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Lloyd's List Business Briefing: Oslo
Topic video - Generational and cultural changes in making the digital conversion
Watch our panel of experts discuss the generational and cultural changes needed within the shipping industry to successfully make the digital journey a positive one for everyone involved. This panel was filmed at the Lloyd's List Business Briefing Oslo on 29 May 2017.
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We have a fantastic afternoon lined up for you today. I'm very grateful that some of the biggest brains in the business have accepted our invitation to talk about opportunities and threats in the shipping industry.
We talk about modernise or sync, we talk about digitise or die, or we even say things like big data is for us like sex is for teenagers, are you thinking? So, everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so I think this is also one of the articles recently published in Lloyd’s List, it's a good way to describe digitalisation in shipping.
We are educating an industry; well I would argue we're probably not educating an industry ready for the technical revolution that we are effectively predicting between us. Your digital assistant will be answering some questions but you've got to get some boots on the ground with people who actually know what they're doing.
Yes, but I take a slightly more say optimistic approach on that because I think if you look at the young generation that is now say at universities or high school it is fantastic to see how they digest the digital capabilities, and I was just thinking last year we introduced drones as a way of inspecting inside of cargo tanks, and drones was the most popular Christmas present in the US a couple of years ago, so these are natural digital natives and they will master a lot of the things that we think is...
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Yes, but we will have exactly a big shift in competences and we need to think, and I mean this is managing about 60,000 seafarers per year around and having to train them this is a big change in competencies, in mindset, in framework and we need to give them clarity because it is a changing environment where we have at the same time a kind of perfect storm because we have 2020 the sulphur, we have the ballast water and we have other things which are speeding up at a certain pace and we see that the industry is struggling to cope with all these things.
I was just thinking there is actually one big dilemma that shipping companies are faced with these days because we talk a little bit as if we're all going to be Silicon Valley programming outfits, and we might. We might go that way but I think we still need to remember that it is a very physical industry, our own company touches somewhere between 10 and 15 million cars every year, it's physical handling of units and it's geographic, it's nitty-gritty, it's challenging in all its practical aspects, where technology of course comes in and supports it.
I think what we're looking at is ways of using partnerships and more flexible models both to speed up how fast we can get to the solutions as well as tapping into the best talent because we can't be sure that we are that; we are clever sure but I'm not sure I am the cleverest programmer on the street, so we need to go and find them. I think instead of trying for all of us to try and build up that competency in-house is going to be quite expensive, maybe it's better to find more flexible modes, so we're certainly looking into ways of partnering up or using areas of competency in a little bit more flexible way than we've historically done, because it's surely going to be a shortage of heads given all the opportunities for development that we have.
Per, Stena has a reputation for being an innovator, you are prepared to put your neck out and do things that others aren’t, is this about technology or is this about change management as we’re heard, what’s your view in terms of what it takes to be a digital ship owner these days?
Definitely, it’s about both of course. I think it really requires that you put things upside down. Here’s to give you an example, we have employed, in our company now, five mathematicians that are doing the work in the machine learning that we have entered into, very, very strongly. It is just something that you have to do, you have to throw the old stuff away and try new things and obviously, you need to try and some of the things work and some of the thing doesn’t really work that well, of course.
Similarly, we’ve brought in mentors for the management of the company so I have been mentoring myself for a number of people, being old in the business so to say. But now my mentor is twenty-five years old and I’m the adept so that’s a new situation and I can tell you, it’s very rewarding. So, that’s one way of doing it, I suppose.
Sven, I asked you here because our companies have been working together, our consultancy arm had helped you produce this report, very nice shiny report which is fresh off the press a couple of days ago. Basically, we helped you to go out and survey the market and your customers and the question was how ready for digitalisation are you...what was the response?
Indeed, I think the response was more positive than we actually anticipated. So, in fact, we asked two hundred shipping companies, thirteen thousand ships, various sizes and geography segments, and we asked at three levels in the organisation. Basically, the fleet, the ICT and the senior management level and the response is very positive that there is indeed very much focus, the organisations are more digital focused and ready than we anticipated and half of the companies expect and plan to invest more in digital services than actually this year and previous years.
Some say, thirty percent say, flat on sixteen and others say, fifty percent say even more so money is being put in the way of digital transformation. We also wanted to find out what, in fact, do we as technology providers actually need to do to give the efficiency, the earnings, the benefits that we all want the industry to benefit from? So, we went to various areas of technology and in fact, connectivity was one of the absolute core topics. Of course, we need to connect the ships to bring them into this global cloud or global operating business model.
Another, if I take the barriers, that is cyber security and security altogether so it’s a very big focus and I think it’s just become bigger since what’s happened out there with businesses affected.
But another one came in to play as well and that is crew skills and staff skills and maybe staff attitudes so we must also really take that into account to say how can we make this digital journey a positive one for everyone involved, I mean not everyone will be involved but we still have to motivate people and we have to make people part of it. I think that’s another key take away is to say how to make this happen with people because we are also a people industry and one other finding is in fact that many of us think ship centric but in fact, it is very much a question of how to improve the overall logistics chain and how to improve the customer experience.
Now, who is the customer? Well, it’s ultimately also the consumer, like you and me. I think that the shipping industry can maybe also change in being a bit more transparent and better in communicating all of the good things we have.