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Twenty-two

Steve Regis - ARX Maritime

Innovation versus the pirates    …

Steve Regis - ARX Maritime

Innovation versus the pirates

Piracy costs the shipping industry $2.6 billion per annum – and the losses are increasing every year. Add to this the cost of other incidents at sea, including damaged cargo, stowaways and crew overboard, and you have a major problem which, in turn, presents a major opportunity for Edinburgh-based ARX Maritime – a company which offers security services for international shipping, including everything from innovative anti-pirate barriers to risk assessment systems powered by Big Data and Artificial Intelligence...

In films and novels, pirates are often portrayed as romantic adventurers, but in the real world they are nasty, violent criminals who steal things and also destroy human lives. To stop them we need more than bullets, however, and ARX Maritime is developing a package of novel solutions which combines the best of physical and digital designs, including barriers and personal alarms as well as the latest Artificial Intelligence tools.

The company's Chief Operating Officer, Steve Regis, may not be your average entrepreneur, but when it comes to maritime security, he is someone you would want to have aboard – he has come face to face with the pirates himself and his company now protects over US$10 billion of maritime assets for 500 clients. An ex-marine who served in Iraq and Afghanistan, Regis also worked as an armed guard on ships in the Indian Ocean. Most people would regard this as a highly dangerous job, but for Regis it was relatively easy compared to a war zone: “After nine years in the forces,” he explains, “I thought it was time to reduce my personal level of risk – I had used up a few of my nine lives already.”

In his new role on containerships and tankers, Regis focused on training the crew and advising how to “harden” the vessel, as well as providing protection. And as he sailed around the ocean with his finger on the trigger, scanning the horizon for pirates, Regis also analysed the “architecture” of the vessels he worked on and started to come up with some ideas of his own.

A better solution?

Barbed wire or razor wire is one of the most basic standard defences recommended by maritime security consultants, but Regis questioned this because it seemed “completely ineffective.” Not only did it fail to stop determined pirates getting aboard but it soon began to crumble after being exposed to the weather and was hard to install. “Razor wire just doesn't work,” says Regis, “so I started to think that there must be a better solution, and that's when the idea for ARX ABaC was born.”

Back on dry land in 2014, Regis started doing research and refining his initial design – an innovative barrier system which “deflects ladders, grappling hooks and climbing poles to stop intruders boarding the vessel.” At this time, Regis had no experience of running a business or product design, but he did have a very clear vision of what was required and a trip to Hobbycraft (an arts and crafts supply shop) enabled him to bring his new idea to life. Armed with advice from Business Gateway, Regis then approached a number of design firms and showed them his sketches – and a balsa-wood model. Some designers didn't seem to understand the concept but Cramasie (a product design and development company based in Edinburgh) “got it straight away” and the product began to take shape, funded by a private investor and matched public funding – £5,000 for a feasibility study and £37, 500 for research and development.

Looking at his original sketches, Regis says the final product looks “remarkably similar” in terms of basic shape and features. Cramasie helped to visualise the final design and the next stage in the process was to research the materials needed to make sure the design would survive extreme conditions – including temperatures of minus 20 to 50 degrees centigrade. The design brief stipulated that the barrier had to be robust enough to withstand attack as well as the weather, but also light and easy to install, and with help from another Edinburgh-based company, naval architects QED Naval, who focus on renewables, a prototype was built and Regis started sounding out the market.

Before it went into production, however, Regis started testing the product – with a little help from climbers at Alien Rock, an indoor climbing centre based near his office in Leith. The climbers actually got over the prototype barrier with relative ease, so Regis asked them for advice. “A lot of nuances in the design came out of those discussions with the climbers,” he explains. Then Regis asked some friends of his, all of them former commandos, to “test it to destruction,” and the barrier was ready for production.

Sales drive begins

Research and development took roughly 18 months from sketch to final product, then the sales drive began. “We knew we needed early adopters,” says Regis, and the first client – BP – signed up in summer 2016. To clinch the deal, Regis drove to Rotterdam with two sample units in the back of his van and delivered them to BP's chief security officer. “Our USP (unique selling point),” says Regis, “is that our solution is incredibly easy to install, so we just handed over the products and manual, and let them get on with the job.” The manual is “IKEA style,” with very simple graphics on a single A4 page, and BP’s team managed to follow instructions and install the first barrier in a couple of minutes.

With orders worth $250,000 now in place, ARX needed more funding to start full production, and raised $1 million, thanks to the support of Bermuda-based investors Entrepreneur Dreamlab, who “identify, invest in, nurture and grow outstanding businesses from the early inception stage of an idea to the mature stage of being prepared for international growth or an exit.” Other syndicates were keen to invest but the new backers also provided a chairman – Stephen Castree, the founder and director of Entrepreneur Dreamlab, who is also the director of a hedge fund with over $20 billion in assets.

The next big moment came when Regis watched 70 units craned onto a ship docked in Muscat. “The idea in my head was now coming aboard,” he recalls.

The final design is 700mm wide and 1,300mm tall, with an overhang of 700mm, and a typical installation would require about 100 barriers, fixed to the most vulnerable part of the ship (e.g. the sunken poop deck), at a cost of about $150 per unit. According to Regis, the barriers should pay for themselves within about three years – unlike other measures such as razor wire which need constant replacement.

“Security is all about layers,” says Regis, “and what we offer is a more effective and sustainable alternative, with professional consultancy part of the service provided.”

More products in pipeline

With the anti-boarding barrier now well established, ARX is busy developing a number of other maritime security products, aimed at dealing with everything from stowaways and crew overboard to container security – all of which can cost a lot of money.

Stowaways can be a major drain on resources – about £35,000 per incident – and ARX is in the final stages of developing what it describes as “the first maritime movement alert and detection system on the market.” Attached to mooring ropes, doorways, anchor chains and rudders, where the crew cannot always keep watch, the ARX Mlarm senses movement and alerts the crew, making it much harder for intruders to board.

Crew overboard is also a problem for shipping, and ARX is currently developing a new solution called ARX MOB (Man Overboard), a device worn by everyone on board the ship, with a distress beacon which activates as soon as it contacts the water then tracks the position of the person overboard, making rescue easier and faster. ARX TempTrack is another new product in the pipeline, designed to monitor refrigerated containers to make sure the cargo is not getting spoiled. And as part of its offer to clients, ARX is also part of the Octopus network, which provides armed protection to vessels.

Intelligent systems

As well as developing physical barriers, alarms and detection systems, ARX takes advantage of the latest advances in Artificial Intelligence (AI) to power its maritime intelligence system, including maps which highlight risks in real time and reports which use the latest Big Data techniques to filter news of incidents at sea and forecast future risks so clients can avoid the high-risk areas.

Marketed by ARX in partnership with Sicyon, OpenBridge “identifies, manages and mitigates risks by recommending best management practices and how best to prepare for and navigate through high-risk areas,” based on geo-referenced data from a number of sources, including insurers and banks as well as “military-grade intelligence” first developed for NATO.

The OpenBridge service is provided free of charge to subscribers and ARX also offers bespoke reports based on individual customer requirements, including size and speed of vessel.

Human versus machine?

As a decision-making tool, AI will increasingly take over some operations at sea, threatening some people’s jobs, but human experience will always be needed. In a recent blog, the CEO of ARX, Josh Hutchinson (another ex-marine who has been with the company right from the start), posed the question: “Will artificial intelligence one day take over from human intelligence?” AI is very good at gathering and processing data, he wrote, and will help to reduce costs and improve efficiency in many critical tasks, but it is “a great assistant and nothing more – our ability to use it is not advanced enough to overtake the skill of human intelligence and judgement.” For example, he added, computers may be good at detecting mechanical problems but are not so good at fixing things such as engines. And ARX exemplifies this dual approach to maritime issues – combining human know-how and intelligent technology.

Business ecosystem

The company has also taken full advantage of the business ecosystem in Scotland: “Scotland is a hot-bed of entrepreneurship, and we’ve been blown away by the level of support here,” says Regis. ARX is also part of a recent initiative launched by the RSE this year called “Unlocking Ambition,” which plans to invest £4 million in up to 20 “high-potential entrepreneurs with innovative projects.”

Meanwhile, ARX is gearing up for future expansion, and seeking new investment – up to $15 million to scale up production and develop its portfolio of products. Sales this year will be about £3 million for barriers, says Regis, with annual growth expected to be about 30%. ARX will use a different model for sales of its various products, including subscription, and will gradually phase in new products, with ARX Mlarm available next year and ARX MOB on sale the following year. And as this innovation continues to gather momentum, the pirates do not stand a chance.

Pirate attacks on the increase

The number of pirate attacks in the first three months of 2018 was higher than it has been for over five years, according to the ICC International Maritime Bureau – a total of 66 around the world. “Not only does piracy seem to be rising,” says ARX Chief Operating Officer Steve Regis, “but the type of attack is also worsening, including 100 people held hostage – more than three times up on last year.”

The Gulf of Guinea is the hotspot for hostage takings, particularly vessels carrying gas and oil, and one explanation could be the release of a large number of Somali pirates from prison.

“The social and economic conditions that gave rise to the first wave of Somali piracy still remain the same,” adds Regis, “so this is an area that is likely to see an upsurge in pirate activity.”

Currently, however, Nigeria ranks Number One in the table, with the number of armed attacks steadily rising, and evidence of more sophisticated equipment used during attacks. Another trend is an increase in terrorist-related attacks.


ARX Maritime in brief

> More than 500 clients
> US$10 billion of assets protected
> 32,488 products delivered

 

 

 

 

 

 

"Steve Regis - ARX Maritime". Science Scotland (Issue Twenty-two)
Printed from http://www.sciencescotland.org/feature.php?id=337 on 24/09/18 02:53:06 PM

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