It Takes An Ecosystem: Transportation-Focused Executives Turn To Outside Providers, Customers, Suppliers And Competitors

Logistics, supply chain and transportation are undergoing a sea change. As highlighted in earlier installments of this series, industry and functional executives recognize they are facing a nearly unprecedented barrage of challenges and opportunities. In response, executives are doing all they can to address their most pressing issues. But resources are scarce.

Today’s opportunities require cooperation across the ecosystem at large. As indicated by Forbes Insights research, transportation-focused executives will not only be looking to hire outside providers for a wider array of services, but they will also be seeking closer collaboration with suppliers, customers and even competitors. In short, for logistics, supply chain and transportation, this is the era of external outreach.

So Hard Keeping Up

Amid so many challenges and opportunities, keeping up with it all is becoming increasingly difficult. In fact, 64% of executives surveyed by Forbes Insights say it is becoming increasingly difficult to keep up with changes in technology, demographics and the competitive environment. Similarly, over half, 53%, say they are concerned their competitors may be moving significantly faster, contributing to disruption in terms of capabilities, costs/margins, service provision and similar attributes.

One proven means to more rapidly reap the benefits of any fast-evolving set of technologies or business practices is to engage experienced third parties. Today, only about one-third of companies (33%) say they outsource the majority or a significant portion of their logistics, supply chain and transport operations/needs. But going forward, 61% say they will be relying significantly more on external sources—outsourcers, service, truck leasing and technology providers—to meet their fast-evolving supply chain, transportation and logistics needs.

Technology: Looking For Outside Help

Amid so many advancements on so many fronts—from telematics/IoT to artificial intelligence and safety/self-driving innovations—technology deserves special attention. Some of the most visible needs include access to leading-edge technology, logistics processes (optimization of routes/loads), or even fleet leasing or maintenance.

A particularly intriguing aspect of the research findings is that in terms of both current and future reliance on outsourcing, the figures are remarkably consistent for all firms large and small. What this means, says Mary Long, managing director of the Supply Chain Management Institute at the University of San Diego School of Business, “is that even those companies with greater resources, the largest in their industries, recognize that with such complex and fast-moving technologies, it makes sense to look more to outside providers.”

Technology is, in fact, transforming logistics, supply chain and transportation processes on so many fronts that the choices, development and onboarding paths can seem bewildering. So it’s no wonder 58% of executives are saying that when it comes to pursuing related technology, they plan to rely on or at least heavily lean on external partners. Only one-third (32%) plan to go it alone; a mere 11% say they will not be pursuing new technologies.

Greater Collaboration Across The Ecosystem

Transportation-focused executives in general will be pursuing greater outreach and collaboration across the whole of the value chain—all participants will be working more intimately with intermediate customers, shippers and 3PLs (third-party logistics companies), end customers, technology providers and so on. Certainly, if the goals are greater efficiency, speed and accuracy, it pays to forge closer ties with others with shared interests and needs.

Such expanded collaboration can take many forms. For example, 60% will pursue expanded partnerships with vehicle manufacturers themselves. By speaking with vehicle makers, users of such products are able to more clearly communicate their evolving needs as well as understand upcoming options and improvements. Similarly, OEMs will more actively reach out to end-users and prospects of their products.

Almost three in five, 59%, say they will more aggressively pursue the outsourcing of transportation processes. This includes activities such as fleet leasing and maintenance. Similarly, 57% of executives say they will aggressively pursue greater outsourcing of logistics processes, including warehousing-as-a-service, scheduling, carrier management, etc.

As to the former—transportation processes—the thinking here, says Long, “is that as the technology in the vehicles becomes even more sophisticated, it becomes not only harder to keep up with changes but also to service existing fleets.” Firms will also turn to leasing and related services “as a means of gaining greater flexibility as well as access to the latest technologies and lower capital costs,” she continues. As to the latter—logistics processes—here, companies can gain earlier and deeper access to advances in artificial intelligence, machine learning and related technologies as a means of optimizing routes, loads, costs and other variables.

Finally, in a series of interrelated findings, 60% say they will aggressively pursue closer collaboration with their own suppliers; 57% will collaborate more closely with partners/distributors; 55% will pursue closer collaboration with customers. Focuses will be on issues such as the sharing of more data, with an eye toward greater end-to-end visibility and process improvement.

Expect A Surge In M&A

Also likely, the industry should be poised for a significant uptick in M&A. Consolidation builds breadth and scale, which, when coupled with optimizing technologies like AI, can also lead to greater efficiency, flexibility and margins. Firms may also acquire technology providers in a bid to build greater sophistication. Overall, the Forbes Insights report reveals, nearly three out of five executives, 57%, plan to pursue this ultimate form of external outreach.

No One Can Do It All

Change is all around. Structurally, the industry is looking at new global trade patterns as well as shifting customer expectations. In terms of frontline technologies, executives are seeing all manner of new safety equipment—and soon will need to contend with driverless vehicles and drones. Behind the scenes? Logistics, supply chain and transportation teams are moving as fast as they can to understand and obtain the benefits of technologies such as telematics/IoT, AI and machine learning. It’s a remarkably demanding set of challenges. No wonder industry professionals are seeking outside assistance—it’s a necessity.

The Key to the Long Expansion? Logistics

“You can’t recommend those stocks,” a Wall Street strategist insisted in 1986. “We’re in the third year of a four-year expansion. They won’t work.” Being naive, I did it anyway. The expansion lasted a total of almost eight years, until July 1990. Strategists don’t know much, but to be fair, it was a B-school accepted truth that expansions last four years. Another expansion began in 1991 and lasted a record 10 years. And this month we broke that record. Since June 2009, the U.S. economy has kept growing. Every day is another record.

Did you ever wonder why we are enjoying a decadelong run? What changed? Everyone wants credit. Was it the Federal Reserve and its relentless stimulus? Nope. The Fed creates the money the economy needs, but not the need itself. Obama or Trump policies? A divided Congress? Demographic shifts? A strong or weak dollar? Actually, none of the above. The answer is just-in-time. You can thank all those freshly minted consultants you see in premium economy crisscrossing the country with their AirPods and Allbirds and airy attitudes.

In the previous era, before pervasive computing, economies would live and die by inventory cycles. Heck, biblical times record seven years of feast and seven of famine. The expansion starts, consumers buy, investment and hiring ramp up, wages and prices rise, inflation emerges, consumers buy ahead of price increases, investment peaks, inventories build, consumers are tapped out, recession starts, inventories are drawn down, and layoffs begin—then start all over every four years. Until recently, price signals didn’t travel very fast, and inventory tracking used clipboards.

In a micro version of this cycle, the videogame industry had a huge bonanza in the early 1980s that ended in ’83 with bust of the highly anticipated “E.T. the Extra-Terrestrial” game. Warner Communications literally buried about 700,000 unsold cartridges of “E.T.” and other titles, and lost more than $500 million. The semiconductor industry got stuck with loads of chips in inventory that had to be written down. It was ugly. After a similar inventory mess related to then-newfangled personal computers, the tech world started implementing just-in-time delivery. Companies like Compaq would ask for chips to be delivered Tuesday for PCs shipped on Wednesday. This gradually smoothed out the cycles of a very volatile industry.

Thirty-six years later, much of the global economy has perfected this just-in-time supply chain. Digital cash registers and bar codes log consumer purchases. Logistics software allows manufacturers to track every production detail everywhere on the globe. Data is fed into giant databases that forecast demand. Manufacturing, transportation and retail are a highly choreographed water ballet of delivering inventory right before it’s needed. Exactly the right amount of toothpaste is magically dropped onto Walmart shelves each night.

Software is now a mind-bending cornucopia of supply-chain management, enterprise-resource planning, business-process re-engineering and decision-support systems—all of which barely existed 30 years ago. But here’s the dirty little secret: Enterprise software from Oracle and SAP and just about everyone else is notoriously hard to use, nasty to implement, and a royal pain to maintain. That means a virtual Full Employment Act for consultants—tens of thousands are hired yearly by PwC, Deloitte, KPMG, Ernst & Young—add BCG and McKinsey too—to customize and implement business processes.

I have to admit my eyes usually glaze over with images of paint drying when I hear these companies’ names. But consulting is booming. Deloitte consulting has grown by double digits in each of the past 10 years. Consulting is now a $130 billion global business. Of that, digital-technology consulting makes up some $50 billion. This software has become the lubricant for economic gears, preventing inventory from gumming up the works. “Consultants” are mislabeled—most are more like implementers, but that doesn’t look as good on a résumé.

Price signals move around the globe in nanoseconds instead of months and squash excesses before they happen. Analytics are also improving—and the field is heating up, as shown by the recent sales of Looker and Tableau. Next, we’ll see machine learning find patterns to squeeze out even more efficiency, putting goods in the right place at the right time. Productivity tools have stretched expansions beyond anyone’s belief and have expanded wealth the world over—see value created at public Salesforce and private Vista Equity Partners.

Have we forever tamed the cycle? Nah, because like white tigers in Las Vegas, outside events can still bite and maul economic growth—oil embargoes, terrorism, tariffs, wars, no-doc home loans, maybe leveraged loans next. The current expansion may have already ended for all we know, stabbed in the back by tariff daggers. But I don’t think so—this could go on for a while. Thank those airline-mile-accumulating consultants. Give ’em your unwanted peanuts. They know how to track them.

Logistics Spending Jumped 11.4% on Strong Economic Growth

U.S. businesses spent $1.64 trillion on transportation and warehousing costs last year, with demand slowing in 2019

By Jennifer Smith
June 18, 2019 9:00 am ET
Rising logistics costs consumed a bigger share of U.S. corporate spending over the past year as companies rushed to take advantage of an improving U.S. economy, according to a new report.

Spending on transportation, inventory-carrying costs and other shipping-related expenses as a share of gross domestic product last year reached its highest level since 2014, the Council of Supply Chain Management Professionals said in its annual State of Logistics Report, a surge the report said is cooling this year on more plentiful capacity and moderating shipping demand.

U.S. businesses spent a record $1.64 trillion on logistics in 2018, up 11.4% from the prior year and accounting for 8% of GDP, the report said. Industry experts view the logistics share of GDP as a measure of the efficiency of transportation and distribution networks, and last year’s figure was sharply up from a 7.5% share in 2017.

With economic growth expected to slow in the second half of 2019, companies that built up inventories ahead of expected tariffs could pull back their demand for logistics services this year, “easing the price increases that bedeviled shippers” during last year’s sizzling freight market, the report said. “This is good news for shippers, but carriers will struggle as volumes fall.”

Logistics costs should still rise in 2019, though not as abruptly as last year, when booming demand and tight capacity strained supply-chain budgets and sent shippers scrambling to book transportation, said Michael Zimmerman, a partner at consulting firm A.T. Kearney Inc. and the lead author of the report.

Trucking rates “will come down but not as dramatically as they have in the past,” Mr. Zimmerman said, while costs tied to warehousing and labor continue to rise. A.T. Kearney forecasts contract pricing for over-the-road truck shipments will decline by between 3% and 5% in 2019.

U.S.-China trade tensions are a wild card that could weigh on shipping demand in 2019. Retailers, manufacturers and wholesalers pulled shipments forward in late 2018 in anticipation of rising levies on Chinese imports. That jammed warehouses and strained logistics capacity around major U.S. trans-Pacific gateways.

Storage and other inventory costs jumped 14.8% in 2018 as inventories measured by value increased 4.6% compared with the prior year, the report said.

Commerce Department figures suggest that inventories may be getting ahead of demand, with the inventory-to-sales ratio for all U.S. businesses hovering around 1.39 this spring, after falling to a three-year low of 1.34 in May and June of 2018.

Accelerating tariffs may have contributed to softer-than-usual demand this spring for Omaha, Neb.-based trucking company Werner Enterprises Inc., whose retail customers account for 52% of revenue, Chief Financial Officer John Steele said at a June 5 industrial conference in Chicago.

“It appears that several [retail customers] grew their inventories in that February-to-March time period,” which could have led to destocking in April and May, Mr. Steele said. A number of retailers notched same-store sales improvement from February to April, “so hopefully that will translate into better freight volumes for our retail customer base going forward,” he said.

Lee Clair, a managing partner at Transportation and Logistics Advisors LLC, a supply-chain-strategy consulting firm, said freight demand this year has “moderated into something below where we were last year, but it’s higher than anything that existed before that…There’s no way it could continue to boom the way it was.”

Overall transportation spending increased 10.4% overall in 2018, with spending on intermodal truck-rail transport soaring 28.7%.

Write to Jennifer Smith at

FedEx, UPS Strive to Automate Loading and Unloading Trucks

Remote Diagnostics to the Rescue

Systems Help Fleets Reduce Vehicle Downtime, Prevent Costly Repairs, Experts Say
Navistar's OnCommand Connection remote diagnostics systemNavistar’s OnCommand Connection remote diagnostics system. (Navistar)

Remote diagnostics systems available on modern trucks are helping fleets avoid costly repairs and reduce vehicle downtime, and this technology is rapidly advancing toward offering better predictions of when problems might occur.

Tom Howard, fleet director for San Francisco-­based Veritable Vegetable, said his fleet doesn’t have much flexibility delivering its time-sensitive organic produce. For a while, it seemed every weekend he was answering a call from a driver reporting a check engine light. With limited information, he then would decide whether to drive to a potentially expensive outside shop or return it to company headquarters. It might be a major problem, or it might be a faulty sensor.

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Read more feature stories from our second-quarter issue of Equipment & Maintenance Update:

In January 2016, the company began using Kenworth’s “TruckTech+” on 11 of its 28 trucks. For those, he receives an e-mail telling him what the light is signaling and suggesting what to check. On the manufacturer’s website, he can see the truck’s fault code history, helping him determine if it’s a one-time problem or part of a trend. The system also provides the locations of the three closest repair facilities.

“Consequently, I haven’t had to roll a truck into a shop, on the ones with TruckTech+, except for once because I didn’t understand what the problem was,” Howard said. It was a software issue.

Veritable Vegetable truck

Veritable Vegetable uses Kenworth’s “TruckTech+” system. (Veritable Vegetable)

At P.A.M. Transport, which operates about 2,000 trucks, the company has reaped the benefits since becoming more proactive with remote diagnostics in recent months, said Paul Pettit, vice president of maintenance.

Previously, the company used fault codes mostly to triage driver road calls. When a check engine light would appear, the driver would be asked to pull the codes himself, which some had trouble doing. Or, drivers wouldn’t contact the company when a light appeared, and the first time the company learned anything was wrong was when the driver called to say the truck had been derated and had slowed to 5 mph.

The company has identified one individual who monitors all incoming telematics from the fleet’s Peterbilt, Freightliner and Navistar models. That information is used to route drivers and ensure dispatchers don’t assign loads to trucks that need service. If necessary, another power unit can be prepared to service the customer.

Not only can the fleet learn what’s wrong, but also how long it’s been happening, the recommended repair, and, in some cases, what nearby shops have the needed parts.

“Pretty much if anything is breaking down right now, we know it when it’s happening or before it happens,” Pettit said.

Tontitown, Ark.-based P.A.M. Transport ranks No. 71 on the Transport Topics Top 100 list of for-hire carriers in North America.

Other fleets also have benefited from remote diagnostics.

Reyes Holdings, a private fleet with more than 4,000 tractors, started using Navistar’s OnCommand Connection in 2016. Annelies Van Thillo, operations analyst, said within a week of rolling out the product, a technician identified two trucks with low diesel exhaust fluid and another with a required regeneration.

At Maryland-based D.M. Bowman, Chief Operating Officer Brian Hall said the 380-tractor truckload carrier saves six to seven hours in downtime per truck per quarter, or about $80 per hour per truck, with the remote diagnostics system his company uses.

Fleets always have operated reactively and still do, according to Kenneth Calhoun, fleet optimization manager for Birmingham, Ala.-based Altec Industries. The difference is that with remote diagnostics, they can shorten that reaction time, he said.

Calhoun, who also is general chairman of American Trucking Associations’ Technology & Maintenance Council, said that while a significant percentage of trucks have the technology installed, fleet adoption varies. Fleets that are progressive elsewhere, such as with electronic logging devices, tend to be the most progressive with remote technology as well. Vocational applications have trailed the rest of the industry, he said.

Providers still are learning what the payment model will look like, Calhoun said. Generally, the service is free for a certain amount of time, and then fleets can subscribe.

Fleets can be overwhelmed by the data, so they must prioritize the information and look for trends, Calhoun said. If a particular group of faults is spiking, the fleet should find the root cause. Fleets should consider a truck’s year model, engine, where it’s domiciled and who is maintaining it. The biggest wins involve finding a problem in groups of vehicles, leading to changes in preventive maintenance, he said.

Looking ahead, Calhoun predicted that in the next 10 years, a vehicle will understand its own issues and then adjust its operating characteristics, allowing the driver to travel to a preferred destination for repairs and updates.

“I think that in our lifetimes, we’ll see the vehicles, for lack of a better way to put it, become self-aware, and then begin to mitigate those situations to extend its life and to optimize the availability of the asset,” he said.

Chris Morrow, fleet management customer service specialist for Entergy, an electric utility, said that because the volume of information can be so overwhelming, fleets should start by focusing on critical codes. Technicians will embrace the technology after seeing it prevent catastrophic failures.

Morrow said Entergy’s main focus has been on its 1,200 medium-duty hydraulic trucks, mostly Freightliners and all with Cummins engines. Following Calhoun’s advice, the fleet focused on those critical codes such as high engine temperatures and low coolant levels.

“That turned out to be fantastic,” he said. “We got those results that we hoped for. Our technicians bought into it, and then twofold, it did end up having a huge financial return for us because those critical codes were just that critical, and they did lead to many of our engine failures.”

Morrow estimates the fleet is saving $250,000 to $300,000 annually avoiding catastrophic engine failures. Remote diagnostics provides information that drivers sometimes didn’t provide. Sometimes the check engine light warned of problems, but the driver would be working in an aerial and didn’t see it.

Remote diagnostics technology is expanding.

Andrew Dondlinger, vice president and general manager for connected services at Navistar, said OnCommand Connection was developed initially to collect and display diagnostic codes. Now, fault code action plans help fleets validate if something is an issue and determine a course of action. Live fault code action plans, which launched about a year ago, show the needed part number, nearby dealers with the part available and standard repair time.

Other engine manufacturers also are providing remote diagnostics systems.

Dheepak Rajannan, product manager for Cummins’ electronic service tools and information business, said the company’s Guidanz system helps fleets and service providers diagnose and respond to problems. The mobile app includes an immediate assessment feature that helps users understand the issue.

Service providers can use immediate assessment to start a work order in Guidanz Web, a guided service event workflow system that automatically transfers information, such as engine specs and the VIN number. The driver can use the application to find the closest certified service location and e-mail the truck’s GPS location and fault code information. Cummins plans to offer different tiers of packages so even owner-operators can obtain support.

Detroit Connect Virtual Technician

A driver accesses information from the Detroit Connect Virtual Technician. (Daimler Trucks North America)

Jason Krajewski, director of truck connectivity for Daimler Trucks North America, said ­the Detroit Connect Virtual Technician quickly notifies fleets of a fault’s severity and whether the driver can resolve the issue. In critical situations, the Detroit customer support center receives engine data from 60 seconds before the fault event and 15 seconds after. Experts then notify the fleet about the cause, recommended parts, and nearest service locations with parts available. Technicians at the selected location receive a copy so they are prepared to address the issue.

Mack GuardDog Connect reduces diagnostic times by 70%, according to David Pardue, Mack’s vice president of connected vehicle and uptime services. Pardue pointed out that software updates can be done using Mack Over the Air programming.

Navistar’s Dondlinger said the technology is advancing to predictive diagnostics. For a per-­vehicle subscription fee, Navistar tells a fleet what units are at the highest risk for major problems, and then it works with them on their maintenance schedules. The manufacturer can spot patterns such as a periodically appearing low coolant indicator, which means the driver is simply refilling the coolant when a long-term fix is ­needed. Fleets can manage the influx of vehicles needing repairs and have bays available for vehicles predicted to have a problem.

The next step: prognostics, in which the manufacturer won’t even need the fault codes to know a serious problem could occur, Dondlinger said. It will use other information such as sensor codes, how the vehicle is being driven and its location.

“We aren’t yet at that point where we can say we have prognostics,” he said, “but … we have our feet firmly on the ground on the predictive diagnostics and are improving that daily through our interaction with our customers.”

Even Tech Companies Say, ‘There Are Always Going to Be Truck Drivers’

Nation’s Ports Off to a Strong Start in 2019; Trump Delays Tariff Increase

Analyst Says Fuel Supply Inadequate for Ocean Shippers to Comply With New Rule

ShipAkio Kon/Bloomberg News

Not enough low-sulfur fuel oil is available to replace the fuels used by marine shippers ahead of a fast-approaching regulation, according to analysis by Wood Mackenzie.

An rule imposed by the International Maritime Organization will limit the amount of sulfur allowable in fuels used by marine shippers. The goal is to reduce sulfur emissions, which cause acid rain. The regulation is set to take effect in less than one year, but analysts at Wood Mackenzie, an energy research and consultancy firm, forecast that there is not enough of the low-sulfur fuel available to replace the dirtier fuels.

By separate estimates, the shipping industry needs to replace up to 3 million barrels per day of marine fuel. The global supply of ultra-low-sulfur fuel, however is estimated to increase to 1.4 million barrels per day in 2020 and to 1.7 million barrels per day in 2024, Wood Mackenzie analysts said.

In 2017, refineries capable of supplying the shipping market produced about 1 million barrels per day of the less than 0.5% sulfur fuel oil, the regulatory cutoff. Refineries, particularly on the Gulf Coast, stand to gain from the regulation because they are capable of processing very dirty crude into fuel that will meet emissions will be in high demand.

Many of those complex refineries are located in the United States and on the Gulf. Refineries could see their profit margins for diesel jump 35% in 2020 due to the rule, according to the U.S. Energy Department.

Since demand for heavier crudes will drop as the shipping industry makes the switch, lighter and sweeter crudes will rise in value, analysts write. This is good news for Texas, which producers lighter grades of crude in the Permian Basin of West Texas and other shale plays.

Lighter crudes are likely to rise in value on the regulation. Booming production in the United States is likely to reduce the supply strain on the global market for lighter grades, analysts write.

As demand for low-sulfur fuel oil jumps, shippers are preparing to take other measures to comply, such as converting their fuel use to liquefied natural gas or equipping ships with scrubbers, a technology that cleans dirty fuel aboard the ship.

Use of LNG for shipping will rise due to the regulation, analysts write, jumping up 70% between 2019 and 2020. However, this will only displace less than 100,000 barrels per day of marine fuels in 2020.

So far, shippers have confirmed more than 2,000 orders for scrubbers, technology that cleans high-sulfur fuel on the ship to meet standards. Wood Mackenzie sees orders for scrubbers steadily increasing each year, exceeding 4,000 by 2025. Analysts anticipate that just more than 10% of the world’s fleet will have scrubbers installed by 2020.

Wood Mackenzie anticipates 85% of the world’s fleet to be in compliance with the regulation in 2020 and predicts full compliance to be achieved by 2025.

Seven Ways the Ocean Cargo Industry Is Pursuing Green Shipping

January 18, 2019 11:30 AM, EST
Cargo ship arrives at the Port of OaklandShipping containers sit stacked on the Kota Cabar cargo ship arriving at the Port of Oakland in July 2018. (David Paul Morris/Bloomberg)

Air pollution from cars and factories has been regulated in much of the world since the 1970s. When it comes to the smoke-belching ships that carry global trade, the rules have been a lot looser.

Big changes start next January, though, when long-debated standards from the International Maritime Organization mandate steep cuts of sulfur emissions associated with respiratory disease and acid rain. Much tougher rules are supposed to take effect in 2050, when the IMO will require ships also reduce carbon dioxide emissions by at least half.

By itself, next year’s cap could prevent 150,000 premature deaths and millions of childhood asthma cases each year, according to research published in the journal Nature. It will also cost tens of billions of dollars for an industry that has dragged its feet on the environment.

Necessity being the mother of invention, some of the world’s most conservative companies are starting to experiment with cleaner fuels and cutting-edge technologies. Here some of the brave, new ideas in green shipping:

1. Sails!

A.P. Moller-Maersk A/S is considering using a modern version of the old-fashioned sail to help power its ships. The devices, which are being tested on one of Maersk’s giant tankers, look more like huge marble columns than anything you’d expect to see on a traditional yacht. Together, the two 10-story-tall cylinders can harness enough wind to replace 20% of the ship’s fossil fuels, according to Norsepower Oy Ltd., which makes them.

Eco Marine Power, a startup based in Japan, has designed another sail — this one with solar panels in its body. Chief Technology Officer Greg Atkinson says the firm is in talks with one of the world’s biggest shippers to test the device this year.

sulfur graphic

2. Underbelly Bubbles

Just as carmakers fine-tune the aerodynamics of their vehicles to get better gas mileage, shipbuilders also try to reduce the friction between a vessel’s body and the water. Optimizing hull shape is one strategy. Another, being tried by firms including Samsung Heavy Industries Co. and Mitsubishi Heavy Industries, is streaming bubbles out of tiny holes in a ship’s underbelly, as a lubricant, to help it slice more cleanly through the water. It’s a little like floating on a carpet of air.

Samsung says it’s already installing the system on one vessel being built for Mediterranean Shipping Co. and has received two other orders. The tech can cut fuel consumption by 4% or 5%, according to the company.

3. Robot Cleaners

Since the earliest days of sea voyages, sailors have been troubled by grasses, barnacles and other organisms that grow on hulls. All the biggest cargo lines are now using submarine robots to strip away such debris and improve fuel efficiency.

One device, developed by a Japanese startup called Hullbot, looks like a propeller-powered go-kart with nylon brushes and a vacuum on its belly. Thrusters on its back keep it pinned to the vessel’s hull. No divers are needed, but the machine still requires a human operator to guide it by remote control.

4. Hydrogen Fuel

The world’s biggest shipbuilder, Hyundai Heavy Industries Co., last year announced it’s developing hydrogen-fueled engines for its massive vessels. The tech is in its infancy, but some proof of concept may come later this year when a small ship being billed as the first fuel-cell passenger ferry, the Water-Go-Round, begins operating on San Francisco Bay. Hydrogen-based ferry systems are also planned in Norway and Scotland’s remote Orkney islands.

5. Battery Boats

The challenges faced by electric cars, with their limited driving ranges, are even more daunting when it comes to oceangoing ships, which can weigh 600,000 tons and must often travel thousands of miles. Shipbuilders are experimenting with smaller river vessels and other craft that stay near shore.

In Norway, where the government wants two-thirds of all ferries carrying passengers and cars along its Atlantic coast to be electrified by 2030, Kongsberg Gruppen ASA is offering battery-powered ship engines and developing a shorthaul electric container vessel.

A Chinese-built ship launched in 2017 on the Pearl River, near Hong Kong, was the first fully-electric cargo carrier of any size, according to the China State Shipbuilding Corp. The vessel is emissions-free, but even with batteries sufficient to power three dozen Tesla sedans, the 2,000-ton ship can only travel about 50 miles without recharging, says the China News Service.

6. Exhaust Scrubbers

Within the next few years, some 10% to 15% of ships are projected to install scrubber systems, like the ones used on factory chimneys, to capture sulfur and fine particulate emissions before they escape exhaust funnels.

Makers of the devices, such as Finland’s Wartsila OYJ and Sweden’s Alfa Laval AB, say there’s already a big backlog of orders, so many ships won’t be outfitted in time for the 2020 rule change. Bloomberg NEF estimates some 4,800 vessels will be scrubber-equipped by 2025.

7. Fossil Fuel Switch

The most immediate — and consequential — change is the most mundane: switching to lighter marine gas oil, which is something closer to the diesel used for highway trucks. It’s still a fossil fuel, but less polluting because it’s been more thoroughly refined.

Marine gas oil is already used in Emission Control Areas, like the ones around Europe’s coasts, but using it full time in order to meet the new emissions rules will cost shipping companies an extra $40 billion to $60 billion annually, according to Goldman Sachs Group Inc. and researcher Wood Mackenzie.

Liquefied natural gas is another option, but the cleaner fuel requires whole new engines and port facilities to store it. In 2016, Nippon Yusen KK launched the world’s first LNG-powered car carrier and last October a Russian super tanker the length of several football fields crossed the Baltic Sea, running on the condensed gas.