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The Battle for Shipbuilding Capacity and Private Equity Targets Vessel Operations · UnDocked: The Maritime Transformation Show

• Nick Chubb: Just wait for you to come off mute. ⁓ sorry, cut go back on mute. all right. Obviously sat in with the riff raft on. Raal: ⁓ sorry. Nick Chubb: Okay. Yeah, fine. So Hello everyone. And well you remember the the News radio accidentally swore at the camera? Sorry. Our Tom counted us in and it really reminded me of that video. I don't know whether you've seen it. hello everyone. It's it's very funny. ⁓ everyone and welcome to episode of Undocked. Hello, Ral Harris. ⁓ How's life? How are you? Raal: Hi, Nick Chubb. Good to see you. I'm good. I've had a very eventful day today. up with a lark, getting few things bashed out. I've been on a sort Chatham round table organized by our good friend, Namrata Nadkarni, ⁓ Intent called, Demystifying Digitalization and AI in Maritime, the Sea Focus Round Table. Nick Chubb: haven't. ⁓ yeah. ⁓ How nice. Raal: And it's a sort of subtitle, the human element an AI enabled workforce. So they're doing two of these. think I'm doing both of them with inter manager hat on industry kind of working group. And yeah, first today was all about the ship. And then we've got one next week on on the, on the shore side operations. Yeah. So Chatham house rules. I can't. Nick Chubb: Nice. Well ⁓ what what can you share? Can you can you share anything? ⁓ c ⁓ what Raal: Yes, yes, I think so. Yeah, I think NAM's happy for me to about it a little bit. So I don't think we're able to say sort of who roles. So I'll give you a kind of a sort of mixture of who on the crowd. So we had serving masters, organisations, maritime organisations, had working for in operational roles ashore, ship managers. we had seafarers, which was a real eye-opener actually, ⁓ and good mix of seafarers as well, and some charities. So a panoply of ⁓ sort of voices, and you know you'll been on these sort of things. The benefits of the Chatham House rules thing is that there's absolutely zero in grandstanding. So... ⁓ Nick Chubb: Nice. Yeah. Honesty. Yeah. Raal: Because if you say something clever, you won't get attributed it anyway. So whereas in a, you you and I would never do this, of course, but in some people might be inclined when they get on the stage to try and sort of, oh, here are my key messages like it or not, you're going to hear them. And regardless of what question you get asked, you know, and I think we've had to both moderate those kinds of characters in the past. Nick Chubb: No no comment. Raal: you don't get any of that. you, you know, so you don't get people speaking because they want to make sure they appear on the record. So there will be a, there will be a report generated from it. So the thinking, the comments that come it will, will be in And, and I think some good I can take you through. know, there was obviously a lot stuff that you and I, you know, talk about every week. So not huge amounts of value. Nick Chubb: Yeah. Yeah. Raal: kind of going into that, but I can maybe pull out some of the things that were kind of interesting. And one thing in particular that was interesting was that they also had an expert, AI expert who works as a sort of consultant and also an educator to companies that are implementing AI strategies. So it's a bit like when we had Peter Rossi on, ⁓ but been working in maritime. Nick Chubb: Nice. Yeah. Raal: as well, so he had some perspectives on that. And I think what was kind of interesting is we sort of think of ourselves in maritime as being, guess, a bit special, don't we, that we're sort of sprinkled in sea salt. Nick Chubb: What do you mean think of ourselves? We are a bit special. Raal: We have special needs. he was a lot more kind of like, this is much more common than you think it is. And even though we have some peculiarities. he made some very interesting points as well around sort of like, you know, like last week we were talking about, I don't think you 100 % bought what I was saying around sort of needing to think about. sort of AI deployment through a kind of human element lens. He was kind of, did touch on this and ⁓ was touching on it mainly from the point of view of like sort of, it's like an employee when you bring an AI worker into the workplace, you know, they're going to be performing on day one, you know, if you brought in someone with no context and no, you know, ⁓ didn't who anyone was and had no of the meeting to do the notes, you know, there would be Nick Chubb: Yeah, yeah. Raal: probably worse than an AI in the same thing. And so there's that kind of ability to sort of to train the models and ⁓ them through in that way, which was, know, ⁓ again, I think this is the sort of level of maturity that you only get from doing implementations and learning the hard way, right? That you do that. But I think the biggest thing, my biggest takeaway for me, the thing that was really different. was the realization that a lot of people are just getting on with picking up the tools and using them much in the same way you and I have kind of come to do. I know Thetius you've done and in Digital Ships ⁓ you've more of a kind of a, you've rolled out correct usage of tools and mainly to optimize. Nick Chubb: Well which we we which we're trying to. I think it's probably speaks to some of your there. Raal: You're still trying. Yeah. Nick Chubb: I I have realized I've been been involved in a round table of business owners, not necessarily maritime or anything, but other business owners recently I realise we're probably more ⁓ we're ahead than than but but equally I think this is one of those spaces where it's easy to feel very, very far behind as well. ⁓ Raal: Yeah, and to just not be optimized and that sort of stuff. so the discussion that we are in, we normally are talking about and the discussions that we talk about with peers and with companies, we're normally thinking about AI being rolled out to the fleet as ⁓ part a tech strategy, there'll be some sort of digitalization officer, they'll be sort of writing ⁓ the guidelines for it. Nick Chubb: Yeah. Raal: testing things, they'll be sort of, you know, and then the challenges, which we've talked about a lot, it's not a trivial to bring the organization with you and do it. And the reason I think that we've gravitated towards those sorts of discussions is that's where there's policies and that's where it's visible. What was really interesting today was listening to seafarers, you know, officers, right, people with responsibility board. Nick Chubb: Yeah. Mm. Raal: talking about the way they use AI, which is as to help them with individual tasks that they have sort of using in a much more entrepreneurial way. Whether those are tools, I mean, obviously if they're on board ship, there's not gonna be any tooling that people aren't aware of, but the way that it's being used. you know, to help build a spreadsheet that's been requested to help with composing of sort of emails, you know, the kind of sort of... Nick Chubb: Yeah. Raal: light touch stuff that we do. there was less talk about kind of now AI is guiding my navigation and my passage plan, all that sort of stuff, much more kind of office based and stuff like that. But what was really interesting in that discussion was thinking about that from the point of view, you know, I said I was there with my, you know, my inter manager hat, so representing ship managers, where you think it's all about governance, isn't it? It's all about high reliability organizations, knowing what's going on. that level of governance. And I suspect there's a whole kind of way of being used, of this technology being used in an entrepreneurial way for probably lots of great outcomes. But it's just that fact of it being unknown, potentially unmanaged without some of the scaffolding that you need when, I think talked about this before. ⁓ Nick Chubb: Yeah. Raal: you know, how many people are aware of what happens to the data that they're inputting and stuff like that. And I think one of the things that was really, really interesting was a discussion around using it when you were having a bad day as a means of getting some. Nick Chubb: Yeah, yeah. Yeah. Raal: don't want to call it therapy, but I guess that's where it kind of comes in on. Yeah. Nick Chubb: Really? Wow. Raal: And apparently this also being anecdotally in the chat, something that is ⁓ terms of isolation and things like that. It's someone to kind of talk to and stuff like that, which again, it's not hard to see the potential benefits of that. If you think about like, well, what is counseling? Most of the time you're talking, someone's reflecting back what they're hearing from you, you know. Nick Chubb: Yeah. Raal: that can be a benign experience, but it's it's unthought through, and it has potentially consequences that we don't know about. So I ⁓ that was the big thing for me was thinking about like, there's enough complications around how we approach managed governed rollout of AI into our corporations. There's a whole other area around trying to predict ⁓ Nick Chubb: Yeah. Yeah. Raal: how people are gonna use these tools and whether they're using them well. And a lot of that will come down to the individual themselves and their knowledge and they kind of find their way to those tools. Some of it will be luck. Nick Chubb: So interesting. there's a a few few reflections there. One is just on I think there you know, this this almost a romantic notion of what a seafarer's job is, you know, navigating ships and all that sort of stuff. But actually most officers and probably quite a lot of crew these days, you know, are doing quote unquote office work and it is pulling spreadsheets and putting reports together and all of that sort of stuff. I just thought that was quite interesting. ⁓ But I I think this whole around shadow AI and and how if it's not if there a clear policy I I say ⁓ Raal: Shadow AI. Nick Chubb: where where I think we are a bit forward thinking is we've got very clear policies internally about tools, what can and can't be used, et cetera, et cetera. If doesn't exist, I think it's naive to assume that your people are therefore not using AI. ⁓ It's it's ⁓ far likely to be the case that your people are using AI. They're just using consumer tools, which comes whole load of of of potential and also just you know potential limitations on on how those tools can be used. the the model that that Raal: Mmm. Nick Chubb: We are at and doing a lot of thinking about at the moment for a for a product that I'm working on, which which you've seen a kind of preview of. which the more I spend on it, the more time I realise I'm gonna have to spend on it. But that's how these things go, I think. is that you need to have you know, obviously good leadership set the direction of of kind of where you're going with AI. and then Raal: Yeah. Nick Chubb: The things that need to be centralized are kind of two things. One is governance. So like w what are the kind of central policies, approved of tools. We get as we get into agentic AI, things like agent registers being held centrally, so everyone knows, you know, and knows and has a kind of inventory of all the kind of AI assets in use. the second is enablement, but only really through the lens of if investing X here, are we actually getting Y back and kind of ⁓ centralizing the function of kind of measuring the performance of that? and then also all of the change management required to to make AI work. Everything else, the actual kind of day-to-day work, the day-to-day adoption, the day-to-day use cases, be decentralized to the organization as far as possible. and so you kind of have to build a mechanism that allows you to have some level of central governance and some of central measurement of enablement, and then push the actual of rolling out of AI as far down the organization as possible, ⁓ because it is a general use that's going change how we work, and the people at the front line the ones Who are really going to be able to capture the benefits rather than some consultant kind of sat on a 50,000 feet view. And interesting, is what's interesting is that where where organizations aren't being proactive about that, and it like maybe some of companies that forum may be less proactive that. People are doing it anyway. And sort of brings you back that kind of shadow AI thing. ⁓ Raal: Mm. Yeah, and I should say as well, didn't, know, we didn't, were lots of other topics being discussed and it was a sort of two hour chat, you know, there were a lot of other topics themes. So we didn't, we didn't sort of chase some of those threads. It was, that was one of the things that just grabbed. This not to say that those companies haven't, A, put a policy or B, that they haven't, you know, mandated or instructed of the things that we heard about. But my, Nick Chubb: Yeah, yeah. Raal: my feeling was in the discussion that probably not. And certainly you can see where it's not. And certainly I can think of lots of companies are not shipping companies in which this kind of thing is happening. And I think the thing that's kind of sits behind it as well is that ⁓ of we go to governance and we go to risk and we think about data breaches and security and those kinds of big pieces first and foremost. But we have to also think about the sort of downstream of some of this stuff, just in terms of efficiency. And a really good example of that is email, right? know, email in as a, well, clues in the name, right? To make it faster to do something that you would do with a letter and immediately became a substitute for talking to colleagues, you know? And we have this situation where people are generating these enormous long emails, almost... ⁓ to avoid having a conversation about it, you know, with all the kind of issues and then someone else and then they copy people in because they can and that sort of email etiquette. And I think that's one of the things that you can see and you can get drawn into. Like if you spend a lot of time synthesizing information, you sort of, you you naturally gravitate to something like Claude or something, you know, like because it's very, or even chat GPT, it's very good at sort of reducing your word count also checking back against your Nick Chubb: Yeah. Raal: your sources and your verifiers. But there's normally going to be a bit where it hits you and it doesn't sound like you want it to sound. It's not making the points you want it to make. And if you're not careful, you'll start telling it little micro details about what's wrong with this paragraph. And it's just quicker to just do it. so there's things like that in there. We don't want to get into a situation where also as well. Nick Chubb: Yeah, yeah. Yeah. Raal: other thing that worries me sometimes with this ⁓ once you get to that wide level of adoption, you run the risk of people generating content with AI, which other people use AI to then read and tell them what they need to know about it. it's like, no actually doing anything anymore. ⁓ Nick Chubb: Did I did I ever tell you about I had a I had an issue with a cake that we had delivered to our house. ⁓ and we we we put a complaint in and got this ri very quick and very long in depth response about why we getting a refund, which I then put into Chat GPT. and then it it became obvious within about five minutes that this just two chat GPTs talking to each other. ⁓ yeah. Raal: Yeah, yeah you did. Yeah, my AI will talk to your AI and then... Nick Chubb: Well it worked. Well it worked for us. We got our refund. My AI was better than their AI. Raal: Yeah. Yeah, or your argument, you you had something, were in the right, obviously, they figured it out between themselves. But interesting thing here just to kind of, you ⁓ know, mustn't spend the whole day speaking about AI again. But I think, you know, again, it's one of those things, it's very, very interesting. This one started out, you know, the topic was more broadly about There was a strong AI kind of focus there. Nick Chubb: Obviously. Raal: But what, you know, it's one of those things you said to yourself last week, you know, it's not magic, but it certainly does look like it. And I think as human beings, we, we end up being very attracted to it and stuff like that. But, but one of the things that did to me in this kind of people will find the tools and they'll find ways and they'll start improvising and playing with this sort of stuff. and it will start affecting the way they learn. I'm reminded of that sort of, that classic ⁓ UX, you know, where Nick Chubb: Yeah. Raal: where they show the paths in the park and then they've obviously... Nick Chubb: Yeah, yeah. Person cat in the corner. Raal: Yeah, and there's that really one, you know, there's all these beautiful paths that someone designed and then there's the one that everybody uses, which is that sort of muddy track that goes through. And it kind of made me think about that, which is kind of leads me to another nice story of a company that sort of picking this up and showing some really interesting best practice. And that sort of led me to have a bit of a look and see a bit more about what they're doing with their approach. So the headlines from your Nick Chubb: Yeah. Raal: your own publication and the yeah, digital ship and it's the headlines compelling 900 seafarers drive MF shipping digital digital strategy. So, this is MF shipping. This is a ship management company based in the Netherlands. ⁓ know them? CEO, Orsell, very, very active, very capable and Nick Chubb: I know of them. I I don't know them personally. Raal: intelligent woman that's kind of of all sorts of forums like Intertanko and things like that. And they're ⁓ progressive company and taken very progressive approach to what doing. So just to kind of give you a few of the numbers. they're in a of a sweet spot, I think, in terms of the size of the operation and things like that. Let me just have a... Nick Chubb: Nice. Yeah. Raal: bring up the numbers. yeah, the mixed fleets, they've got one row row, 22 tankers, 15 dry cargo and nine cement carriers. So a fairly good portfolio of 900 seafarers, something like that. I would say, you know, a big enough operation for them to start to get some of the benefits of scale, but still small enough to take perhaps a slightly different approach to others. so the story here written by Arnell, your man in the Philippines, Nick Chubb: Yeah, yeah. Raal: The company surveyed 900 seafarers to understand the day to day frustrations of working with digital systems on board and the feedback is now shaping its ship management strategy with the goal of simplifying workflows, reducing administrative burden and making technology support operational decisions rather than adding screens. So almost textbook to the kind of things that we've talked about in terms of, you know, that tipping point where you're bringing in technology as supposed to solve problems and is actually Nick Chubb: Interesting. Yeah. Raal: causing tech stress and is giving seafarers more work to do and that sort of stuff. So I said, just of the facts, seafarers contributed to feedback, helped shape their transformation. The focus of strategy is on improving ship management rather than deploying technology, sounds revolutionary, it? ⁓ Nick Chubb: That's a it it's a it's a it's a subtle thing, but actually I imagine that would go a long way. Raal: Well, it's the first time you sort of see it in that, framed in that way. It's like, okay. You know, because normally, again, people are normally talking about, we have a digital strategy rather than ⁓ have a ship management strategy founded on digital, which I thought was good. And this the kind of approach they're taking that it recognizes that the ⁓ digitalization only succeed if they actually get adoption and they actually, you know, and the crews are welcome and trust the solutions that are being. Nick Chubb: Yeah, yeah. Yeah. That's good. Raal: put and so this is indicative the is starting to drop in the industry moving towards kind of more human centered digitalization where the technology is closer to the operational reality rather than these sort of organizational silos we talked about where you ⁓ we bring in a piece of software for the such and such team. And then they kind of work on that. And you know what I mean? And I think the clues in the story itself and the way it's positioned, but it's a kind of question around, you know, who gets to design that digital transformation there? You sort of said, it someone coming in with a 50,000 foot view and sort of saying, hey, look, this is, you we've done this before. This is how you do it. Drop it in. Or is it somebody that's actually sort of coming in? Nick Chubb: Yeah. Raal: saying the answers are in the room, my job to kind of make that happen, which is certainly the right I think. Nick Chubb: Yeah, I d I think the lesson carries, right? ⁓ well or at least maybe the lesson of good digital transformation should carry forward into into AI. Because I that's enough the same lesson. Some governance, or centralized governance, some centralized enablement, but then actually going to where the work gets done to look at how the should get implemented. just think it's such a it's such a sensible It's also it's refreshing to I can't tell you how often we speak to ship owners and managers who who go out and develop software themselves, and then two, kind of say, Well, we're thinking about maybe spinning this out and turning it into its own company. And often I c I kinda find myself questioning it's it's not to say it never works. There are some very notable companies in this industry that have been spun out of ship owners. But I do often find myself looking at them and sort of thinking, well, d do you really want to become a company? Because is a very, very different business to operating ships. and have you got the culture to make that work? and and can you really make that change happen? And ⁓ and ⁓ nine out ten the answer ultimately is no. occasionally does work. ⁓ but but I d it's it's so refreshing to hear a ship owner or a ship I should say, saying, We are in the business of ship and we're gonna find the best digital tools to make us. Raal: Yeah. Yeah. Well, I think there's, something else which I, you know, I followed the, breadcrumb chart. know Karen, I know the company, well, but you know, you don't often sort of look at websites and see where they're going with different stuff. And one of the things that I really liked about it, you can go on their website and and see their entire strategy is kind of laid out for them there. And importantly, all the KPIs are laid bare. And it's really interesting when you go on the website. So they talk about sustainability and then they tell you in very hard terms how it's gonna be measured. And the thing that was interesting with obviously with the digitalization pieces, they're there. They've actually put the KPIs that they're using to measure it as well. And I think that's... Nick Chubb: Look at that, yeah. Raal: You know, that's a kind of, it's a way of why they've done it. I know, reason to doubt that they're not doing it you know, entirely good reasons of transparency. it actually is damn effective a marketing perspective as well, because you're literally just sort of saying, this is who we are. This is what we believe in. This is the quality of our ⁓ Nick Chubb: Yeah. Yeah. Yeah. Raal: you know, of our operations by just simply just kind of laying it all out. and, you know, and it's one of those things that's interesting as well. ⁓ think it's something I said on the call this morning. where we tend to collaborate as an industry, gravitates towards the things that are sort of, you you don't want to compete on like, know, like seafarers safety and risk. These are the areas where protecting is kind of like, we don't tend to think about that as something that we want to differentiate on. We want everyone to be as safe as possible. And we tend to get together into forums and do this. And then when it comes to sort of things like technology and and so on, this is where you get to differentiate. So people are kind of tend to be little bit more secretive and what you'll see is the sort of more the marketing narrative around, know, we are digital first and we have, but they won't of get into the bone ⁓ for obvious reasons. it's really interesting to look at this, the way they've kind presented their information as being sort of, you know, very transparent about what's, Nick Chubb: Yeah. Raal: what they're working to as far as their KPIs when they're rolling out different things and that kind of thing. they've put, it is. Nick Chubb: really impressive. So I'm I'm off on the website and I'm I it's yeah, it's it's rare that see this level of clarity in in a any corporate let alone a shipping company. ⁓ Raal: Yeah, they're walking it like they talk it. think, you know, ⁓ thing is, the thing that's really good as well is that like it normally takes time, right? And see that, to see when you're, when you're sort of spotlighting things, I can't remember when we started talking about around this mismatch in, terms of like, you know, throw, are we just throwing technology at people and all that kind of stuff? I think crew connect is a good marker, right? Of when Nick Chubb: Yeah. Yeah, yeah. Raal: And I certainly don't think that was on the agenda last year. So we're only talking about like November last year. So I remember writing articles on this at the beginning of the year. We talked about it on the show, I think this year as well, quite early on. For that to have filtered through into policy, I'm not saying that we influenced it, by the way. were up a mood, right? We were picking up what we're hearing from people and... Nick Chubb: Ha ha. Raal: And we were talking about that and they obviously picking up the same things. I'm not sure if you did get it from the show though, Karen, do write in. I'd love to take credit. You know, so, but it's quite rare that that's then gets acted on and you mobilize a strategy like this. And of course it may be that this is something they saw themselves, you know, last year and were able to work to. But so what I'm getting at is that that was a fairly new idea or a fairly something that people had started to come around to. fairly recently. So to see it already kind of adopted and picked up on shows some real agility and some real, you know, some they're really listening to those signals that were coming through. Nick Chubb: W when you when you say the idea is fairly new, you talk about the idea of being so open about Raal: No, no, no, No, if you, if you think about like, if you think about the conversation, the, the conversation for a long time has been about rolling out digital. It's been about like very much around sort of being, being focused, getting technology platforms in, you know, automating stuff in work better, workflows, efficiency. That was the. Nick Chubb: strategy or or specific sp specifically about the digital performance and Yeah. Raal: the thrust and the challenge that people talked about was getting that in, rolling that out to, you know, and to a certain extent, training people in how to use it and that sort of stuff. And we hit a point, know, probably end of last year, certainly the beginning of this year where there started to be stories about tech stress was one, you know, people actually being overwhelmed by the technology they're having. Nick Chubb: Yeah. Yeah. Raal: Another one was the point I raised because of Seafarer, I think I talked about this on the show, but got in touch with me out the blue and said, could we have a chat? And it was great. We had a long conversation, covered lots of different things. But one of things he raised with me was how difficult handovers were on bridge and stuff like that. because, he was now working in the office on-shore he was going back to sea as well. But he said, When you do a handover on shore now, there's like nine pieces of software and you have to get all the logins and then you get told this one works like this and you've got very limited time as you will know from your seafaring experience. And then he said, you've got that constant obviously churn of personnel coming in who potentially just have to pick this up. Now, obviously across a fleet, it's entirely possible they have the same software on lots of them. So it might not, it's not as bad as every time you bounce a ship. Nick Chubb: Yeah, yeah. Raal: know, something's got to be done there. But it could be if they're specialist vessels and they're under, you know, is some differentiation there. But was also saying in the office, you come in, there's quite a lot of churn in the office and people are always having to learn and do these kind of things. So that became a topic and there were two or three things and I was asked to write an article about it. think I'd maybe probably moaned about something online. And I did feel a bit ginger about writing it because I'd sort been a vendor for 20 years and then I was like... And then I stopped and said, do you know what all these software vendors need to do? But it was in part due to the fact that, you know... Nick Chubb: I was about to say, you spent the last twenty years making software. Eight eight of those twenty logins are yours. Raal: that obviously stepping away from it, I was having different kinds of conversations and stuff like that. So I was kind of, but I'd been thinking about it for a while because I think because you get into, I think it's when don't need to retread it, but that the whole sort of platform discussion is inherently sort of about this as well. It's about that idea that you, know, that are. Nick Chubb: Yeah. Raal: trying to minimize that by putting everything in one platform, at least the common features for various things you do, and at least the data interoperability and the workflows can be more integrated. And that all sounds very We know it comes with its own issues as well. So the discussion I'm talking about. It's like people started to come around to this. And then I saw other things mentioning it as well. And it was starting to find its way onto round table discussions and things like that too, because It's not a question of too much technology. don't think anyone is trying to roll back or put the genie back in the bottle of that. It's just that we've overlooked the whole human dimension of it in terms of thinking about like, it's not just a technical rollout. It's not just a, the human bit is not a binary bit where you just need to make sure everyone knows how to use the software. It's like, it's actually thinking about, you know, designing it a different way. And, Nick Chubb: Yeah, yeah. Raal: to kind of defend vendors as well. I've mentioned this on other shows. Quite often the problem is you're given the piece that they think that you need to talk about and they don't want to share their entire business, you know, and everything ⁓ you. They share as little as they can for obvious reasons. ⁓ they shouldn't be forced. But in doing that, you inevitably might lose a critical part of the story. Nick Chubb: Yeah, yeah. Yeah, neither should they. Yeah. Raal: And particularly these ⁓ organisations where they be quite siloed sometimes, but there could be something really fundamental you're missing if you're just talking to one department when it comes to adding value to the business and certainly to the day-to-day reality of the seafarers who are then working in service of potentially multiple departments. Nick Chubb: Yeah. Raal: and multiple stakeholders, you know, because charter also wants something and somebody else also. So when we develop things, if we don't have the full story, then it becomes difficult to get access. And then we also talked about it as well from a UX perspective, you know, getting people access to seafarers is not always easy as well, because they are to a certain extent, you know, a protected asset for because they're time poor and all those sorts of things. It's not easy. It's a lot harder to get people on ships than it used to be. I've talked about that in the past as well. it's a difficult problem to solve, but it starts being solved with the will and the understanding. And that's very clearly what they've done at MF. ⁓ Nick Chubb: Yeah, I I I was gonna say I I think all of that becomes significantly easier when you have a very clear and white strategy that tells you what we are gonna do and more importantly calls out what we're not gonna do. because you can very easily if you take that MF shipping group strategy that we were just looking at, you can easily it becomes a very easy decision filter. Because you can at a project or you can look at a piece of software and you can say, does make the boat go faster, metaphorically speaking, does it get it closest to our goals? And if the answer is is then it can just go straight to the bottom of a priorities pile. And I think when you get stuff like that right, you can push decision making down through the organization and not and you you don't end up with senior leadership becoming the kind of bottleneck where everything takes eighteen months to to to to come to a decision. So kudos to MF Shipping Group for actually doing that and and being so open about it. I think it's it's really cool to see. It's re it's rare to see that kind of clarity. ⁓ Raal: Yeah, and just the other thing as well is that just to add to your point, I think it also changes how we measure success as well. Like what is the success of our digital strategy? Is it the number of systems deployed, the number of processes, the number of things we've digitized, or is life now easier for the people that are operating the ship? effectively reduce the number of hours that they have to spend on administrative tasks and stuff like that. Now, aren't normally, you know, even satisfaction survey or something, you know, like, ⁓ I they're not normally part of the mix. So, so I think, again, to your point, if your strategy is a people first strategy, as they clearly got what you choose to measure changes and Nick Chubb: Yeah, yeah, yeah. Raal: what your success looks like. And then that then drives lots of other things as well. Nick Chubb: I'll I'll I'll ask you ⁓ a related question. What percentage ⁓ AI do you have a measurable impact on profit? Raal: What do you mean like when you say AI projects you're about Nick Chubb: This is this is done by MIT looking the success failure rate ⁓ of AI ⁓ And the the the they have is ⁓ what what percentage of AI, I rollouts, AI pilots, that sort stuff, actually had a meaningful impact on the organization's profit margin or or on the on the profit generated by the organization. ⁓ Raal: Right. Oh, on profit, I reckon it'd be negligible. It'd be like less than 10, 15%, something like that. Nick Chubb: Yeah. It's five percent. ninety-five percent of organizations are getting zero return on their AI projects. Just percent of integrated AI pilots are extracting value, while the vast remain stuck with no measurable PL impact. ⁓ so that that's a study from June, June last year. So it's a little bit old now ⁓ in the AI world, but I do it's quite an interesting point. ⁓ Raal: Yeah. Well, if you just. Yeah. Well, and I'm very pleased to say that there were people who were honest, you know, I thought I went to 10 and then I went 15 because I thought no one would want to admit that. Nick Chubb: Yeah. Well interestingly, I I I did I I dug into the the detail on it a little bit. I and actually ⁓ interesting than that is that of reason that number is so low is that no one, A, really knows how measure it, and then B, no one to measure it. so ⁓ the profits may well have moved, but no one knows if it's the AI that's doing it. ⁓ Raal: Well. Yeah. Well, ⁓ glad you brought that up because it's of those things, isn't it? It's extremely difficult to get a handle on. I don't think, I think ⁓ went up, many years I was working and I did some sort of contract work with companies. And a couple of them were sort of in the, let's say it's sort of, exclusively, but sort of in the ad world, you know. where it's all account-based work that you're doing and everything you do is built against an account that someone's picking up. It wasn't quite that sort of work. Nick Chubb: Was was the name Don Draper by any chance? I I had assumed you you modelled you modelled your your whole personality and mystique on Don Draper at some point. So it makes sense that you met. ⁓ Raal: I was here first. At time, I was working in a much more perfunctory. I wasn't swanning around drinking and smoking while giving big ideas. I was kind of building sort of like multimedia of flash type games and kind of stuff. I was much more downstream of the big ideas. Nick Chubb: Yeah. Right, okay. Raal: The reason I brought it up was because that's the only time that I've worked in a company where you have strict time sheets, that all the work that you do has to be accountable for because the model is that you're billing, you you're billing the client for everything. I worked for about three companies that did it. And really, I mean, it's horrible way to work by the way, because there's always work that you, you know, is just lost and time that's just lost on, you know. Nick Chubb: Right, okay. Yeah, yeah. Yeah. Yeah, yeah. Raal: I don't mean chatting by the water call. just mean like organizing stuff and kind of getting things, you know, there's not really fair to charge clients for. And conversations bleed and you know, that sort of stuff. It's kind of, but anyway, the but the thing you can do in that environment is you can hardly measure, you well, ⁓ these people normally spending much time on this. are now spending this much time. So, you know, closer to that sort of thing and that sort of work. And obviously in a factory, you've got like sort of time and motion studies and that kind of thing you can work to and it's fairly binary. But ⁓ most of us working, know, it's very, very difficult to kind of prove one way or the other, isn't it? What the ROI is of these things because, yeah, we don't measure enough of the work itself to be able to really say. Nick Chubb: Yeah, yeah. Yeah, that's very true. and and there aren't any easy answers that. I ⁓ other than I the only thing I would say is in terms of AI, I ⁓ I think trying think about it through both time and quality, I think just a a helpful, helpful way of framing it. Even even then though, actually getting hard measurements on that stuff is is really, really tough. ⁓ Raal: Yeah, it's really difficult. when it comes to quality as well, I mean, you know, there's so many involved. You know, one of the, I think one of the issues with AI that I picked up on very early is that it has the simulcrum of good work. It's very easy for something to look credible. And it very often doesn't stand up when you actually go and have a cup of tea and come back and read it again and actually kind of... Nick Chubb: Yeah, yeah. Raal: put some intellectual heft in it and then go, actually, this is just sounds, you know, and you have to, and as the author working alongside it, you have to really put a critical eye on. And that's where actually, know, we've, we've talked about this in the past. It's very helpful to have multiple agents that you can pass work to from and critique because you quite often then find out that the arguments are not good and the spine is not there and stuff like that. So yeah, it's very, it's very important that the ⁓ Nick Chubb: Yeah. Yeah. Raal: again, that brings us back to the point earlier about how train people to work with and where we want to have human oversight and where we want to feel it's important that the human has made the decision or the human has kind of put the original in and that sort of stuff. ⁓ Nick Chubb: Just a general shout out before we move on from this topic. If if anyone is trying to tackle those questions in their organization this mysterious project I keep talking about, I I'm interested in having a conversation with you. so please reach out. Drop me a message or or j stick a comment somewhere or or d find a way to reach me. I would be I would be I would love to have a chat with you about it. ⁓ Yeah. ⁓ Raal: That was... I may have to challenge you at this point because I think that was so obtuse. think A, people won't know what to do and B, won't welcome a lot of the input that you get. So I know what talking about. Nick Chubb: Well, I I don't know I don't know whether I'm quite there yet. But if i if you're responsible for rolling AI in your organization you're struggling with some of those questions around the of people, training, skills, measuring all this stuff, ⁓ how to your organization around it, drop me a message. I'd be very interested to just have a have a chat with you and try and learn more about that problem 'cause I'm I'm one, we're we're also it in our own organization, but two, as I've alluded to, I'm working on sort of side projects in that in that field. Raal: Very interesting, is all I can tell you. And would it be a subject that we're likely to cover at the Digital Ships Summit? Nick Chubb: ⁓ or ⁓ w even almost certainly. We absolutely will. We have a whole session. ⁓ doing all the plugging for me. This is great. We have a whole session planned as part of the Digital Ship Summit on AI and automation. ⁓ We've got a keynote from Peter I I don't really know Peter, but CTO of C SPAN. he is talking about their use and rollout of agentic AI in ship management. And they've done some really exciting stuff in terms of kind of how you go about building of dedicated agents for particular functions, and then how you go about making sure those agents have access the right information and that they can fetch information on the permissions of the user asking, all of that sort of stuff. is fascinating, really, really interesting. And he he will talk through their whole journey from I think about six years they started working on this stuff in earnest, how they've had to transform the to make it work, and then kind of results that they're seeing. we'll have a panel discussion on AI and and I think it's one of those topics that will come all the way through the ⁓ all the way through the session, no doubt. Raal: Yeah, so come, come and join us. It's in Athens as well. Nick Chubb: It's in Athens. It is hang on, let's if we're gonna do this, let's do it properly, shall we? Let let me build pull up all the details. it is in Athens on the fifteenth of October, twenty twenty six. we are planning ⁓ we haven't got the details worked out in it yet, every row, but we are planning some kind of undock live ⁓ to take Not not dissimilar to to what we did in in Bergen. and we'll possibly make it, you know, into the evening and have a few drinks around it. ⁓ so yeah, it would be great to see you there. If you're if you're a regular listener to the show, ⁓ we'd love to have Raal: That'd be some, yeah. Yeah. And just a reminder as well, like when we talk about it, this is a, I think, cause you mentioned that the sort of social aspects of it as well. think one of the things that I would say, one of the things I liked about this when we started talking about it at the beginning was that the community that we're trying to bring together is a very specific one, right? So this is, if you're into, if you have responsibility for technology in your company, if you are looking to, as Nick said, Nick Chubb: Okay. Raal: get the practical end of it. I'm not saying it's not going to be a good show for other people, but it's really, we are trying to focus on that community, right, with this show. Nick Chubb: Yeah, I was I was speaking to a a potential sponsor ⁓ other day and and they sort of said you it's it's a shame you're not getting more vest v fleet and and fleet management professionals into the room. And I just said, I I I think if that's who you're going after, then it's just it's not for you. and that's okay. Like we are we are doing a dedicated summit for maritime IT professionals. So if you're ⁓ if you're not doing IT and In your organization, it's bound to be a very, very boring day. if you are, I'd to think it's probably one of the only ⁓ sort of physical events ⁓ on the calendar that would be worth attending. So, you know, the the kind of general is that that IT has moved from being this kind back office function that sort of sat under the CFO to being a strategic function its own right that that drives transformation of the organization and and we want to bring a kind of peer community together to discuss what that means. And and yeah it's very for IT and digital. ⁓ Raal: this is what I was getting at because in experience with these sorts of when you get something that's really specific with a very specific community, you'll hear lots of great insight ⁓ from the but then you also get a lot of benefit of being to discuss and to talk to people in the bar, over coffee, breakfast, to actually get into some of, ⁓ to share war stories and some best practice and some, you know, to kind of able to work through some problems together. And that's, for me, that's the real benefit that you get from being physically together over being sort of, you remote. And as I said, it's community that often aren't the ones that get to travel to these kind of international events and don't get therefore get those benefit of those sort of side conversations and things. So come. Nick Chubb: Yeah, yeah, absolutely. Yeah, do come. we actually announced last week ⁓ our headline sponsors, so thank you to the teams at Insight and Smartsy for for for for joining us as our headline sponsors. we're really excited to have their expertise as well. Insight's one of the world's largest IT integrators and they have a a small but very dedicated maritime ⁓ team these days. and they're doing a lot of really interesting work with Smartsea on supporting the rollout of new platforms the ship management in particular. And obviously Smartsee are ⁓ 50% owned by SITA who run all of the aviation industry's kind of data standards. And so they're trying to take that kind of aviation approach to to data standardization and data platforms into the maritime sector. So I think it's a really interesting time for the industry. It's a really interesting time for and digital generally. And it's a really interesting time if you're a a CIIO in in the maritime sector. So make sure you're there. ⁓ Raal: And that us, I have to say to another story, which we didn't have time to talk about the other week. And these are our good friends at the doc. ⁓ because you mentioned there about the, you know, consolidation data layers, all that sort of stuff. This is the kind of background story, I think, to, what they've just done. So they've just published their, is it their sort of their report? I'm just trying to see what they call it now. They go, I've got it open here. Nick Chubb: Yeah. Raal: The maritime tech M &A, a decade of relentless consolidation. So they get this as their 2026 kind of report, which is a bit of a look back at the deals. You know them very well. We've talked about them before on the show. A few headlines that they're brought up on here. So since 2017, 381 transactions have taken place with deal activity accelerating rather than slowing. After just eight deals in 2017, annual volumes reached 52 deals in 2025 and 2526 projected to exceed a hundred transactions, making it the busiest two year period the industry has ever seen. So this is mergers and acquisitions going and they've got a really nice graphic. And if you go on their website, you can, and you follow this article, you can see the year on year deals and they've actually got this lovely interactive PDF where you can. you can click on the logos and see the deal and see what actually So yeah. Nick Chubb: it's it's it's always a really nicely presented piece of work this that comes out every year. I actually Nia from the doc me about it when went live I was on holiday the week it went live. ⁓ so I kinda text back saying, This week Nia, I actually don't care. but when I got back to my desk it was one of the first things I I had a look at. and I I think it's what's always interesting is ⁓ the Raal: Hmm. Nick Chubb: the kind of overall trend is the is the kind of growth of what what of of this opportunity and actually and kinda how much interest now is in private i from private equity as you will know in this and we've seen that from kind of twenty nineteen when we started seriously looking at this. Twenty nineteen through to seven years. you know, we've just seen that go up and up and up and up. And ⁓ and what's what's great about that is it gives who are working in this space, you a genuine exit path perhaps wasn't there. Certainly wasn't there ten ago, but probably wasn't there even even five years ago. Raal: Yeah. And I think the other thing as well is that these, the thing that's nice about these reports and these milestones and these kind of, you know, they've gone there. I think they, did they start 2016, something like that? think maybe started tracking this. 17. So it's not quite 10 years. Scrub that bit then Tom, cut that bit out. The thing that's nice about, the thing that's nice about when you kind of get these reports or these kind of milestone. Nick Chubb: Seventeen, I think. Yeah. Raal: bits where you look at it, it's where you can kind of start to look at the trends and that kind of thing. It's all interesting stuff was in there. Get take on this one, Nick. Vessel operations and autonomous shipping account for more than one third of all acquisitions. That's kind of an interesting one. And the other one, the other one, cybersecurity and maritime safety have almost doubled their share of deals since 2023. Nick Chubb: Yeah, that is interesting. Interesting. I could see ⁓ I mean cybersecurity that that makes sense because we we've had ⁓ guess something of a regulatory in in that world. Obviously the IMO Raal: anything from your research that leans on that. Yeah. Nick Chubb: pulled cyber risk management into ISM three years ago now. And the the new unified from class E twenty six, E twenty seven on cyber risk management into force last year for new built vessels and and over time will will will be in force for the fleet. So actually ⁓ that's gone from something was and again kind of what we were just talking about, that's gone from something that was kind of on you know on the on for a lot of ship owners to now becoming a a a genuine, important thing to to to to to think about. ⁓ Raal: Which worth saying real sweet spot for private equity. They are gamblers. They like things that have very strong kind of evidence and background and pull towards market growth. So yeah, and I we've had some big cyber security incidents, haven't we? sort of proceeding that. Sometimes I'm trying to think when the big ones were, but sort of, yeah, around that. Nick Chubb: Yeah. Raal: before that kind of thing. that will also put the spotlight on a lot of this stuff. ⁓ Maritime safety as a category. What would you put into that though? Because there's a bit of a mix of stuff could be in there. I don't know quite how they're like. Nick Chubb: Yeah. Yeah, that's an interesting one. don't know the numbers that they've pulled together, but I can tell you, this a this is a bit depressing. on on our own research, track we track ⁓ and A multiples. every year we do an kind of annual report of ⁓ of all of this ⁓ A activity, you know, what and what's the kind of multiple based on Raal: Yeah. Nick Chubb: You know, n number of times turnover or number of times profit that the company's been acquired for. So the average multiple in ship operations and management is 3.6, which ⁓ may may disappoint a lot of founders working in that space, but ⁓ often these multiples are actually far lower than than might expect. That's 3.6 times turnover. In safety vessels, it's Raal: Really? Mmm. Nick Chubb: So it's a it's a it's a relatively tough to build long enduring value in, I would say. ⁓ Raal: Hmm. Yeah, to see what's in there. I mean, I think the other one there, we glossed over that a little bit. So I jumped in on the cybersecurity one. The other one, the vessel operations, autonomous shipping, more than one third. I mean, fairly obvious, right? This is where there's sort big technology opportunity, right? So that makes sense. Nick Chubb: Yeah, and there was news actually recently. Hang on, just bear with me one sec, let just Need an edit. Raal: I'll take a drink at this point. Nick Chubb: there was news recently, just in the last week or so, that the International Group of P and I Clubs Which is the essentially the group of insurers for vessel So they cover the crew and they cover the cargo. They have that liabilities for autonomous vessels, including fully unmanned ⁓ will now be within the kind of shared insurance pooling arrangements. ⁓ So now we've the kind of IMO mass code, which is which has developed over the last few years and is is now sort of coming to fruition in a major way. Off the back of that, the insurance market's basically Raal: Okay. Nick Chubb: turn around and says, okay, actually we're we're kind of opening up the kind of insurance pathway for for autonomous vessels. And so that becomes a very, very interesting area. Raal: Yeah. the other thing as well, I those kinds of things as well, sort of vessel operations and autonomous shipping for the reasons that you mentioned there, they sort of go hand in hand, don't they? Because the same tools that are sort of enabling mariners are also, you know, the same things that will ultimately lead to potential for, as far as sort of navigational stuff goes and that kind of thing as well. So, ⁓ Nick Chubb: Yeah, and b and the potential to improve safety. you know, kind of s speaking on your last comment. Raal: What sorry Nick Chubb: I said just speaking on your last comment about safety, the the of autonomy to improve safety, ⁓ theory at least, is high. ⁓ ⁓ Raal: What, there's no people involved? Yes, yeah. ⁓ just one other as well, interesting to bring up again, nothing new to us here. We've talked about it a lot. In fact, we even talked about it in the sort of the copy and paste AI world that we talked about last week. Nick Chubb: Yeah, well there's fewer. Yeah. Raal: but private equity backed consolidations Vesson, Nautical, I say their name, ⁓ Kepler, big market aggressive acquirers. there's that sort of big consolidation around these sort of platforms and the sort of from lots and lots of fragmented ecosystem niche providers. Nick Chubb: Kepler. Raal: very specific and individual problems. ⁓ you know, ⁓ part because of what we were talking about earlier, it's the market consolidating around these platforms with broader capabilities, know, that sort of there's that convergence as well, which is also causing people to become competitors that perhaps weren't competitors before. And private sort changes the pace and the speed of this, right, in terms of what can, you know, can be done. Certainly, it's not true of all funds, there are certainly as ownership moves through different PE funds, amount of investment is pretty much limitless if the case, the business case is there and is strong enough so that, you know, that ⁓ is possible to make these big acquisitions, bolt these big companies together almost overnight, you know, certainly as far as the deal sort thing goes, it can move very, very fast. Nick Chubb: Yeah. Raal: potentially. And so if we get to a state where sort of fewer and fewer people are kind of in control of the digital infrastructure, that's, you know, that in itself is kind of interesting because the trend would appear to sort of to look towards consolidation as a major kind of trend in there as well. And then things we've talked about topics we've talked about before, but like, you know, what are the targets that you're doing? Are these kind of bolt-ons that sort of extend with cross-selling opportunities that but there's also things like the data as a strategic asset, because as we've said, it's getting easier to write ⁓ to write your own software, to connect applications. There's ⁓ of transforming data with AI that weren't possible before, or certainly at a reporting level, that's a lot easier than it used to be. And so actual ownership of the data itself, starts to take on much more relevance. We talked about that last week as there being sort of two sort of ways of looking at it. Is it the layer that really nicely and ably connects everything or is it actually having more and more of the kind of bits in there as well? And so I think these are the kind of things that are washing out the moment. But of course, you know, as I said, AI also potentially accelerating that. So it's one thing to make a play Nick Chubb: Yeah. Raal: as a PE house by buying businesses, your then challenge as I've lived through myself and we've had Heather from Ripple about this is a common thing, right, I'm gonna buy all these businesses, technology businesses, now my real challenge is working out how do I integrate them, how do I build a common roadmap from several different ones and please everyone and. you know, that's and deal with all the little customizations and integrations that we have with all these other different Of course, now that is also being transformed just as we talked about for people to be able to write their own middleware. Now I can put strategies together where there's whole kind of agentic software teams that can generate, you know, code a way and test code in a way that was never possible before. so the speed with which you can kind of then make good on your investment is is surely ⁓ up too. So yeah, very interesting to look at &A a think. It's interesting sobering what you're saying about the multiples. Have we seen, what's been, mean, putting you on the spot here, but what's been the kind of, well, I was actually thinking about outliers of, know, where have the real multiples been? Because some, ⁓ Nick Chubb: Some historical averages. Raal: In the SaaS world, some of those were talked about as sort 10, you know, like kind of not sure they ever materialized, Nick Chubb: Yeah. Well you you you dragged the average up, I think. don't know whether you you can talk about it these days, but I think yeah. Well not you personally. Well you know maybe you know, you maybe you personally. I you guys are around about ten X, which is which is above ⁓ so I'll you the median the the the mean tends to ⁓ get a bit one way or the other. But the the median revenue multiple in maritime software is three point three X. Raal: Personally, no. Nick Chubb: the median earnings yeah and the median earnings multiple is eleven x. so you're you're not talking about massive numbers. But don't forget that most maritime software exits to trade. Raal: It's a lot of isn't it? Nick Chubb: But as said, although it has changed in the last five years, is a relatively limited pool of trade buyers out there, ⁓ backed trade buyers who can actually do these kind of kinds of deals. It's saying our data lags. So, you but th there's been a lot of MA in the last couple of months that we have, we don't have numbers for yet. ⁓ Raal: Yeah. you make a good point. ⁓ lot has changed. The global picture has changed substantially. Money's not as cheap as it used to be. We've a lot of things happening our industry. AI has changed massively. I think maybe it's time for us to do an ⁓ &A special, maybe get Manish back and see what they've been doing. ⁓ Nick Chubb: Okay. Yeah. Yeah, there's a few people we could go out. Maybe we get a little little group together. Raal: Yeah, I think we should. owe it to our listeners because we started out talking about deals every week, mainly because there were deals every week and it's sort of as ⁓ &A quietened down. But I think this report shows us is that it hasn't really, it's just maybe the deals that we normally gravitate to because we're you ⁓ fascinated. Nick Chubb: Yeah. I could we should see if from Sednaughts come on 'cause he seems to be buying a company every t ten minutes. ⁓ and Marcura, the are the are the are the same. Henrik at Marcura, they they they seem to announce something every week, ⁓ th guys. So yeah, th all right, we'll we'll we'll see getting a a special pull together. ⁓ Okay. Raal: No. Yeah, so we. get back on that horse. But talked a lot about the software side of this and we tend to gravitate towards software, but technology more broadly, there's a lot going on there. Well, Lomar Labs was a big hardware discussion and you said that ⁓ you've some interesting things happening in shipbuilding. Nick Chubb: Yeah, I've I've I've i been a very interesting week in shipbuilding. It's been by maths, it's been seven billion dollar week. In terms of announcements in shipbuilding. But shipbuilding, know, because you're talking about making massive infrastructure investments, you know, most of the time it starts with a B. So it's it's not that exciting. But there's been announcements in last week that I think are worth having a chat about. one in India, so Tata, that that Tatar steel etc. etc. They have just applied. Raal: Ew, yeah. Nick Chubb: applied to the Indian government to get approval on a billion dollar shipbuilding investment that will be in Kerala. it will be their first foray into shipbuilding. and it's possible that the state will approve it, incredibly, will approve it in as in as little as a month and they'll provide the land and Tatar will put up billion dollars to actually build the yard. so India sort of coming into the shipbuilding game. ⁓ go on. ⁓ Raal: Well, you carry on. I'll come back with the questions at the end. Nick Chubb: Bangladesh, Malta Bari Green Dockyard in Bangladesh has just been given a green light and a billion dollars of financing as well for a shipbuilding and repair complex at Maltabari Deep Sea Port. so it's actually an Australian financer and Chinese equipment that's gonna go into the as the kind of technical partner. so that's gonna be a a two hundred acre estate with a with a ⁓ Pretty pretty chunky dry dock, 600 meters by 95 meters. so that will be able to take near enough the biggest vessels in in the world. we have, and this this ⁓ kind shocked me when I saw it, a three billion dollar investment into a next shipyard ⁓ in the United of Starting construction in 2026, this is this is actually quite interesting. Do you know the company Saronic? think I've mentioned them on the podcast once before. ⁓ ⁓ they they are an an advanced ⁓ advanced maritime autonomous primarily primarily for the defense sector. ⁓ and so they are building their shipyard in the US. and they're investing three billion dollars to do it in Texas. ⁓ Raal: I know the name. I can't remember where I've come across. Right. Where are they? In Texas. Yeah. Nick Chubb: Yeah. So I said about the the one in Bangladesh being two hundred acres, which sounds like a large site. This one is gonna be eight hundred and thirty five acres, room to grow to four thousand four hundred acres. they have the potential to build vessels as large as twelve hundred feet. Unfortunately I've got absolutely no idea how long a foot is versus a meter. I think that's four meter long vessels. So si you're talking about serious commercial vessels. so The world to be moving in ⁓ in the s in the shipbuilding market. ⁓ Raal: Well, I was gonna ask you, mean, USA, we know that this is almost unlikely. it's capitalist society, right? So normally they wouldn't be doing things that perhaps don't make sense commercially, but we do know that, I'm not saying it doesn't make sense make ships commercially, I have no idea, but there's a reason why they stopped doing it, right? And started. getting it done elsewhere. This is a political kind of, what's the word for it? Sort of self-sufficiency kind of thing, right? And I imagine behind it, this is part of that whole policy, because Trump was mandating this. So I guess money is less of an object, right? Nick Chubb: Absolutely. Well th this is the the kind of interesting trend is that shipbuilding is becoming a big part of geopolitics. ⁓ and I go on. Raal: Well, it's, yeah. on, please. I but I want to hear yours first. Nick Chubb: Let let me let let me unpack why. do know what percentage of new orders took in Q one twenty twenty six? Raal: I don't actually. Nick Chubb: Eighty five percent. Raal: Wow. Nick Chubb: Yeah, eighty-five percent of Q one new build ordering went to China. So Clarkson's put H one new building or H one new orders eighty-one percent for twenty-six ⁓ and did sixty-three percent of output in H one twenty twenty-six. China owns owns, is that the ⁓ China ⁓ has booked point three percent of all of the global outstanding order book. So Korea comes next. Raal: Yeah. Nick Chubb: and then depending on how you measure it, they take roughly thirteen to twenty percent. ⁓ then and then do you know who's third place? Raal: Mm-hmm. Well, Historically, Japan, I would imagine, but it's probably... Is it Japan? Nick Chubb: It is Japan and and Japan is in third place for Q1 2026 they took percent of new build orders. the third place ⁓ in this is is percent. and you know you talk about power laws in in specific markets. ⁓ there is a power law at play here and China is the one at the forefront of it. ⁓ Raal: ⁓ dear. It's 1 % Yeah. away with it in big style, isn't it? the other one ⁓ I didn't want to overlook was the investment. I was keen understand that whether that's a national fleet that they're building there. Because I know there's this kind of appetite to, again, for self-sufficiency and to kind of say, well, look, on, we're number two crew supply and we don't have ship. our own shipbuilding and relatively modest management out of India as well. Nick Chubb: Set. So so at the national level is an eight billion ⁓ package in place from the Indian government. ⁓ called the Maritime Development Fund the express aim of developing maritime infrastructure. So ⁓ today, ch today India sits somewhere between 16th and 22nd globally ⁓ for depending on how you measure it. And their aim to kind of get themselves into being a kind of five shipbuilder by by the early 2030s. They want to be sorry, top five by twenty forty seven, ⁓ top ten by twenty thirty. Raal: That's it. That's it, You So what the top five by your current statistics means they need about 0.5. No, but it's a good aim. It's a good aim. You'll only beat what's there, can't you? But the, no, but I mean, you know, it's fascinating. mean, because this is the thing in a globalized world, we've sort of delegated all sorts of things to different, you know, different partners across the world, be it technology, be it. Nick Chubb: Yeah, yeah, yeah. you're right. It doesn't take much necessarily. ⁓ Raal: you know, I mean, look at us here in UK, right? If we're dependent USAI, 100%, right? And as that becomes more and more integrated, you know, it's something you've got to think about. And clearly ships are a massive part of as well. We've seen what's happened once you start to put a choke hold on. on different routes and things like that. geopolitics is changing the game. We talked about again, the shadow fleet and what's going on with and how that is impacting in Baltics and places like that where they're seeing activity and ⁓ so interesting times we're living in. I wonder, it's one thing to ships, you've also got to manage them, you've got to have seafarers to... Nick Chubb: Yeah. So the the Raal: to man those vessels, is gonna be the next discussion? You know, some real energy into getting our own merchant seafarers in some of these. I mean, obviously India don't have a problem, but certainly I would imagine, I don't know how many US seafarers we have these days, but imagine it's nothing like it used to be, and just as it is here. So, interesting. Nick Chubb: Yeah. But it Yeah, well in in the the conversation I had in Bergen with Andreas Enger from Hogue Linus, he he talked about the fact that If we don't buy these ships from China, Chinese will buy them themselves. ⁓ so in the short term, probably actually the what you have to do is engage with the with with China's shipbuilding 'cause there literally isn't an alternative. But there is a a kind of effort around the world to build out shipbuilding capacity. so it's so it's yeah, America has the kind of maritime action plan. The Korean government's launched something called MASGA, is their kind of policy package to support shipbuilding. Japan has a trillion yen fund and roadmap, a yen. I'm not actually sure that's that impressive when you ⁓ convert it into into dollars, but and then obviously in the Indian government's eight billion dollar package that I that I mentioned. ⁓ The EU now has launched industrial maritime strategy as well, and so looking at kind of specialist shipbuilding in ac across Europe. but I spotted quite an interesting term that I'd never heard before I was researching this. something called friendshoring. ⁓ You have you ever heard that term? It's it was a new one on me. ⁓ Raal: Hmm, I have heard that. Yeah, not in this context, but Nick Chubb: but essentially saying that, you know, if you take the US as one the two major global superpowers, it can't build out enough shipyard capacity in a short space of time. So now the of strategic view is that they need to friendshore, and that means getting much, much closer to Japan and Korea, where the shipbuilding capacity exists. Obviously the US, Japan and Korea are historically, or at least for the last half of the twentieth century, historically been very close. and and so n Now they're going from the kind of MAGA view of ⁓ we to absolutely make sure that we are only investing US shipbuilding ⁓ to looking things like the Jones Act and how actually you can make it possible ⁓ to expand Jones Act to include Japanese-built and Korean-built vessels, because there's no other way realistically for the kind US to compete with compete with China, which I thought was quite interesting. ⁓ Raal: Yeah, well on those numbers and statistics you mentioned there, that's pretty staggering. You can see why it would worry them, though. Nick Chubb: And then give you one more, which into everything else we we talked about, one more little sort of emerging trend on shipbuilding. HD Korea, which is Humanized Shipbuilding, has partnered with a company called Nava Cloud to build an AI and cloud platform designed specifically for shipbuilding. They're taking 200 million shipbuilding and marine records to train sector-specific AI models. the idea is that they want to build physical AI. Can ⁓ span cloud infrastructure, AI factor factories, robotics, data centers, and software-driven ships. and so they're basically taking all of the shipbuilding knowledge that they've built over the last you know, 50, 60 years, whatever, to build their their kind of quoted end game is an AI-based intelligent smart shipyard and vessels that controlled, managed, and updated through software after delivery. So it's kind of moving more in the direction of the kind of Tesla model of how you go building a fleet of ships. ⁓ And actually the same. Raal: Yeah. Nick Chubb: Thing has happened in China, CSSC, which one of the major Chinese yards, has also begun training AI models for ship design using very similar thing, using a data pool to help interpret design rules and organize technical information. So not only this kind of hotting up globally, the the kind of for is exceptionally high. ⁓ Raal: And where we then see, we've got a new Prime Minister in the country, in the UK now, where we see a resurgence of the, I'm not sure you could bring them back, but there was a ship building on the Tyne and all that sort of stuff. It starts to look very short-sighted to have closed all these plants down, doesn't it? And in Scotland as well. So know, just interesting the way the wheel turns and yeah. if go on. Nick Chubb: There was. Yeah, well it's it it i I ha I have met the because Boris Johnson created a National Shipbuilding Office, who I meet with. but I I don't think I've I'll be careful with my words here. ⁓ I don't think the plans the National Shipbuilding Office were particularly I they were neither ambitious nor ⁓ is is probably as as polite as I'll be about them. ⁓ and so Raal: a terrible combination. want them at least to be ambitious if they're not realistic. Nick Chubb: and so I ⁓ I'm not expecting a great deal ⁓ out of that. But I will say one caution, one caveat on all of this, because I I don't want everyone to go and start investing in shipbuilding necessarily. the global order book is at a 17-year high. so 17% ⁓ of the fleet is currently on order and so, you know, we we are kind of looking at the days of ship ordering mania that we that had that we've had about, you know, ⁓ exactly. And what happens when there's mass Raal: mass-overset ply. Yes, and the rates go through the toilet. Yeah, and if want to some sense of what happens shipyards close down, I can ⁓ recommend the Shipbuilding, particularly the Robert version, which is heartbreaking. Look it up if got Spotify. Beautiful song. I think it's actually Nick Lowe maybe wrote it. ⁓ Nick Chubb: If you'd like to hear a live rendition, Ral will be performing at the Rosencrown Pub in Brighton. Yeah. Is it? All right. Raal: We do the karaoke. Yeah, it's one of my go-to karaoke, so yeah, when I'm feeling depressed. So there we are. hour in our company and we've ended up depressing me talking about. But the north rise again. And so will Whatever happens, we go through these boom and bust cycles. but yeah, interesting times. Nick Chubb: Okay. Ha ha ha. We're always there. Well, on that happy note, should we call it a day there? Raal: think we should give Tom half a chance. Nick Chubb: Yeah. Thanks everyone. Have a wonderful week wherever you are and see you soon, Rolf. ⁓ Raal: Cheers. Bye bye.