How much iron ore is China really buying around the world? Never mind what Beijing says, how much is it really buying? How much oil is Iran selling? What about the Islamic State organization? Are fishers around the world really adhering to quotas, or are they still depleting the oceans?
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Windward, a maritime “big data” startup are on central Tel Aviv’s tiny Har Sinai Street, across from the city’s Great Synagogue and surrounded by bars, knows. And for a fee, it will tell you.
Founded in 2010 by Israel Navy veterans, Windward began by selling its information to governments. It has since turned its sights to the financial sector, including big commodity traders and hedge funds seeking an edge over less-informed rivals.
“Most of us don’t think about the huge stakes at sea, but 90% of the world’s trade is transported by vessels,” says Windward Marketing Vice President Michal Chafets. “So what ships are actually doing is hugely meaningful.”
For instance, when the six world powers signed the nuclear deal with Iran in July, a question niggled. Iran, everyone suspected, had been stockpiling oil on ships that simply squatted in the Persian Gulf, waiting for the sanctions to be lifted. Government negotiators and traders wanted to know: How much oil might Tehran suddenly pour into the market from this “floating warehouse”?
“Iran said it had none, which no one believed. Experts estimated it had anywhere from 10 million to 40 million barrels in floating storage. We saw there were 54 million barrels,” Chafets says. How? “Because we understand ships,” she says.
Fallible humans, corrupt data
Windward provides data and, crucially, analysis of the movements of big oceangoing ships. It processes over 100 million data points a day from different sources, Chafets says.
If anyone can access satellite data, who needs Windward? Can’t all ships’ locations, and cargo, be tracked by satellite? Yes, but.
Data is abundant nowadays. Interpreting it is another matter. By nature, raw data is fragmented and unreliable. The company’s value is in making sense of a blizzard of data that has two weaknesses, Chafets says.
The first is that nearly all the data are reported by people, who are fallible by nature and in some cases have reason to lie. A ship that is fishing illegally or smuggling weapons or illegal immigrants can easily conceal its location or cargo when the reporting is being done by human beings, she points out.
The second problem is that more than half of the data from satellites are corrupted. Ships transmit location data. Satellites send this information down to base stations, where an effort is made to unscramble and interpret. Errors can occur at any link in the chain, Chafets explains.
The company’s services are considered important enough to have attracted serious money from investors including the Hong Kong billionaire Li Ka-shing and Angelic Ventures, owned by former Thomson Reuters CEO Thomas Glocer.
Fish laundering and whiffs of rats
Raw data can tell you exactly where a specific ship is. Analytics is knowing the history of the ship and that its usual route is from A to B, and now it is inexplicably at C, ergo, there is a whiff of rat.
“If a ship is somewhere unusual, deviating from a pattern, or if it seems to be behaving in an uneconomic, and therefore suspicious, manner, we would flag that,” Chafets explains. “We take all this data, corrupt and all, and clean out the manipulations using the Windward system. We organize the data into unique DNA for each vessel.”
Each? It isn’t tracking coracles with clandestine pearl divers or canoes bearing illegal cod fishers to sea. “If there’s a dinghy off the shore of Haifa, we don’t know about it,” Chafets admits.
What Windward can do is to log over 200,000 large registered oceangoing vessels that constantly transmit their whereabouts. It knows everything they have done, every port they visited.
It can’t tell you about Somali pirates, because they aren’t sailing on large registered vessels and routinely transmitting their locations.
It can tell you when an oil tanker docks in Tanzania, according to the raw data, but at a port that Windward knows cannot accommodate ships of its size. Something is evidently being faked.
Windward estimates that about 1% of all ships on the sea are transmitting a false identity, which is equivalent to 1,000 people a day waltzing through Kennedy International Airport with a fake passport. This is a common practice among the likes of illegal fishers, whose gambits include switching identities or giving their illegal catches to giant refrigerator ships. Forget money, this is fish laundering.
Why bother faking? Why not simply stay silent? Because you could get blown out of the water by an antsy challenger. Until about five years ago ships could do whatever they wanted, but not in today’s vigilant world, she explains.
“At this point, if a large ship is not transmitting, it is in danger. Say I’m a NATO ship and I see a ship not transmitting; I will challenge it,” Chafets answers. It may hide briefly by shutting down, but it won’t remain off-grid. “Ships today are better off transmitting inaccurate data than not transmitting at all. The incentive is to sail legit,” Chafets says.