For a couple of years we have been trying to have Dr. Kokarakis “on the record” and have his views on many shipping issues, paramount for shipping, particularly within the coming decade, in a very much changing Shipping Industry. We are very pleased he took his time and we come up with an excellent interview.
John Faraclas / All About Shipping: What are the key strategic elements of BV’s technology in supporting both internal and external clients?
Dr. John Kokarakis / BV: Bureau Veritas (BV) has developed a comprehensive strategy that integrates technology to support both internal and external clients effectively. Here are the key strategic elements of BV’s technology in this context
- Digital Transformation Initiatives
BV is committed to embracing digital transformation as a core part of its growth strategy. This includes leveraging advanced technologies to enhance operational efficiency, responsiveness, and value creation for clients. The adoption of platforms like Dassault Systèmes’ 3DEXPERIENCE is pivotal in improving productivity and ensuring compliance, particularly in the marine and offshore sectors. - Cloud-Based Enterprise Systems
The implementation of scalable, cloud-based enterprise systems allows BV to streamline its global operations across various functions such as human resources, finance, and sales. This infrastructure supports real-time data capture and enhances service delivery, enabling BV to respond more effectively to client needs. - Artificial Intelligence (AI) Integration
BV has partnered with Microsoft to incorporate AI into its laboratory testing services. This collaboration aims to optimize testing processes and improve service efficiency by utilizing machine learning and advanced data analysis techniques. The integration of AI helps in delivering more accurate results and enhances the overall customer experience. - Tech-Augmented Service Models
BV is developing new tech-augmented service models that require innovative skills and competencies. These models enable experts to focus on value-added activities while improving productivity and customer service quality. By utilizing technology, BV enhances its ability to meet the evolving demands of clients. - Sustainability Support Services
As clients increasingly pursue sustainable practices, BV leverages its technological capabilities to offer services that support their sustainability journeys. This includes providing advisory services on corporate strategy, operational transformation, and non-financial reporting, all facilitated by advanced digital tools. - Enhanced Data Management Solutions
BV has introduced digital solutions like the Maia+ portal and MyRadar dashboard, which facilitate better data management and transparency in ESG assessments. These tools enable clients to track their sustainability performance effectively, making it easier to identify non-conformities and develop corrective action plans.
Through the aforementioned strategic elements, Bureau Veritas effectively utilizes technology to enhance its service offerings, improve operational efficiency, and support clients in navigating complex regulatory environments while also addressing sustainability challenges. The focus on digital transformation positions BV as a leader in providing innovative solutions tailored to the needs of its diverse client base.
JF/AAS: Do you see BV’s future more as a regulatory body or as a service provider? Do you believe consultancy services will eventually surpass the needs for regulatory compliance?
JK/BV: Bureau Veritas (BV) is positioned at a unique intersection of regulatory compliance and service provision, and its future likely encompasses both roles rather than favouring one over the other. Insights into how BV’s trajectory may unfold in these areas:
Regulatory Body vs. Service Provider
Dual Role: BV operates as both a regulatory body and a service provider. It offers certification and compliance services that are essential for meeting industry regulations while also providing consultancy services that help clients navigate complex regulatory environments.
Certification Initiatives: Recent developments, such as BV becoming a certification body for the CertifHy™ hydrogen scheme, illustrate its role in regulatory compliance. This initiative supports the hydrogen market by providing certified proof of origin, aligning with global decarbonization efforts and regulatory frameworks aimed at sustainability.
Consultancy Services Growth
Increasing Demand for Consultancy: There is a growing trend among businesses to seek consultancy services that go beyond mere compliance. Companies are increasingly focused on sustainability, operational efficiency, and risk management, which positions BV’s consultancy services as vital in helping clients achieve their strategic goals.
Integration of Technology: BV’s investments in technology, such as AI-powered solutions for sustainability planning, indicate a shift towards more comprehensive service offerings that can address both compliance and strategic business needs. This integration enhances BV’s ability to provide value-added services that may surpass traditional regulatory compliance.
Future Outlook
Evolving Market Needs: As industries face more stringent regulations and heightened public scrutiny regarding sustainability practices, the demand for consultancy services is likely to grow. BV’s strategic focus on expanding its sustainability services aligns with this trend, suggesting that consultancy could become a more prominent aspect of its business model.
Balancing Compliance and Consultancy: While regulatory compliance will remain a critical function for BV, the expansion of consultancy services may lead to a scenario where these services complement rather than compete with compliance needs. Clients may increasingly rely on BV not just for meeting regulations but also for strategic insights that drive business performance.
In summary, Bureau Veritas is poised to continue its dual role as both a regulatory body and a service provider. The increasing emphasis on sustainability and operational excellence suggests that consultancy services will become increasingly significant, potentially surpassing traditional needs for regulatory compliance in some sectors. As BV evolves, it will likely enhance its offerings to meet the changing demands of its clients while maintaining its foundational role in ensuring compliance with industry standards.
JF/AAS:Is artificial intelligence a component of BV’s technology strategy? How do you envision AI being used within BV and for your clients?
JK/BV: Artificial Intelligence (AI) is a significant component of Bureau Veritas’s (BV) technology strategy. The company has actively integrated AI into various aspects of its operations to enhance service delivery and improve client outcomes. Here’s how AI is being utilized within BV and for its clients:
- Sustainability Planning and Emissions Analysis
BV recently acquired Aligned Incentives, a company specializing in AI-powered sustainability planning solutions. This acquisition aims to enhance BV’s capabilities in analyzing Scope 3 emissions—indirect emissions from a company’s value chain. The integration of Aligned Incentives’ AITrack software allows BV to provide detailed life cycle assessments (LCA) of products, helping clients understand and manage their environmental impact more effectively. - Augmented Laboratory Testing
BV has launched “Augmented Labs,” which utilize an AI program named CHARLES®. CHARLES® is an AI platform-driven oil analysis which identifies precursors of wear on equipment or changes in fluid conditions. This AI enhances laboratory testing by:
Accelerating Data Analysis: CHARLES® analyzes thousands of data points faster than human technicians, allowing them to focus on more complex testing issues.
Learning and Adapting: The AI system improves over time by recognizing sample patterns, which increases the accuracy and efficiency of testing processes. - Automation and Efficiency in Asset Management
Through partnerships with AI technology providers like super.AI, BV has automated data extraction from equipment nameplates. This automation improves the accuracy of inventory tracking and condition assessments, enabling more efficient preventative maintenance activities. By leveraging AI for these tasks, BV can scale its operations and reduce costs associated with manual processes. - Enhanced Client Services
AI-driven solutions enable BV to offer tailored assessments and insights into clients’ operations, particularly in sustainability metrics and compliance reporting. This capability is crucial for clients aiming to meet environmental, social, and governance (ESG) standards with greater precision and speed.
The Future
As BV continues to integrate AI into its services, it envisions:
Broader Applications: Extending AI capabilities across all testing services offered by BV globally, enhancing quality assurance across various industries.
Improved Decision-Making: Providing clients with actionable insights derived from advanced data analytics, helping them make informed decisions regarding sustainability and operational efficiency.
Overall, artificial intelligence is not just a component but a transformative element of Bureau Veritas’s technology strategy. By incorporating AI into its operations, BV enhances its ability to support clients in navigating complex regulatory landscapes while promoting sustainability and operational excellence. The future use of AI within BV is likely to expand further, providing even more innovative solutions tailored to client needs.
JF/AAS: Has your company encountered any conflicts of interest when providing consultancy services to clients? If so, how have these been addressed and resolved?
JK/BV:Bureau Veritas (BV) has encountered conflicts of interest, particularly in its consultancy services, notably during its partnership with GreenBizCheck.
Specific Conflicts Encountered
Partnership with GreenBizCheck:
In 2011, BV entered into a formal partnership with GreenBizCheck, which involved BV conducting assessments for clients of this consultancy as part of an unaccredited environmental certification program. This relationship raised concerns about potential conflicts of interest because BV was also responsible for ISO 14001 certification, leading to allegations that BV could not objectively assess GBC clients without bias due to financial ties1.
Marketing materials from GreenBizCheck implied that clients would benefit from a “substantially lower cost” and a streamlined process for obtaining ISO 14001 certification through BV, which was against the principles outlined in ISO 17021 that prohibit such claims.
Addressing and Resolving Conflicts
Internal Policies:
BV has established a Code of Ethics and a Conflict of Interest Policy that mandates employees to avoid situations that may influence their judgment or create potential conflicts. Employees are required to report any commitments or links that could lead to conflicts of interest.
The policies emphasize independence in assessment and prohibit any arrangements that could compromise objectivity, ensuring that all employees are aware of the importance of maintaining impartiality in their roles.
Actions Taken:
Following the emergence of concerns regarding the partnership with GreenBizCheck, BV management denied any improper claims made by GBC regarding their relationship and requested the removal of misleading marketing materials. They asserted that they had previously asked GBC to correct these claims, indicating an effort to address the conflict proactively1.
BV’s General Manager publicly stated that while the partnership existed, it did not create an insurmountable conflict as long as proper protocols were followed. However, this assertion has been contested by external parties who argue that financial relationships inherently create bias in assessments.
While Bureau Veritas has implemented policies and taken steps to mitigate conflicts of interest, such as clarifying its relationship with consulting partners and enforcing ethical guidelines, challenges remain. The situation with GreenBizCheck exemplifies the complexities involved in balancing consultancy services with regulatory compliance. Ongoing vigilance and adherence to established ethical standards will be crucial for BV to maintain its credibility and integrity in both consultancy and certification roles moving forward.
JF/AAS: How do you perceive the impact of the new U.S. administration’s alternative fuels policy? How do you expect it to influence your company’s BV’s strategy?
JK/BV: The new U.S. administration’s alternative fuels policy is expected to have a significant impact on the maritime industry and, consequently, on Bureau Veritas’s (BV) strategy. Here are the key aspects of this influence:
- Increased Focus on Decarbonization
The administration’s commitment to alternative fuels aligns with global decarbonization goals, emphasizing the need for sustainable practices across industries, including shipping. BV has already laid out a “well-to-wake” approach that evaluates the environmental impact of alternative fuels through comprehensive life-cycle analysis. This focus will likely intensify as regulatory frameworks become more stringent, pushing BV to enhance its consultancy services in sustainability and emissions reduction strategies for clients. - Collaboration with Production Chains
As highlighted by BV, achieving decarbonization will require unprecedented collaboration with production chains. The U.S. policy may foster partnerships among stakeholders in the alternative fuels sector, including producers, regulators, and shipping companies. BV is positioned to facilitate these collaborations by providing expertise in compliance and certification processes related to alternative fuels. - Adaptation of Services and Offerings
BV’s strategy may evolve to include more robust advisory services focused on the implementation of alternative fuel technologies and compliance with new regulations. This could involve developing tailored solutions for clients transitioning to low-carbon fuels, ensuring they meet both regulatory requirements and sustainability goals. - Regulatory Navigation
With the introduction of new policies, BV will likely play a crucial role in helping clients navigate the evolving regulatory landscape surrounding alternative fuels. This includes providing guidance on compliance with U.S. regulations and international standards that govern emissions and fuel usage in shipping.
The impact of the new U.S. administration’s alternative fuels policy is expected to drive significant changes in BV’s strategic focus towards sustainability, regulatory compliance, and collaboration within the maritime industry. By enhancing its services related to alternative fuels and emissions reduction, BV can position itself as a leader in supporting clients through this transition while contributing to global decarbonization efforts.
JF/AAS: Do you foresee a future where Classification Societies primarily serve as consultants to shipowners and shipyards rather than functioning as traditional regulatory bodies?
JK/BV: The future of classification societies, such as Bureau Veritas (BV), may indeed see a shift towards primarily serving as consultants to shipowners and shipyards rather than functioning solely as traditional regulatory bodies. This evolution is influenced by several factors:
Changing Industry Needs
The maritime industry is undergoing significant transformations driven by digitalization, decarbonization, and the adoption of alternative fuels. As these changes unfold, shipowners and shipyards increasingly require expert guidance on navigating new technologies and compliance with evolving environmental regulations. Classification societies are well-positioned to provide this consultancy, leveraging their technical expertise and industry knowledge.
Expansion of Roles
Classification societies have historically been seen as regulatory bodies focused on safety and compliance. However, there is a growing recognition that their roles must expand to include advisory services that address broader operational challenges. This includes consulting on sustainability practices, risk management, and the implementation of innovative technologies such as autonomous vessels and digital systems. The dual role of being both a regulator and a consultant allows classification societies to add value beyond mere compliance checks.
Proactive Regulation
The shift from reactive to proactive regulation is evident in the maritime sector. Classification societies are increasingly involved in fostering a safety culture and promoting best practices within the industry. This proactive approach aligns with their potential to serve more as trusted advisors who help clients anticipate regulatory changes and implement effective strategies.
Integration of Technology
The integration of advanced technologies, including AI and data analytics, enables classification societies to enhance their consultancy offerings. These technologies can provide insights into operational efficiencies, safety improvements, and environmental impact assessments, further solidifying the role of classification societies as essential partners for shipowners and shipyards.
Market Competition
As competition among classification societies increases, there is pressure to differentiate services. Offering comprehensive consultancy services can be a key differentiator that attracts clients looking for more than just regulatory compliance.
In summary, while classification societies will continue to fulfil their traditional roles in ensuring safety and compliance, there is a clear trajectory towards becoming more prominent consultants within the maritime industry. This evolution reflects the changing needs of shipowners and shipyards in an increasingly complex regulatory environment, where expert guidance on sustainability and technological advancements is essential for success. As this trend continues, classification societies like BV will likely play a crucial role in shaping the future of maritime operations through their expanded consultancy services.
JF/AAS: Which emerging technology is the Greek market most eager to adopt, and conversely, which technology has it shown the least interest?
JK/BV: The Greek maritime industry is currently most eager to adopt artificial intelligence (AI) and big data analytics while showing the least interest in blockchain technology.
Most Eagerly Adopted Technology: Artificial Intelligence (AI) and Big Data
Operational Optimization: AI and big data are being actively embraced to enhance fleet performance, optimize routing, improve fuel efficiency, and predict maintenance needs. These technologies allow Greek shipowners to reduce costs and improve sustainability, aligning with global decarbonization goals.
Sustainability Goals: AI-powered tools are helping Greek shipping companies comply with IMO regulations like CII (Carbon Intensity Indicator) and EEXI (Energy Efficiency Existing Ship Index). This is particularly relevant as Greece remains a global leader in shipping tonnage, necessitating efficient operations.
Focus on Autonomous Vessels: The Greek market is also exploring autonomous vessel technologies, which rely heavily on AI for navigation and operational safety. Trials and discussions around these technologies are gaining traction as part of the broader push towards smart shipping.
Least Interest: Blockchain Technology
Limited Adoption: Despite its potential to streamline documentation, enhance transparency, and reduce fraud in maritime logistics, blockchain adoption remains limited in the Greek maritime sector. While there is recognition of its benefits (e.g., smart contracts and secure cargo tracking), the technology has not gained widespread traction due to:
Complexity of Implementation: Many stakeholders find blockchain systems challenging to integrate into existing workflows.
Regulatory Uncertainty: The lack of clear global standards for blockchain in shipping creates hesitation among Greek shipowners.
Lower Perceived ROI: Compared to AI or digitalization tools, blockchain’s immediate cost-saving potential is less apparent, making it a lower priority for investment.
The Greek maritime industry is prioritizing technologies like AI and big data that deliver immediate operational and regulatory benefits. In contrast, blockchain technology has yet to capture significant interest due to implementation challenges and unclear value propositions. As the industry evolves, this dynamic may shift depending on advancements in blockchain applications and regulatory clarity.
JF/AAS: Thank you Dr. Kokarakis; it has been a pleasure having you onboard www.allaboutshipping-co-uk.preview-domain.com with so many issues and we believe same will attract the interest of our global viewers and a discussion can begin.
