Further on up the road…
The Arab Spring is even more confounding. With so many analysts and pundits on hand to opine about the Middle East, why did no one see the uprisings in Egypt, Iran, Syria and Bahrain coming? Perhaps they had been numbed by the false dawns in Palestine and Lebanon, but for a moment it seemed as though the ability to imagine what a future Middle Eastern might look like had gone for good.
Predicting technology development is, granted, even more difficult than political events but the stakes, while valued differently, are just as high. Only last week, I saw a satellite gateway where banks of processors had been replaced by one trim cabinet.
Social Media took some time to take hold with some early failures dropping by the wayside so perhaps we should go easy on digital pundits. But given that the internet has taken the lid off communications once and for all, it should have been easier to see that the rules were going to change forever.
In shipping, I’d suggest there have been far too few examples of forward thinking. DNV’s Shipping 2020 publication is one of the few that provide a firm vision and in its case, the findings are predicated on shipping’s ability or otherwise to adapt to the changing regulatory landscape and grasp the competitive opportunities that they present, while also managing the risks.
What it doesn’t mention are the other trends that I think need more debate and greater understanding.
Chief among these is political and business risk, or put another way, that the shipping industry which emerges from the current recession will not only look different to the one that went into it, it will work to different rules, be subject to different forces and ultimately be controlled by a different set of leaders.
For shipping this means a continuation, not an abating, of short-term volatility in rates and earnings, with new sources of cargo and finance in equal measure. As commodities shift more towards spot pricing, so will shipping. Some even predict the end to long term charters without a link to index pricing, so uncertain is the picture looking more than 12 months ahead. That increases pressure on the whole supply chain to not just reflect price levels but payment terms too. The risk that quality suffers must be considered a real one.
Demographic changes are continuing too; not least the impending retirement of a wave of senior Caucasian seafarers and their replacement with officers from the booming markets of Asia and Eastern Europe. The ceo of a large shipmanagement company last week told me that their problem was not just a shortage of competent seafarers but that with crew choosing to come ashore earlier, skills were under pressure in the office as well.
The seafarer issue has been highlighted – telegraphed even – by BIMCO/ISF manpower survey seafarer surveys of the 2000, 2005 and 2010 but according to some manning agencies, shipowners and managers weren’t listening clearly enough at the start of the last decade and are suffering now as a result.
Other trends – the shift to new fuel sources for reasons of cost and compliance are better known and the industry will spend the next decade chasing multiple single-digit improvements in fuel efficiency until someone grasps the nettle and chooses to build the truly next generation ships that are currently still concept designs.
The final trend – and one that has been to some extent ignored by those outside the IT department – is the growth of computing power that continues to drive Moore’s Law headlong into the cloud.
Until recently, cloud computing for ships was a pie in the sky idea, made impractical by the cost and practicality of ship to shore communications. For some users, simply overcoming latency was challenge enough. When it came to complex computing and sharing of data and documents, there was too big a mountain to climb.
The ability to compress and optimise data not just over land-based networks but via satellite too has started to make cloud computing a reality in shipping. Just as with other major changes there are winners and losers from this change. Ships and managers can use the systems they use ashore and finally use the same tools of social media that are so quickly changing life ashore. The suppliers that counted on the fact that shipping would always do things differently will need to adapt or die.
As I discussed on the Admiralty blog earlier this month, the piteously small number of seafarers with access to anything other than some voice and limited email, demands that things change here and fast if young people are to see anything other than a last chance choice.
But where do we go from here? I’m en route to Athens for the DigitalShip Conference and hoping to pick up on some of the next wave of trends. These will hopefully be not just extrapolations of what we already know but insights from people who have taken the time, against the grain to look out of the window and wonder what’s really out there.
If this is something you or your organisation have done and you are willing to share the results, I’d be pleased to hear from you. Post a comment and I’ll get back to you.