The business case for performance monitoring of ships

Early 2021, we wrote a blog on the business case of fuel efficiency. Due to recent price increases, we think it is time to revisit this business case.

At the time, we saw a rise in bunker prices to 426 US$/MT. Now we are over 1000.

Source: Bunkerworld

Solid business case

All investments require a solid business case. So, let's see how advanced performance monitoring is helping you to boost financial results.

As an example, below a calculation for a bulk carrier with 25MT daily consumption and 220 sailing days per year.

The annual fuel bill is amounting to over 5,4 Million dollars. Maritime companies will see their annual fuel spend rise by millions of dollars compared to one year ago.

Most vessels off-the-grid in terms of performance monitoring

You would expect that with these high costs, performance specialists at charterers, ship managers, and shipowners will have a seat at every management meeting, displaying real-time data on the latest trends in their fleet.

However, we see that the industry still relies on manual input from daily noon-reports, with an update frequency of 24 hours. An estimated 80% of the chartered world fleet runs effectively off-the-grid without sensors or sophisticated data collection, as mentioned in an earlier blog.

In terms of performance monitoring, you need a real-time data collection system, based on objective performance data that does not rely on manual input.  

It's high time to improve performance monitoring. Because: If not now, then when?

The tangible results of performance monitoring

On average, we see a 3 to 5% improvement in efficiency after the implementation of our solution. These are the results of relatively small changes, such as sailing at a more optimal speed and early detection of hull fouling and resulting cleanings.

Also, charterers can select vessels based on historic performance, jointly work with owners to improve less-efficient vessels, or decide to redeliver underperforming vessels.

And, based on the bulker mentioned earlier, as every 1% saving will result in over 48,000 US$ annual net saving per vessel, it is easy to understand the logic behind using an advanced monitoring solution.

Net annual savings per vessel (USD)

Assuming a monthly 400 EUR spend on running a performance solution, nowadays you would only need 0,1% savings to compensate for the costs. The rest of the saving goes directly to your bottom line.

Advance your performance monitoring today

In order to stay competitive as an operator, now and in the future, it is essential to improve ship- and fleet efficiency.

A model-based approach such as developed by We4Sea offers data-driven solutions to improve your company's competitiveness, increase you fleet efficiency, reduce costs for fuel consumption and reduce emissions of vessels.

Interested in what we can do for you? Request a demo or a pilot on your fleet.

Trust us, you will be amazed.