Panos Patsadas: Digitization in Shipping... at the cost of losing skills
A number of people, having read previous articles of mine on LinkedIn or other maritime press sources, ask me why I am against digitization. I am always open to debate, and in fact I am not against it, I am very much for digitization where quantity is the issue at discussion and not quality. I live by it on my day to day, and have always been saying that shipping is a big data industry. What I am against though is robotization of shipping. Taking functions that require expertise, and either have an algorithm do the work, or train someone to do it cheaper, and claiming that the outcome can be of the same quality.
I was asked this question regarding the outsourcing of port disbursements, and whether I think it is a good example of digitization put to good use. There is the obvious benefit of outsourcing the administration of processing a DA, and for sure makes life easier for marine accountants and for record keeping purposes. That is added value. Additionally it takes one task away from the operator allowing them more time to focus on what is really important, the turnaround of the vessel. So we are taking one task, which requires a certain amount of specialization, and we outsource it to another person, who has been trained to check if the number of items on a DA are according to applicable tariffs. So far so good. And we do that to save time and possibly FTEs (Full Time Equivalents). My question is, what happens with the items included in the PDA? The Outsourcing checks if the included items are according to tariffs. What happens with items that should not have been included? They go unanswered, and then ball is back in the operator's court. So, you are either a Principal that trusts the service, so your operators can focus on the important stuff, meaning you just approve PDA's because someone has just checked it, or you have the service but still want to check it for accuracy. In the latter case, it defeats the purpose. Why pay for a service to save you time, if you are still going to check everything yourself?
Here comes my experience. The way the business works, everyone -every vendor you work with as a Principal- will try to squeeze you out of that extra buck. Whether it is stevedoring overtime, laytime caclulation, service fees etc. So you put a young operator to approve the PDA, already checked by the service provider, and there is an item or two that the agent has managed to slide in, that don't belong there. The service provider has missed it, because that is not his job, and the operator misses it because, you decided it is not his job either. This awareness of who pays what is something that comes with years of experience, provided that you have gone through few hundred DA's and you had an old Captain in the office teaching you every trick in the book. One example, a classic one where a lot of money is involved, is transit charges. Say Canada Lakes, or Bosporus, or Kerch. Where the vessel will go in and out in a matter of few days. Might discharge and load from the same area thereafter. And that will be two separate calls, but the agent will charge you in and out both inbound and outbound. For the lakes that can cost you USD 30,000 extra. A young guy will not see it, and a service provider will not pick up on it.
So let's assume that tomorrow all owners and charterers outsource their disbursements to one of the service providers, and fast forward this 10 years from now. How is this affecting the quality on the next generation of operators entering shipping? What has been a classic learn by doing field of operations, with too many tricks to mention, is gradually being passed on 3rd parties whose job is to audit, and do back-to-back checks. Not to check what has made its way into the PDA in the first place. I can fully appreciate that for certain trades, like LNG, LPG, Tankers where cargo handling is limited and standardized, that indeed using a 3rd party to check items against tariff might make sense. But for other trades where stevedores, materials and other items are involved, the outcome cannot be of same quality. At the same time, we are trying to transfer a task from the operator, or in house, to a 3rd party, without transferring the full scope of the job. The result in the long run, in my eyes will be to deteriorate the quality of operators. You are taking a whole task away from them, transfer only part of it to a 3rd party and the know-how is lost somewhere down the line. And last but not least, who is assuming the risk for the loss, for that extra 10,000 usd item that should not have been in the PDA in the first place ? It is the Principal.
So digitization has many faces, and some of them, when it comes to handling standardized transparent information can for sure add value. I would fully comprehend the outsourcing of the PDA to a 3rd party, if such party would also be willing to assume the risk of omissions. If somewhere down the line, it turns out that the service provider missed thirty odd thousand dollars that should not have been in the PDA in the first place, and the junior operator just followed that routine procedure of approving, because it was already checked, would the service provider compensate the Principal for this? It would then make some sense. I still think it would be against the long term standards of operations personnel, but then the whole scope of the task would be transferred, and it could make sense. When we look at digitization, we should not just get excited by what it brings, but we should also consider what it takes away, and in some cases, it is wiping out knowledge and skills.
Mr. Panos Patsadas holds a BSc Hons in Applied Mathematics from the University of St Andrews and an MSc in International Trade and Transport from LMU in London. He has over 15 years experience in both chartering and operations, serving in senior managerial roles for German and Danish MPP / Heavy lift Shipowners. His expertise lies in Dry Cargo and Heavy Lift / Out of Gauge shipments, where he has often been consulted by the international maritime press on reviews, market outlook, opinions. As of June 2019 Mr. Patsadas joined Sibur International in Vienna, the export division of Sibur Holdings, the largest Petrochemicals Producer of Russia, where he will be serving as Chartering Manager for the Group's fleet of 8 vessels and LPG exports by Sea. In addition, Mr. Patsadas has been actively contributing to the Shipping Sector of Nea Dimokratia Party, in the areas of Flag Competitiveness & International market trends, and he has been a member of the Party since 2016.