In a previous post, we explained our view on the future of data-collection on ships. Research shows that 95% of ship-owners still use noon-reporting as their management tool. The majority of data from ships is still collected only once every 24 hours, and mostly relying on manual input. With all the data around us, we can do so much better!
In a rapidly digitizing world, the maritime industry has many opportunities to improve their business by using data. In many industries, collecting and analyzing data has played a significant role in optimizing efficiency and lowering costs. Take aerospace. Can you image a captain of a Boeing 747 having to fill in a manual report every 24 hours, send it to the office and then call it fuel efficiency monitoring? By continuous monitoring, Boeing has collected millions of hours of data that it uses to improve their aeroplanes. This pool of data is now one of their most significant assets.
The business case for a more digital future is clear: a recent report by Roland Berger shows the potential of data-driven digital solutions. They conclude that a 10% reduction in CO2 emissions (and therefore fuel costs) across the shipping industry is readily achievable from mass adoption of such digital solutions. Within our customer base, we have seen similar savings, such as our client Euro Marine Logistics.
When talking to clients, the fragmentation of the shipping industry is the main challenge towards both the wide adoption of digital solutions and the development of data-driven systems on the road to smart(er) shipping. One of the main drivers is the split incentives within the shipping industry. This split is not surprising when you consider the variety of potential parties involved (ship owners, ship operators, ship managers, charterers, cargo owners etc.) as well as the variety of legal contracts that exist between them (bill of lading, charter party, contract of affreightment).
As an example, under most charter-party terms, the charterer pays for the fuel yet does not own the ship. So the owner may have no incentive, while the charterer cannot invest in the ship to make it more energy-efficient. Whilst there is a natural benefit for charterers to use more fuel-efficient vessels, such as those adopting leading digital solutions.
Other reasons for slow adoption — as confirmed by our interviews and studies — is a lack of trust between value chain participants (e.g. owners and charterers), concerns over data transparency and commercial sensitivity of data. But also there is a joint agreement that in the end, both owners and charterers will benefit from efficiency improvements.
We believe that the maritime industry can benefit significantly by using data. Shipping should jump on the data boat. By using data with all vessel movements, voyages, draft, trim, engine usage, fuel consumption, cargo load, speeds sailed, weather encountered, we can make better, informed decisions that help us to learn how to optimize the vessel performance ánd reduce fuel consumption and emissions. At We4Sea, we made it our mission to improve shipping efficiency, using data.
Also, new developments in satellite and weather data can be used to the fullest, so there is no need anymore for sensors or hardware to start monitoring ships. Data-driven and model-based tools already offer advanced solutions to monitor vessel performance without the Capex.
This enables the industry to start to utilize the vast amounts of operational and real-time data of ships already available, such as position, speed, heading and draft and enriches this data with other data sources, such as weather conditions, wave heights, currents and wind. Not every 24 hours like in noon-reports, but continuously. Smart, model-based tools such as the proprietary Digital Twin modelling of We4Sea transform this big data pool into actionable management information and reports KPI’s.
Smart charterers already start implementing the possibilities. We strongly believe that there will be wide adoption of digital solutions and increased development of data-driven systems. Charterers and ship-owners will have access to data-sets, that help them to make informed business decisions. By using smarter solutions, we can take away the need for investments which solved the issues around the incentive split. Are you onboard?