Staying safe, staying competitive

Investing in maritime safety is putting your money in the right place when it comes to building and maintaining operational advantage in what is an intensely competitive domain, says John Roger Nesje of Norwegian wireless connectivity pioneer Scanreach.

Research company Verified Market Research (VMR) estimates the value of the global maritime safety market at USD 20.94bn in 2019 and that it will grow to USD 35.73bn by 2027. That equals an impressive compound annual growth rate of 7.45% over the next seven years. It is only a projection but the value trend is clear – the maritime community is spending increasing amounts on safety-related technology and services.

As for what is driving the market, the VMR report states: “The increase in maritime awareness is crucial to ensure the maximum safety of a ship and its inhabitants, [especially given] the emergence of smart technology as well as integrated solutions [where] there is a need for strict compliance with rules and standards.”

Regulations mean maritime companies have no option but to spend money on compliance just to keep ships trading. Cynical operators might say that implementing minimum standards is a necessary evil, and that the business case for investing a lot more on safety solutions over and above what is necessary, is weak. That might be correct if decisions are based purely on short-term cost/benefit analyses. But what is motivating the long-sighted who are implementing safety management and state-of-the-art solutions that go far beyond the minimum, despite opaque payback times? Vendors do not develop new safety technologies if there is little demand. Customers evidently want these innovations. Why?

“To me the answer is quite clear,” says chief executive John Roger Nesje of Norwegian wireless connectivity pioneer Scanreach. “Having a regulatory framework that sets the baseline for safety standards and ensures a level playing field is important, but as world trade and sea transport grows in tandem with global population – the UN estimates we’ll be 10 billion people on the planet by 2050 – companies perceive that anything that can radically improve safety on ships adds value.”

Responsible companies aim to reduce risk wherever they can (ideally without incurring more risk in the process). “Excellence in safety management and investing in software applications and new technologies is part and parcel of that, and boosts competitiveness by default,” says Nesje.

A good safety record and documented safe operations are a priority for many charterers in their vetting processes. Being first in line for business on those criteria, perhaps over others who are not so proactive, is clearly a winning strategy. “If that’s not competitive edge, I don’t know what is,” Nesje says. “Reputation means a lot. You don’t want any of your ships being detained for safety deficiencies, for example. That’s your reputation in a temporary black hole, and it takes time to rebuild trust. Again, unless you’re extremely unlucky, first-class safety tools and procedures help to avoid such outcomes. There’s a lot of hidden value.”

The same can be said of cargo owners as they become more discerning amid growing public awareness of the logistics lifecycle of getting products and commodities to market. “It’s plausible that in the future you might even see products promoted based on sustainability of logistics and only using intermediaries committed to sustainability and optimal working conditions. “First-class safety speaks for itself here and will be crucial for business success,” says Nesje.

Safety also supports cost-effective operations, which lead in turn to higher performance. “Investing in safety solutions and training makes great bottom-line sense over the long term, Nesje says. “Reduced risk of accidents and related costs, reduced risk of injury or death, reduced risk of pollution, reduced insurance premiums, happy seafarers, lower turnover, high professionalism, the list is long.” Cutting-edge safety solutions are not for short-sighted players looking for immediate payback. “I’d also venture that an ‘it’ll do’ attitude to safety can actually harm competitiveness and seriously dent your bottom line if you consider what can happen in the event of hazards,” Nesje says.

Ensuring the most effective protection possible for personnel, the environment and wider society means deploying reliable safety systems, clear procedures and engaging personnel both at sea and onshore. “It’s all about people. Improving your safety culture shows you’re committed to their health and welfare. Drills are also really important so everyone knows what they’re supposed to do in case of emergencies,” Nesje says.

Seafaring is by nature dangerous especially in terms of what the weather can throw up, and no ship is 100% risk-free. “But striving to improve working environment and conditions is guaranteed to go over well. Well-trained, fairly employed crews can boost profitability and save money,” Nesje says. He also believes high safety standards foster a sense of belonging, which can also reinforce competitiveness. “It’s something that can get overlooked, and again it’s reputational. You can bet seafarers share their feelings about the great company they work for – or the not-so-great, if that’s the case.”

Managers have to spell out that safety is the priority. As global consultancy firm McKinsey writes in its Insight article ‘Overcoming limiting mind-sets to improve safety’ (21 May 2019): “It’s critical to explain to all employees what is expected of them and why. For example, for an organization to have a positive safety culture, leaders must be explicit about there being no acceptable trade-offs between safety and productivity. Safety is paramount at the expense of productivity. That said, when safety is truly prioritized, productivity often follows accordingly.”

This is borne out by a McKinsey analysis of its Organizational Health Index (OHI), which covers companies in 100 countries and measures the hard elements that drive financial performance. “Companies in the top quartile in organizational health have six times fewer safety incidents than those in the bottom quartile, which have almost three times as many incidents leading to lost work time as companies in the top quartile,” it writes. “Companies with superior organizational health — those that align most successfully around a clear strategy, execute it well and renew themselves over time — also tend to have the best safety records. Companies with good safety records outperform their counterparts on all nine key organizational outcomes that contribute to organizational health.”

The same can be said for shipping companies. “At the end of the day, investing in top-level safety is much more than just the cost. It is simply the right thing to do and the right way to work,” says Nesje.

“Being part of that matrix is a great motivator,” adds chief technology officer Tor Christian Angeltveit. “We’re proud to have developed a wireless connectivity solution that can take safety to an unprecedented level.”

The Scanreach team has taken five years to crack the ‘Faraday cage’ problem where steel structures on ships and offshore infrastructure like rigs and offshore wind turbines block wireless signals. “Enabling full onboard connectivity to personnel, equipment assets, cargo and environmental IoT sensors with no cables involved and at an affordable price, is a solution the market has been crying out for,” says Angeltveit.

Many ships are already internet-enabled via satellite but the connection stops at the bridge. So far, it has been expensive and time-consuming to connect to sensors and data sources to give a holistic picture of operational parameters like fuel consumption, vibration, noise, gases, cargo movement and not least people. That means a big chunk of the world fleet is operating at times inefficiently and with relatively low protection for crew. “Especially regarding crew, our safety tracking, including wearables, ensures a safe working environment and better incident and evacuation response. That can save lives and significant associated costs,” says Angeltveit.

Scanreach’s In:Mesh technology is based on an IoT network combined with Bluetooth and low-frequency radio communications. “It’s flexible and can be updated remotely ensuring low cost and long lifespan. Our ‘plug and play’ installation is up to 100 times cheaper than other wireless technology like wifi or mobile, and can be done while the ship is on the move,” says Angeltveit.

“We listen closely to end-users, so we know In:Mesh is a driver for competitiveness, with clear return on investment,” says Nesje, who is clear about his ambition. “We aim to lead the world in wireless connectivity at sea. Our goal is complete wireless coverage on more than 10,000 ships and installations within five years. Scalability is the essence.”

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