London delivers a new tech reality check

September 26, 2017

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‘London can take it’ was the slogan designed to keep morale high during the dark days of bombardment in wartime. These days the threats to London’s survival are more economic and political, but nonetheless serious.

The impact of the decision to leave the EU loomed large over London International Shipping Week, as the organisers sought to portray a strong industry ready for any challenge.

It didn’t always feel like that in the trenches and whether or not the UK government can deliver a form of Brexit that protects the country’s ports and services industry remains to be seen.

Perhaps because we were on high alert for existential threats, another observable trend was how much time industry players spent repositioning their comments on technology, disruption and digitalisation.

This was perhaps a response to this year’s Nor-Shipping which left participants shell-shocked and wary of a subject that had seemed to have taken on an agenda of its own. There were still skirmishes of course but plenty of reasoned debate too, enough to indicate that contrary to the prevailing narrative, the industry’s imminent destruction at the hands of the barbarians has little place in most realistic assessments of the near future.

The tone in London was one of adjustment, recalibration and in particular an understanding that critical human thinking and the human factor will be more important than ever in a digital future.

As Chairman of the International Chamber of Shipping Esben Poulsen pointed out to the main LISW Conference, the term disruption ‘has become so over used as to be almost meaningless’.

The idea that Silicon Valley tech companies want to increase their exposure to an industry with as many structural problems and whose margins are as fragile as shipping’s seemed questionable. “Don’t bet on an Uber coming into shipping,” he added. “We have always been very good at finding solutions to our problems.”

Similarly, the number of headlines proclaiming the imminent adoption of autonomous ships is in inverse proportion to the number of real projects. IACS Chairman and CEO Maritime of DNV GL Knut Ørbeck-Nilsson delivered some much-needed clarity about the goals and the tactics.

“The aim is not autonomous ships,” he said. “The aim is a safer and more efficient shipping industry.”

“We have a tendency with technology to go from one extreme to the other,” he continued, pointing out that the idea of a remotely-controlled shipping fleet remained somewhat unrealistic given that the majority of ships are not yet connected to anything that could be described as broadband communications.

It was also illuminating that leading legal commentator and honorary QC Joshua Rozenberg had, in his overview of the regulatory changes that might be required in order to make autonomous vessels acceptable to the many parties involved in shipping, described a mountain rather than the foothills. That the industry knows this of course doesn’t make it any less complex – in fact the degree of that complexity is only just beginning to dawn on many.

It was less of a surprise that seafarer unions question the wisdom of further reducing manning levels, since its members could be the direct losers. Mark Dickinson of the International Transport Workers Federation made a familiar but still important point about the need to correctly frame the debate.

“Luddites were portrayed as people who opposed technology because of the threat it posed to their jobs but what they in reality opposed was the use of technology in a way that did not enhance work and society,” he said. On that basis he was happy to declare himself a luddite, though he welcomed technology if it enhanced and improved the working experience.

So as LISW drew to an end, and the debate on new technology paused for a truce, perhaps the most important conclusion to draw is this.

The adoption of advanced technology, whether robotics, data or AI, will have huge implications for humanity, society and work; implications that that have yet to be resolved or in some cases properly understood. Given the lack of standards, consensus and legal frameworks, why should shipowners be expected to roll over at the first salvo from manufacturers with a product to sell?

This is not to say the industry can avoid change. It must adopt a more collaborative, less confrontational approach to its customer relations and business models, prepared to engage with and not merely destroy the competition, as well as understanding its place in the supply chain. The advance of connectivity and the transparency it will bring leave little alternative.

I was talking about old times and new technologies with a colleague who was on the inside of shipping’s dotcom boom in 2001. At that time, the industry was awash with other people’s money and tech companies that promised either victory or death depending on your role in the industry.

It proved to be a phoney war but the stakes are much higher now. The difference between 2001 and 2017 is that the coming few years will not be marked by the euphoria of sky-high markets that came to the industry’s rescue between 2002-2008.

Overcapacity, under-profitability, inefficiency, not to mention a welter of ever more costly regulatory compliance mean that for the industry a war of attrition lies ahead. To win – smartly and as quickly as possible – it needs new weapons and perhaps new leaders too.