The internet has transformed many aspects of modern life, but one sector yet to digitize is shipping.This is true despite the fact that maritime commerce is the lifeblood of international trade, ferrying raw materials and finished goods between producers and consumers around the globe. In fact, 90% of all trade measured by volume is transported on a ship. In Boston, we get our gasoline, heating oil, natural gas, road salt, new cars — and many other staples that our lives depend upon — by sea.Shipping has historically been important to Massachusetts, known as the “Bay State,” where the company I lead, CargoMetrics Technologies, is based.
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May 7, 2019 - The Maritime Community Meet at Digital Ship Forums. Earlier this month Digital Ship brought together the maritime community in Athens at the. PAST EVENTS / CONTACT US / DIGITAL SHIP MAGAZINE / Past Events. For more information on any of our events contact: Youngsuk Park / e: [email protected] / t: + 3409. Maritime Cyber Resilience Forum 2019. Digital Ship Athens 2018. DIGITAL SHIP ATHENS 2017.
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Faneuil Hall, a city landmark, was a marketplace for seaborne imports and exports; Nantucket and New Bedford were once homeports to the world’s largest whaling fleets; the greatest clipper ships of the 19th century were built in East Boston; and Newburyport is the birthplace of the U.S. The Boston Tea Party is a shipping story, and the USS Constitution, an anchor on our waterfront, is the last stop on the historic Freedom Trail.But, as new glass high-rises fill up Boston’s seaport district, the city’s shipping sector has been replaced with a services industry of biotech, fintech, and many other kinds of technology drawing upon our extraordinary network of local universities. Boston punches above its weight, for example, in pharmaceutical and robotics research.While we rightly celebrate marvelous innovations happening onshore, shipping has been metaphorically pushed offshore, and not just in Boston, but in other coastal cities too — out of sight and out of mind. This is causing some persistent problems to fester.For starters, ships burn the dirtiest kind of bunker fuel, accounting for three percent of total CO2 emissions.
If shipping were a country, it would be the eighth largest greenhouse gas emitter, roughly equivalent to Germany’s carbon footprint. Coming IMO 2020 international regulations requiring ships to consume lower sulfur fuel are meant to start curbing these emissions, but shipping has a long way to go in order to become carbon neutral. Shipping wrestles with other environmental problems as well, such as the manner in which old ships are scrapped.
When carbon is ultimately priced for the cargoes themselves, trade patterns will evolve too.Despite shipping being vital to economic networks, it is also still far from secure. In the wake of 9/11, Congress passed legislation requiring 100% of imported containers to be checked for weapons of mass destruction. Today, according to the Journal of Commerce, we scan 3-5% of them.Convoluted offshore legal structures also let shady middlemen in the commodity markets prosper, and it’s their ships that evade sanctions and help keep despots in power. Tankers export Venezuelan and Iranian crude oil, often utilizing island storage facilities — the equivalent of the ocean’s dark alleys — to evade sanctions. North Korea runs an intricate network of mid-ocean “ship-to-ship” transfers which form an important link in the hermit state’s supply chain.
And it’s by ship that the vast majority of the world’s cocaine, heroin, and fentanyl are moved.Due to its innate international nature, shipping can be viewed as a case study in what happens when an industry lacks transparency — the Panama Papers on steroids so to speak. Obscure middlemen can influence the price of nearly every commodity. Look up the legacy of Marc Rich or the corruption probes ongoing in Brazil tied to Swiss trading houses to get a sense of the skullduggery.This means that trading houses managing complex logistics networks, clever in avoiding taxes yet instrumental in getting goods out of, say, Sudan, Libya or Zimbabwe, remain the go-betweens in the global economy. Arbitraging commodity prices to consumers is a quaint idea in an internet age when we otherwise know the real-time price of everything.Steeped in tradition, shipping is one of the last industrial sectors to innovate, which means a general lack of transparency in a mode of transportation that moves $9 trillion worth of cargo annually. Part of what makes shipping so interesting is also what has bedeviled its digital transformation; it is possible, even typical, for a vessel’s ownership, management, crew, flag, insurance, financing, and cargo all to come from different places. Unlike social networking apps where people share lots of personal information, in the shipping market, players’ instincts are the opposite; they have historically gone to great lengths to hide what they are doing. Like tech-enabled disruption happening elsewhere, however, the ubiquitous world wide web is beginning to catch up with the shipping business preference for secrecy and transcending its intrinsic borderlessness.Shipping is no stranger to innovation, having experienced profound periods of transformation like the application of the steam engine at sea, the container, or satellite global positioning systems (all three of which were American inventions, by the way).
Powered by data, today’s technologies are bringing new transparency that comes with new information. Shipping is on the cusp of being eaten by software.Take CargoMetrics Technologies, for example. Ten years ago, the big data systems the company relies upon were in their infancy. Today, CargoMetrics processes hundreds of millions of data points to generate intelligence on every vessel and every cargo that moves at sea. Lots of “dirty” data are cleansed and organized, and signals can be discovered in the noise. And the company records everything, maintaining a vast searchable archive measuring hundreds of billions of records that can be utilized by machine learning algorithms.
Rented servers in the cloud aligned in powerful computing networks crunch data from satellites, terrestrial sensors, and other sources to generate proprietary analytics on a global fleet of over 100,000 commercial vessels transporting cargo between more than 150 coastal countries.This kind of “Google for trade” brings radical new transparency to supply chains. See the “Oil Adequacy Index” CargoMetrics recently started publishing in collaboration with The Economist Intelligence Unit (EIU), for example, to learn OPEC’s weekly crude oil seaborne exports. Shipping intelligence that started by word of mouth in the famous Lloyd’s Coffee House in London in the 17th century is no longer a secret; it is now readily available on the internet to anyone for free. This trend will continue with the increasing commoditization of commodity information itself.
Data is the new oil.There are also some exciting innovations happening at traditional shipping businesses as well, perhaps no better epitomized than in one of our strategic partners, Maersk Tankers. Maersk, the Danish shipping company managing a traditional operation of rudder and propeller, is headlong into reinventing itself with analytics. Just a few years ago, Maersk operated a fully manual business.
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