Israeli Shipping Data Firm to Enter Commodities Game
Analysts say intelligent analytics could give firm an edge.
A young Israeli technology company believes the expertise it has built up in tracking ships for governments and security agencies could help it break into the much larger market for providing information on seaborne commodities.
Windward, founded just over five years ago by two former Israeli navy officers, plans to launch a maritime information service later this year for banks, investors and trading houses, its chief executive Ami Daniel told Reuters in an interview.
About 90 percent of global trade is transported by sea, but there is little visibility on what ships are doing and what cargo they carry.
With pressure on traders and banks due to a weak world economy and a rout in commodities markets, having insight into cargo movements could give them an edge in gauging which way prices will go. It could also help them to meet compliance rules due to sanctions on some countries, thereby avoiding fines.
Windward has built up an information network that now processes more than 100 million data points daily from sources including satellites and the transponders vessels use to avoid collisions, Daniel said.
With an initial focus on providing information to coast guards and security agencies, the company has also established a history of vessels and analytical tools to identify deviations from normal activity.
For example, if vessels turn off their transponders, Windward is able to give an estimate of their likely activity - a process known as "activity-based intelligence" that goes beyond the information provided by simple ship-tracking data.
Some industry experts believe this could give the company an edge as it looks to expand into more commercial activities.
"They fill in that gap when captains turn off their transponders," said Morgan Downey, CEO of financial data vendor Money.Net and author of the book "Oil 101", pointing out that accurate information on shipping is critical to building supply and demand models for oil and other commodities.
Windward has raised more than $17 million from investors, include Horizon Ventures, the investment arm of Asia's richest man Li Ka-shing, and former CIA director David Petraeus. Analysts estimate that a fundraising last year gave it a potential market value of about $100 million.
Daniel would not disclose sales data but said revenue had grown 2.5-fold annually for the past two years, and forecast a similar trajectory this year.
Industry experts still see growth opportunities in the company's traditional security market.
Khoo Boon Hui, senior adviser to Singapore's Ministry of Home Affairs and president of Interpol from 2008-2012, said tightening security at airports and land borders could push more illegal traffic onto the seas.
But Daniel has high hopes for commercial markets too, saying Windward's database and mapping of ports and jetties around the world meant it could identify exactly what was being loaded and unloaded onto a ship.
"If a vessel is unloading oil we can say what type of oil and how much. We can quantify what vessels do rather than what they say," he said.
Windward competes with several companies in different sectors. IHS of Colorado and London's Informa provide maritime data, relying on databases and manual work by analysts, while Thomson Reuters and Bloomberg have live-data ship tracking products for clients and investors.
In maritime security, Windward competes with GreenLine Systems of Virginia, while U.S.-based ClipperData and Genscape provide insight into global oil flows.
By Tova Cohen