Digitalization and Green Concept

Message from the Chief Executive of Technical Headquarters

Integrating the Power of Our Technical Headquarters to Accelerate Value Creation

Tomoyuki Koyama

Senior Managing Executive Officer
Chief Safety Officer (Marine)
Chief Information Officer
Chairman of Group IT Strategy Committee
Chief Executive of Technical Headquarters
(Executive Chief of Environmental Management, Chairman of Technology Strategy Committee)

At the NYK Group, safety and the environment are the most important challenges when it comes to promoting ESG man-agement. I believe the key to addressing these challenges lies in how much of the power of our Technical Headquarters we can integrate. We have formulated a Vessel Technology and Innovation Road Map, which shows various time frames and research domains toward 2050. This road map includes the NYK SUPER ECO SHIP 2050, a concept ship, factoring in the environment in ESG. In addition, we are progressing R&D to realize safe operations and to develop carbon-free vessels.

Further, we have set medium- to long-term environmental targets that anticipate the reduction of CO2 emissions from vessels and the ripple effect down to the supply chain. As a first step toward reaching these targets, we are investigating the introduction of LNG-fueled vessels in line with our new building plan. However, LNG fuel is considered as a bridging solution for reducing our carbon footprint, we are extremely keen in developing zero-emission vessels by switching fuels to either Ammonia or hydrogen, which we plan to introduce around 2030. On top of fuel changes, we continue to pursue innovative hull and machinery design to curtail CO2 emissions. Having said so, dramatic improvements in operational efficiency are needed as the contribution of hardware innovation to decarbonization is limited at least before the zero-emission vessels era. We are confident that through the cooperation of our customers together with our digital transformation, we will be achieve our goals.

The function of Technical headquarters includes New Building, Fleet Safety, Environment, ICT, Digitalization and 130 employees are working for those. NYK also has four R&D arms—MTI Co., Ltd, Japan Marine Science Inc., NYK Business Systems Co., Ltd., and Symphony Creative Solutions Pte. Ltd.– which makes the NYK Group unique and strong. It is because of this organizational strength and our solid track record that we are able to engage in open collaboration with marine equip-ment manufacturers, shipyards, and companies outside the maritime cluster. Moreover, in June 2020 we made the deci-sion to become a founding member of the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, a research center dedicated to promoting decarbonization within the maritime industry by converting to alternative fuels.

The Technical Headquarters has two major areas of focus: infrastructure technology to support business and cutting-edge technology aimed at differentiating the Group from others. The former refers to technology that supports the foundation of the Group's business, such as new buildings, ship management, and IT infrastructure, including cybersecurity. Without this technology, operations would not continue even for a day. The latter refers to technology directed toward the future, keeping us a half-step ahead of the competition. SIMS, a ship informa-tion management system introduced in 2008, is one of our trailblazers in cutting-edge technology. This system accumu-lates voyage data and weather and sea conditions as big data, provides engine performance analysis and condition-based maintenance (CBM),* among other functions, and is leading to the development of manned autonomous ships. The ship management data sharing platform NiBiKi, which went into full-scale operation from 2019, has made it possible to convert the human element of onboard operations into big data as well. I believe that the ability to analyze the data collected by SIMS and NiBiKi by the Group's engineers is what differentiates us and will lead to future business returns.

  • *CBM is preventative action that continually monitors the status of equipment anomaly on board so that maintenance can be performed before breakdown. As a result, advanced engine plant operations can be expected.

Digitalization and Green Initiatives

In March 2018, the Group announced its new medium-term management plan "Staying Ahead 2022 with Digitalization and Green," which is being promoted throughout the Group as the path for survival.

Collaboration with not only other companies in the same industry but also with other industries is crucial. Also investments, which were overly inclined toward hardware in the past, are shifting to the so-called era of software. Digitalization is the embodiment of software, and with the help of software, we will dare to differentiate our company from the rest. The use of our Ship Information Management System, or SIMS, a system for gathering and analyzing operation data on a real-time basis, is a representative example of our company's drive toward digitalization. We want to be able to analyze massive amounts of accumulated operation data with the help of AI (artificial intelligence), and then use the results in predicting dangers and defects or failures during navigation. We will be able to visualize the future of new ships, such as autonomous ships, once we get there.

Our Green initiative comprises three components. The first is compliance with rules, including the 2020 sulfur oxide (SOx) emission regulation. The second is the reduction of carbon dioxide (CO2) emissions, and since this is directly linked to energy saving, we will promote the enhancement of efficiency in both the operation and hardware sides. And the third is commercialization in the environment field, which includes various areas of interest, such as LNG Bunkering Business, wind-power generation, biomass, hydrogen and ammonia, and green terminals. One of the commercialization projects that we have already concluded is a wind-power generation project at a completed car terminal in Belgium's Zeebrugge port.

Create New Value with Digitalization and Green

Leveraging Creative Solutions as a Source of Differentiation

"Creative solutions" is the continuing theme from the previous medium-term management plan "More Than Shipping 2018." The Group is combining creative solutions from the entire Group to achieve further differentiation and create additional value.

Encouraging Innovation through the Creative Solutions Support System

Aiming to discover and foster creative solutions among group companies and build an environment conducive to creating new businesses, we set up the Creative Solutions Development Fund in 2014. In August 2017, we renamed it the Creative Solutions Support System, but it continues to function as originally intended. Drives for applications have resulted in 84 submissions, approximately 20 percent of which have been selected for support.
The aim of the inaugural project was to establish a business based on the system, and Symphony Creative Solutions Pte. Ltd. (SCS) was thus jointly formed in Singapore in March 2016 by NYK, its group companies the Monohakobi Technology Institute (MTI) and NYK Business Systems Co. Ltd., Weathernews Inc., and Kozo Keikaku Engineering Inc. The new company is tasked with developing and providing next-generation solutions in the shipping and logistics fields. Accordingly, SCS will take advantage of the frontline capabilities, technological expertise, and networks of the shareholder companies to rapidly advance the development of innovative solutions that cater to increasingly sophisticated needs in logistics frontline operations. Given the growing difficulty of establishing differentiation as IoT becomes more common, the system will add impetus to projects and initiatives that create high-value-added services based on insights into customers' precise needs.

An Example of the Creative Solutions Support System
Diver cleaning a vessel bottom under water

Capitalizing on expertise cultivated over many years, Yusen Navtec Co. Ltd. upgrades devices and collaborates with the Headquarter's Dry Bulk Marine Quality Control Group to ensure that the cleaning of vessel bottoms in Japan and overseas complies with the Group's standards. These activities could contribute to the Group's competitiveness because they have the potential to be used for vessel types other than dry bulk carriers and to accelerate fuel-saving efforts. With this in mind, the system is supporting efforts to establish upgraded devices as intellectual properties and select and conduct negotiations with local providers of services for the cleaning of vessel bottoms overseas.

NYK Digital Academy

Human resources are the most important driver of sustainable growth in a company.
The NYK Group's business environment is experiencing major changes, such as the
advancement of digital technologies, requiring us to radically revise our conventional business models. We have established the NYK Digital Academy in September 2019 to develop human resources who will lead the Group in the future.

Types of Human Resources We Aim to Cultivate:

  • Business leaders who will lead the Group by opening new markets, creating new businesses, and inspiring internal transformation
  • Project leaders who will drive internal reforms and innovation

Lectures:

One two-hour lecture/week (total lecture time: 124 hours/participant)

Schedule:

Foundational studies (two months), practicum (four months)
Upon graduating from the program, participants receive a completion certificate

Follow-up:

Six months after the program