In 2021, when we raised our Seed Round at Y-Combinator, our thesis was that we could optimise crew changes, deliver cost savings, and apply the same methodology to other owners’ expenses. Consumables, Lubes, Port Agency, Bunkers… we would coordinate the most efficient port to do those transactions.

But we were very careful to exclude cargo.

What I liked about the owner's expenses was that there was no competition. Our business model was to optimise where and when a transaction happened. Many people asked why we were not applying the same methodology to cargo?

Typically, I responded, “We have identified a Blue Ocean with no competition. The Total Addressable Market (TAM) is huge, and we can play in a safe space where we’ll have the advantage. Greywing is applying techniques to owners' expenses that, so far, have only been applied in the cargo space. If we enter cargo, we are entering a Red Ocean. With experienced, well-funded competition and a much harder, more competitive space to stand out in. Our model is to focus on owners OPEX, to build the business in a less competitive space where we can advantage more quickly.

The truth was, I didn’t think we would be able to stand out in the cargo space in a compelling way. We did not have a technical, financing or similar edge to compete. Our first criterion for any space we worked in was that we had to be able to win in that space. And that was not true of cargo.

Generative AI Changes Everything

This all changed in August of 2023.

We had completed a crewing project with one of our clients who had both an in-house fleet and a chartered fleet. Their core competence was the Commercial operation of vessels. We had been working together for nine months, had delivered a first-of-its-kind solution, and we were catching up after the project had been delivered.

We had spoken about a few additional projects that we might pursue together. Adding a procurement vertical for Spare Parts to complement our crewing solution was one of the suggestions. Creating a Generative AI tool to converse with all of the company’s data was another (The thinking was we could help the client retain institutional knowledge even after people had retired by gathering insights and direction from their reports, emails and other historical documentation).

But then the client abruptly stopped talking, took a deep breath and sat back in their chair. He looked me straight in the eye and said…

"The most significant wave of technology transformation in the world is Generative AI and Chat GPT. We have not seen anyone else as far along as Greywing on this. The work you have done on automating crewing operations is exceptional.
Given that the most significant part of our business is as a Commercial Operator, and your unique strength is Greywing's experience in Generative AI, maybe we should find an overlap between those so that the work that we do has the greatest opportunity to have a material impact on our core business; Commercial Management."

This was where our focus on deploying technology in Chartering and Commercial Operations began to change. It was no longer true that we did not have a competitive edge that would allow us to provide unique value in the Commercial Operations space of shipping.

We Start Talking to Chartering Managers

That conversation led to brainstorming sessions with three different Chartering & Commercial Teams where Greywing’s application of Generative AI could help them develop an edge over their competition.

Usually, the way the meetings go is that initially, the Chartering Manager says,

“I am in favour of innovation,I love what you guys have done in crewing. But I just feel that it is unlikely you can help us given the interpersonal nature of our business.”

Once they see a demonstration, they only have two questions,

1. “When can you deliver this?”
2. “How much does it cost?”

Now we have contracts with two of those three companies.

I’ll get into the problems that we solve in my next article. Before I sign off, I’d like to answer the question of why we are making this transition.

If we do a great job and save our clients 1% on a vessel's crewing OPEX, that is about US$ 9,000 a year.

If we do an average job and increase the TCE rate for a client by 1%, that is circa US$ 180,000 a year.

Generative AI Technology is 20X more valuable in Chartering.

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