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BIG DATA

Strategy in shipping

IS SHIPPING TOO SMALL FOR BIG DATA ?
marit.thorsen@ubf.oslo.kommune.no
Every day, we create 2.5 quintillion bytes of data so much that 90% of the data in the world today has been created in the last two years alone. This data comes from everywhere: sensors used to gather climate information, posts to social media sites, digital pictures and videos, purchase transaction records, and cell phone GPS signals to name a few. This data is big data.

"BIG DATA" has become an important issue to address for most companies. But the Shipping industry is not concerned - at least not so far. Why is that ? The shipping industry is a very competitive industry but many companies are still threading along in a old fashioned way - not showing even the remotest interest in starting to consider using management tools that other industries are gearing up with.

Big data and advanced analytics has become a top of mind issue for business leaders around the world for very simple reasons: It is going to define the difference between winners and losers in most of our industries going forward. The ability to get incremental results out of the chartering dollars or the  ability to get incremental margin out of scheduling and rate negotiations or incremental reduction in energy costs. All of this is going to define the difference between winners and losers. The interest is very high in many industries - but not shipping. The challenge is figuring out how to start and how to really go after these ideas and turn them from great industry conference conversations into things  that the companies are acting on every single day.

According to McKinsey. the management consultants, there are three major challenges when companies try to get into this:

The first challenge i figuring out what data the company actually wants to use.
There is a lot of information generated internally. Lots of performance data, contractual information, laydays, cargo availability, charterers' bargaining power etc. Just handling this alone is a big challenge for many companies. But that is  not where all the value can be created. The real value is in understanding what other data sources are available - and bringing external data into play.

What data do we need - internally and externally. The real values are where we bring external data in: traffic patterns, competitive data, port information, stock piling information. To understand what rates are offered in the market, what ships are in position for what cargoes, what are brokers saying. Which data to use, how to source it and how to get it together in an
integrated form so that it can be used across the company is the key.

The second challenge is the analytics themselves. This is a highly math intensive analytical modelling exercise. Getting that right, getting the right skills and capability and getting people who really know how to use the latest mathematical techniques, the latest statistical methodology to get that inside the data and find the real nuggets of gold
  
The third one and probably the hardest of all is taking those insights and use them to transform the way business operates . It does not make sense to draw insight out of the data if you are not going to change the way managers are operating on a day to day basis.

We are now soon entering into the hectic week with Nor-Shipping, all the exhibits, the conferences, the parties. But still the topic is concentrated to issues such as eco ships, cranes, hull structure, and the usual presentations from analysts and brokers with great power point graphs on demand and supply. We have seen them before, and we will see them again and again - but does it make us act more intelligently ? Probably not. Do we use information from AIS about true ship movements that can impact how competitive our ship's position is for the next cargo ? Probably not. Do we model contractual and spot data in a form so we can intelligently find the most optimal scheduling for our fleet ? Probably not. Oslo October 2014.

 
 
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