First up, Seatrade Maritime News:
Shipping, data and avoiding becoming the Uber drivers of the seas
And from Tanker Shipping & Trade, March 14, more on quant shipping fund CargoMetrics:How shipping can utilise big data to avoid yet further commodisation of its service and improve safety of operations was a topic panelists at grappled with at the Connecticut Maritime Association (CMA) conference last week.
On a panel on the second day Christopher Rex, head of research at Danish Ship Finance, asked the question of how shipping, which is clearly commoditised already and getting more so in an age of slow growing trade flows, could pick up additional streams of economic value.
His main focus is to identify “ways to turn shipping data into an asset that could be monetized” and, in so doing, point the industry away from its present path where “ships are turned into Uber drivers, simply hoping to secure their next ride”.
In his view, a reinvented operating model- where data can optimize vessel performance and the “customer experience” - presumably things like just-in-time arrivals, though this was never stated explicitly in the speech - would be vehicles for creating the desired streams of value.
On the same panel, industry veteran Frank Coles, now at the helm of Transas Marine, also looked into the future, noting that logistics is moving at a more rapid pace than operators who provide the actual transport....MORE
Is shipping too late to change?
Almost 19 years ago to the day, there was an outbreak of dot.com fever at the Connecticut Maritime Association event that is held every March in Stamford, USA. ShippingBabes.com was at the height of its fame, and if we had only realised it at the time, the founder, Jonny Kulukundis, had effectively invented Facebook. Back then, everyone wanted to talk about how their website was going to disintermediate the shipbroker with total transparency of data, and the shipping industry would have to change or die.A couple of our earlier posts on CargoMetrics:
The dot.coms questioned the wisdom of having hundreds of brokers on the phone trying to discover the price of freight, or the value of a ship. They were extracting rent by withholding data, just like the taxi dispatchers of old referred to by Danish Ship Finance head of research Christopher Rex.
The price of freight is inherent in the supply/demand balance, if only you had the whole picture. Now someone claims to have created that picture.
Mapping trade in real-time
CargoMetrics Technologies LLC does what the name suggests: it is a tech company that creates metrics from cargo. It maps global trade in real-time, but that is pretty much all the tech company/hedge fund will say about itself. Eight years ago, CargoMetrics chief executive Dr Scott Borgerson, a US Coast Guard Academy graduate with an impressive array of educational qualifications, had an idea on how to use the fact that shipping is a lead indicator for the global economy, and came to CMA to speak to some shipping folk.
Jim Lawrence, the driving force behind the CMA event, took Dr Borgerson under his wing, and introduced him to all the right people. Dr Borgerson was a fast study, as they say, and quickly realised that if you knew absolutely everything about cargo demand, you would know everything about the demand for shipping, and from that predict all the key metrics, including freight rates. As a favour to Mr Lawrence, he came back in 2018 to talk a little (literally) his product.
“I have been in stealth mode for the last eight years,” he told CMA, adding that CargoMetrics is a hedge fund, and he was not allowed to say anything about how it works. We did learn that he was the only seafarer in the company, and he takes the data scientists on “touch a tanker days” at the Port of Boston.
Geo-tagging the world
The data scientists, of which there seem to be several hundred, are sucking up data on commodities using customs data, vessel AIS movements (satellite and terrestrial), images and other raw data from hundreds of sources. The company has a dynamic register of ships (it is no secret CargoMetrics is working with Clarksons Research Services), and has geo-tagged the global ports. This means that CargoMetrics can track a ship to the berth and then cross reference the cargo against the other data.
Dr Borgerson aims to have a complete and verified picture of world trade in real-time. The company even claims to have built a real-time model of China’s gross domestic product by measuring everything: “we aim to be the NSA of global trade”, Dr Borgerson said.
CargoMetrics’ investors have very deep pockets
Not only must it be incredibly costly to buy every possible source of data and have a supercomputer to run algorithms in real-time to cross reference sources, it also creates a huge amount of data. According to Dr Borgerson, an early investment in Amazon cloud servers is paying dividends. As someone who has worked at a relatively simple level of converting AIS movements for a limited number of sectors into tonne-mile demand, this was a massive understatement. CargoMetrics must be generating government-scale quantities of fresh data every day....MORE
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