Ship owners and charterers: A relationship where each of the parties need the other, but their respective incentives rarely align.
Owners time charter their vessels as a way to secure income in a volatile and uncertain market; while charterers receive assurance that they have secured sufficient tonnage to move their cargo. The lack af aligned incentives is visible in many things – from minimal data sharing, to unwillingness in sharing consumption tables, arbitrations and claims—all leading to losss valuable time and money.
We believe that technology can align all of the competing interests and incentives of a charter-party relationship. Not only to increase efficiency, but also in order to meet the IMO’s 2050 mandate to reduce CO2 emissions by 50%. We basically need to do things differently, and the good news is that the business case is on the table!
The direction to go is clear: full data transparency and alignment of charter parties to incentivize both parties. This transformation is essential for more sustainable operations. Owners and charterers could and should have access to real-time performance data, empowering owners in marketing their vessels and charterers to operate the vessels.
We should also look into the current practice that owners are penalized for vessel underperformance—and don’t benefit from overperformance—this is one of the main reasons for them not to share real-time data. Overperformance should be incentivized to encourage transparency and increase both value and efficiency on all sides.
We simply cannot afford to continues with the current way of working,as it leads to high costs. As an example, We4Sea recently advised a charterer to slow down and sail on 11 knots instead of 12. The vessel would still be on time, but with a 15,000 dollar lower fuel costs. The reply of the operator was that the advise was sound, but they would not change speed as it would mean losing the warranty, as only a CP speed of 12 knots was warranted.
Realigning the charterer/owner relationship around data transparency is essential. We are developing new tools to help sharing the upside of optimization. Through our Digital Twin, owners and charterers together can joinly increase voyage efficiency by reducing bunker consumption.
The Digital Twin can be used to benchmark and align the performance of the vessel, and a tool to share costs and benefits in the charter party agreement. The Digital Twin uses real-time satellite data to report a vessel’s true speed through water and benchmark consumption and performance. Using sea-and weather data, we can establish normalized vessel performance, allowing owners and charterers to optimize every voyage.