During the 2020 SAFETY4SEA Limassol Forum, in a keynote address to delegates, Frank Coles, Group Chief Executive, Wallem, provided an overview of the current realities shipping has to encounter, highlighting that the industry is neither special, nor immune from the 4th industrial revolution. The longer it resists, the greater the pain is going to be and if it wants to be special, it needs to reinvent itself and “forget the dinosaurs and their havens of denial”.
Reality has never changed as fast as it is happening today. This COVID-19 story changed the world in only just few weeks and has the potential to rewrite history books. And along with that, to change the balance of the world economy.
In maritime, this could create a maritime revolution and many of us are talking about it for some time. It is about time that we need to create real change in the maritime industry. By that, you can infer that I don’t have much faith in the current digitalization story. Like the Augmented Reality of the world created by social media fake news and media misinformation; if you read the media and listen some of the technologies suppliers we are undergoing some kind of digital revolution. And while I expect changes happening, the story on the ground in most owners and ship energies is a far cry from the vision you read about and is projected by many technology vendors and in the media. This is my opinion, based on my experience and while I accept that there are changes, pockets of progress do not institute a revolution. My position is that we need ground breaking change. We need an event (i.e. coronavirus) or a genius to create a real difference; a true digitalization, true revolution. We are a traditional industry by nature, but now we need a revolution!
Everyone likes talking about Elon Musk, Einstein, Bill Gates, Henry Ford etc. Do you think they cared for committees or what government thought? Their disruption came in spite of and not because of committees. This is the very essence of what a revolution is. The words disruption, innovation, digitalization do not fit well with committees like the IMO and organizations that support them. They are the very opposites of what organizations stand for. The history of these organizations in the development of regulations and enforcing operational standards prove the point. And today, with things changing in the maritime industry in lightning speed or in the world around us in lightning speed this is even more true. Governments and committees do not create revolution; people do.
Sustainability is one of the key topics for the industry. Have you been onboard a ship with a scrubber? Have you visited a drydock as long as it is being installed? I have been on several. The measures that are being put in place is to prevent corrosion such as the huge pipes that are put on open loop scrubbers. We can talk all day about the economics of scrubbers, the cost of maintenance and the ridiculous implementation of IMO Sulphur cap. One thing is very clear to me; it was not green and it was not sensible. There is something completely ridiculous to me, that we have all ships sailing around on low Sulphur fuel, all pumping heavily corrosion liquid in the ocean while carrying millions of tons of cargo and fossil fuels to countries which would burn it into the atmosphere. This has to be done in a smarter way.
On top of this, when I have the discussion of the quality of fuel that is available or what fuel are we going to burn in ships; but as usual, unless something changes, we are going to stumble through this with very little leadership and owners will be left to pick up the pieces.
Where is the pragmatic leadership from the charterers, from the oil majors, and all the other so called experts? I would be very happy to see the EU challenge the IMO. The IMO has made a mess of the regulatory framework of almost everything they touched in the last 30 years and now it is time to change.
If shipping really wants to control its own agenda, it needs to act differently. Oil majors and charterers need to develop a social conscious for a greener ship. They need to pay owners more for green ships. Incentivize rather than penalize. How can you build a ship today for the next 20 years? When the engine, the fuel, the crew qualification are all in doubt? Nobody actually knows what is required. Why would you even build a ship to carry oil today? When everybody wants to get rid of fuels. The uncertainty is just mind blowing.
My other favourite topic is human factor. As an ex-seafarer I find it very disappointing to what’s the current attitude and treatment towards seafarers. I honestly believe things have gone worse in the years since I left the sea. The environment and working conditions are not improved for the vast majority of seafarers at sea today. 20% of seafarers have considered self harm. This is a staggering statistic and one we should all be ashamed of. Add to this, about 170 seafarers die every 8 weeks. 170 every two months. 6-10% of them commit suicide. This is a totally unacceptable situation.
The industry talks about safety, but figures like these suggest that we are not addressing the core requirement; a happy and safe crew. If we don’t have a happy crew, and no one is treated with respect, how can we possible have a safe ship?
It is interesting while I was running a technology company, I was told by technology guys that technology is going to replace the crew, so we don’t have to consider them. I find this considerably disturbing at so many levels. I think we can run the ship automatically; engine rooms of today and aircraft are capable to do that. But in both cases, they have humans involved in monitoring and the level of training is high.
It is amazing when we consider the Boeing 737 accident recently and the mistakes made in training and software quality control. And then we talk about what new engines, what new fuels, the introduction of complex technologies and then we start think of having unmanned ships. These things don’t fit together. From my experience, we should and could move to automated operation but it needs to be monitored by skilled team. And we need a business case for it.
Have you seen the level of quality of today’s marine equipment? I think that we have a long way to go. And I’m not holding my breath. Otherwise, we are going to need multiple redundant systems, engines and fire fighting and safety backups.
Technology; in the last 16 months since I’ve taken over at Wallem, I have been considering the technology picture for the other side of the wall. It makes for a very interesting discussion when I catch up with all contacts and technology companies when they visit me at Wallem. We have so much technology to add in the puzzle, but the situation is being mishandled on so many levels. First and foremost, owners and managers are largely at a completely different stage of revolution to some of the modern technology vendors and the stories that they spin. A large number of operators still run very basic technology platforms. And yet to embrace the full concept of technology is a complete tool for operational efficiency. Coupled with this comes the fact that products on offer are so often fragmented and not fit for purpose. Only parts of the required solution are on offer. Integration is always almost impossible or at very best complex. The thing that most upsets me though is the misinformation to owners and operators.
Proper optimization of the ship operation and fuel optimization will only come when we can have machinery sensor data and the abducted data working at a proper picture of the vessels past, current and future voyages. Try getting a company to give you that today. And then try to get it for a reasonable price. Then try convincing your owners that this is the way to go. I’m still working on that problem. The multiple companies, protocols and levels of manual import that are still around make this a mindful for every owner to consider implementing it. I get that suppliers want to sell, but the lack of transparency when they produce these solutions is not doing owners or vendor any favor. So, what we end up is with over hyped solutions, over confused customers and a fragmented stumbling progress towards modernizing our business.
I smile when I think of loss prevention. There is a simple answer to this, don’t let the ships sail. Of course, that’s not an answer or a helpful comment. But I think of loss prevention a little bit pharmacy agencies and doctors. That there are to cure the sick and not to prevent the sickness. And so goes the insurance market. True loss prevention will only come from the things I have been talking about above. Human factor training, human factor wellness and use of the tools to reduce the risk and the chance of losses. The fact is the premium will be reduced to those that have a high level of training and a high level of technology. We would ensure a win for the shipping industry, if we had to pay less to the insurance companies.
In conclusion, maybe the current crisis will drive enough ships out of the market. Maybe the economic picture will change enough for a new model to evolve. Maybe the light will go on somewhere and a charterer will pay for a green ship with a qualified crew on a modern connected and analytical ship. I believe that the difference of the future is going to be the story of data and the first to handle this will be the leader.
I am obviously talking about operation because freight and trade is so far ahead of us. Tomorrow ships are not going to be operated by today’s managers. Tomorrow ships are not going to run in the same way. This is not a fuel efficiency story, it is about so much more. It is not about a smart route or a just in time arrival. It is not about a fast satellite connection or sharing data with the port on arrival. These are pretty basic elements. This is about the ship as an economical green note on the value chain. The proper tools to evaluate productive life in the short and long term, an ideal tomorrow will have a complete picture of the daily performance of the ship live at the same time is being managed by a maintenance plan live. Tomorrow’s superintendents will not simply manage an annual budget, but by superintendents that are afraid to bust that budget. The budget that was decided months ago and is the same it was last year because the owner won’t change its numbers. That is not the future.
So in essence, I am saying that attitude has to change. This has to be from the top to the bottom. It has to be on how we view change, how we view management and how we view technology. But most of all, we have to recognize that shipping is not special. It is not immune from the revolution. And the longer we resist, the greater the pain. If it wants to be special, it needs to reinvent itself. It needs to forget the dinosaurs that hide in the havens of denial while they sit in the committees.
Above text is an edited version of Frank Coles keynote speech during the 2020 SAFETY4SEA Limassol Forum
View his video presentation herebelow
The views expressed in this article are solely those of the author and do not necessarily represent those of SAFETY4SEA and are for information sharing and discussion purposes only.
About Frank Coles, Group Chief Executive, Wallem
Frank Coles is known as a disruptor and visionary business leader, who has been leading the maritime industry into the new technology-driven world. Starting off as a deck officer after 12 years at sea Frank came ashore as a Master Mariner. He read for a LLM in Legal Aspects of Maritime Affairs from Cardiff University, Wales. In 1995, Frank started as an Operations Director at Pacific Basin Bulk Shipping. During this period Pacific Basin had invested in Rydex, the leading company at the time in email software for maritime communications. Frank became CEO of Rydex while continuing in the operations role with PB. During 1998-1999, Frank was a Vice President Business Development at Sperry Marine. In 1999, Frank took on the role of Chief Operating Officer at Globe Wireless, where in 2003 he had been appointed CEO, President, and board member. Between 2011 and 2014 Frank worked at Inmarsat. Joining as a Director in 2011, by the end of the year, Frank had been promoted to President of the newly formed Inmarsat Maritime business unit. In 2015, Frank Coles became the CEO of Transas, a world leader in high-tech equipment, software and system integration for the maritime industry. Transas was acquired by Wartsila Corporation in May 2018. After the transaction was complete, Frank left Wartsila. Frank was headhunted to join the Wallem Group as Chief Executive Officer in October 2018. He has set an agenda of renewing the brand, and a path and vision for Wallem to be the leading provider of technology-driven maritime solutions in a customer-centric and transparent manner. Frank is a Freeman of the Honourable Company of Master Mariners. He also is a trustee of the Nautical Institute as well as a Fellow of the Nautical Institute.