Bhagya Wickramasinghe

Shipping tech Sailing into maritime digitalization and decarbonization 17 11 2023

Shipping tech_hero

Shipping tech: Sailing into maritime digitalization and decarbonization

Using autonomous, green, IoT, and digital technologies to shape the future of ocean-based transportation

Shipping Tech

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 Shipping tech
 
 refers to the use of next-gen technologies and tools to digitalize and decarbonize ocean cargo and passenger transportation.&nbsp;
 
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 Digitalization and decarbonization efforts are fueled by factors like the need to reduce shipping emissions by 2050 and rising shipping costs. 
 
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 Despite a surge in 2022, funding dried up in 2023 with overall VC activity slowing down.
 
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 We have identified 
 five categories of next-gen solutions
 that aim to 
 digitalize and decarbonize
 ocean cargo and passenger transportation: 1) digital freight solutions, 2) smart ports and terminals, 3) autonomous/remotely-operated vessels, 4) green ships and related tech, and 5) data analytics and sensor technologies.&nbsp;
 
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 </ul>
 <ul>
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 Shipping tech companies raised USD 1.7 billion in 2022, the most in a calendar year.
 Notably, digital freight solutions startup Flexport&rsquo;s two giga-funding rounds (2019 and 2022) collectively accounted for 56% of total funding during this period. Funding dried up in 2023 (USD 116 million as of end-October), with overall 
 <a href="https://kpmg.com/xx/en/home/campaigns/2023/10/venture-pulse-q3.html#:~:text=Global%20VC%20investment%20falls%20to,protracted%20lack%20of%20exit%20opportunities.">
 VC activity slowing
 </a>
 .
 
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 </ul>
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 Digital freight solution startups have become prominent
 , fueled by Covid-19 disruptions, which spurred the adoption of digital solutions to complement traditional freight forwarding. The segment also has the most growth-stage companies, including the only shipping tech unicorns 
 <a href="https://sp-edge.com/companies/220062">
 Flexport
 </a>
 and 
 <a href="https://sp-edge.com/companies/409089">
 Forto
 </a>
 .
 
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 </ul>
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 Smart ports and terminals as well as data analytics and sensors segments are emerging 
 having benefited from the development of several smart ports around the world in recent years as well as advances in AI/machine learning (ML), IoT, and big data. With the global push toward 
 <a href="https://maritime-professionals.com/how-autonomous-ships-are-revolutionizing-the-maritime-industry/#:~:text=Remote%20and%20autonomous%20operations%3A%20Autonomous,navigation%2C%20and%20other%20operational%20functions.">
 autonomous driving
 </a>
 and 
 <a href="https://maritime-professionals.com/the-potential-of-alternative-fuels-in-the-shipping-industry/">
 alternative fuels
 </a>
 , 
 autonomous/remotely operated vessels and green-ships-related tech show high growth potential, 
 despite being relatively small at present.
 
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 </ul>
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 <li>
 
 Global target to reduce shipping emissions by 50% by 2050 drives decarbonization efforts. 
 Around 175 countries have pledged their support, while the US, UK, France, and Germany are taking the lead, having already launched several government initiatives including green shipping corridors. 
 Rising shipping costs drive the need for digital optimization.
 Having gone through the heights of the Covid-19 pandemic, which led to an exponential increase in shipping costs, the industry is now facing the effects of 
 <a href="https://www.europarl.europa.eu/RegData/etudes/ATAG/2022/733603/EPRS_ATA(2022)733603_EN.pdf">
 geopolitical tensions
 </a>
 between Russia and Ukraine, which have increased shipping distances.&nbsp;
 
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 Significant financing requirements and security threats may hinder adoption. 
 The UNCTAD 
 <a href="https://unctad.org/news/bold-global-action-needed-decarbonize-shipping-and-ensure-just-transition-unctad-report#:~:text=UNCTAD%20reports%20that%20an%20additional,carbon%2Dneutral%20fuels%20by%202050.">
 estimates
 </a>
 additional annual spending of USD 8 billion&ndash;28 billion and one-off investments of USD 28 billion&ndash;90 billion to decarbonize ships by 2050. Cybersecurity remains a key challenge for digitalization, underscored by recent attacks on 
 <a href="https://www.kordia.co.nz/news-and-views/the-maersk-cyber-attack">
 Maersk
 </a>
 , 
 <a href="https://www.cybersecurity-insiders.com/cyber-attack-on-cosco/">
 COSCO
 </a>
 , and 
 <a href="https://www.ship-technology.com/news/cma-cgm-reports-another-cyberattack/">
 CMA CGM
 </a>
 , along with limited bandwidth and data latency.
 
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 </ul>
 
 
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