the cruise industry, where it could be used to plan short routes, and the offshore oil and gas industry to map supply operations for rigs and floating offshore units.

ABB estimates that the system is currently utilised by around 90 per cent of the semi-submersible heavy lift ships in operation worldwide.

By the end of 2021, Valour Consultancy anticipates more than 60,000 smart shipping subscriptions will be sold by marine OEMs, representing a hefty chunk of changes, nearly $235 million globally. More increasingly, we foresee monthly subscription rates increasing over the next two to three years.

-
[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="5847|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="none" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]https://valourconsultancy.com/wp-content/uploads/2021/06/Fishing-Boat.png[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] Over the last few months, the topic of smart shipping and the various purposes of maritime IoT has been receiving increased media attention. A key point to remember is these terms mean different things to different people within the shipping ecosystem. I will attempt to shed some light upon these….The uses of smart shipping technology for a ship owner, to a charterer, a ship manager, or an operator will vary significantly. One is primarily maintaining the asset’s value and utilisation as best as possible, another may to simply enable the vessel to reach its destination as quick and cost effectively, or another to maintain optimal performance of vessel operations. Companies providing solutions will vary in their approach to each segment and how they convey their solutions. Software control of major marine equipment has been with us for over 30 years and with the capacity of microchips and memory increasing so has the sophistication and proliferation of that control so much so that, beyond the galley kitchen, it is rare to find some aspect or equipment of modern ships that is not monitored and/or controlled by a microprocessor. Connecting these to a shore-based intelligence (artificial or otherwise) is a sensible step. Within maritime digital application vendors, the race is wide open, and how companies target potential customer group differs. One notable observation, from myself, is that everyone seems to be focused on the merchant market and the time to build up a critical mass of dominance in this area will lengthy. Solutions within the maritime connectivity service provider market are also building and we are seeing some clear frontrunners, particularly Inmarsat and KVH Industries. However, what some people may not realise is the strength, and clever strategies deployed by marine OEMs. In this piece, I wanted to give a clear overview of the key players in this part of the ecosystem. In the case of marine OEMs, these firms have quickly envisage the potential for connected vessels with new operations of innovation or cost savings, and adjusted their businesses accordingly. This has been a case from moving CAPEX business models for machinery to SaaS model for value added services or service included within the purchase of equipment. This means the owners of the connectivity solution onboard the vessel need to allocate or allow some capacity for equipment machineries. Recently, I interviewed Wärtsilä in regards to Fleet Operations Solution for voyage planning and fleet performance management. The firm offers an entry point to an element of its smart shipping service with Navi-Planner which incorporates a modular approach; the first being “tracking and awareness”. In some cases, no upfront payments are required for installing a module onboard. Obviously to fully utilise the Warstila’s smart shipping solutions, radar and bridge sensors are necessary. The primary object of the tool is allow an operator or charterer to understand their fleets in real-time, see planned routes, contingent deviations and forecast vessel/fleet schedules. Connectivity is key and VSAT, and even MSS connectivity needs sufficient bandwidth for use. Interestingly, Wärtsilä is offering customers the connectivity capabilities (like a service provider) as part of its fleet operation solutions, however, how many vessels they’ve equipped as a service provider is unknown. My guess is less than 500 but more than 100. (However, I should add this is only a portion of Wärtsilä’s smart shipping portfolio, and customers brought from the Eniram acquisition, vessel traffic services and others means Wärtsilä has a hefty number of vessel subscriptions.). Monthly fees for Navi-Planner increase with additional modules of compliance reporting, voyage and ports and also hull-monitoring and engine supervision are included. The compliance and reporting module is particularly useful for charterers, hull and engine module for ship owners to extoll the productivity of their asset and voyage and ports solution for any companies looking to augment their logistics capabilities. While Wärtsilä has been pushing focused services of a vessel’s functionality, ABB, with its ABB Ability™ offering has been gathering pace. In another interview with Antto Shemeikka, Vice President Digital Services, ABB Marine & Ports, the company has seen an increased interest in its digital maritime technology over the last 18 months. Moreover, ABB also launched its ABB Ability™ Genix Industrial Analytics and AI Suite to aid in decision making. The firm believes with the greater use of vessel operational data, combined with its AI and analytics feature, included in ABB Ability™ Genix, a reduction of fuel consumption by up to ten per cent is possible. Furthermore, the technology has other benefits such as maintenance savings which utilises condition-based monitoring and early identification of potential malfunctions. All these factors can improve vessel uptime and reduce essential service visits to vessels by as much as 30 per cent. ABB has refrained from getting too involved in whether the vessel has connectivity, and providing this if not. It is unclear why the company has chosen not to get too involved in this area as connectivity is vital for its solutions Valour’s take is in the case of Wärtsilä, that decision was probably thrust upon them. Wärtsilä has a significant market in after-sales. Its primary products are great big heavy marine diesel engines which need regular overhauls. Most ships won’t have the crew numbers for this activity so will call in a Wärtsilä team or one of the licensed providers to strip the engines. Many of these ships are older models and, in order to increase that side of their business, they will have offered extended warranty provided the ship engines can report into a Wärtsilä base, so it was in their commercial interest to hook up with a connectivity supplier. ABB ‘s marine business is primarily electronic solutions and digital offerings, which traditionally have a smaller after-sales market than other vessel systems. For example, distribution and control systems are rarely overhauled. ABB has recently developed  a new module within its ABB Ability™ Marine Advisory - OCTOPUS for the EU-funded ATLANTIS project that provides actionable insights to help onshore operators optimise the planning of missions from port to wind farm, cut transfer times between land and wind farms, and reduce vessel waiting time and working times on-site. The potential for this new module goes beyond a original sector. ABB’s vision is to develop the module to serve multiple sectors, such as the cruise industry, where it could be used to plan short routes, and the offshore oil and gas industry to map supply operations for rigs and floating offshore units. ABB estimates that the system is currently utilised by around 90 per cent of the semi-submersible heavy lift ships in operation worldwide. By the end of 2021, Valour Consultancy anticipates more than 60,000 smart shipping subscriptions will be sold by marine OEMs, representing a hefty chunk of changes, nearly $235 million globally. More increasingly, we foresee monthly subscription rates increasing over the next two to three years. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Smart Shipping Has Arrived

One thing is certain within the maritime industry, smart shipping has arrived. However, what most people will think is “What is Smart Shipping?”

After speaking to range of different players in the ecosystem; I will endeavor to try and provide some understanding of this.

Smart shipping, ship digitalisation, maritime IoT, maritime digital applications; all these terms essentially refer advancements in ship operations, maintenance, performance optimisation via the use of technology and broadband communications.

Over the course of developing our latest report on smart shipping – The Future of Smart Shipping and Maritime Digital Applications, we discovered a plethora of opinions and interpretations about the aforementioned terms from a variety of players in the ecosystem.

Valour Consultancy defines a smart vessel as any vessel with applications to cover remote machinery diagnostics, CCTV/video connection services, predictive maintenance and cloud-based storage. To achieve this, the vessel must have broadband connectivity capabilities such as VSAT or cellular, and a vessel management system.

However, proclaiming how many smart ships are operating around the world is challenging as this category is catered for by a multitude of players for each of the above components.

Furthermore, for example, Samsung Heavy Industries (a ship builder) constructs a merchant vessel and deploys its SSI solution, sells the vessel to CMA CMG, who purchase several pieces of equipment from ABB and Wartsila, then also add some additional IoT services from Marlink, its connectivity service provider, and also subscribing to a data analytics company, such as NAPA.

Each of the parties will claim a sale, or subscription service for this one smart vessel. As such, calculating the total number of smart ships is rather challenging because if we were to sum each smart ship subscription or service, it would amount to a very high number indeed misrepresenting magnitude of the market.

Key Suspects

Presently, the maritime equipment manufacturers hold the majority of smart shipping services, with companies such as Kongsberg, Wärtsilä, and ABB being quick to extend their digital offerings to existing business operations. For example, as widely publicised, Kongsberg has been heavily involved in the Yara Birkeland, an autonomous container vessel currently being completed and commissioned in Norway. Although the subject of this piece is smart shipping, this element is a key step in the evolution, ultimately, to autonomous vessels.

Kongsberg’s intelligent digital platform, Kognifai, enables 3rd party data analytics companies to bring their solutions to a much larger shipping fleet. In addition, one of the company’s key smart shipping and IoT solutions is “Vessel Insight Benchmark”. The new application aims to provide ship metrics and data insights to improve a vessel or a fleet of vessel’s performance and was launched in the middle of 2020. The maritime digital application looks to provide a data-driven insight into the vessel operating profile compared to vessels of similar size and type. The service is based on common definitions and high quality data that provides an instant historic perspective. It is understood 37 per cent of the firm’s maritime revenues are recurring basis. The firm had more 30,000 vessels with vessel insight installed.

The Finnish company, Wärtsilä, defining its products and services within the smart shipping realm in itself would be a 50,000 word thesis focusing upon operational efficiencies and cost savings. However, a short summary includes the firm serves Anglo-Eastern’s fleet, more than 600 vessels, with its Fleet Optimisation Solution, a digitalisation suite that enhances efficiency and performance via route optimisation, speed management, weather routing, ship-to-shore reporting, and fleet performance management to reduce fuel consumption. Other services offered include a new online platform that allows companies to manage their installations more efficiently, and the remote accessibility of experts. This tool leverages artificial intelligence and advanced diagnostics to remotely monitor equipment and systems in real time. The firm has quickly transformed its business model to a SaaS rather than traditional CAPEX business model. Consequently, managing the lifecycle of an asset has become paramount and performance gains are achieved via upgrades, fuel conversions, and using data analytics and artificial intelligence to support its customer business decisions. Even by the end of 2019, the business of equipment sales to service revenues were equally split.

ABB launched ABB Ability in 2017, digital portfolio that offers hundreds of digital solutions to increase productivity and safety cost effectively. The solution is part of an integrated global network of round-the-clock operations centers that can take care of the full scope of ABB systems on board vessels from afar. Remote diagnostics of shipboard equipment has become a key feature of shipping over the last decade. Sensor-driven onboard monitoring software that fully integrates with analytics ashore plays a central role in facilitating this approach and ABB believes that there are clear maintenance savings available to owners that commit to its package as digitally connected on-duty engineers can solve cases remotely 24/7.

Traditional connectivity providers such as Inmarsat, KVH Industries and others are also embracing the smart shipping revolution. For example, Inmarsat now provides dedicated IoT and operational service called Fleet Data. The service or digital ecosystem enables 3rd party data analytic vendors or other solutions to “plug-in” their applications for Inmarsat’s FX vessels. This could be simply to aggregate data functions allowing the user of the service to easily view, monitor, analyse and compare performances of vessel operations. Inmarsat has made Fleet Data available to all its FX and FB vessels – more than 40,000 vessels. The service is offered on a yearly subscription basis and it is estimated that the basic package starts from $1,000 per year, however, costs obviously vary upon the application’s data usage from a bandwidth and capacity standpoint.

KVH provides a similar stand-alone IoT service which it launched in June 2019. The solution has three modes: Watch Flow, for 24/7, machine-to-machine (M2M) data delivery compatible with all IoT applications; Flow Intervention for a boosted data capacity and speeds for bulk file transfers, application updates, and general access to the onboard endpoint. Remote Expert Intervention is an on-demand high-speed session for remote face-to-face support and remote equipment access. The company hopes KVH Watch service enable hardware manufacturers, data analytic companies and other IoT service firms to have their own dedicated VSAT terminal.

The Watch Flow plan starts from as little as $99 per month and customers do not need to purchase an AgilePlans subscription for the IoT service. The price of the plan is primarily dependent on the number of sensors and data requirements of the user.

As stated above, many companies are addressing elements of the smart shipping market in different ways. This patchwork of solutions is a start but still in the primary stages of development.

The availability and price of ship satellite connectivity is much better than, say, 5 years ago, and, providing simple solutions to streamline processes onboard a vessel is easy to translate into operational and financial gains.

It is expected that a swarm of bigger companies will develop holistic system solutions that will provide a complete oversight and co-ordination for all the software inputs feeding it. These may be companies outside of the maritime sphere.

Market Dynamics

Satellite connectivity is becoming ever more cost effective. It’s highly commoditized and we will see a raft of mergers and acquisitions in the next 18 months within the maritime connectivity sphere.

One natural strategy for service providers and operators will be to include and upsell more value added services. Cybersecurity protection and IoT solutions will become focal services in the next two years. Services providers will likely generate more than 40 per cent of their revenues from these new services rather than the connectivity airtime within this period.

We will also see it as much more common practice for hardware companies, such as Wartsila or Kongsberg to own their communication terminals onboard customer vessels. Control and accessibility of their resources will be more critical than ever. KVH Industries will likely see some strong upsides from this trend.

Valour Consultancy’s key takeaways

1.      The initial stages of the smart shipping evolution are now fully developed.

2.      A concise and clear definition of a smart vessel is possible, how many smart ships sailing the oceans is still unclear. However, there are many smart shipping solutions being used.

3.      Following the last point, the number of maritime digital applications has exploded and hundreds of vendors are pushing their services.

4.      Large number of acquisitions will be undertaken by the leading companies of hardware manufacturers and service providers.

5.      Service providers will become kingmakers in this field by 2026 onwards, we believe they will quickly purchase the leading 3rd party maritime analytic companies.

6.      The end game is autonomous vessels.

-
[fusion_builder_container hundred_percent="no" hundred_percent_height="no" hundred_percent_height_scroll="no" hundred_percent_height_center_content="yes" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" status="published" publish_date="" class="" id="" border_size="" border_color="" border_style="solid" margin_top="" margin_bottom="" padding_top="" padding_right="" padding_bottom="" padding_left="" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" enable_mobile="no" parallax_speed="0.3" background_blend_mode="none" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" video_preview_image="" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0"][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" spacing="" center_content="no" link="" target="_self" min_height="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" hover_type="none" border_size="0" border_color="" border_style="solid" border_position="all" border_radius="" box_shadow="no" dimension_box_shadow="" box_shadow_blur="0" box_shadow_spread="0" box_shadow_color="" box_shadow_style="" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="" margin_bottom="" background_type="single" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_image_id="" background_position="left top" background_repeat="no-repeat" background_blend_mode="none" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset="" filter_type="regular" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0" last="no"][fusion_separator style_type="default" hide_on_mobile="small-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] One thing is certain within the maritime industry, smart shipping has arrived. However, what most people will think is “What is Smart Shipping?” After speaking to range of different players in the ecosystem; I will endeavor to try and provide some understanding of this. Smart shipping, ship digitalisation, maritime IoT, maritime digital applications; all these terms essentially refer advancements in ship operations, maintenance, performance optimisation via the use of technology and broadband communications. Over the course of developing our latest report on smart shipping – The Future of Smart Shipping and Maritime Digital Applications, we discovered a plethora of opinions and interpretations about the aforementioned terms from a variety of players in the ecosystem. Valour Consultancy defines a smart vessel as any vessel with applications to cover remote machinery diagnostics, CCTV/video connection services, predictive maintenance and cloud-based storage. To achieve this, the vessel must have broadband connectivity capabilities such as VSAT or cellular, and a vessel management system. However, proclaiming how many smart ships are operating around the world is challenging as this category is catered for by a multitude of players for each of the above components. Furthermore, for example, Samsung Heavy Industries (a ship builder) constructs a merchant vessel and deploys its SSI solution, sells the vessel to CMA CMG, who purchase several pieces of equipment from ABB and Wartsila, then also add some additional IoT services from Marlink, its connectivity service provider, and also subscribing to a data analytics company, such as NAPA. Each of the parties will claim a sale, or subscription service for this one smart vessel. As such, calculating the total number of smart ships is rather challenging because if we were to sum each smart ship subscription or service, it would amount to a very high number indeed misrepresenting magnitude of the market.

Key Suspects

Presently, the maritime equipment manufacturers hold the majority of smart shipping services, with companies such as Kongsberg, Wärtsilä, and ABB being quick to extend their digital offerings to existing business operations. For example, as widely publicised, Kongsberg has been heavily involved in the Yara Birkeland, an autonomous container vessel currently being completed and commissioned in Norway. Although the subject of this piece is smart shipping, this element is a key step in the evolution, ultimately, to autonomous vessels. Kongsberg’s intelligent digital platform, Kognifai, enables 3rd party data analytics companies to bring their solutions to a much larger shipping fleet. In addition, one of the company’s key smart shipping and IoT solutions is “Vessel Insight Benchmark”. The new application aims to provide ship metrics and data insights to improve a vessel or a fleet of vessel’s performance and was launched in the middle of 2020. The maritime digital application looks to provide a data-driven insight into the vessel operating profile compared to vessels of similar size and type. The service is based on common definitions and high quality data that provides an instant historic perspective. It is understood 37 per cent of the firm’s maritime revenues are recurring basis. The firm had more 30,000 vessels with vessel insight installed. The Finnish company, Wärtsilä, defining its products and services within the smart shipping realm in itself would be a 50,000 word thesis focusing upon operational efficiencies and cost savings. However, a short summary includes the firm serves Anglo-Eastern’s fleet, more than 600 vessels, with its Fleet Optimisation Solution, a digitalisation suite that enhances efficiency and performance via route optimisation, speed management, weather routing, ship-to-shore reporting, and fleet performance management to reduce fuel consumption. Other services offered include a new online platform that allows companies to manage their installations more efficiently, and the remote accessibility of experts. This tool leverages artificial intelligence and advanced diagnostics to remotely monitor equipment and systems in real time. The firm has quickly transformed its business model to a SaaS rather than traditional CAPEX business model. Consequently, managing the lifecycle of an asset has become paramount and performance gains are achieved via upgrades, fuel conversions, and using data analytics and artificial intelligence to support its customer business decisions. Even by the end of 2019, the business of equipment sales to service revenues were equally split. ABB launched ABB Ability in 2017, digital portfolio that offers hundreds of digital solutions to increase productivity and safety cost effectively. The solution is part of an integrated global network of round-the-clock operations centers that can take care of the full scope of ABB systems on board vessels from afar. Remote diagnostics of shipboard equipment has become a key feature of shipping over the last decade. Sensor-driven onboard monitoring software that fully integrates with analytics ashore plays a central role in facilitating this approach and ABB believes that there are clear maintenance savings available to owners that commit to its package as digitally connected on-duty engineers can solve cases remotely 24/7. Traditional connectivity providers such as Inmarsat, KVH Industries and others are also embracing the smart shipping revolution. For example, Inmarsat now provides dedicated IoT and operational service called Fleet Data. The service or digital ecosystem enables 3rd party data analytic vendors or other solutions to “plug-in” their applications for Inmarsat’s FX vessels. This could be simply to aggregate data functions allowing the user of the service to easily view, monitor, analyse and compare performances of vessel operations. Inmarsat has made Fleet Data available to all its FX and FB vessels – more than 40,000 vessels. The service is offered on a yearly subscription basis and it is estimated that the basic package starts from $1,000 per year, however, costs obviously vary upon the application’s data usage from a bandwidth and capacity standpoint. KVH provides a similar stand-alone IoT service which it launched in June 2019. The solution has three modes: Watch Flow, for 24/7, machine-to-machine (M2M) data delivery compatible with all IoT applications; Flow Intervention for a boosted data capacity and speeds for bulk file transfers, application updates, and general access to the onboard endpoint. Remote Expert Intervention is an on-demand high-speed session for remote face-to-face support and remote equipment access. The company hopes KVH Watch service enable hardware manufacturers, data analytic companies and other IoT service firms to have their own dedicated VSAT terminal. The Watch Flow plan starts from as little as $99 per month and customers do not need to purchase an AgilePlans subscription for the IoT service. The price of the plan is primarily dependent on the number of sensors and data requirements of the user. As stated above, many companies are addressing elements of the smart shipping market in different ways. This patchwork of solutions is a start but still in the primary stages of development. The availability and price of ship satellite connectivity is much better than, say, 5 years ago, and, providing simple solutions to streamline processes onboard a vessel is easy to translate into operational and financial gains. It is expected that a swarm of bigger companies will develop holistic system solutions that will provide a complete oversight and co-ordination for all the software inputs feeding it. These may be companies outside of the maritime sphere.

Market Dynamics

Satellite connectivity is becoming ever more cost effective. It’s highly commoditized and we will see a raft of mergers and acquisitions in the next 18 months within the maritime connectivity sphere. One natural strategy for service providers and operators will be to include and upsell more value added services. Cybersecurity protection and IoT solutions will become focal services in the next two years. Services providers will likely generate more than 40 per cent of their revenues from these new services rather than the connectivity airtime within this period. We will also see it as much more common practice for hardware companies, such as Wartsila or Kongsberg to own their communication terminals onboard customer vessels. Control and accessibility of their resources will be more critical than ever. KVH Industries will likely see some strong upsides from this trend.

Valour Consultancy’s key takeaways

1.      The initial stages of the smart shipping evolution are now fully developed. 2.      A concise and clear definition of a smart vessel is possible, how many smart ships sailing the oceans is still unclear. However, there are many smart shipping solutions being used. 3.      Following the last point, the number of maritime digital applications has exploded and hundreds of vendors are pushing their services. 4.      Large number of acquisitions will be undertaken by the leading companies of hardware manufacturers and service providers. 5.      Service providers will become kingmakers in this field by 2026 onwards, we believe they will quickly purchase the leading 3rd party maritime analytic companies. 6.      The end game is autonomous vessels. [/fusion_text][/fusion_builder_column][fusion_builder_column type="1_1" layout="1_1" spacing="" center_content="no" link="" target="_self" min_height="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" hover_type="none" border_size="0" border_color="" border_style="solid" border_position="all" border_radius="" box_shadow="no" dimension_box_shadow="" box_shadow_blur="0" box_shadow_spread="0" box_shadow_color="" box_shadow_style="" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="" margin_bottom="" background_type="single" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_image_id="" background_position="left top" background_repeat="no-repeat" background_blend_mode="none" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset="" filter_type="regular" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0" last="no"][fusion_separator style_type="default" hide_on_mobile="small-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]
Sign up to Our FREE Newsletter
You'll receive updates on our research and regular insights on the impact of the current COVID-19 pandemic
SIGN UP
No Thanks!
close-link