Tag Archives: maritime communications

Yes we can! (maybe)

And he doesn’t have any HTS capacity coming onstream. Nati Harnik/AP

With the political fervour in the US growing daily stronger it seemed appropriate that the 2016 Satellite show followed hard on the heels of the Conservative Political Action Conference at National Harbor on the outskirts of Washington DC.  But even once the politicos had departed, the prevailing mood echoed the incumbent president’s best-known slogan.

There is a pretty simple reason for this. The huge amounts of new capacity coming onstream over coming months and years contrasts starkly with the depressed end user market. Where FSS/mobility providers are eyeing expansion into terrestrial markets and talking up compatibility to the next generation of cellular services, there is no escaping the gap between ambition and reality in the maritime market.

This means the providers have to believe in something that at first look seems highly questionable. As more capacity and greater competition acts to lower prices, shipowners can be persuaded to pay to use more data, the pie will grow and the supply side will prosper.

These same providers must be able to differentiate on more than just cost and in doing so must still make money. This is happening at a time when the trend in VSAT is towards lower margin, more commoditised services, similar to current L-Band offerings.

The maritime panel at Satellite 2016 featured three network operators, all of whom are bringing new capacity to market, either High Throughput or enhanced L-Band and service providers that enable the ground segment and whose role is to distribute services to end users.

Billions of dollars are being spent on campaigns to convince owners and managers not only that they need more bandwidth, but also that they should choose a particular product even if it is more expensive than what they are using now.

This makes it more like an election campaign than the participants on the maritime panel would probably admit, but if this is a battle, what wins?

To Matt Broida of HarrisCaprock, the formula “is 60% cost, 30% business model and 10% technology” and he sees significant growth potential from the latent demand in a number of deepwater segments.

But that cost element shouldn’t be all about price. Broida pointed out that Exxon has cut staff by 20% in 20 years but produced 25% more oil in the same period. “That’s the model we have to go to. Bandwidth and hardware prices are going to come down but keeping that value for yourself is the business model. Staying competitive means you don’t want to give that all away to customers.”

His view is that it is the value chain that is disruptive “and if your strategy is to keep doing what you’re doing but better, you’re waiting to go out of business”. Service providers have to figure out who to partner with. “If you choose the right partners you can come out of disruption on the right side of it. It forces you to place some big bets but it enables you to place more bets than you could make on your own.”

For Inmarsat’s Drew Brandy the move from the company’s legacy L-band services to VSAT is an inflection point with a similar metaphor. “Like us many others are gambling on increased demand driven by new applications and that we can evolve to provide new differentiated solutions,” he said.

The Inmarsat FX VSAT model is designed to mirror its L-band offerings, built for simplicity and pre-assembly so moving away from bespoke nature of VSAT. “It strips some of the cost out of the solution because you’re not doing bespoke customised installations every time.”

Perhaps driven by the need to prepare previous damage to its partner relationships caused by waves of price rises, Inmarsat is focussed on adding value for its distribution channel to provide sufficient margin support and Brandy thinks there could be more for SPs than in current L band deals.

Inmarsat was one of the innovators in crew calling but less than 30% of crew are still properly served. Crews consistently put comms access near the top of their wish list but the lack of delivery is not going to change until vessel operators accept it as a differentiator. “As costs start to fall over the next few years, the internet will become for accessible and available and owners will start to make that change provided strict access policies are in place” he suggested.

The price elephant is still in the room. Intelsat’s Chris Insall bemoaned shipowners’ decades-long focus on price above all other things. “It’s just been part of the process but the focus we see is increasingly on operational efficiency. We’re entering a phase where there is a realisation that sub-500kb [ie L-Band] systems are unable to match the requirement of crew and operational demands. I hope we have moved beyond area of focus on cost.”

As a result he took issue with the assertion that maritime bandwidth is in oversupply for either crew or operational demand. “The majority of users say they want more bandwidth than is currently available, there is a need for genuine broadband services.”

To Comtech EF Data’s Louis Dubin the proliferation of HTS products and solutions is still creating confusion and he stressed a need for innovation to be baked-in. “If price is your only differentiator, we’re all going down quick.”

The risk for owners he said is that they cannot capture the benefits of HTS because they are relying on a previous generation of infrastructure. You might buy multi-megabit but end up getting kilobits. In the space segment very little changed for decades but with so much happening so fast, owners are increasingly looking for a consultative approach to their investments. “It’s not their core competence. They need you to prove it for them.”

So this need not be a zero sum game – even if the session title was Battle on the High Seas. What the supply side must do is find ways to help users make money, not just with cheaper communications but with applications that allow them to realise efficiencies, according to Iridium’s Brian Pemberton.

“Some customers are very content with the basic operations they are running but others are interested in what might be possible with 10x or 20x connectivity without having to increase their spend 20 or 30 times.”

Iridium to a great extent made its reputation in crew calling, providing commodity voice services at competitive prices. Nonetheless this is a segment that remains underserved and Pemberton doesn’t expect that to change. Much of this comes back to the ability to monetise the service.

“Understanding crew behaviour and cultural expectations is very tricky. We see a lot of opportunity going forward, but the willingness to pay and ability to pay are definitely challenges,” he said.

There are still too many operators who analyse the opportunity and conclude crew communications is a pot of gold. “In fact it’s about taking mean margins from a lot of people and aggregating those into something. There are a lot of broken business cases out there,” he added.

And neither does he see the operational segment as a cash machine as owners bank on increased data for competitive advantage. “They want to enable that connectivity but what they may find is that they already knew 99% of what the data is telling them. What I think we could see is that processing taking place on the vessel with just the exceptions sent back.”

But he added that customers shouldn’t expect the same from Iridium’s new services as they have in the past. Iridium he said planned to be “quite disruptive to the market in migrating our customer [and] putting tools into hands of distribution partners which they can use to differentiate and earn better margins.”

At the time of writing, there are 228 days to the US election. But for the mobile satellite providers and their partners the battle for hearts, minds and wallets is only just beginning.

Maritime satellite gets with the programme

Maritime communications spent a long time being of little interest to most people. Beyond safety requirements, it took the dotcom boom to generate a significant uptick in activity, as software entrepreneurs discovered this ‘untapped’ market.

That ended with the dotcoms going belly up, but the Rubicon had been crossed. There was now a clear realisation that connectivity held the key to better productivity and perhaps even a more efficient supply chain.

Once again, the market was overtaken by events – namely the best earnings many had ever seen – and suddenly no-one cared about saving fuel or improving efficiency, because rates were through the roof.

Another crash followed and suddenly we are back to the future. This time, the recession looks longer, deeper and likely to claim more scalps. The answer? Better connectivity for increased efficiency and improved crew retention.

It’s a change that has not gone un-noticed by the analysts at NSR, whose Brad Grady hosted the big data panel session at the recent DigitalShip CIO Forum in Oslo.

“There is a definite increase in activity and the adoption criteria are expanding. Prices are cheaper, applications are becoming more sophisticated and the number of vessels as good candidates is increasing,” he says. With increased demolition of older ships the newer, better-wired ones are looking for efficiencies.

NSR updated its maritime sector report in May and he says the big change from last year to this is the uptick in merchant fleet activity in terms of new installs, retrofits and upgrades.

“There’s not necessarily an improvement in the economics [of shipping] but its finally coming to an understanding that this is the reality we are living in. Like all processes, it’s about putting something in place that will bear fruit,” he says.

On a longer time horizon he sees interest in the opportunities delivered by HTS and an expected increase in bandwidth uptake. Even with a cheaper fuel environment, owners are still feeling pressure to invest in optimisation and potential efficiencies.

In part the pressure is from the providers who have already delivered a huge amount of bandwidth to the cruise sector and are targeting maritime over offshore, which is also struggling to make money.

“We’re not expecting a tremendous amount of growth in the offshore sector over the next couple of years; growing demand there will be a challenge. Once oil stabilises we might see a return to resources with higher extraction costs and a similar investment in new technologies,” he suggests.

The emerging story in energy is non-geostationary HTS capacity; lower orbiting high capacity services which have much lower latency and therefore an opportunity to support emerging concepts like increased automation with reduced manning. Grady says these could support attempts by oil companies to reduce costs by cutting personnel in favour of high interval reporting.

“The question we don’t have an answer for yet is how many Non-GEO HTS megabits per second will you have to buy from these providers? If you can buy in nominal amounts at low prices then Non-GEO HTS Capacity could be a real game changer. It could have a tremendous impact on the way the market works.”

He thinks the alternative scenario for Non-GEO HTS capacity, which operators would probably prefer, whereby they sell dedicated beam capacity would “price Non GEO-HTS out of most markets, it won’t expand the addressable market size”.

For HTS capacity in geostationary orbit from the likes of Intelsat, SES, Inmarsat, and others, a similar story holds true, will end-users pay a little more and get a whole lot more Mbps, or can they pay less and get the same (or a few more) Mbps?

The bigger challenge is persuading shipowners that greater bandwidth, especially HTS capacity, is going to make enough difference to be worth the investment. Grady agrees this is perfect time for suppliers to get in front of owners but they will have to come with new and increasingly competitive pricing models.

Either way, he thinks HTS will be a higher end market play, but it doesn’t stop him being enthusiastic about its potential. “I don’t think there are technical barriers, it’s more about end-user education. Five years down road, when all the variables are known about HTS , it will be ‘why did we doubt how awesome it was going to be?’”

That doesn’t stop NSR seeing plenty of life in L-Band MSS though. He notes that if Iridium succeeds in getting IMO approval to provide GMDSS then together with its NEXT broadband platform, it will have a package that will be very commercially appealing. “MSS has been a doom and gloom story for a couple of years now, but there’s plenty of life left in it.”

Despite the industry being widely split on whether more consolidation is likely or even desirable in satellite, NSR sees the potential for this as well as greater price competition. Panasonic’s acquisition of ITC is a good example of the former, where a provider with growing aeronautical business who looked at maritime and saw an opportunity, he says.

As Intelsat, SES, KVH and others up their game, to some extent the pressure will be on Inmarsat as the maritime incumbent, to deliver its GX service with the same success it has sold L-Band services.

Part of that success will depend to what extent it opens up GX and allows SPs to act as Virtual Network Operators – enabling them to add their own applications and value and sell to whomever they like – and how much it tries to lock the service down.

“Inmarsat has always been simple from the SP standpoint and there’s a lot to be said for terminal ubiquity, with integrated L-Band for back-up. For some segments we’re pretty bullish on Ka-Band in merchant shipping.”

Inmarsat and KVH have been playing catch up with each other on adding value to their services, with entertainment and learning content available over both, in addition to more typical business applications. As if to underscore their symbiosis, the two announced a cross-selling deal instead of a rumoured merger.

Even though he sees greater levels of activity, Grady is less sure that the addressable market is changing as much and as fast as some claim. “How do you define the size and scale of that is really the question. For example, there are a lot of fishing vessels but their requirements are small narrowband solutions. Can you really convince these users to switch over to higher throughput?”

Operators are keen to talk up the potential, but Grady thinks for SPs it’s still a difficult conversation. Even industrial fishermen run a tight ship and don’t have much time to watch television. The evolution path is reminiscent of merchant maritime.

“The trick for SPs is finding right mix and that might not be streaming video. It could be more like upgrading equipment so they can do email and integrate personal devices. In Africa telecoms skipped wires and went straight to wireless. In fishing, you have to go right to value-add and work backwards from there.”

Five things it would be good to hear at Satellite 2015

Young people tell me that the listicle is the way to go (flexible length, no need to build narrative flow) so here’s what I’m hoping for from Satellite 2015 next week.

From a maritime industry perspective, few of these things are likely: Satellite is peer-to-peer show more concerned with orbital insertion and the potential of nanosats than the niceties of maritime. That will get a lot more play the next week during CMA when the industry will talk about almost everything except communications.

  1. Less about HTS. The satellite industry is obsessed with HTS and its potential. And so they should be, since it brings potential communication speed out of the early 1990s dial-up era and into the early broadband era of the 2000s. In satellite that kind of improvement is worthy of this much fuss. Satellite is hard, expensive and tough to deliver to moving targets but the maritime industry for one is going to take some convincing that the next big thing is just that. It’s worth remembering the Stark Moore McMillan (as was) survey of a few years ago that found the majority of the maritime industry still working at 9.6kbps with thousands of seafarers still unconnected. HTS isn’t going to lift those people out of bandwidth poverty.
  1. More about end-users. If any of Satellite’s delegates have been paying attention, they will have noticed the Baltic Dry Index hitting its record low, all but a few containership operators bleeding red ink and global trade demand prospects so poor that even those who said this slump is not as bad as the 1980s are now keeping quiet. With the exception of tanker trades driven by low oil prices, the industry is in the toilet, so it’s not a great time to sell them new shiny things unless they are mandated by regulation. That doesn’t mean they won’t buy, just that satellite people have to listen first, sell second. The maritime satellite providers have talked a good game on the need for monitoring, telematics and chart updates but it would be good to see a little more evidence-based data of the need.
  1. Easier to buy VSAT. This is happening – KVH will say it has already happened – but if the industry is to take to VSAT in large numbers it needs to be a commodity sale just like L-Band has been. Owners are unsure about VSAT because they see a large per month expenditure, sometimes with expensive equipment on top and are unsure whether they can make it pay. Deciding whether or not they will monetise or incentivise their crew makes that clearer and I tend to think that crew would pay for a good service. The headlines tell us more and more owners are signing up for VSAT but they are still in the minority. No one issues a PR that says ‘Fleet77 unit still working, if pricey’.
  1. Making value added a reality. Shipping likes the idea of added value. Ship suppliers, classification societies, even satellite service providers use it to differentiate even though it means different things to them and their customers. Without it they are selling the same thing and price is the only thing that counts. But shipping is good at bolt-ons; telemedicine, e-learning, weather routeing and so on. When this stuff moves beyond the ‘bursty’ and into a continuous stream – then there is a supply-demand gap. Seafarers want it – and some companies too – but it is hard to get the bandwidth required to make it happen without confidence that your connection is robust enough to support it.
  2. Choice that is easier to choose. The maritime industry has seen satellite providers grow from IMO-mandated monopoly to duopoly then to a free market with a wealth of choice. But something has prevented them from seeing this as real choice.
    Perhaps it is a lack of inertia because ‘no-one-ever got fired for buying Inmarsat’, perhaps that the alternatives on offer really weren’t that much better. And where the incumbent used to respond to market changes slowly, it is now pushing them to stay in contention not just at sea but in the air and on land. Between the remaining L-band providers and the FSS VSAT companies who think there is a gold mine awaiting them in shipping, there is a lot of interest in carving out territory. But there is also an imbalance between the very large service/distribution partners, some of whom run satellites themselves and the traditional SPs whose value lies in experienced people who also have a handy way with a spanner. Ultimately this is an ‘out of town supermarket versus the high street’ scenario. One may have a preference, but from this side of the pond, it’s pretty easy to see how that one ended.

See you at the show and if you are free on Tuesday at 16:30 come along to the MSUA-12 maritime session. Full details:  www.satshow.com.

M2M and mad cows – through the mobility looking glass

Can satellite ever really go mainstream? It’s a nice idea, but one that has already claimed some scalps among those who have modelled the concept only to find the reality rather different. Two of those (fully resuscitated) examples were present on the MSS CEO panel at Satellite 2014 along with Inmarsat and Thuraya. Iridium and Globalstar are these days talking a strong book with launches tabled and new services in the pipeline.

Even if the low cost satphone in your pocket remains something of a chimera, the session provided a useful glimpse of what the roadmap looks like for the mobility majors.

So much so in fact that Iridium CEO Matt Desch offered to double his bet with Globalstar’s Jay Monroe that his new network would be up and running before Globalstar’s – a wager he offered to settle in Iridium stock. He subsequently agreed that the NEXT schedule had slipped somewhat but insisted he was not in hurry, despite wanting to bring new services on. Such is the mirror world of mobility satellite.

Though rumours persist that Globalstar is waiting to be acquired by an internet company keen to use its spectrum rights for the delivery of more day to day goods and services, Monroe insisted that the potential to address a market unserved by cellular with a $100 product was still realistic.

Desch and Samer Halawi disagreed – the former probably through bitter experience – the latter because Thuraya’s BYOD play the SatSleeve has attracted so much attention by extending two already successful brands.

Halawi thought that lack of standardisation made it hard to achieve a consumer market opportunity Monroe thought was ‘worth millions’, though he again asserted that SatSleeve’s mission was to liven up a “somewhat dull MSS market”.

Desch agreed that low initial costs would always tend to rise and “making a commodity product that Best Buy would want to list for $30 would be hard to make a success for partners and channels too”.

Inmarsat’s Rupert Pearce has the new iSat 2 handheld in the game but said their model was enterprise users with heavier usage and better average revenue per user. “We are business to business and business to government. Consumer is a bridge too far.”

Away from the user the threat to all their businesses is the apparent desire of mobile phone operators to grab back spectrum it thinks mobile satellite is not using to its fullest extent, including the L-Band the industry ‘doesn’t need’ as it moves increasingly to Ku and Ka.

GVF has already done a lot of work on the political lobbying and Pearce was unequivocal. This was a bubble that needed to be burst “it will be hyper-politicised [at the ITU’s World Radio Council 15 meeting] and we need a coalition of the willing to lobby on the need for critical satellite services”. He didn’t add ‘rather than more leisure users’ but one sensed that’s what he meant.

Moderator Tim Farrar pondered by how much GX was delayed or on track – rather a moot point for maritime users – but important for the company’s reporting and financials. Despite suggestions of delays to the iDirect hub component, Pearce said the core equipment and satellites were aligned and said that “more than 30% of GX revenues were already committed, including the 1,000 XpressLink installs which are ready to move to GX”.

The surprise purchase of Globe Wireless is among a series of ‘quick buys’ Inmarsat has made to help its channel cover Ku to Ka conversions over first 18-24 months. He mentioned the Globe iFusion box as being a component of the value that Globe brings to Inmarsat, though  how that dovetails with the CISCO Router that lies at the heart of GX connectivity was not made clear.

For Desch, Iridium’s strategy remains little changed – evolutionary compatible products in which broadband remains an upside to the ‘low-end’ segment it serves, one he feels can grow further. Iridium he said would be providing new capability before its NEXT network is finished and speeds would increase too but “it’s not worth chasing commodity broadband because that market is going to look different in three to five years from how it looks now – we are going to take a bigger chunk of what we do with more capability”.

For Halawi, the future means considerations on how to design and build next generation satellites, though the Thuraya CEO insisted time was on his side. Thuraya has said for some time that its next generation concept is under development but it won’t be a ‘me-too’ system. “We are looking at future applications, how people will use technology 10 or 15 years from now and how technology can support that. There will be more clarity by next year but it won’t be a system similar to the ones being planned for today,” he said.

Pearce has new launches in mind too, but in this case he meant the Inmarsat I-6, the next generation of L-Band satellites to complement the GX service. He said its potential users understood that a dollar spent on better communications could deliver $10 into the enterprise and he also pointed out that most of Inmarsat customers won’t be moving to GX and will need to be supported by the i6 constellation.

Pearce was lightly pressed on Inmarsat’s E&E and FBB price rises over the past two years but insisted that prices had fallen by more than they had risen when compared to the newer FBB bundles. Calling the price rises ‘a win-win’ and a ‘virtuous cycle’ was probably pushing it for users and SPs who had been squeezed as a result, but the continued evidence of users ‘marching up the packages as they understand the value’ was as close as we would get to an explanation.

He must have known the channel question would be next and he suggested that indirect sales remained the priority, with direct sales reduced by 2% per over five years and a stronger focus on controlling where the company goes direct, primarily maritime GX where the learning curve is steep.  “We are trying to work out where network ends where channel adds value,” he said.

Desch countered that price rises had enabled Iridium to work with SPs and their end-users frustrated by lack of price control. Iridium has no desire to go direct he said, but the potential lack of trust in Inmarsat created a continuing opportunity.

Where the satellite industry certainly sees value is the M2M market, with acquisition and expansion on the slate for the MSS operators. Monroe memorably described this as ‘data heroin’ – with tracking as a gateway drug that led on to heavier and heavier usage.

Desch agreed on the growth potential but said ARPU was ‘more interesting than it is attractive’ and no-one would be making millions from M2M anytime soon. “We have natural advantages and we will see it grow but we need our standards to be compatible with what is being written in the terrestrial world.

Farrar quipped about projections for huge growth, everything from cargo monitoring to tracking cows in Brazil or sheep in Scandinavia. Monroe replied that this was far from a pipe dream.

“The projections are for tens of millions of units but there is a real example. Brazil spends millions every year trying to combat mad cow disease. Now, could you track the herds, segregate the infected stock and treat them? They are looking at it seriously.”

The internet of animals – it might have smelled like bullshit, but it was a suitably enigmatic note on which to ponder what the future would really look like for mobility and whether it would really that dull after all.

Adapt or die? Four key technology trends for a sustainable shipping industry

Roger Adamson, ceo of Stark Moore McMillan continues his series on the technology threats and opportunities facing shipping, focusing on four emerging issues: the sentient ship, the cyborg crew, shipistics and business e-volution

Historically conservative and insular, like many industries before it shipping is facing a watershed period. Currently languishing in the worst downturn many can remember, regulatory compliance and survival in many sectors is the prime focus. But some are already acknowledging that a longer-term view is necessary. In order to secure its future shipping must be focussing on efficiency, competitive advantage and the type of technological innovation other industries are already preparing for and implementing.

I’ve previously outlined what we call the ‘e-nautics’ agenda; the transition to new, digital and technological-based standards of operation and monitoring within the maritime space being driven by regulation, commercial necessity and global change. The study and exploration of this technology-enabled maritime future, Futurenautics is grouped around four key trends, the sentient ship, the cyborg crew, shipistics [a point deducted here for debasement of English – Ed] and business e-volution.

These subject areas include IT-enabled trends and converging technologies both inside and outside shipping: nanotechnology, sensors and actuators, smart materials, connected communications, M2M, the Cloud, big data and the automation of knowledge work.

From nano-tech coatings for waterproofing and anti-fouling to fuel and oil additives, the sentient ship covers the impact of new technologies on the design, construction, materials and operation of commercial vessels. The potential of High Throughput Satellite (HTS) data links, innovative bridge and hull design and algorithms which allow ships to learn and sail themselves are all mirrored in R&D in other industries.

But the potential of smart ships to revolutionise the industry is only being glimpsed. The unpromisingly-named Buckypaper for example, is one tenth the weight yet potentially 500 times stronger than steel. Its lightness means a vehicle built from it needs less fuel, improving energy efficiency. It also offers improved structural integrity and allows wireless data transfer through the composite material. It is already being investigated to build the aeroplanes of the future, but what about for the ships of the future?

And what of the crew on these new smart ships? Wearable tech which transmits a seafarer’s whereabouts to the ship could transform the safety landscape, but the potential for integrating crew and vessel is far greater. From implanted chips facilitating wireless money transfer and payments, confirming identity and enhancing security to the ‘quantified self’ – ingestible sensors monitoring crew health, rest hours/sleep and delivering medication, the management and deployment of technology is poised to deliver sci-fi possibilities.

As HTS facilitates data ‘heavy-lifting’ the potential of big data to shipping will begin to be realised. As companies utilise the cloud to allow business applications to be accessed both onboard and ashore terabytes of data will be streamed to shore and collected by company-wide operations – and shipistics will emerge.

Essential to this will be analysts with the skill-sets to mine and analyse this data, plus new business processes to enable real-time monitoring and transparency and the experimentation that can inform business decisions and drive product and service innovation. Already experts are warning of a worldwide shortage of people qualified to undertake this kind of role, but very few in shipping are even alert to the technology, people, skills and mindsets needed within maritime organisations to capitalise and defend against this trend.

But the lack of preparedness goes wider and deeper than that. The maritime industry has already been described as existing, if not in the stone age, then certainly in the middle of last century by analysts, and remaining competitive in a future of business e-volution will require a wholesale reappraisal of business models and operations.

The potential of machine to machine communications and the internet of things, cloud computing, big data, knowledge automation and customer and consumer expectations will change business profoundly. Maritime leaders must be prepared to consider how the cloud offers them new, creative ways to monetise physical assets as a service, how transparency and data availability erodes established market norms and threatens disintermediation as businesses seek closer integration with their customers.

They should also be prepared to consider new multi-dimensional business models as old sources of competitive advantage give way to new ones. Crucially they must also understand the potential consequences of a failure to innovate in laying the way open to aggressive new cross-industry competitors.

LR’s Global Marine Trends 2030 report – one of the original drivers to the Futurenautics project – paints a picture of a maritime industry as a passive reactor to global drivers and circumstances. Shipping and maritime will change, from ship design, materials and operations to the organisational and commercial structure of shipping and maritime businesses and the jobs and skill-sets of their people both at sea and ashore.

The extent to which it is the master of its own destiny depends upon senior shipping and maritime leaders being equipped with information and contextual analysis of these trends and the opportunities and threats they hold.

Futurenautics aims to demonstrate the importance of transitioning IT/technology from a cost-centre to an enabler of business intelligence and innovation at the heart of the business. It will help shipping and maritime leaders to understand the new skill-sets they, their employees and stakeholders will require to remain competitive and how new consumer and customer expectations will threaten established industry structures, and the importance of innovation in the face of new cross-industry competitors.

And above all Futurenautics aims to inform, educate, engage and entertain and perhaps inspire the next  generation to help shipping shed its image of a passive reactor and become and engaged leader in application of technology.

To register for your free digital launch copy of the quarterly Futurenautics journal, please visit www.futurenautics.com.

Futurenautics, e-nautics and the shape of maritime technology to come…

Research considering the future of shipping is flavour of the moment, but argues guest columnist Roger Adamson of Stark Moore McMillan, it fails to get to grips with technology. Luckily there’s an App for that…

Earlier this year, Lloyd’s Register together with Qinetiq and the University of Strathclyde published the Global Marine Trends 2030 report. Ambitious and fascinating, the report took two years of research to produce and maps out a variety of potential global future scenarios in trade, politics and social development. Assessing their respective impacts upon the commercial maritime industry, it goes on to provide some insights into what shipping might look like in 2030.

It’s an interesting read, but flawed in a couple of really fundamental respects. Firstly, the report simply reinforces the idea that shipping’s cyclical bi-polar economic rollercoaster is beyond its control. Published at a time when shipping is experiencing the worst downturn in memory, no doubt this is a comforting message for many.

However, this downturn has done more to expose the often antiquated business processes and practices of shipping which are increasingly recognised as bearing significant responsibility for the industry’s woes. There are vast opportunities to improve strategy, margin and operational efficiency, and almost all of them are related to technology. Which is where the GMT2030 report really falls down.

Focussing exclusively on the global drivers external to maritime – geopolitical, economic, environmental and demographic – the report recognises technology only as a constituent part of national economics. Describing technology as ‘an enabler not a driver’ for commercial maritime, the report concludes that technological innovation such as actuators and sensors, robotics, behavioural algorithms and 3-D printing are so unforeseeable, and have such massive consequences that they rank alongside global economic collapse.

GMT2030 paints a future picture of a shipping and maritime industry as passive reactor to global drivers and circumstances, demonstrating no significant change or innovation. It sets aside the impact of new technology as disruptive but unknown, its potential implications so profound that they are incapable of being modelled. This maritime future is a depressing one. Whilst the world changes around it, shipping remains, essentially, the same.

But the reality is likely to be profoundly different. Far from being unforeseeable technology trends are already changing the complexion of shipping and business with the pace of change accelerating. From new HTS satellites to M2M or ‘The Internet of All Things’, cloud computing, nanotechnology, smart materials and the e-volution of business it is already possible to spot the maritime future on the horizon.

The transition to new, digital and technological-based standards of operation and monitoring within the maritime space being driven by regulation, commercial necessity and global change can be term ‘e-nautics’. The ‘e-nautic’ agenda comprises IMO’s move towards e-navigation and ECDIS mandation, increased use of voyage optimisation and routing software to reduce fuel costs, and the rising implementation of applications designed to streamline operations and integrate better with customer requirements and systems.

To date regulation has been the prime driver of innovation within maritime and specifically in complying with Marpol, Solas, STCW and the MLC but future mandates are challenges which can increasingly only be met by the intelligent deployment of technology solutions. (Indeed, the failure of regulations like the Ballast Water Management Convention to work as expected can be directly traced to getting the technology/problem cart/horse in the wrong order. Seemp, asset optimisation and the promised re-write of Solas have a direct technology link – but both are another story – Ed).

But for an industry considered to be operating ‘in the stone age’ by business analysts, the real opportunities, and threats, of the accelerating pace of global technological change to shipping and maritime companies have yet to be properly identified and addressed.

Far from being a sci-fi scenario, Manufacturing 3.0 is already here. 3-D printing technology – which has the potential to decimate the container shipping business model – is already being deployed by motor manufacturers and giants like GE for aero engine manufacture. (See in particular the most recent Economist Technology Quarterly – http://www.economist.com/technology-quarterly/2013-09-07 for evidence of that – Ed)

Stark Moore McMillan calls this technology-enabled maritime future Futurenautics. Grouped around four key trends, The Sentient Ship, The Cyborg Crew, Shipistics and Business e-volution, Futurenautics includes IT-enabled trends and converging technologies both inside and outside shipping.

In order to equip senior shipping and maritime leaders and stakeholders with information and contextual analysis of these trends and the threats and opportunities they hold, a new resource by the same name is launching this autumn.

The shipping industry will change, but the extent to which it is the master of its own destiny lies in the hands of this and the coming generation of shipping and maritime leaders. In order to be successful those at the helm of maritime businesses need to be looking across their organisations at the impacts, threats and opportunities from a technology paradigm. It is crucial that they are encouraged and helped to understand how this should shape their future strategies.

I’ll take a deeper dive into the four key trends, the underlying technologies, impacts and threats in a future guest article.

To register for your free digital launch copy of the quarterly Futurenautics journal, please visit www.futurenautics.com.

So poke me. Do seafarers really need always-on communications at sea?

In the second part of my interview with Intermanager Secretary General Kuba Szymanski we get off topic. That is to say, beyond Intermanager’s work with VSAT vendors and into an area of arguably greatest interest for maritime satellite providers: crew communications and the use of social media onboard ship.

The latter appears to have the communications industry captivated. Crew are reportedly demanding greater access to the internet and the industry is responding, citing its importance in retention and the risks of ignoring such requests.

The perceived shortage of skilled and qualified crew is driving demand for bandwidth far in excess of that for business use. In doing so, it skews the VSAT demand figures, not least because the kind of applications seafarers would like to use are so bandwidth hungry.

To Kuba this puts the cart and horse in the wrong order. The potential of social media tools is huge and growing, but to use a shortage of seafarers as a driver to growth is to misunderstand the current situation.

“First of all, I don’t think this effect is happening as much as some journalists say and as much as some shipping industry ‘politicians’ claim. People are saying every day that the younger generation will not go to sea. I’m being very honest with you now, but the younger generation has no choice, because there is no other employment at the moment,” he says.

The popularity of cadetships at the UK’s Trinity House is growing year by year, not least because of the introduction of tuition fees but Kuba says across Europe, the realisation that a junior officer can earn £35,000 a year tax free is enough for them to make the leap and if that means no internet access, so be it.

“I’m not very popular for saying things like this. I’m seen as being controversial but this is how I see it,” he says. “I also believe that a lot of youngsters are clever enough to know how to communicate whenever the vessel is in port or near shore, so the periods with no communication might be quite limited depending on the trade they are in.”

The ‘bring your own device’ trend where more youngsters have their own laptops or smartphones means they are increasingly adept at getting online. But he says lack of signal is only half the problem.

Also at issue is that owners are increasingly looking to crew to share the cost burden of crew calling, providing the best possible way to accurately measure demand. “The owners are saying OK, but you need to pay half or a percentage and that immediately shows you that youngsters can do without it. If it is free of charge then everybody uses it, but as soon as you have to pay something, then all of a sudden you find that they can do without it,” he notes.

He mentions a large tanker company which put a lot of resources into free onboard internet for crew use but found the cost so prohibitive that they were forced to put more and more restrictions in place as the price for free access. The result, to coin a phrase is neither public nor convenient.

But Kuba’s iconoclasm doesn’t stop there. The industry needs to understand the simplest of drivers – supply and demand.

“I think it is very important to understand there is no shortage of seafarers,” he states. “There is a surplus of seafarers, even in the LNG sector. Owners are not struggling to get crew and some are asking why should I go the extra mile, they will come to me anyhow.”

That’s a big statement in an industry where ‘shortage of crew’, like ‘high fuel costs’ and ‘too much regulation’ is an article of faith. Is Kuba really saying the industry has all the skilled and competent seafarers it needs? Just as in communications, you get what you pay for, he thinks.

“If you want a good quality crew they are there. If you want the best, well, that’s hard because everybody is after them. If you pay the bottom of the market, that’s what you will get. It’s like having sex and not imagining you might have a child. Owners are getting very cheap crew and expecting to have excellent standards and quality,” he adds.

But as to their expectations, he sees the potential of social media as the glue that can bind seafarers together, and maybe let their would-be employers in on the game too. He contests whether Facebook and Skype are truly household names onboard ship, but says the effect on seafarers is immediate and obvious.

“If you think from the psychological point of view. I might work with you for four months and then there is a chance then I will never work with you again. But we became friends and we want to keep in touch. Facebook is a beautiful solution to that, which is why seafarers use it so much, along with things like CrewToo or MyShip.”

Intermanager is hardly the first industry body to have a Facebook page but he has noted that it gets double the traffic than the official website, primarily from seafarers.

“I was asking myself the question why and the answer is it comes with age. In shipmanagement, you’ve got people my age or older and onboard the vessels you’ve got people my age or younger and to these guys it’s what they grew up with.”

The desire to keep in touch and the availability of the tools to make it happen provides a natural win for an organisation so interested in the crew that make world trade go around.

“The most successful companies realise that Facebook does not have to be an enemy. It should be a tool to tap into seafarers, so listen to them, see how morale is, what is motivating them, to keep a finger on the pulse,” he suggests.

It is that – rather than outfitting the ship with a fat communications pipe and footing the bill – that he believes will make a difference in getting the best crew to work with your company. And as he adds, compared to Inmarsat or VSAT, the investment is far lower.

“Still, when I talk to people, people say Facebook gives you no return on investment. First of all, the investment is minimal; it’s time not money. But what it brings is a lot of traffic, a lot of interesting stuff. It is difficult to measure, but how much would you pay to get to five thousand people on your database, most of whom are potential employees? All I know is you would have to spend a lot of money on advertising to achieve anything similar.”

Smarter shipping means having communications you can rely on

The opportunity for a conversation with Intermanager Secretary General Kuba Szymanski is not to be missed, but you do have to pick your moment. True, he is to be seen on many a conference platform, but he is equally likely to be en route to another airport and the other side of the world, or even home to his beloved Isle of Man.

My interest for catching up with him was prompted by his having taken part in the recent Satellite 2013 conference in Washington, illustrating a growing interest in communications on behalf of Intermanager members. Some 12 months previously he had given a rather effective dressing down to VSAT providers at the Global VSAT Forum just after MaritimeInsight got going, so I was keen to see what progress he had made in making the process of buying satcoms more transparent.

As always when talking to Kuba, the conversation took in related subjects and included some strong opinions. Nonetheless, this is an organisation that wants to change things, so a straight line is not always the most effective route from A to B.

Intermanager’s interest in satellite communications stems from not just from a desire to shake up the buying process. It is founded on the belief that communications form a vital and undervalued link in the business process as well as in crew welfare.

“Intermanager is always talking about crew and I thought it was time to start walking the talk,” he explains. “We really care about our crew and that means the crew as both a worker and as an employee.”

“What we wanted to bring forward is that communication is also extremely important for the viability of our businesses. Without good communication, without good core connection with vessels we will struggle,” he goes on. As a former fleet General Manager for MOL Tankship, his experience had convinced him that users were not getting what VSAT had promised them.

“For the last few years, we have been, let’s say ‘misled’ and we could not afford that anymore. When we only had Inmarsat everybody knew what the boundaries were, expectations were quite limited but Inmarsat was able to meet these expectations. As soon as VSAT came onboard, expectations have been blown out of proportion by the providers,” he adds.

The biggest problem was the assumption that maritime users made that they would soon be enjoying terrestrial broadband speeds. But his gripe was not that VSAT failed to usher in an era of social media and internet use but that VSAT services failed to do what they said on the tin despite running to big bucks.

“We were told we would get 365 days of connection but they forgot to say there would be no service between Australia and Cape Town. Intermanager said, OK, enough is enough. We can always whinge but this will not improve the situation. So we sat down with GVF and we gave them some very constructive criticism and they were happy to take the feedback.”

Suitably chastened no doubt, GVF got Intermanager involved in its events and brought the organisation together with the providers. Kuba happily admits this was not one way traffic, the managers had to improve their knowledge too.

To be fruitful, this could never be just a question of blaming the VSAT guys, but rather looking for sources of assistance and that meant shipmanagers could help themselves by deciding clearly what they needed.

The organisation commissioned Stark Moore McMillan to undertake a survey to gauge return on investment for shipmanagers, “so we could help our guys to see how much money they have to invest in order to achieve more, what were areas which could benefit most and which might benefit least from good communications” he explains.

In providing a tool to help in decision-making Kuba says managers have moved from ‘an educated guess to an educated management decision’ and he says the vendors have listened and moved too.

“I’m extremely pleased because it shows them we were right! There are cowboys in shipmanagement and the same applies to the VSAT system providers. The name of the game here is listening, so they sat down with us and said OK you tell us what your problems are and we together will try to work out the best possible solutions. That is what I was hoping for three years ago and we are some way to achieving that.”

He agrees there are members who decide they still know better but he says even the switched-on companies need help and advice so the opportunity to work directly with suppliers is welcome.

He says many on the sell-side realised they had to up their game if they wanted to sell to owners bumping along the bottom of a terrible market and for whom the to do list starts with the regulatory must-haves and works down to the nice to have add-ons.

“It’s not only VSAT, some of the bigger providers manage terrestrial communication, GSM, data exchanges so they are able to pull a lot of strings. I didn’t expect some of them to know as much about shipping as they did but I ended talking to one who said ‘what about ECDIS, we’ve got a nice solution for you guys’ and that was the icing on the cake.”

The Intermanager engagement strategy is simple, if demanding: be professional, do your homework, understand what makes a shipmanager tick and what can be done to make their life easier. Without that it’s best not to come to the table.

Isn’t it a problem though, that just as the industry sees light at the end of the tunnel, the broader satellite industry is regarding maritime as a potential pot of gold? The risk is that not just incumbents become more aggressive but that new players steam in and destabilise a market that is just getting back on its feet.

Kuba sees the same trend and a repeat of the original path of VSAT into maritime. Other markets have been already saturated and with revenues from government or land mobile under pressure and aero still emerging, shipping looks like a safe bet.

“A lot of them have a misconception in that they see shipping as the big passenger vessels so it is an eye-opener to discover there are only have 350 of those. That might have put them off but they don’t have many other places to go so suddenly the other 75,000 vessels look very tempting. But just because you can sell one million iPhones doesn’t mean all those ships want or can afford VSAT. Using your iPhone might mean paying $20 dollars a month not $5,000 a month for VSAT,” he says.

The number of commercial aircraft also compares poorly to ships, prompting a revival of interest at the point when potential customer advantage can be gained from better communication.

“Everybody has a vessel, everyone has crew but only very few can provide an excellent communication link with your customers so users now are demanding more. The charterer used to ask the manager or operator where is my vessel, what is the ETA, where should I put my trucks? These days the manager can say ‘don’t ask me, log in and you can see all that information.”

Coming up in Part 2 – why the crew calling trend could be overdone and whether there really is a shortage of seafarers.

Satcoms buyer – heal thyself

Kevin Tester of MITE was right to warn last week that buyers tread a minefield in specifying maritime satellite communications systems. There has never been greater choice in terms of airtime, band and bandwidth, hardware and value-add solutions and never more clamouring voices trying to flog you unlimited this and unrestricted that.

I’d like to put a parallel point of view, not because I disagree with him, but because it’s one that bears repeating. Put simply, owners and managers have to do more than shop comparatively and in doing so drive down price to the lowest possible level.

At the heart of the problem lies a chronic but typically shipping industry mismatch. Owners want the moon on a stick (OK well, fuel savings) but insist on holding down the comms budget and making it hard for the entrepreneurs Kevin talks about to provide the value adds that might actually save them money.

Who is stopping that engine condition monitoring data getting ashore? Yes it’s the owner. Who is wasting money (as Giampiero Soncini regularly contends) on inventory because they cannot replicate databases or make RFQs from the ship. Right again. The list goes on and on.

Some owners go the other way. Dualog told last year’s DS Athens of the Norwegian anchor handling workboat which burned through 40-60GB a month but had no IT policy in place, resulting in congestion so bad that the bridge team couldn’t communicate when they needed to, risking put the ship off-hire.

For the most part, though it’s famine not feast that is the problem. Service providers can talk all they like about the potential of higher bandwidth, faster speeds and HTS services – owners still see cost not value. As a result, the majority of the SOLAS fleet is living in a world closer to 256kb or even lower than to megabits per second. Some send a few hundred megabits of data per month and are happy with that.

This by the way, rather undermines the argument that owners are simultaneously being starved of small volume options while at the same time demanding boundless volume at ever faster speeds. This is not a one size fits all market.

What owners want is uptime and dependability and if they have their eyes on the ball, they will be thinking about the value-added options available to them and weighing these against trading opportunities.

But no-one should imagine that vast numbers of existing bulk carriers or tankers will be re-fitting with VSAT or FleetBroadband. The fact that many owners have entered zombie territory – reliant on the goodwill of their banks but with little forward earnings momentum – means that all available costs will be cut.

Still satcoms makes up a tiny part of day to day operating expenses, marginal when compared to the cost of 50 tonnes of fuel a day burned by a Capesize bulk carrier hauling ore from Brazil to China.

Almost a year ago, Inmarsat Maritime President Frank Coles suggested the VSAT opportunity might be applicable to perhaps 20,000 of the SOLAS fleet, which by some counts is close to 70,000 vessels. That suggests that the remainder will be divided between higher spending owners and more technical ships and a large rump of users who are happy to use lower volumes at lower prices.

But in fact if owners are prepared to look even a little they will find a universe of applications already optimised for satellite, which can hold down bandwidth usage and cost. If they are serious about increasing data traffic, then there has never been a better time.

Let’s not mistake this for utopia – fair usage policies, committed information rates and the like mean that the internet experience at sea will never be like the experience ashore.

But the fact remains that owners who aren’t prepared to spend money on business communications are missing a trick. Owners who aren’t prepared to offer crew communications will see a direct correlation in the quality of the personnel available to them.

And there is another reason to look beyond the short term timeline. As managed VSAT services supplant L-Band, a new universe of services, applications and traffic management is increasingly opened up.

To continue to believe, even as that era begins to open up, that spending on communications is a necessary evil rather than an opportunity to be grasped, would be an enormous mistake.


Does shipping have an Aaron Swartz? Maybe it needs one

This is one of those articles – an obituary in fact – that you read, then re-read with growing attention and which sets you thinking. You think ‘what a waste of a brilliant brain’ but I don’t know enough about him to make judgements about that.

What I wondered was – what would a shipping industry version of this guy look like? Would he get anywhere? Would anyone listen to him?

Has anyone in maritime IT invented anything anything as innovative or useful as RSS? How about ECDIS or S-100? One might say AIS is a neat piece of technology but of course the US Air Force paid for that and shipping got to use it.

Mostly I keep being drawn back to the concluding comment – that people like Aaron develop standards for free that companies take up and use to create profits. Some are winners, some pay the price of their idealism.

Read the Bloomberg Businessweek article here.