Venture capitalist Yariv Zghoul has sworn off shipowning, but he is closing in on a digital fleet of 1,200 ships as a service provider through software company JiBe ERP.
About half of that is the managed and crewed fleet of Anglo-Eastern Shipmanagement, which the former shipowner's company has just begun putting online. Zghoul hopes to win the fleets of two more major third-party managers soon.
What started out as the accounting department of a shipowning company has been a stand-alone for two years now, and Zghoul said he plans to keep it that way.
"I have committed to my clients that I will not own ships," said the former Ofer family executive, who started containership venture SeaChange in 2006 together with Sam Norton.
That venture was wound down in 2017, with Norton moving on to head Overseas Shipholding Group (OSG) and Zghoul continuing to develop the company's inhouse enterprise resource platform (ERP) for a wider audience.
In shipmanagement, you manage risk and try to extend the life of your asset as long as you can. In software you build unknown solutions, experiment, and your asset after three years of life has to be rebuilt.
Yariv Zghoul
ERP systems are business management software suites that allow companies to oversee multiple elements of their business. They are a key pillar of the digitalisation of shipmanagment, as modules cover safety, quality and other matters, crewing, finance and chartering.
Zghoul's JiBe ERP has hit a milestone by picking up shipmanager Anglo-Eastern, doubling JiBe's fleet and giving it the kind of big-data scale he believes shipping ERPs need to have.
He feels shipowners have been spending five to 10 times too much on software in comparison to land-based industries, and getting a fraction of the functionality.
About 20 onboard
Zghoul has convinced about 20 owners and third-party managers that the solution he is flogging is the best one.
Not everybody has risen to the bait. Zghoul said it could soon sign on two more of the big players in third-party shipmanagement.
But TradeWinds understands that technical managers, including V.Ships, Bernhard Schulte Shipmanagement and Fleet Management, have opted for their own inhouse solutions instead.
As a service provider, he contends that shipmanagers have a set of priorities that are the opposite of what is needed in a digital platform provider.
"In shipmanagement, you manage risk and try to extend the life of your asset as long as you can," Zghoul said in a recent blog post for his customers. "In software you build unknown solutions, experiment, and your asset after three years of life has to be rebuilt."
But many owners and managers remain with what has been the default approach in recent years: using different IT solutions for separate facets of the task of ship digitalisation and customising them in pursuit of integration.
That approach seems to be the great white whale that Zghoul is out to kill. He views the integration of multiple legacy systems as a self-defeating task, but one that has tempted a number of IT providers because it remains a money spinner.
"You cannot integrate a Blackberry and a Nokia and get an iPhone," he said.
Land-based industries are decades past that, according to Zghoul, but integration still prevails in shipping years, just because of the most essential feature of the business: the remoteness of the workplace.
As long as ships in a fleet have remained only intermittently in connection with each other and with headquarters, the data has tended to remain separate as well.
But improvements in connectivity have changed that. Ships have just reached the point of being continuously online, constantly sharing voyage information with owners and managers onshore rather than having to update information at intervals throughout the day in discrete transmissions.
Anglo-Eastern chief executive Bjorn Hojgaard agrees. He told TradeWinds this is the reason for the timing of his company's digitalisation programme.
'Full online'
“We have reached the point in time now when you can begin to consider ships as being fully online,” he said. “Previously, satellite connectivity was not fast enough.
“The key point was to get to a place where there is a single reality between the ship, the shipmanagement offices and the client offices. And now we are in a position to design an architecture of IT infrastructure and tools on the basis that all offices and ships are considered to be operating as a single network.”
Hojgaard said Anglo-Eastern started developing its ongoing project with JiBe in early 2018 and now has 12 ships on the platform, with 50 more coming by December and the remaining 550 ships during 2020.
JiBe's current customers include former partner Norton's OSG, Soechi Group shipmanager Vektor Maritime, Japan's Tokei Kaiun, Nigeria LNG's manager NSML, Belships sister company Belchem, Greece's Angelakos, and Singapore-based New Ocean Shipmanagement, the manager for Japan's JX Ocean. According to Zghoul, new business should dilute Anglo-Eastern's share of JiBe's business to less than 50% within a year.
JiBe is too digital to have headquarters. "No client would ever come to my office," Zghoul said.
The company has bases in Singapore and Athens as well as five developer offices in India, but Zghoul often works from home in Miami instead.
This article has been amended since publication to reflect that Singapore-based New Ocean Shipmanagement is a customer of Jibe ERP.
