Proving the Business Case for the Internet of Things

Shipping companies set to spend $2.5m on IoT

Steve Rogerson
June 19, 2018
 
Shipping companies are set to spend US$2.5m in the next three years on IoT products and services, according to research commissioned by satellite company Inmarsat.
 
The research suggests that the maritime industry is more amenable to adopting analytic, management and operational tools applied through the IoT than many commentators have supposed.
 
The release of the report coincides with Posidonia, the international shipping exhibition held in Greece, and is part of the Inmarsat Research Programme 2018, which provides a cross-sector study on digitalisation in the global supply chain and is due for publication on 26 June.
 
The full report, based on 750 interviews conducted by technology market research company Vanson Bourne, investigates use of, attitudes to and predictions for IoT-based services across the maritime, transport, logistics, energy, mining and agriculture sectors.
 
The 125 maritime respondents include owners from across the board in terms of fleet size, with owners from Greece making up the largest constituency (25), followed by Japan (20) and Germany (15). Ship types are spread across the container, tanker, bulker, gas, offshore and fishing vessel segments.
 
“This is probably the most detailed account of attitudes towards the internet of things ever undertaken in the maritime industry, and its findings will surprise many,” says Stein Oro, vice president of Inmarsat Maritime. “Respondents suggest that their average expenditure per business on IoT-based solutions will amount to $2.5m over the next three years. They say that IoT-based solutions will attract a larger share of their IT budgets than any other next-generation technology, while early analysis of other segments places maritime ahead of energy, agriculture and mining.”
 
Given the timing of the report, it is interesting to note that Greek owners envisage much smaller outlay on IoT-based products in the period ahead, with the average investment planned for the coming three years less than ten per cent of the average overall. The finding is in line with overall expectations from three quarters of respondents that they will fully deploy IoT-based services within 18 months, while the equivalent figure for Greek respondents is forty per cent.
 
Drilling down into the report, owners show themselves as upholding the maritime industry’s decade-long fixation with costs. While just over half of respondents say revenue generation does not figure in their considerations, three quarters say that they have realised, or expect to realise, savings using the IoT. Route optimisation is typical and is identified by 57% as in use or on trial.
 
Regulation is providing a separate prompt for adoption. With rules inexorably tightening on emissions from ships, 65% of respondents say they already use IoT-based products to monitor fuel consumption, rising to 100% by 2023.
 
Also notable is the influential role played by marine insurers – cutting premiums is cited by 70% of respondents as one of the most important drivers for adoption. The finding is especially notable given that respondents are more concerned about data storage methods, poor network security and potential mishandling or misuse of data than they are of cyber attack, but only a quarter are working on new IoT security policies.