When Matthew Magnuson was a computer science student working on robotics at Southeastern Louisiana University, officials from St. James Stevedoring approached him for help on a shipping industry problem: how to accurately measure the draft of barges carrying freight on the Mississippi River.
Working under the newly formed St. James Technologies, Magnuson helped develop a solution that gave SJS an edge over its competitors. But from his perspective, SJT's success was limited to the needs of its parent company.
Magnuson sensed the need to break away. So St. James Technologies sought guidance from LSU's Louisiana Business & Technology Center, which helped it form a new division, Harbor Telematics. Through the new division, the company sells another original product, mobile harbor crane data systems.
"We hadn't sold anything to anyone else," he says, "and we were working on the crane technology. We realized something had to change. We found out about the incubator and figured it was time to cut the cord."
St. James Stevedoring became Harbor Telematics' first customer, outfitting six of its cranes with the new data system. About six months after the line was introduced to the marketplace, Magnuson says, a German competitor launched a similar product. Harbor Telematics kept up with its rival, in the process learning that customers had complaints.
"In many cases," he says," we were asked to install our system over theirs. I think our success goes back to our roots in a stevedoring company and being able to create from the customer's point of view."
GAINING AN EDGE
Magnuson's first project was to develop a better way to measure draft, the distance from a vessel's keel to its highest water line. That number is a critical component in calculating the weight—thus the cost—of freight, but it historically has been unreliable throughout the industry.
"You're talking about thousands of tons of material," Magnuson says. "Being off by even a 10th of an inch means you can be off by hundreds of thousands of dollars. In general, the shipping industry is a field that has not seen a lot of innovation."
The technology provided St. James Stevedoring with a technological advantage over its competitors on the Mississippi River, where crude measurements still prevail. Moreover, the company's ability to precisely calculate freight prevented its barges from overloading and from damaging the river's succession of locks.
ON ITS OWN
The draft technology might have been successful, but it was custom designed for one company, Magnuson says, which wanted to keep it proprietary. By adding a new division, Harbor Telematics, the company began to develop data systems for mobile harbor cranes, essential components in the shipping world, since they move billions of dollars in cargo in and out of ports around the world.
Other than their heft, which enables them to lift as much as 100 tons each, the machines had operated with few technological advancements, Magnuson says. Harbor Telematics developed a data system that sends real-time information to a remote site about a crane's functions and its loading activity, intelligence that's highly valued by investors who are anxious about freight and also by port officials who are concerned about crane performance.
"If you can't quantify something, you can't control it," Magnuson says. "By bringing metrics, we've been able to change the way these companies do business."
Magnuson's team spends its day considering how technology can improve shipping processes.
"The LBTC has been invaluable in guiding us in legal and liability issues," he says, "especially in giving us advice on how to take custom software designs to international markets."
The company's end users largely are ports and stevedoring companies, and its target growth markets are Africa, Asia and Europe, especially Great Britain.
Magnuson would like to place all shipping industry products under the Harbor Telematics brand, with St. James Technologies becoming a fully formed idea and innovation company with application beyond barges and cranes.
This dual rebranding project also is receiving technical assistance from LBTC. There's no shortage of ideas, Magnuson says, aiming for St. James Technologies to become a global design company similar to IDEO.
Leaning on the incubator to handle the business side of the startup has enabled Magnuson and his team to remain creative.
"We can focus on what we're good at," he says, "developing products."
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