Viktor Genkulov on the cost of digitalizing the maritime industry and when it will start to pay off

Next year, the Assembly of the International Maritime Organization (IMO) is expected to give final approval to the maritime industry’s Digitalization Strategy. The organization’s specialized committees have already approved the document, which will serve as the foundation for the further rollout of digital solutions across the world fleet. According to the strategy, digital technologies are meant to become one of the key tools for improving the efficiency, safety, and sustainability of global shipping. “When people talk about digitalization, many of them picture the rollout of individual technologies. But what’s really at stake is the transformation of the entire system of fleet technical operations, from document management and equipment maintenance to engineering decision-making,” says marine engineer Viktor Genkulov, commenting on the IMO strategy. Viktor has spent more than ten years working on ships making voyages around the world, specializing in technical management and the reliability of shipboard systems. Alongside his hands-on work, Viktor is also engaged in research: he publishes academic papers, serves as a peer reviewer, and studies issues of digital transformation in the maritime industry. His methodological guide, “Digitalization of Technical Operations,” is devoted to this very topic and examines how digital technologies are changing approaches to fleet operations. In the interview, the expert explains why shipowners should invest in digitalization, how much it costs to modernize shipboard systems, and how much real savings these technologies can deliver, from fuel monitoring to preventing emergency situations. – Viktor, your guide came out at exactly the moment the IMO approved its digitalization strategy. Would you call that a coincidence, or did you know the industry was approaching this milestone? I’d call it a convergence of accumulated experience with an objective reality. Traditional approaches no longer always allow you to control every process on board effectively. A specialist spends a lot of time on routine operations: filling out logs, processing data, running standard checks. As a result, there’s less time and attention left for analyzing the situation, finding non-standard solutions, and managing potential risks. Many people assume everything has already been digitalized for a long time, but that’s only how it looks from the outside. Only now is the industry going through a genuine stage of digital transformation, one where digital solutions are becoming the backbone of fleet management. You often hear the question: “How did people manage before digitalization?” And it’s true, crews used to handle these tasks manually, but the conditions were different too: there was less information to process, ships had different technical characteristics, and safety and process-control requirements weren’t as strict as they are today. We want technology to keep developing and becoming more sophisticated and efficient. But the approaches to operating and managing it need to develop alongside it. – Are there opponents of the new strategy within the industry? Of course there are. Any large-scale change creates wariness, and the maritime industry is quite conservative to begin with. First, that’s simply how it developed historically: shipping is one of the oldest industries, and many of its processes were shaped over decades. A lot of people in leadership positions are from an older generation who have worked according to familiar methods for decades. For them, the introduction of digital solutions can sometimes feel like a challenge. The question comes up: if a computer can monitor processes, analyze data, and issue recommendations, doesn’t that make me, as a specialist, replaceable? Any change looks confusing to them, even frightening. The second reason the maritime industry treats technology cautiously is that the cost of a single mistake here is extremely high. People are used to trusting their own experience and judgment rather than a system they don’t yet fully understand. And yet the human factor remains one of the leading causes of maritime incidents. According to the European Maritime Safety Agency (EMSA), the human element was present among the contributing factors in most of the accidents investigated. – In your published methodology, you say that switching to electronic checklists can reduce errors linked to the human factor by 70 to 80 percent. What drives that result? Electronic checklists help keep processes under control. If a particular item hasn’t been completed, the system can send a reminder, request confirmation, or simply not allow the operator to move on to the next step until the necessary check has been carried out. A paper checklist has clear limitations in that kind of situation: it can be lost, damaged, an entry can be skipped, or a completed item simply might not get marked off. For example, when starting up or shutting down equipment, a specialist might carry out most of the steps correctly but, due to fatigue or a heavy workload, forget one small yet critically important item, such as switching off a particular unit or checking a parameter. At first glance that might look like a minor slip, but if part of the system keeps running unmonitored, the consequences may only show up later, once an alarm goes off and the problem has become far more serious. – You propose moving from planned preventive maintenance to condition-based maintenance. For a shipowner, that sounds appealing: no replacing parts ahead of time, no wasted money. But the obvious question is, doesn’t that approach increase the risk of a sudden equipment failure? Those concerns do exist in the industry, but it’s important to understand that condition-based maintenance doesn’t mean we simply wait for equipment to fail. On the contrary, its whole purpose is to spot early signs of a potential problem and step in before a failure happens. To do that, we rely on sensor data, IoT technologies, machine learning, and analysis of large volumes of information. A system can track changes in equipment operating parameters, such as vibration, temperature, pressure, and other indicators, and identify deviations that a person wouldn’t necessarily catch at an early stage. – You implemented a monitoring system like that as part of your work at MD Best Solutions Team. If a shipowner considering a similar modernization came to you, what budget should they expect, and what determines the final cost of the project? Short answer: the total budget you should plan for on a project like this ranges from about $55,000 to $105,000 or more. But that’s a very broad estimate. Let me break down what makes up that cost so it’s transparent. First is equipment and components: sensors, controllers, cabling, software. Here the price is relatively stable and averages between $15,000 and $20,000, though again, that depends on the number and type of tanks involved. Second is the labor itself, and that’s the most variable part. Installation, commissioning, programming, and calibration can run from $40,000 to $85,000 or more. The final price is shaped by the yacht’s length and the extent of cable runs, the number and type of tanks, how difficult it is to access the tanks, the need to check seal integrity and restore existing openings, the amount of programming and integration with the systems already on board, and, importantly, identifying and fixing errors left behind by the builder or previous owners. That last part is a whole separate layer of work that tends to surface only once the project is underway, and it requires skilled handling. It’s also worth factoring in the alternative cost of a project like this. If you carried out a comparable modernization through a shipyard, the budget could run to roughly $250,000 to $450,000. In our case, a more efficient approach delivered substantial savings, on the order of $150,000 to $250,000. – That’s not a small budget. But the main question for any shipowner is what it delivers in the long run. In your methodology, you say digitalization helps optimize fuel consumption and reduce operating costs. What mechanisms drive that, and how significant can the savings be? The economic effect of digitalization comes from tighter, more accurate control over every process tied to fuel purchasing, accounting, and consumption. One of the clearest examples is bunkering. Traditionally, the amount of fuel received is determined through manual measurements and paper documentation. Any error or imprecision in those measurements translates directly into financial losses for the shipowner. Digital systems make this process far more transparent. Modern Mass Flow Meters (MFM), for instance, measure fuel mass directly rather than volume, with a margin error of less than 0.5 percent. At the same time, they record all key parameters in real time: the amount of fuel received, its density, temperature, and flow rate. That data is saved automatically in the electronic system, so any operation can be verified and reconstructed down to the minute. For a shipowner, that means a lower risk of short deliveries and disputes with suppliers, along with a reduction in operating losses. If a ship receives less fuel than it paid for, that can disrupt the voyage schedule, force additional port calls for refueling, cause downtime, and generate unplanned costs. – Do the digital monitoring systems you describe apply to alternative fuel types? And how do these technologies help control emissions and meet IMO environmental requirements? Yes, they do apply. In the methodology, I go into detail on how digital systems perform with modern low-sulfur fuels (VLSFO) and biofuels. As the industry shifts to newer fuel types, their characteristics become more variable: viscosity, density, and component compatibility all shift. That’s exactly where intelligent monitoring systems are needed. Modern viscometers, for example, can measure not only kinematic and dynamic viscosity but also fuel density directly in the flow, in real time. That data is integrated with engine operating parameters, which makes it possible to catch fuel quality or ignitability problems early. In particular, a system can calculate the Calculated Carbon Aromaticity Index (CCAI) in real time, an indicator of a fuel’s ignitability. That allows fuel with poor characteristics to be identified before it leads to detonation, thermal overload of the engine, or reduced engine efficiency. On top of that, keeping fuel viscosity within an optimal range, roughly 10 to 15 cSt, supports more complete combustion, lowers specific fuel oil consumption (SFOC), and, as a result, reduces emissions. – Viktor, you said earlier that many shipowners still approach digitalization with caution. If you had to convince someone like that with just one argument today, what would you tell them? The world is changing, and the fleet is changing along with it. We can’t run a modern ship the way we did 20 years ago; that’s inefficient and, more importantly, unsafe. If technologies exist that let you work faster, more precisely, and more safely, you should be using them. And it’s better to start today than to be catching up tomorrow with those who started earlier.