Part 1: Commercial Operators
Shipping is a strongly intermediated market where three sides interact and have unique strengths and challenges. On the one hand, ship owners/commercial operators seek to maximize the employment and the revenues of their vessels. Shipbrokers, the intermediaries, have to facilitate large deals in volatile market conditions, while relying on incomplete information. Finally, charterers, as controllers of the world’s cargoes, are constantly trying to assess the ideal time, quality and price to book transportation for their goods.
The shipping sector has been slow to adopt technology tools needed to facilitate decision-making. Information on vessel bookings (“fixtures”), vessel availability (“positions”) and service requests (“cargoes”) are still primarily communicated via email/chat in non-standard formats that have seen very little change in structure and content since the time of TELEX. Many daily tasks are done manually or through spreadsheets, databases, and person to person communications.
In recent years, commercial shipping has become an even more complex and competitive market due to the surge in the availability, variety and quantity of data. With this “data boom,” it is estimated that the shipping industry generates between 100-200 million data points every day. In order for commercial decisions to be made based on factual information, this data needs to be absorbed, understood and cross referenced against a growing array of detailed information related to vessels, ports, routes and trading patterns, as well as a range of commercial, legal, regulatory and environmental factors.
Today, Artificial intelligence (AI) and machine learning (ML) technologies are enabling the processing of vast amounts of data and turning that data into valuable and easily understood market insights. Most of these technologies are now available securely in the cloud which eliminates the need for costly, custom in-house installations and maintenance. Technology can help professionals and increase transparency in a largely opaque market such as shipping, but only sophisticated solutions, based on a deep understanding of the industry, can meaningfully solve some of the very complex problems involved.
In a series of three articles focused on digital transformation, we describe how The Signal Ocean Platform enables each of the key players of the commercial shipping market (the commercial operators, shipbrokers and charterers) to gain market intelligence while respecting and supporting the current processes, information flows and overall way of doing business.
Part 1 of 3: How Commercial Operators can leverage ship management software to increase efficiency and profitability
Shipping is a highly competitive and volatile industry. Success is ultimately based on the most effective utilization of assets. When a vessel is underutilized, the owner assumes the cost burden of crew wages, port fees, and maintenance, among other things.
In addition, a detailed view of the market is something that has historically been difficult to achieve. While an operator will know the movement and specifications of his own fleet, together with information fed via brokers, he may lack overall market visibility and the tools to make informed pricing decisions and cargo load choices.
Optimizing pricing decisions and cargo load choices
Knowing how many vessels are available in each part of the world, how busy they are and when they will become available again is critical. This level of insight can help estimate how strong the market is going to be and how the freight rates will fluctuate in the foreseeable future. This is exactly what Signal Ocean does.
The Signal Ocean Platform, a ship management software, is designed to provide all the stakeholders in the shipping supply chain with the intelligence to make better commercial decisions. The shipping platform was created by a team that comes from a long history in commercial shipping and who, therefore, understand and respect the existing market structure, and want to serve it without disrupting its structure.
For commercial operators, Signal Ocean is a valuable tool that processes the large influx of unstructured information that operators receive daily, combines and cross-references it with additional data provided by the platform and runs it through advanced analytical algorithms that help users interpret and predict competitive market pressures in the global spot freight markets. For example, a commercial operator can monitor how the vessel supply is changing in the short-term and how the industry responds to those changes for multiple markets. Ultimately, this helps them decide the exact timing and the levels of their offers, while they are trying to complete a fixture of one of their vessels to a particular cargo.
Another example is that commercial operators can estimate daily profitability (TCE) by calculating profitability of future voyages in order to optimise how they deploy their fleet for maximum commercial efficiency. The advantage of this feature is that they not only can do this for their own vessels but also for any other competing vessel.
In summary, shipping platforms and ship management software tools are making the commercial shipping sector more efficient. Technology is an enabler and a valuable tool which can be a gamechanger for shipping companies. Leveraging Signal Ocean, commercial operators can support and refine their view and feeling of the market through fast and powerful data analysis. Designed by the shipping industry for the shipping industry, Signal Ocean is accessible anywhere in the world via a web browser, and on desktop and mobile devices.
To request a demo of Signal Ocean, click here.