Setting the standards for a shipping revolution
Highlighting increased environmental regulations, autonomy and digitisation as three pertinent examples, Nick Brown, Marine & Offshore Director of Lloyd’s Register (LR) said he expects “to see a revolution in how we operate assets over the next few years; and much of this will be driven by the change in the way we use data.”
Inside Marine asked Nick Brown about what role LR will play in the years to come, whilst also discussing his career at LR, which began over 20 years ago and has covered positions in leading shipping and shipbuilding locations across the globe.
Nick, please can you provide us with a brief background about yourself? What are your key roles within Lloyd’s Register (LR)?
I joined LR in 1996. I worked as a ship surveyor in Bahrain, Dubai, Finland and Germany and have extensive experience of ship repair and conversion projects.
During 2005, I led LR’s global tanker business at a time when IACS’ Common Structural Rules (CSR) for tankers were being finalised. Following the adoption of the CSRs in 2006, I moved to China, initially in a business development role as the shipbuilding market took off and new ship owners entered the industry. Subsequently, I was promoted to Area General Manager and Marine Manager for Greater China.
In October 2013, after seven years leading LR’s activities in China, I was appointed Director for Business Development and Innovation - based at LR’s Global Technology Centre (GTC) in Southampton. In July 2014, with LR’s Marine business continuing to grow, I was appointed Marine Chief Operating Officer.
In January 2016, I was appointed Marine & Offshore Director, responsible for LR’s entire marine and energy compliance businesses. My focus is on leading LR to meet the technical and commercial challenges facing the marine and offshore industry, providing the support, services and innovation needed to meet ever increasing safety, environmental and efficiency goals.
In May this year, LR launched the ‘Sulphur 2020 – Options Evaluator’ to aid the shipping industry’s compliance with the global sulphur in fuel oil limit of 0.50% m/m, which comes into effect on 1st January 2020. What are this online tool’s key attributes, and how well has it been received by the industry so far?
The ‘Options Evaluator’ aims to bring some much-needed clarity to what the potential cost and investment implications could be for the various compliance strategies, such as transition from fuel oil to MGO, use of scrubbers and HSFO or use of other compliant fuels such as LNG or methanol. It has been well received by the industry.
Are you confident that the industry will be ready for the Sulphur 2020 deadline?
The requirement to reduce the maximum sulphur content of fuel to 0.50% by 2020 will require technological solutions and investment to ensure compliance. LR is well placed to support our clients develop a strategic plan in response to these regulations which increasingly require a balanced commercial and technical view.
Planning is critical. It’s the one thing that will help mitigate risk of non-compliance and cost, whilst maintaining safety. There are numerous issues to be considered but the biggest issue is probably crew awareness and training. Dialogue with all stakeholders involved should also start at the earliest opportunity.
In addition to Sulphur 2020, the shipping industry is facing a number of upcoming environmental/sustainable regulations in the upcoming years, such as ballast water treatment, and improved ship recycling practices. With each additional compliance costing shipping companies money during a time when margins for many are tight, what is your overarching message to the industry?
Firstly, regulation needs to be practical and global, ensuring a level playing field. Advances in technology and the opportunities this brings to reduce GHG emissions from our industry as well as reduce our carbon footprint should be welcomed.
However, as with the initial LNG-fuelled projects, we need to work within a risk-based regulatory framework initially, to gain experience from such technology or alternative fuels and then bring this experience together to support practical regulation that encourages innovation and environmental and safety improvements.
Having previously applied blockchain technology to the classification process of registering new ships into class, at SMM 2018, LR unveiled a prototype blockchain-enabled register tool in collaboration with Applied Blockchain. Please tell me more about this.
LR has tested blockchain technology as an enabler to enter a ship into class and we have identified multiple potential sources of value by adopting this technology in relation to the management of the activities required as part of this process. A blockchain-based register provides immutability and auditability, therefore providing enhanced trust in the information provided on the platform and also potentially facilitating the trusted information to be available ‘up-to-the-minute’ allowing financing, insuring, payments etc to be provided more dynamically.
This value discovery project has culminated in a prototype blockchain-enabled register tool. We are now focused on how we can extend the value to other stakeholders in the maritime supply chain.
The autonomous ships market looks set to really kick-off in the next few years. How do you envisage increased autonomy will be implemented in the years ahead?
We believe the industry will welcome the increased adoption of greater levels of autonomy in shipping, thus allowing technology to do what it can do best and allow the crew on board to spend more time on tasks where their skills and experience can add the greatest value. As remote diagnostics and increased remote analytics of ship performance and ship operations builds on greater sensor reliability and cheaper data transmission costs, we see the role of the seafarer moving away from ‘maintenance and operation’ to a much greater focus on ‘operation’, with maintenance being carried out in planned periods by specialist teams and SMEs.
We see technology as a capability multiplier, a facilitator to make things better…It’s about a move to more intelligent processes, made possible by digital technologies that optimise systems and people.
How should the commercial shipping sector approach the technology and regulations behind increased autonomy?
No one organisation can find the solutions, we need to work together. We need to change the mindset of the industry, understanding we are an integral part of the global supply system but also that we need greater collective working and standardisation. Digitalisation shouldn’t just replace analogue systems; it should improve the way vessels are operated, the way crews interact with technology, the way ships connect with shore stations, ports, and the wider supply chain. We need to work together to a greater degree to achieve this.
LR’s approach is extremely practical and by collaborating with industry partners and our clients we are leading in the areas of research that are needed to answer the most pressing questions and delivering practical solutions with tangible benefits. For example, LR is working with leading industry players to make autonomous shipping a reality; from Rolls-Royce and Svitzer and the world’s first remotely-controlled commercial vessel, to CSSC and China’s first smart ship, Great Intelligence.
With so many ongoing developments occurring simultaneously throughout the shipping and shipbuilding sectors, how has LR’s role as a classification society changed in recent years?
For 258 years we have been trusted as an independent regulator and custodian of global safety and environmental standards. We have always supported the sector throughout new developments and have a history of firsts. Consequently, we have long and deep relationships with many of our clients as evidenced by our leading market share, for example in the cruise, LNG and FLNG sectors.
However, we cannot afford to be complacent and are continually innovating ourselves to ensure that we remain as relevant for our clients in the future as in the past. Additionally, as the adoption of technology, connectivity and society’s sustainability expectations of our sector accelerate, we are welcoming the opportunity to collaborate with an increasingly diverse set of other companies and advisers. This includes digital start-ups, flags, policy makers, global OEMs and established industry players. LR’s reputation is becoming one of a trusted advisor and innovation partner.
LR has accelerated our pace of change in the last two years, especially in the way that we co-create and work with partners to prove value in innovative solutions and at the same time invest in our own tools and systems to ensure that we deliver a great customer experience.
We expect to see a revolution in how we operate assets over the next few years; and much of this will be driven by the change in the way we use data. Also, there is a move needed to a systems approach in the approving of an asset and class needs to be cognizant of the technology that is being designed and specified into new ships. This will require new ways of working and greater multidisciplinary teams working together outside of prescriptive rules but in a risk based process.
Adding to that, how do you expect LR’s position to change in the upcoming years? What is the company doing to gear itself for the demands of a future full of digitalisation and sustainability?
As with most industries, scale is of critical importance. It is important because it offers the advantage of maintaining sufficient capacity to facilitate innovation, co-creation with our clients, and research and development in line with the continuous acceleration of technology, safety and environmental expectations from our society in this fourth industrial revolution.
Over the past three years, we have been pleased to see our market share grow significantly, thus supporting our ambitions in innovation and research and development. We will continue with our focused approach, placing our clients’ needs and the quality of our service delivery at the heart of what we do. We expect to continue our position as one of the leading providers of classification, certification, and assurance in the marine and offshore industry for the future, as well as the present.
What are the biggest challenges currently facing LR and the shipping industry at large?
The Implementation of the MARPOL Annex VI Reg. 14.1.3 0.50% sulphur limit for fuel oil used on board ships operating outside emission control areas shall enter into effect on 1st January 2020. LR recognises this is presenting one of the greatest challenges to all stakeholders in the marine fuel oil market, from the producer to the user.
Looking further ahead, our published research and studies have shown that there is a dynamic shift happening within the shipping industry over the next 30 years; this shift will be enabled by acceleration in the application of technology into the maritime sector. Tangible signs of this shift are already being witnessed today. More will come at an accelerated pace as technology becomes proven and deployed more widely.
The drivers of this accelerated shift are both commercial and regulatory. Climate change, air quality and clean oceans are dominating the global agenda; solutions in the form of new energy sources, systems, connectivity, remote control/access, situational awareness, etc are being explored and piloted to determine their viability in the commercial world.
The technology that will enable the shipping industry to address the aforementioned agenda will leave its mark on the way ships of the future will be manned and operated. Integration of systems on a ship and integration of a ship in an industry supply chain requires a re-think of the adequacy of some of the current business models.
Visionary companies have already begun to set the tone for what is possible.
What are LR’s main goals and objectives for the future?
Our world is experiencing significant change and LR aims to not only maintain its relevance in this shifting world, but go beyond the traditional areas of class in order to have the vision and the tools to assist our clients in adapting and succeeding.
We think the most important change we need to see for our industry to succeed is collaboration. We need a change of mindset and to work together more effectively to meet the challenges of today’s changing world and leverage the opportunities, understanding that our future performance depends on today’s decisions.
It is more important than ever that we don’t forget the people our industry relies upon, ensuring that we support and invest in them for this transition to be successful. Finding the balance between the adequate level of technology and the necessary level of human activity – and the integration of these – will be the critical issue for the post-2020 maritime industry.
It’s likely that finding the sweet spot will drive higher levels of safety for people, business and the environment. We need to balance the investment in technology with our investment in people.