SRT Marine and Windward emerging as key players in digital marine technology

SRT Marine Systems and Windward Ltd, two providers of maritime intelligence and security systems, made noteworthy announcements this morning.

SRT Marine Systems

 () announced a minor, but strategically significant order worth US$260k for its Digital Aids to Navigation (DAS) products from a Japanese customer. SRT's DAS products are proprietary digital transceivers, which convey information to vessels and navigation authorities in real time to enhance navigation safety.

Previously, on 21 June, SRT announced a contract win worth up to US$20m for its transceivers with an existing Coast Guard customer. And on 18 May, SRT signed a US$180m contract to supply an integrated maritime surveillance and intelligence system to a national Coast Guard customer.

This series of contracts testifies to SRT's rapidly growing opportunity pipeline. Over the past year, SRT's pipeline of new system contract opportunities has grown to approximately £1.4bn, of which £380m are at a mature stage in the sales cycle. SRT's current market cap is approximately £94m.

Windward Ltd

 () shares jumped 13% after the company announced a partnership with the London Stock Exchange Group (LSEG) whereby LSEG will deploy Windward's AI system to combat "sanctions busting" across global shipping in real time.

Windward's AI-based solution can detect indicators of potentially suspicious maritime activity for the entirety of global shipping. It can track over 117,000 vessels currently at sea globally, including oil tankers, dry bulk carriers, and container ships.

"By blending Windward's vessel risk profiling with LSEG shipping analytics capabilities, we can now equip our trading and chartering users with the best solution to assess and mitigate the sanctions compliance risks in the maritime space as part of their daily workflow." said Fabrice Maille, Head of Shipping & Agriculture at LSEG.

The importance of maritime compliance and sanctions risk has been highlighted by the ongoing conflict in Ukraine, with data showing 42% of all high-risk tankers being Russia-affiliated. In this context and in general, the risk of businesses accidentally or intentionally breaching sanctions and compliance is ever increasing. AI can be a potent tool to tackling sanctions risk in global shipping, which Windward is heavily invested in.

Maritime Domain Awareness

Both of today's announcements touch on the wider topic of Maritime Domain Awareness or MDA - an acronym increasingly used in financial and government circles around the world. MDA is defined by the International Maritime Organisation as "the effective understanding of anything associated with the maritime domain that could impact security, safety, the economy or the marine environment".

This essentially concerns all decision-making, associated tools, and situational awareness relating to maritime activities. MDA aims to reduce various risks at sea, such as sanction evasion and compliance as discussed above, as well as fishing violations and other illegal activities like drug and weapon smuggling, human trafficking, and terrorism. The main areas of concern are national security, law enforcement, vessel safety, and environmental protection.

Combined territorial waters and exclusive economic zones (EEZ) are enormous spaces to monitor - for many states, the maritime domain is in fact much larger than their total land area. For instance, the UK's EEZ is the 5th largest in the world at 6,805,586 km2, compared to the UK's land area of 243,610 km2. This necessitates the use of advanced technology like Windward's Maritime AI to assist in monitoring the enormous maritime domains.

The MDA market is still in its early stages of growth, as changes in maritime regulation begin to require migrations to digital systems, not unlike the development of air traffic control in previous decades. SRT and Windward are early players in the space, with significant sales pipelines from private and government customers, and much room to grow as the MDA sector and associated technologies mature. Contracts in the MDA space tend to be long, with predictable follow-ons and long-term revenue visibility.

For these reasons, we recommend you follow SRT Marine Systems:  and Windward:  for investors interested in the burgeoning MDA sector.