AI | Shipping
Shipping Remains The One Industry Artificial Intelligence Will Never Master
There Is No Replacing the Masters Of The Sea
The year has begun with groundbreaking advancements in artificial intelligence, highlighted by The Stargate Project, a $500 billion initiative spearheaded by industry titans like Oracle’s Larry Ellison, OpenAI’s Sam Altman, SoftBank’s Masayoshi Son, and an Emirati sovereign wealth fund. Meanwhile, OpenAI’s new Operator model, an autonomous AI agent, is making waves by taking action on behalf of users. Yet, amidst this AI revolution, one age-old industry stands resilient against full automation: shipping
The shipping industry is an age-old field that has largely remained the same since the days of the Vikings and has managed to cripple the world’s supply chain during the COVID-19 lockdowns and every time there are issues at sea.
The shipping industry is mostly an after thought for many in today’s world. Focus is heavily placed on businesses and platforms that are easily accessible by the general masses such as airplanes, food deliveries, e-commerce. People hardly remember how vital the shipping industry is until a pandemic happens or Egypt’s Suez Canal is blocked and the Panama Canal experiencing a 154 ship pile up. Only then does the world take notice of the shipping industry.
Each year, approximately 11 billion tons of goods are transported by ship. This equals 1.5 tons per person based on the current global population. The shipping industry’s ability to move goods and materials from their production sites to their final destinations is unparalleled.
Take for example, in the European Union, shipping accounts for 80% of total exports and imports by volume and around 50% by value. In 2019, the annual global shipping trade had exceeded a total value of 14 trillion US dollars.
The Complexities of the Shipping Industry
In its current state, there is only so much AI can do. At this early stage, AI is often given a task that is repetitive and is able to be based on previously obtained information such as data and patterns. For example, in 2021, AI was able to beat world chess champion Garry Kasparov. Taking into account that chess is a game with well documented moves throughout the years, it is no wonder that AI won.
Shipping is significantly influenced by relationships, geopolitics, and weather patterns. A safe shipping route that has been reliable for decades can suddenly become perilous, as illustrated in early January 2024. During this time, Yemen’s Houthi rebel group targeted several vessels crossing the Bab al-Mandab Strait, forcing these ships to take a lengthy detour around the continent of Africa.
Situations like these remind us that unforeseen events such as weather changes, geopolitical tensions, and piracy often happen at sea. And it takes experience and on-the-field training to face them.
Limitations of Artificial Intelligence in Shipping
Despite the many advances in technology and AI, the core of any business is relationships, especially in the shipping business. Ship owners have to trust the operators and the charterers. Negotiations are often based on word of mouth and reputation.
Information in the shipping industry is shared within trusted networks, emphasizing the importance of relationships. Similar to the diamond trade industry. There is no public data available on who is the best partner to do business with nor if a company is trustworthy or not. It all comes down to relationships.
Although AI and robotics can assist with real-time tracking and risk management, the manual nature of repairs still requires skilled human intervention. Additionally, crew management is an irreplaceable human skill, even with the advancement of AI.
The shipping industry is steeped in tradition and has a wealth of knowledge passed down through generations. At the beginning of my career, I worked in a company that specialized in import export. My boss at that time was a Greek man and he shared with me some of his knowledge into the shipping world. Everything he taught me was based on his experience in the shipping business. Nothing was ever written, everything was verbally shared. Similar to traditions.
This type of knowledge transfer is similar to how experienced mariners possess lessons learned from years at sea with insights that are challenging to translate into algorithms. This rich heritage of practical knowledge and seamanship is invaluable and irreplaceable by AI, no matter how autonomous AI will be.
Human Expertise: The Heart of Shipping
Another caveat of shipping that is irreplacable by AI is that shipping involves navigating a complex network of international laws and regulations, which can vary significantly from one country to another. These laws are frequently updated, sometimes overnight, with a stroke of a pen.
For example, the United States might be Consider the upcoming tariffs that may soon be implemented in the United States. As reported by CNBC, US shippers are facing uncertainty due to these new tariffs and the potential for a port strike.
The election of a new president, along with the possibility of increased tariffs on goods although unusual is not impossible. The newly elected President of the United States, Donald Trump, announced in Davos, during the World Economic Forum, “But if you don’t make your product in America, which is your prerogative, then very simply you will have to pay a tariff. Differing amounts, but a tariff.” Decisions such as an increased tariff by a newly elected President of a country, is not an established pattern to be analyzed, and no data can be input into an AI algorithm to predict or circumvent what a person will or will not do or how to best negotiate this situation.
Human expertise is essential for understanding and complying with these regulations, as well as for handling the bureaucratic processes. AI can assist in tracking and managing compliance, but the human touch remains indispensable for interpreting and applying these regulations correctly.
The Future of Shipping in the Age of AI
Currently, no single country or individual is significantly changing the shipping industry as a whole. Over the past forty years, sea trade has quadrupled, offering global consumers the benefit of competitive freight rates.
Despite the tremendous potential and importance of shipping to the world, only China, through its Belt and Road Initiative, has made any efforts to transform the industry.
Recent advancements in shipping technology include Navier’s flying boats in California, which are powered by renewable energy and have a lower impact on coral reefs. However, the shipping industry is not as easily replaceable by AI as some other sectors.
While AI has the potential to transform certain aspects of the shipping industry, it cannot replace the human expertise that lies at its core.
The future of shipping will depend on a harmonious blend of AI-driven efficiency and the irreplaceable intuition and adaptability of human professionals
