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Suez Canal Fiasco Heralds the Need for Digital Transformation in the Maritime Industry

 - Success in Simulation and Scheduling

Circumstances beyond human control are bound to happen now and then as the blocked Suez Canal shows. Since the news broke of the Ever Given’s, a 220,000-ton container ship, blockade of the canal approximately 140 ships are held up in transit. One of the world’s busiest supply routes responsible for 12% of seaborne trade is blocked and billions of dollars are being lost every day the blockade remains.

Although tugboats, cranes, and dredgers are on the scene, conservative estimates believe a successful removal will take weeks…and while the manual labor continues the discussion about integrating cutting-edge digital transformation technologies to secure the maritime industry has reared its head. Before delving into how digital transformation can help the industry, let’s take a look at its adoption rate.

Compared to the use of digital transformation tools in the hinterlands, the maritime industry adoption rate of digital transformative technologies lags at 25%. Although the digital transformation market within the industry is expected to grow by 10% for the next 5 years, the application of digital technology is limited to optimizing vessel scheduling, loading/unloading times, capacity management, and training.

Digital transformation offers much more than the aforementioned services. The ability to answer complex questions and integrate risk-based analysis into simulation models of maritime operations is a powerful tool for navigating through unexpected situations.

Risk-based Scheduling as an Evaluation Tool for Maritime Enterprises

For maritime enterprises navigating the Suez Canal, an incident has occurred and the question is what can be done to limit your losses? Mitigating losses in similar situations starts with determining a blockade timeframe and its effect on delivery timelines. With accurate estimations of what a week’s delay would mean to your business operations, a strategy to keep customers happy can be developed.

Risk-based scheduling provides the solution for estimating the effect of delays to supply on the production line or delivery timelines as the case may be. The ability to evaluate the effects of extended delays means you can tell the customer that the bulk of their supplies or products will be available in 3 weeks while breaking out reserve products/materials to share or continue production to bide some time.

Simulation Modeling as a Preventive Tool in the Maritime Industry

The old adage ‘prevention is better than seeking a cure’ aptly describes the importance of preventing issues before they occur. One of the risk factors within the maritime industry is unplanned downtime caused by defective terminal equipment, blockade to water routes, and accidents. Enterprises who put all their eggs in one basket without any alternative plans end up missing delivery deadlines which leads to irate customers.

The average customer is not interested in your delivery or production challenges because they want what they ordered for now. Thus, developing alternate transportation strategies and implementing them into general operations is recommended. For example, an enterprise with multiple freighting strategies that is involved in the Suez Canal incident will simply take advantage of the other routes while waiting for a clear up.

Simulation modeling software is a powerful digital transformation tool to develop models of alternate transportation routes. Using the model, maritime enterprises can estimate the cost of using transportation solutions such as tankers an air cargo to transport crucial supplies. Access to alternate routes then becomes a preventive solution or strategy to incidents that happen at sea.

Conclusion

Errors such as the Suez Canal blockade highlight the importance of implementing industrial automation using digital transformative technologies within the maritime industry. This incident is expected to increase the maritime industry’s interest in digital risk mitigation tools and risk-based scheduling and simulation software is a good place to start. Schedule a demo to learn more about applying digital transformation technologies to deliver high-performance levels.

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