Navigating the Complexities of Smart Shipping on the Path to Decarbonization

The world is striving to combat the threat of climate change, and industries across the globe are being required to evaluate their environmental impact and improve sustainability. Over 80 percent of the volume of international trade is carried through the ocean, and so the maritime industry must play a pivotal role in reducing environmental impact.

Due to this, the sector has seen a series of regulations aimed at addressing sustainability. The 2023 International Maritime Organization (IMO) GHG Strategy is aimed at reducing carbon intensity by at least 40 percent by 2030, 80 percent by 2040, and ultimately achieving net zero around 2050. New regulations, such as the EEXI CII requirements which focus on enhancing energy efficiency and reducing carbon emissions, are a significant driver toward this goal.

From a commercial perspective, decarbonization enhances operational efficiencies and often goes hand in hand with substantial cost savings. It’s highly likely this is what drives shipping companies when they invest in smart shipping technologies.

This article looks at the technologies involved with smart shipping, the role of satellite, and the challenges to advancing smart shipping.

Where Are We Now?

What is smart shipping? Smart shipping is the utilization of digital technologies to improve vessel and fleet efficiencies. This can be unmanned machinery spaces, the remote and automated monitoring of machinery, tank levels, and cargo as well as data analytics that optimize vessel operations through predictive maintenance, and most importantly route and fuel optimization.

There are various companies involved in the smart shipping and IoT ecosystem. Data analytic companies play an essential role in optimizing vessel performance and reducing carbon emissions which often use a mixture of manual and real-time sensor data to support better decision-making. Hardware companies provide the necessary technological infrastructure for these services, including sensor technology and data storage. These companies are increasingly offering software solutions to provide a more holistic service. One example is the foundation of Kongsberg Digital in 2016, which provides vessel performance insights through its Vessel Insight and K-Fleet.

Ship classification societies also have an interesting role in the ecosystem. Societies not only provide verification services but also offer their own digitalization solutions either by developing this in-house or by purchasing software companies. It was early last month that Lloyd’s Register announced its acquisitions OneOcean, Hanseaticsoft, and ISF Watchkeeper are all merging under the LROneOcean brand.

Connectivity is key in the smart shipping and IoT ecosystem, and therefore the satellite industry has an important role to play in meeting decarbonization goals.

Connectivity service providers are both enablers and providers of smart shipping solutions. Satellite connectivity is an enabler of ship-to-shore communication and real-time data collection and exchange. This real-time data exchange is necessary to monitor a vessel’s performance, safety, and environmental conditions. This facilitation of IoT solutions is exemplified in KVH’s connectivity package, AgilePlans, which delivers network segregation of IoT sensors and services when connecting with cloud and onshore networks. Furthermore, providers are commonly turning to value-added services as an addition to connectivity packages, examples include Marlink’s BridgeLink, and Inmarsat’s Fleet Data.

But the connectivity sphere is changing, and the role of Low-Earth Orbit (LEO) LEO constellations is attracting significant attention. This attention is not only on Starlink, but also Eutelsat OneWeb and upcoming constellations such as Telesat Lightspeed, and Amazon Kuiper.

The benefit of LEO constellations is that they have lower latency and higher data throughput in comparison with Geostationary Orbit (GEO) VSAT which offers significant benefits for real-time data transfer. With respect to decarbonization goals, this data exchange is particularly useful for remote monitoring and route optimization. The constellations also offer significant potential for the concept of the unmanned vessel which requires continuous uptime of connectivity for a continuous data exchange.

Nevertheless, for current applications GEO VSAT provides enough latency and bandwidth for vessel and bandwidth to meet vessel and application requirements. The impact of LEO constellations remains to be seen, as the technology spreads across the industry its role is only set to increase.

Key Challenges

While smart shipping technologies have advanced, there is a considerable distance to cover before these services can align with the challenging goal set by the IMO.

A modern vessel is estimated to produce 20 gigabytes of sensor data per day, and this is only set to increase. Smart shipping services generate a significant amount of data related to engine status, various mechanical parts, or onboard refrigerated containers. Yet this can cause issues. Increased data standardization is necessary when amassing a large amount of data from various sources. Without it the quality and reliability of analyses and reporting are compromised as inconsistent data formats can lead to errors, hinder integration, and create unnecessary complexities. There are moves towards creating better data standardization in the maritime industry.

Organizations such as the Digital Container Shipping Association (DCSA) are driving standardization. Its members include four of the world’s largest shipping companies Maersk, MSC, Hapag-Lloyd, and Ocean Network Express as well as CMA CGM, Evergreen Line, Hyundai Merchant Marine, Yang Ming Marine Transport Corporation, and ZIM Integrated Shipping Service. The role of DCSA is to achieve data interoperability in container shipping by offering digital standards. These standards are adopted on a global scale by the industry, enabling digital trade, providing real-time cargo visibility and improving utilization of vessels and containers. Its standards create explicit understanding of data definitions and the way these data are exchanged between supply chain stakeholders. The organization reflects the growing appetite for digital solutions in the container shipping market.

Due to current economic climates, startups in all sectors are challenged with reduced funding. In the smart shipping industry, we saw a peak in 2019 and 2020 in the number of new startups which has slowed in recent years. The venture capital (VC) community has been a relatively slow adopter of the maritime sector, for it attracts only 0.3 percent of total VC investment, even with a share of global GPD of approximately 0.9 percent. Nevertheless, investment in maritime technology is taking place. In 2022, the UK Shipping Office for Reducing Emissions (SHORE) made 206 million pounds ($258 million) available to support the development of clean and smart maritime technologies, which built on the previous funding of 23 million pounds ($29 million).

The final key challenge of smart shipping solutions meeting decarbonization goals is the role of connectivity. As discussed, connectivity is a facilitator of smart shipping services as it enables ship-to-shore communication and real-time data exchange. However, there are a large number of vessels without GEO VSAT connectivity onboard and thus have the inability to fully deploy smart shipping services.

Valour Consultancy believes less than 50,000 vessels worldwide have GEO VSAT-equipped connectivity onboard. But with a wide range of connectivity options available does a vessel need VSAT to be considered a smart ship? LEO VSAT is one avenue that is open to the maritime industry with others including the utilization of cellular technology.

On the road to decarbonization, the maritime industry is met with both progress and challenges. Regulatory framework is providing direction, but the path remains to be complex. Smart ship technologies offer one promising avenue, another being the development of alternative fuels. Innovations such as the digital twin, sensor technology, and artificial technologies offer significant benefits for vessel management, cost saving, and improved environmental responsibility. Connectivity plays a pivotal role in enabling smart shipping technologies, serving as an enabler in achieving decarbonization objectives in the maritime industry. Nevertheless, there remain challenges for satellite connectivity which need to be addressed, alongside challenges for standardization and collaboration, to continue the journey towards net zero. VS

Alishia Sims is a market research analyst at Valour Consultancy. The company principally centers on the mobility markets and Alishia is currently studying the influence of maritime digital technologies and connectivity services.