Digitalization can provide the ferry industry with both a reduction of operational costs and revenue increase, along with increased safety and crew efficiencies, a new report by global satellite communications provider Inmarsat reveals.
he new ‘Global Status of Ferry Digitalisation Report – Uncovering the Passenger and Operational advantage’ reports on attitudes to ferry market digitalization, drawing on interviews with 10 leading ferry owners by consultancy JG Maritime Solutions. Authored by Ogilvy, the report also includes findings from Digitalisation Uncovered – the Inmarsat-sponsored research project into shipping digitalization, launched in December 2020.
This report demonstrates there are good reasons for owners to evaluate the flexible and affordable broadband services already serving tens of thousands of vessels worldwide and providing operational and safety benefits such as real-time situational awareness. Continuous connectivity and unlimited data are the keys to unlocking further cost reduction, enhancing the passenger experience and boosting revenues,
…says Les Shortall, Director of Market Development – Yachting and Passenger, Inmarsat.
Key report takeaways:
- Reduce costs: One in three ferry operators expect digitalization to bring savings of over $10m within 12 months with a suite of enhanced operational efficiencies.
- Passenger Wi-Fi: Passengers will likely expect ferry operators to match the onboard experience they receive in the air or by rail/bus. Reliable connectivity creates an opportunity to enhance and monetize the customer experience while expediting customer loyalty.
- Post-Covid passenger safety: Digitalisation can support passenger confidence with new post-Covid protocols such as card-only contactless transactions and digital ticketing using the passengers’ own devices to help passengers feel safer.
- Revenue generation: Four out of ten ferry operators interviewed mention revenue creation as an investment driver for digital solutions. Connectivity unlocks revenue generation via ancillary services offered to passengers, from add-ons to the journey, destination services, upgrades, retail, and more.
- Safety: Increased use of technology enables ferry operators to get ahead of safety issues, rather than react to them.
- Customer loyalty: Following the easing of Covid-19 travel restrictions, ferries will be in direct competition with other modes of transport. Digitalization can expedite customer loyalty; ensure ferry travel is a preferred mode of transport; minimize customer dissatisfaction and in turn lower the cost burden of complaints.
- Crew efficiencies: Digital technology proves vital in taking the administrative strain away from crew members, improving compliance, and moving away from paperwork. Advanced technologies such as virtual reality can allow remote technical input and specialist guidance from the shore.
According to the report, one in four passenger ship owners said new revenues were a top 3 reason for digital investment, against a lower one in six for all ship owners.
Similarly, 18% of passenger ship owners see creating new value for customers as a number 1 reason for digitalization, versus only 13% of all owners.
Furthermore, whilst 30% of all ship owners value digitalization as a means of supporting compliance with regulations and certification, the figure for passenger ship owners is much higher at 43%.
Meanwhile, four out of 10 of the owners/operators in the report mentioned revenue generation as a primary investment driver. In North Europe, point-of-sale payment for duty-free goods offers a promising revenue stream post-Brexit, for example, best enabled by continuous connectivity.
Ferry owners have been early adopters of the ‘smart’ technologies behind always-on emissions monitoring, voyage planning, predictive maintenance, and situational awareness to enhance sustainability, efficiency, reliability, and safety. Decarbonization goals are accelerating the adoption of electric-hybrid propulsion technology that works especially cost effectively when combined with IoT-based decision-making via satellite connectivity.
Meanwhile, interviewees recognized drivers to utilize digital solutions in implementing new Covid-19 protocols and inspire confidence with ’biosafe’ contactless transactions. In addition, customers returning to sea post-pandemic now have very different connectivity expectations.
The report concludes that “staying connected is not a nice-to-have, but a must-have,” with poor or patchy connectivity now having the potential to damage a ferry operator’s brand. If digital solutions enhance operational efficiencies, meanwhile, “these same solutions can help grow much-needed revenue via heightened passenger loyalty and boosting ancillary revenues”, the report adds.
Digitalization can create new revenues but also expedite customer loyalty to help ensure ferries remain a preferred transport option. Robust new satellite technology and the advent of digital platforms can enable ferry operators to become leaner, increase their agility to deliver a safe travel experience and secure the opportunities offered by ancillary revenues,
… Shortall continued.
Guidance for operators to shape their future digitalization strategies
- Major conversions onboard to support decarbonization of the shipping sector, such as electric-hybrid propulsion or clean fuel SMART platforms, are likely to be the catalyst for supporting digitalization.
- Operators currently prioritizing and dynamically managing their existing onboard connectivity pipeline capacity should look to collaborate further with OEMs on connectivity that supports always-on monitoring. This could see a dynamically controlled cloud-based service to share information collected from operator vessels onwards to their key partners and suppliers.
- Where operators take delivery of new vessels or have existing vessels converted to a “Smart” platform with asset or integrated management systems installed, a higher level of onboard connectivity will be required.
- To resolve problems, operators should start considering more advanced technologies coming through, such as VR headsets and glasses that onboard technicians can wear to view an equipment problem and stream information back to shore. This allows technical input and specialist guidance to be provided.
- Operators without reliable seamless connectivity should seek opportunities with connectivity providers to trial options that will optimize their current connectivity solution. Particular areas to look at include enabling dynamic bandwidth management and prioritizing operational data streams.
- Operators should look to become smarter in their pricing models for passenger Wi-Fi and also seek options to expand the capabilities of enhanced onboard connectivity to enrich the passenger experience with destination services, content and retail, together with harnessing advertising to open new revenue streams.
- Robust new satellite technology could trigger new opportunities for ferry operators previously disappointed by satellite service performance to trial higher-capacity services. This will assist them in unlocking the value of digital solutions across the passenger journey.
- Ferry operators will bring onboard retail services back in-house. This is due to retail and revenue management becoming increasingly automated, less labour intensive and more secure, thanks to card payments being assured via reliable connectivity. This could trigger a boom in ancillary revenue creation. Operators re-introducing duty-free services will need to ensure reliable connectivity to maintain compliance with customs regulations.
- Operators servicing “Brexit bypass” routes need to ensure their onboard connectivity is reliable enough to maintain the operational efficiency gains that digitalization is bringing them. No less important, they need to ensure good passenger connectivity on these longer routes.
- The inclusion of Cyber Security within the ISM Code from 1st January 2021 was seen as a benefit by a number of the ferry operators interviewed. As such, operators should lose no time in ensuring they implement the new cyber requirements and avail themselves of the wide range of information and support that vendors are providing.
- Operators should look at using connectivity to push VDR data in the cloud if triggered by an incident such as listing, grounding, etc. including the ability to retrieve data leading up to the incident. This will help improve situational awareness, particularly in port areas, and will record ‘near miss’ data that can be used in future training exercises in order to minimize future risk.