Innovation to Overhaul Projects, Processes

By Carly Fields 

Weird and wonderful jargon, idioms and acronyms are the unforgiving prerequisites of involvement in and understanding of industrial sectors; the breakbulk and project cargo business is no exception.

But a new wave of technology-based lingo is challenging those language barriers even further: innovation in today’s project cargo and breakbulk industry is defined by a collection of two-letter contractions: AI, ML, AR, VR and MR and involvement with one, two or all of these promises to shape growth potential in the sector.

PwC predicts that artificial intelligence, or AI, will drive gross domestic product, or GDP, gains of US$15.7 trillion, and that global GDP will be 14 percent higher in 2030 as a result of AI. It described AI as the biggest commercial opportunity in today’s fast-changing economy.

Gerard Verweij, global data and analytics leader at the multinational professional services company, warned that no sector or business is in any way immune from the impact of AI: “The impact on productivity alone could be competitively transformational and even disruptive. Businesses that fail to apply AI could quickly find themselves being undercut on turnaround times as well as costs and experience, and may lose a significant amount of their market share as a result.”

And that’s just one of the technology innovations raining down on the project cargo industry.

Bechtel applies its trademarked Engineered Logistics moniker to describe the collection of these various tech-based tools and initiatives because it believes that the project cargo industry is no longer managing transportation in the traditional way.   »

“As an engineering company, we are blending industrial engineering methodology with expert knowledge to fundamentally change how we approach problems such as forecasting and predictability in shipping,” said Steve Spoljaric, procurement innovation team leader at Bechtel Oil, Gas, & Chemicals.

Bechtel is particularly focused on augmented, mixed and virtual realities, or AR, MR and VR, especially when it comes to improving safety. All three offer the ability to visualize projects in advance of final engineering and long before fabrication starts, allowing EPCs to review plans with all stakeholders. “Using AR and VR to be more predictable removes contingency and reduces risk,” Spoljaric said, adding that the industry is only “scraping the surface of the potential of this technology.”

No Boundaries to Innovation

The project cargo industry’s thirst to be more predictable is one of the main drivers of the development of innovative technologies. Spencer Askew, CEO of Teknowlogi, an AI-driven, cloud-based solution for the logistics industry, added that another driver for innovation in the logistics industry comes from companies’ requirements for on-demand data and better business process workflow management. Other drivers for innovation include the need for digital transformation and big data management, better visibility, moves to automation, capacity constraints, dealing with an aging workforce, and succession planning.

The quick march towards digitalization can also be attributed to customers’ more-demanding expectations of EPCs’ and forwarders’ technology, based on their experiences in their personal life with smart gadgets and widgets. Customers simply expect more digitally of their providers.

“Digitalization, data science and AI can bring an unparalleled level of innovation capabilities that can support this kind of transformation like has been done across many other industries,” said Anwar Siddiqui, Bahri Data president.

For Bahri, advanced analytics and big data are particularly important in providing insight and foresight, and in meeting those increasing customer demands. “Any company that has an edge due to data-driven decision capabilities and insights will naturally benefit more in the commodities markets, trading, operating and is better positioned to achieve excellent top and bottom-line performance compared to its peers,” Siddiqui said.

Illustration of a human brain using diodes and lights
“Organizations should begin investigating technology solutions built on AI now so they can start taking advantage of the capabilities and benefits it has to offer.” – Spencer Askew, Teknowlogi. Credit: Shutterstock.

Dealing With Too Much Choice

But with a surfeit of technology and providers out there, breakbulk and project cargo operators can be forgiven for indecision when it comes to ascertaining which potential innovation technologies to investigate, never mind select.

Bechtel’s Spoljaric recommends that project cargo/breakbulk companies get involved in pilot projects to enjoy the crown of “early adopter.” Indeed, Bechtel created its Future Fund in 2016 to stimulate innovation (“Predictably Innovative,” Breakbulk Issue 5 / 2016, page 26). It was specifically tasked with seeking out new, disruptive ideas from Bechtel’s colleagues, suppliers and customers. The US$60-million fund resources the exploration, prototyping and piloting of ideas that offer the potential to improve Bechtel’s quality, safety, effectiveness and efficiency.

The Future Fund works on an idea matrix to evaluate what gets funded and what is delayed allowing for technology to evolve and mature. Some ideas may require technology that hasn’t been developed or remains untested, and in that situation Bechtel assesses how it can support the development of that technology, either through collaboration with other innovation partners or simply by waiting for that technology to catch up before further developing its concepts for implementation.

Breakbulk and project cargo companies should also look to work with companies that provide industry-specific logistics ML and AI, versus those that just talk about it. “These organizations should begin investigating technology solutions built on AI now so they can start taking advantage of the capabilities and benefits it has to offer,” Teknowlogi’s Askew said.

Biju Kewalram, vice president of operational transformation at global integrated logistics provider Agility, advised “escalating engagement” to make sense of the mass of choice of technology and solutions. Make a commitment to small pilot projects at the early stages of technology introduction to assess value and learn about the technology early, and then grow with the project as both the technology and the adoption evolve, he said.


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Investment in Innovation Projects

Putting its money where its mouth is, Agility has committed to several innovation projects.

Firstly, it has created a new technology venture to partner with start-ups and entrepreneurs that it believes have the potential to reshape the future of the industry. The idea is to look at new business models that Agility can help grow through its business and network.

Secondly, it has invested in a company looking to revolutionize how road freight is booked in complex markets, pitched as an “Uber” for trucking.

“We believe this business will be of interest to customers, shippers, transport suppliers and regulators in a number of emerging markets,” Grant Wattman, president and CEO, told Breakbulk.

Thirdly, it has invested in solar technology that can be used for cooling warehouses. With the largest warehousing network in the Middle East, the appeal of the concept to Agility is obvious.

Agility has also partnered with a company that has patented a revolutionary hybrid technology that reduces fuel consumption in existing trucking fleets by 30 percent. These savings are achieved by recycling otherwise wasted kinetic energy, and doing it through a simple, one-hour trailer retrofit.

Wattman said: “Agility’s strategy is two-fold: transform the business we have today through technology, and anticipate new ways of doing business. In addition to believing these are exciting businesses in their own right – and ones that we can add value to by helping them help scale and enter new markets – we also believe that these partnerships are helping us build an eco-system for innovation in the company. Our technology ventures board, partnerships with academic institutions and venture capitalists, and portfolio companies, allow us to stay close to the most cutting-edge new ideas in our industry.

A human hand reaches out to a robotic hand
Bechtel has been looking at ways to implement AI for some time, and has found that for the project cargo and breakbulk sector. Credit: Shutterstock.

Overcoming Ingrained Reluctance

But not everyone is as open to the new technology flooding into the sector. This is an industry long-criticized for its lack of collaboration and transparency, and its “closed shop” mentality. Can this state of mind ever be truly overcome?

Agility’s Kewalram said it must and those with a “my data is too valuable to share” need a wake-up call. The dramatic disruption in supply chains to date has only been possible through collaboration at a data level between the participants in supply chains, he pointed out. “Trust – gaining and keeping it – has been an important part of this evolution,” he said. “Companies that put trust above proprietary data are able to deliver more responsive supply chains with lower costs.”

Regardless of how valuable a company perceives its data to be, the reality is that data actually only becomes valuable in an interconnected world when it is shared and used for mutual advantage. “We emphasize and build trusting relationships to encourage data sharing, while at the same time pointing out that competitors willing to share data will gain advantage,” Kewalram said.

Bechtel is also open to data sharing, particularly when it comes to safety, and takes a collaborative approach with service providers. “It is our intent to stay out in front of innovation – communicating our ideas, driving paradigm shifts. If we fail to collaborate, the ideas will be limited in their full potential,” Spoljaric said.

Teknowlogi’s Askew agrees that transparency is lacking: “We continue to see companies try and leverage the lack of transparency as some sort of chess move – that never results in maximized business value or desired outcomes. Being ‘coy’ with business goals, strategy and data is not a healthy nor the most productive way to advance the organization.”

Bahri’s Siddiqui said project cargo and breakbulk companies would do well to embrace the idea of co-petition, or cooperative competition, where companies come together to create something in an open-sourced environment, but compete in the way they serve and offer value to their customers. “Since the competition is about serving the customer and not about creating something that can be easily shared, co-creation not only helps companies drive growth, but it also moves the industry forward.

Importance of AI

Of the innovative technologies breaking new ground in the project cargo and logistics industry, Askew believes that AI will be the one to ultimately transform it, while machine learning, or ML, will also have an important role to play. “Project cargo and breakbulk companies should adopt and adapt to practical, industry-specific, logistics expert-based machine learning and artificial intelligence,” Askew said. “Focusing on a more intelligent logistics expert system is definitely the direction where the industry is headed.”

Bechtel has been looking at ways to implement AI for some time, and has found that for the project cargo and breakbulk sector, using digital twin technology – a virtual model of a process, product or service – and incorporating AI can significantly improve planning and forecasting. Additionally, chat bots are starting to change how Bechtel looks for data and even how it does its work.

All this serves to prove that innovation, ultimately, means different things to different people in the breakbulk world. But definitions aside, the technology supporting innovation in whatever guise has the potential to propel the breakbulk and project cargo industry ahead at a stomach-churning speed. Companies need to embrace the co-petition mindset, learning from failures and sharing lessons learned.

The rapid rate at which technology is advancing is already forcing a re-evaluation of everything from relationships to business models. And as prices drop, technology becomes easier to invest in and implement. Then, if your competitor gets in on the act, you will need to keep up. Scalability of technology innovations could prove to be key, said Agility’s Kewalram. “It is not about one initiative or another, but about internalizing and making innovation a core advantage.”

As a parting thought, Bechtel’s Spoljaric said he draws inspiration from Bechtel’s Chief Innovation Officer, David Wilson. Wilson gives feedback after pitching a new idea and takes the idea beyond what was originally thought possible, stretching it and getting multiple disciplines engaged to deliver something profound and innovative in the true sense of the word. Something we could all aspire to.

 

Carly Fields has reported on the shipping industry for the past 17 years, covering bunkers and broking and much in between.

Photo credit: Shutterstock

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