“The most significant benefit of digitisation is increased capabilities to serve our customers’ needs,” says Tim Polson, Business Development Manager at Klaveness Digital.
The latest episode of the podcast NBAS Talks, released on May 5th, is focusing on maritime innovation and digitalization. One of the key messages from guests Magnus Lande from DNV GL and Steen Lund from Singapore Shipping Association is to focus on the core business, not on digitalization itself.
This is also the message from Tim Polson, Business Development Manager at Klaveness Digital. In this article, he shares his thoughts on the importance of innovation and cooperation to solve the problems the shipping sector is experiencing.
“Winners experiment most, fastest and cheapest”
“We at Klaveness are pioneers and have challenged the status quo in shipping from our inception,” states Polson. Early innovations at Klaveness include being the first to carry cement in bulk in 1961 and pioneering shipping pools back in 1963.
Polson says a drive for innovation is a key part of the company’s DNA: “Most recently, we established software company Klaveness Digital in 2015 and combination carrier operator Klaveness Combination Carriers (KCC) in 2018. The creation of ‘K-Lab’ in 2015 marked the first step of our digital journey – an initiative aimed at providing the most useful and intuitive digital services in shipping. From this grew Klaveness Digital, now a standalone company offering software as a service solution such as CargoValue. CargoValue is an intelligent logistics platform designed for industrial companies sourcing and shipping raw materials by sea. It helps them reduce the costs, risks and CO2 emissions related to shipping and logistics through real-time, actionable data.”
Polson addresses two common questions from maritime professionals: “Do we spend a fortune on digitizing for the sake of digitizing?” and “what are the benefits?”
He adds, “Both questions are very good, especially considering alternative uses for the time and financial outlay required to digitise. We believe that digitisation is dynamic; there is no ‘big bang’, rather a series of many small ‘bangs’.”
Identify the quick wins
Polson explains that Klaveness’ digital journey began with mapping processes in the aluminium industry, identifying low hanging fruit – problems that can be solved with existing solutions- and gaining small, but regular wins.
“Valuable lessons were learned from initiatives that did not result in a win. Sharing these lessons and other industry knowledge has been key to a successful digital evolution. Klaveness’ technological initiatives all stem from team members recognising something internal or external to the organization that could be improved, and the organization working together to find a solution,” says Polson.
An example of this is the recent collaboration with DNV GL and Arundo Analytics on implementing the Veracity data platform onboard Klaveness vessels. This platform provides a crucial link between data generated by sensors onboard vessels and shore-based teams who are charged with managing these vessels efficiently and effectively. Operations teams ashore can use these insights to make more effective decisions on items such as when to drydock vessels, when to order mechanical parts and which suppliers’ materials are performing best. Shipboard team members can also use these insights to operate the vessel more effectively and communicate requirements more clearly with shore-based functions. An example could be the ship’s crew justifying the need to dry-dock earlier than planned, based on data-driven insights showing hull growth being higher than expected due to unforeseen time anchored in tropical waters.
Tim Polson is emphasizing that digital optimization initiatives save considerable costs both for Klaveness and their customers. However, this is just the beginning of the digital transformation journey, according to the Business Development Manager at Klaveness Digital.
“The most significant benefit of digitization is increased capabilities to serve our customers’ needs. This strategy is not a new concept in shipping: the master of a 17th century East Indiaman galleon had little opportunity to make his vessel perform mechanically better than the hundreds of other similar vessels, but he could study weather and tide, learn from others’ mistakes, set his rig according to performance indicators and navigate his course better than others,” states Polson.
In his view, the reward is reaping the highest price for delivering the freshest produce of the season first.
Klaveness aims to identify challenges, democratise the data related to those challenges so that the data tells a story about the challenge, then go about solving it and thereby challenging the status quo.
Looking ahead, Klaveness Digital philosophy is sharing knowledge with the wider industry. Klaveness studied bulk material producers’ and receivers’ supply chains over several years to develop its supply chain solution CargoValue. A key finding was that many of these companies use spreadsheets, antiquated enterprise resource planning systems and manual processes to co-ordinate high-value, time-sensitive shipments. Most rely on email and phone calls to transmit shipment-critical information, meaning staff and management are overloaded with transactional tasks and potentially hundreds of different versions or variations of a single piece of information.
For instance, a simple estimated time of arrival (ETA) update: A port agent provides an ETA update to a bulk receiving company’s port operations team (eight people) who forwards it to the chartering team (four people), local transport co-ordination (six people), local sales team (seven people) and local accounts payable team (three people). That is one piece of information multiplied 28 times, which is a benign piece of data that will be out of date as soon as a new ETA update comes, maybe a few hours later.
“It is hardly surprising that when changes occur, for example, a normal 24-hour delay due to weather, the organization struggles to respond quickly enough to avoid unnecessary costs,” says Polson.
The bullwhip or ripple effect from a 24-hour delay not being quickly and accurately transmitted can cost tens of thousands of dollars, and this may happen several times a month. CargoValue is a platform for all stakeholders in this equation to have real-time information available all the time, be able to manipulate that information and make intelligent, proactive decisions, thus avoiding unnecessary waste.
Klaveness’ research has also debunked a common misconception that intermediaries are a source of waste in bulk commodity supply chains. Quite the opposite, given the right digital tools an intermediary is more valuable than ever to solve the problems in a maritime supply chain.
Klaveness’ mantra is mapping a scenario, identifying problem areas and developing digital solutions to address those problems.
“There is no sense in building a whole new berth to avoid demurrage when the real problem is lack of information transparency, solved for a fraction of the cost. To maritime enterprises yet to begin their digital transformation journey, we encourage them to do so with haste, starting with small, but regular improvements. To those whose journey is already underway, we implore digital initiatives to be prioritized higher on the agenda. Performance gains from democratising and manipulating data are real and measurable. When employees are armed with improved visibility into their company’s operations, they can identify more areas for improvement and opportunities to adapt, and so the benefits from digital transformation snowball,” ends Tim Polson, Business Development Manager at Klaveness Digital.
The article is an adaptation of an article first published in an Institute of Chartered Shipbrokers publication.
Tim Polson is Business Development Manager at Klaveness Digital and can be contacted on email@example.com.