The rise of Artificial Intelligence in shipping

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A decade years ago it was impossible to predict the range of Artificial Intelligence (AI) tools we would be adopting in shipping in 2024, or how they would impact costs, carbon emissions or employees.

The rise in the predictive power of Artificial Intelligence in container shipping and the potential of real-time AI tracking signals a major turning point for the sector.

AI Tracking, Co-Pilots, Predictive Analytics, Optimised Routing, Digital Twins, Autonomous Vessels and Automated Inventory Management are the tools which are most familiar to us. It’s almost impossible to imagine the tools that AI and her human supervisors are yet to invent.

Maersk has been actively trialling autonomous vessels as part of its AI and digital innovation strategy for a number of years. Back in 2018 it partnered with Sea Machines Robotics to test the world’s first AI-powered Situational Awareness System aboard a container ship.

Rolls-Royce has also been a prominent player, working with various shipping companies to trial AI-based autonomous systems for commercial vessels.

The coming decade is the one to watch, as adoption of AI in the sector starts to be normalised. Earlier this year CMA CGM signed a partnership with  Google to speed up deployment of AI solutions across its operations. Its plan is to shorten delivery times through the optimisation of routes, container handling, and inventory management, while minimising costs and carbon emissions.

We’re also seeing less-celebrated examples of it at the heart of some unrest – strikes in the US for example – where US East Coast dockers objected to Maersk’s automated gate system.

“Who the hell is a foreign company like Maersk to come on to American soil and build fully automated terminals?,” said chief negotiator of the International Longshoremen’s Association (ILA), Harold Daggett, in a statement on the association’s Facebook page, followed by comments from concerned workers, “ready for war”.

It’s difficult to tear curious eyes away from the leaps we’re seeing in AI. Maersk especially is a company which is both comfortable and keen to discuss how generative AI is transforming supply chains. Those amongst us that are already using it, know it’s likely to change the job we do in some capacity.

Smart Shipping & AI will be a core topic at Intermodal Europe 2024, the prime event for those in the container industry and the ideal place to explore and debate the impact of Artificial Intelligence.

A tool to help humans?

In early July, Bloomberg UK reported that software developer Pactum AI had raised $20 million in venture capital from backers, including Maersk.

Pactum’s autonomous bots can negotiate with thousands of suppliers at once to secure the best pricing and terms for routine corporate purchases across logistics. Since 2021, Maersk has used Pactum’s tech for spot trucking services.

Officially, supply chain businesses aren’t viewing AI as a replacement for human intelligence, but rather as a tool to help humans, and elevate their capabilities. Responsible companies will incorporate AI to handle routine, pattern-based tasks, while human expertise is left to strategic decision-making and problem-solving.

AI will add $15.7 trillion to world economy by 2030

By 2030, AI could add up to $15.7 trillion to the world economy, which is more than China and India produce together. About $6.6 trillion of this will likely come from making work more efficient, and $9.1 trillion from people spending more because of AI.

PwC’s Global Artificial Intelligence Study: Exploiting the AI revolution, also argues that “ Labour productivity improvements will drive initial GDP gains as firms seek to “augment” the productivity of their labour force with AI technologies and to automate some tasks and roles.”

Efficiency gains from the uptake of AI in shipping  is likely to contribute substantially to the aforementioned $6.6 trillion.

How is AI cutting costs in shipping?

Route Optimisation carries containers full of promise, so it’s no surprise that CMA CGM were keen to partner with google on this. It optimises delivery routes by analysing historical data, traffic conditions, and other factors, enabling routing that quickly adapts to disruptions. By selecting optimal routes it can save fuel costs and reduce delays.

AI-driven Automation can address inefficiencies in freight verification and documentation, speeding up processes and potentially saving significant costs.

AI sensors in shipping containers provide real-time data on temperature, humidity, pressure, and other factors. This helps logistics companies with Cargo Monitoring, maintaining the quality of perishable goods, pricey pharmaceuticals, and sensitive cargo during transit.

AI tracks equipment performance, making it easier to detect and address issues promptly. This Predictive Maintenance prevents costly repairs and reduces the downtime of ships, ensuring that they remain operational for longer periods​

A good example of this technology comes out of Japan. Asahi Kasei Engineering (AEC) has developed a cloud-based service for maintaining ocean vessel motors. Developed with Mitsui O.S.K. Lines, V-MO monitors motor vibrations to detect potential issues, allowing for timely repairs when the ship reaches port. This service helps to reduce downtime and improve vessel operations by analysing data sent to the cloud. After successful trials, MOL Ship Management Singapore plans to install V-MO on its container vessels by the end of this year.

AI enhances real-time tracking, providing accurate shipment status and location updates. Real-time Tracking and Visibility enables better decision-making, more precise delivery estimates and avoids costly delays and damage to goods. These things also increase customer satisfaction.

AI helps logistics companies anticipate and mitigate risks by analysing factors like weather, geopolitical events, and traffic. Digital Twins allow for real-time testing and scenario planning, aiding in contingency planning for unforeseen events. It also lets operators trial new technology in a Virtual Reality, before they buy it, aiding decisions around Capital Investment.

Dynamic Pricing adjusts to variables such as fuel costs, transportation capacity, and demand. This allows logistics providers to offer competitive pricing while optimising their performance in the market.

Chatbots and Virtual Assistants streamline communication, providing real-time updates and improving customer experience. They also gather sentiment-based metrics to refine customer interactions. This kind of AI reduces labour costs associated with maintaining a 24/7 customer service operation.

AI to tackle urgent climate goals

While AI can and will cut costs, it’s also a key tool in cutting carbon emissions. A report published in June 2024 from the Sea Cargo Charter– the organisation which represents 20% of global bulk cargo transport – says that urgent action is required in the shipping sector in order to reach climate goals.

New data shows the shipping industry fell behind minimum international climate goals by 17% on average in 2023 – a shortfall of 165 million metric tonnes of CO2e.

“Currently, dry bulk, general cargo, and tankers account for around 400 million tonnes of CO2 emissions. With global trade predicted to quadruple by 2050, emissions will skyrocket without urgent action,” writes the SCC.

In response to the report, Yarden Gross, CEO and Co-founder of maritime technology start-up Orca AI, remarked “Our own figures estimate that global commercial shipping could cut carbon emissions by 47 million tonnes per year by deploying AI for sea navigation.”

“Sharp manoeuvres and route deviations markedly increase fuel consumption. And we estimate that reducing them could help ships shave off 38.2 million nautical miles per year off voyages, saving an average of $100,000 in fuel costs per vessel.”

AI cutting carbon emissions in shipping is a significant reason for shippers to explore AI without hesitation, as AI solutions are proving a vital front line in reducing fuel consumption and emissions.

Change management is critical when integrating AI

It can’t be easy for dockers, for example, to picture themselves in one of these new higher-value problem solving roles.

As the use of AI continues to rise, upskilling and training employees is crucial. Providing opportunities for coaching, mentoring, and open discussions allows employees to process changes, ask questions and apply their learnings in practical ways. Building trust and comfort levels with AI through hands-on experience is important.

Change management is critical when integrating AI into business processes. Clear communication, visible leadership support, and addressing fears/uncertainties can help employees embrace AI rather than feel threatened by it. And involving employees in the transition builds ownership.

Continuous learning and professional development opportunities empower employees to take on higher-value roles that complement AI systems. Re-skilling initiatives allow the workforce to develop new capabilities aligned with AI-driven operations.

Fostering an environment of psychological safety enables teams to openly share ideas and concerns as AI is introduced. Employees should feel their voices are heard and that their human strengths are valued alongside AI ones.

Smart Shipping & AI

The rise of Artificial Intelligence in shipping means a well-needed reduction in carbon emissions, greater efficiency, costs being cut and new higher-value problem solving roles emerging. Sailing alongside these shifts, we must see the upskilling and training of employees.

Smart Shipping & AI will be a core topic at Intermodal 2024. This is the premier event for those in the container industry to discuss and explore the future of maritime transport. Every year thousands of individuals from across the container market and beyond gather to meet, do business and explore trends in the industry.

Attendees can gain valuable insights by attending talks from expert speakers, who will explore a range of topics, including the impact of AI on the container industry. Intermodal Europe 2024 offers a unique opportunity to engage with industry leaders and discover how cutting-edge technologies are shaping the future of logistics.

Registration for Intermodal Europe 2024 is currently open, and attendance is free. For more information, please head to intermodal-event.com.

Registration for Intermodal Asia 2025 will open soon. For more information, please head to intermodal-asia.com.

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