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Shipping's future is in IT, not bigger ships: expert
Publication Date : 20-02-2014
The days of getting increased gains from building ever larger ships may soon be over, said a maritime economist in Singapore on wednesday.
Dr Martin Stopford, president of shipping intelligence firm Clarkson Research Services, argued that gains from "mechanisation" are fast diminishing. The way forward is in the realm of information technology, he added.
"The ships are as big as they are going to be. They are reaching the pinnacle of mechanisation.
"They are wonderful ships but you are getting diminishing returns," said Dr Stopford, referring to recent classes of mega-ships each carrying as many as 18,000 standard-sized containers.
"Just getting bigger and bigger is no longer the solution."
He noted that the cost of freight had gone down over the past 50 years or so but has recently headed back up, owing to the slowing down of returns from mechanisation and the higher costs of energy.
Rather, information technology offers a way ahead for increased profitability. "The new dog in town is the global information technology platform - cloud computing, big data, the world wide web," he added.
Now, it is up to companies and maritime cities to use the technologies to create value in "door to door logistics", or the moving of goods right to the doorstep of customers.
Much can be done in this area, he said, noting that there is still no global database of seafarers.
"We are so backward that we don't know how backward we are. We take our standards from what we do at the moment and what we do at the moment is not much different from what we did 30 years ago."
London-based Dr Stopford was speaking to The Straits Times ahead of a lecture at the Ministry of National Development Auditorium in Maxwell Road. The lecture, on the global trends in shipping and the impact on port cities, was jointly organised by MPA Academy and the Centre for Liveable Cities (CLC).
MPA Academy is the training arm of the Maritime and Port Authority of Singapore (MPA) and the CLC operates as part of the Ministry of National Development.
Dr Stopford's experience includes being the chief executive of Lloyds Maritime Information Service and a global shipping economist with financial institution Chase Manhattan.
The shipping industry also needs to tackle issues like fossil fuels, which are getting increasingly expensive, and the carbon footprint of the sector, he said.
Overall, he called shipping a "very old-fashioned business".
"We like it this way, but it's not the future," he said.