In this month's guest blog, Open Sea Pro CEO Vasiliy Kotylevskiy introduces the company's new online ship chartering tool, with which it wants to reinvent the shipping chartering market:
Shipping is a traditional industry, where changes are adapted in a slower motion than elsewhere. However, since our world becomes more and more technologically advanced, new technologies join the shipping industry as well, in order to make our life easier and our work more efficient. But why is shipping not very friendly in new technologies? What are the recent developments in this field and how can they transform shipping in general and ship chartering in particular? While everyone is busy to deliver its daily tasks, there is no time left in order to be updated in the ongoing innovations and adapt same. In this article, we will discuss about the special characteristics of the shipping industry which make it look different and less technologically advanced than other economic sectors, the recent developments and some interesting technologies that we already see around the market and finally, we will focus on the online marketplace which has come to enhance and transform the ship chartering environment.
The special characteristics of shipping have kept things traditional
Looking into the general characteristics of the shipping industry, you may understand the main reasons that our industry is not very friendly in technological innovations. The most common of these reasons seem to be the following:
- A major part of the shore personnel at the shipping offices have been ex-mariners with sea experience. Most of these people prefer to keep things in their traditional way while they are also not very familiar with new technologies. The new generations of seamen already have higher computer skills however it may take years in order for those additional skills to become apparent in the market
- Shipping is a very competitive market which requires high interaction between the players. For example, in order for the shipowners to fix the employment of their ships, they need to come into contact with a charterer. But in case the shipowner uses a system or process which is not used by the other party, the communication and fixture will be impossible. Therefore, in order for a technology to be generally adapted, it should be established and used by a major part of the market players
- A lot of companies, mainly the ship management or ship owning ones, are family owned who hardly invest in new technologies and IT systems. This “family-oriented” model, which was the successful management model of the Greek shipping companies during the past decades, now changes and while the big players increase their investments in new technologies the same pattern is also followed by the smaller companies who seem to realize that such investments can reduce the operating costs and, in the long term, generate higher returns for the company.
Technological innovations will lead the way to future
Despite its traditional characteristics, nowadays we see various investments around the market which may lead the industry within the next years and totally transform shipping business. These new investments indent to develop new technologies which may apply either on the day-to-day operations at the office or even on the way that ships move and operate.
New technologies in ship operations: the automated ship
Rolls-Royce has recently invested in the creation of the so called "unmanned" or “automated” ships. The building of such vessels is going to be the revolution in shipping during the next 10 years, while initially their operation will be limited in short sea shipping. Furthermore, the European Union has funded a similar project with $ 4.8 million. The automated ships seem to offer interesting advantages which are related with a reduction in the weight of constants allowing room for more cargo intake as well as a reduction in fuel consumption. However, the most important advantage is the decrease of the operating expenses which can be as high as 40% due to the reduction of the crew wages.
New technologies in repairs and drydocking
When a vessel is expected to take repairs, or pass a drydock or special survey, the superintendents and/or the technical manager should write down an email with all the expected works and contact a number of different shipyards, ask for their quotation and negotiate via email exchanges or phone calls. Maindeck.io have recently established a marketplace between the ship management companies from one side and the shipyards on the other side in an effort to connect them with just a few clicks. The superintendents prepare an online form with the required repair works and ask for shipyard’s quotations. The shipyards, who are interested to take the business, evaluate each and every work of the list and offer their final price. Furthermore, this way, all the members of a team in the ship management company can also have access into the platform, amend the repair works if needed and be updated instantly without the need to exchange unnecessary and time consuming emails which may delay the whole process. Last but not least, with Maindeck.io the ship management companies may have easier access and develop relationships with more shipyards and receive much more quotations which may definitely lead to a more competitive price and a reduction of their operating expenses.
New technologies in the sale & purchase of ships
The shipowners should always be updated about the current fair market value of their assets. As it is well known, the FMV of ships is well volatiled and may change even on a daily basis. Therefore, in order to remain up to date, you should follow all the recent sales, study market reports and stay in continuous contact with the S&P brokers. Furthermore, the shipowners and the financial institutions may need valuations either for accounting and financial purposes or for commercial reasons. Apparently, this is just a simple thing, though requires a lot of time and effort in order to be obtained. During the last couple of years, a company has developed an online platform by which the users can have access into the fair market values of each and every vessel around the world. Just with a few clicks in VesselsValue.com, you can see the characteristics of the ship, her current market value, recent sales of similar vessels, her historical values, her scrap value and other such useful information while an official valuation can also be instantly printed and used for accounting, financial or other official purpose. This online system brings simplicity and high transparency since everyone can have access into an objective evaluation of the asset prices.
New technologies in the ship chartering
How many changes have you seen in the ship chartering industry during the years? Just a few we suppose, since chartering has remained quite traditional during the years with a revolutionary change taking place each time every 20 or 30 years. From the telephone to the telex in the 1950s, then move to the fax in the 1980s and finally to the e-mail at the end of 1990’s. Since then, no further innovation has appeared with just the use of Instant Messaging like Skype or Yahoo which has just made the communication between
the parties easier and cheaper. Recently, a major revolution is taking place in the ship chartering sector with the development from OpenSea.pro of an online marketplace. Shipowners, Charterers and Shipbrokers are part of the online community, they can post their ship’s and cargoes’ positions and fix way quicker than in a traditional way. Let’s see more characteristics of the online chartering marketplace which promises to boost the chartering performance of its members.
Online ship chartering: How it works and the main advantages for its members
Today’s ship chartering process is time consuming and, in some cases, complicating. How many emails do you have to follow each day? How many circulars are you sending out? How many hours of communication with the various brokers? That is all for the sake of one single fixture, which you need to fix right now. And what would be better than an immediate response to your circular? There is an easy way to get an instant result, without a long chain of intermediaries, dozens of negotiations and waste of valuable time. This is the major revolution of ship chartering which is already here since more than 1,000 professionals already use the OpenSea marketplace. With just a few clicks and within a few minutes you can join the OpenSea platform, register a ship’s position or cargo inquiry and the system will immediately find the best matching candidate which can be fixed with just a few more clicks. Recently, OpenSea team has gone even further and, in an effort to save users’ time even more, it now offers a new feature by which you can register a position or cargo just by simply adding the e-mail address into your circulation list. This feature allows the registered users to easily update their open positions while all changes/updates will be instantly available to the worldwide users of OpenSea and they will get all matching opportunities directly into their mailbox. This means that you will not get hundreds of irrelevant emails but only the matching positions or firm offers you are really interested in.
Furthermore, there is very strong privacy since the users’ contact details remain private, until the user gets the perfect match and decides to start firm negotiations with a counter-party. This mechanism allows users to safely choose the best offer and commence discussions on the charter party terms with the right party.
With OpenSea, the shipowners are not only able to find the best matching cargo within a few minutes, but they can also get a detailed picture of the market conditions in each area of the world by taking a quick look into the online map and evaluate whether a backhaul cargo will be possible which can make a chartering strategy more efficient and maximise the profits. Furthermore, after the completion of each charter which is fixed via the OpenSea marketplace, the parties are welcome to leave feedback on the performance of their counter-party which can help the whole market to become more transparent and safer. Last but not least, the OpenSea service can be used absolutely free of charge until the users fix their first contract and get a positive experience of this revolutionary chartering service.
Of course, this is not a complete list of the new technologies and the revolutionary ventures which have appeared in shipping. We recently see serious progress in the digital developments, which can change the way we perform the various day-to-day tasks in all sectors of the shipping industry. Times change and new technologies are definitely going to bring more value into shipping and finally help this traditional industry become technologically advanced and gain higher levels of efficiency.