Stayin’ A.I.-live

With consumers buying less goods, technology threatening blue-collar shipping jobs and an urgent need to create digital visions, maritime companies need to buck up their ideas when it comes to digital disruption.

The development of new technological advancements is having a profound impact upon the world – and not just in the maritime industry. At the Women’s International Shipping & Trading Association (WISTA) conference during London International Shipping Week 2017 (LISW17), Mike Rebeiro, partner at Norton Rose Fulbright, said that artificial intelligence (AI) was “having an impact on every sector.

“It’s having an impact on healthcare, it’s having an impact on financial services, having an impact on education,” he explained.

Roger Adamson, chief executive of research and consultancy organisation Futurenautics, went a step further, stating that “the world is likely to change more in the next 30-40 years than it has over the past 300 years” at a Shipowners’ Club seminar, also at LISW17. At the event, Mr Adamson explained that an aging population was moving the economy from a goods to a service-based system, which has implications for shipping.

Looking into the future

“We are at the end of the demographic sweet spot,” Mr Adamson said. “We’re getting older and older people buy more services. Conditions for consumer growth aren’t there anymore. We’re consuming less goods and therefore shipping less goods.

“In the circular economy, we won’t need 170m tonnes of iron ore, according to the Ellen McArthur Foundation,” he continued. “The move to electric cars will affect tankers and containers – PwC says 37% of container shipments are at risk from 3D printing. Seaborne volumes in 2030 will be no higher than today, according to Danish Ship Finance. This is the new seaconomics.”

Gerd Leonhard, chief executive at The Futures Agency, a futurist company, had an even starker view of what is to come at an Inmarsat seminar that also took place during the week. “I think robots and AI will take our routine tasks,” he said. “Anything that cannot be digitalised or automated will become really valuable.

“If you are not clever with technology and do not have the algorithms, you will not succeed. You have to observe, understand and imagine and then you can transform. It’s no longer about digitalisation, it’s about construction on top of digitalisation.”

Technology, agreed Mr Adamson, is empowering everything, but the key lies in empowering people. “We have a rendezvous with an entirely new maritime industry,” he said. “It’s not the next generation that will cop it, we’re going to see this too.”

Not only are people now interconnected in different ways; so too are things. Science fiction, said Mr Leonhard, has already become science fact. He added that there will soon be complete disruption of all components of shipping. “We’re at the pivotal point of exponential change,” he said, noting that the change “will be gradually and then suddenly”.

“In shipping, the future is no longer an extension of the present,” he continued, saying that offline was now a mental rather than a technical state. Digitalisation, datafication, cognification, disintermediation, virtualisation and personalisation were all highlighted as key megashifts to monitor.

Technology and shipping

Stephen Hawking described AI as “either the best, or the worst thing, ever to happen to humanity”, while business magnate Elon Musk said it posed “a fundamental risk to the existence of human civilisation”. At the Shipowners’ Club event, Mr Adamson was similarly concerned about the risks that the form of intelligence could pose.

“AI is a big threat, not just to shipping either,” he explained. “There will be a loss of white and blue-collar jobs. What will that mean? A job for life is something that we’re not going to see in the future.”

Mr Leonhard agreed on the importance of AI: “To invest in oil today is ludicrous; data is the new oil and you don’t even have to own the data,” he said. “AI is the new electricity. Whoever cracks this in shipping will be the number one.”

However, he did not agree with Mr Adamson’s assessment that AI would cut employment in the maritime world: “Lots of research shows that we are creating new jobs that didn’t exist,” said Mr Leonhard. “We will find new ways to employ seafarers.”

Bridget Hogan from The Nautical Institute echoed Mr Leonhard’s sentiments: “However automated you make the system, however many robots you have involved in the system, still there have to be people at some end of the chain,” she said at the WISTA conference.

That said, technology still gives the maritime sector the greatest opportunity since the advent of steam, according to Mr Adamson. He expected shipping to become part of a new intelligent transport system – the blue logistics channel. “Disruption will start in the small boat sector first,” he added. “Don’t just focus on the autonomous vessel, don’t fixate on that. Machines are for answers, humans are for solutions.”

Adaptation is key

With change afoot, those in the field will need to learn how to adapt if they are to survive.

“Maritime companies need to get their heads around linear and exponential,” Mr Adamson said. “They are not doing it yet, but they need to. They are using the past to predict the future and that’s dangerous because we don’t have the conditions for continuing consumer growth anymore.”

Instead, maritime companies need to change part of their culture, he said. “It’s a mindset issue. You don’t need to know technology at a bits and bytes level, you need to look at technology from a strategic level.”

For him, the industrial revolution – or the second machine age – is the augmentation of intellectual capabilities, starting with AI and automation. “Yes, we need to learn from our Generations Xs, but we also have to get our head around Machine Learning.”

A key takeaway was that shipping companies need to urgently create digital visions, something that is lacking at the moment.

Mr Leonhard’s advice for those shipping companies starting out on their digital journey was to reduce friction step by step in the company and to use technology to do new things, not just to do better or cheaper things. “If you do not do new things you will not exist in five to seven years,” he warned.