Top four everyday shipowner challenges in 2021… and one solution
We sat down with leading Norwegian headquartered shipowners to quiz them on the top day-to-day operational challenges facing them in 2021, and the solution they desire. Could greater data integration and utilisation help them successfully navigate an increasingly demanding future?
1. Environmental efficiency
“It’s a constant battle, but one we’re committed to fighting.”
Anders Tønnessen, Performance Manager, Höegh LNG, is addressing the one subject that impacts upon every stakeholder within the shipping value chain – sustainability.
Improving the industry’s environmental performance is intrinsic to survival: of individual companies, of commercial maritime, and of wider society itself. The IMO has set an ambitious industry wide goal of decarbonisation by 2100, while forward thinking owners are positioning to sit at the vanguard of change, supercharging their own transitions to carbon-neutrality.
Höegh LNG is in a strong position – thanks to the relatively clean nature of LNG, a modern fleet, and large investments in technology and people to monitor performance and emissions – but that doesn’t breed complacency.
Far from it in fact.
“We have the responsibility to continually work to reduce our carbon footprint,” Tønnessen explains. “That’s good for the environment, but it also makes good business sense – enhancing energy efficiency, lowering costs, and ensuring compliance with both regulatory demands and the requirements of our charterers. It necessitates an on-going process of optimisation; on every vessel, for every day of operations, no matter where they are.”
“And that,” he smiles, “is a challenge… but a rewarding one delivering real benefits.”
For Oslo-based Tønnessen it means his “battle” is fighting to gather and analyse all relevant performance data for an advanced fleet of 12 vessels, benchmarking individual vessel results to incorporate best practice into a fleet-wide systematic approach.
He explains: “Monitoring real-time performance is crucial, checking to identify deviations from expectations and assess exactly what the fleet is doing and how we could do it better.
“There’s so many data sources, and so much value to be derived from them, that we need an effective organization and tools to streamline and simplify the process, guiding our ships – and our business – on a path of improvement.”
Greater regulatory demands, a competitive commercial landscape, and increasing operational complexity create an environment where documentation and reporting is more essential – and expected – than ever before.
Port authorities, charterers, business stakeholders and a diverse spectrum of interested parties place a heavy burden of proof upon individual vessels and fleets. Torfinn Jølle, Senior Marine Superintendent, and a colleague of Tønnessen, sums it up concisely:
“Put simply, there’s too much administration,” he notes. “It’s definitely one of the main challenges facing crews, and onshore teams, that already shoulder a great deal of responsibility.”
Jølle says that a greater integration of systems and data would assist those in his role as much as Tønnessen’s, making insights easier for his colleague and enabling the possibility of increased automation of tasks for vessel crews and himself.
“That would deliver real efficiencies across fleets,” he comments, “while also improving safety.”
Here the Höegh LNG executive references the increased likelihood of human error when it comes to laborious admin tasks and data input.
“One slip of a key can make a big difference,” he concludes. “The more we avoid that possibility, the better.”
3. Proving performance
For owners chartering out vessels, meeting contractual covenants is essential to running a profitable, reputable and successful business. Charter party agreements may have implicit warranties or performance guarantees, with promise of a minimum standard related to fuel consumption and set speed. If this level of performance cannot be achieved, a charterer can potentially submit a performance claim, which could be substantial, eating into a company’s bottom line.
In today’s harsh trading environment there’s simply no room for such excesses, opines Thomas Strand Knudsen of Bergen headquartered Spar Shipping. Knudsen says there’s a clear need to both protect profitability, reduce environmental impact and, at the same time, demonstrate integrity.
“Good shipping companies invest in building strong relationships with customers,” he says, “and for Spar that means operating with integrity, trust and transparency. Proving performance is key.
“But, it is often easier said than done.”
Traditionally, performance is assessed based on a raft of different documentation from vessels, detailing, for instance, average speed, weather and bunker consumption. This requirement places an administrative burden on ships staff, as highlighted by Höegh’s Jølle. Despite the best intentions and efforts of crew, results can sometimes be disputed and the integrity of Masters and bridge teams questioned, as Knudsen explains:
“The information is coming from the owner’s vessel and the owner’s officers, and a charterer looking to submit a claim may see that as subjective. Ideally, you may like to see third party verification, with no vested interest, and a charterer may refuse to accept an owner’s report altogether, instead looking to compile their own with a weather company they trust. The owner may, in turn, also have to consult a third party to provide further proof.
“It’s a time-consuming way of doing business and not necessarily optimal when it comes to building relationships.”
A platform capable of channelling various real-time data sources into one system, which then can be used to automatically generate reports, and provide immediate feedback, may be the way forward, the Spar executive suggests. Data provided by respected suppliers, with proven integrity, could potentially provide a solid foundation of proof… all at the touch of a button.
“In an increasingly connected, digital industry, the less analogue work we are required to do the better,” he notes. “A system that unequivocally demonstrates performance would be a real step forward.”
4. Trouble shooting
The need for digitisation is something Tor Svanes appreciates more than most.
For a supplier perspective on challenges, Svanes, the Founder and CEO of NAVTOR, is a perfect port of call. His company, formed in 2012, has quickly established itself as the leading authority on e-Navigation, delivering innovative products and services to over 6000 vessels – and a wide variety of shipowners – worldwide. He’s used to speaking to owners and, along with his team, devising solutions to meet demands. He agrees that data and integration is the way forward.
“We now have the digital infrastructure to enable safe, reliable and secure real-time data flows between vessels, shore-based offices, and throughout entire organisations,” he comments. “But you have to be smart when you look at that data to see the big picture. By combining, for instance, weather data with consumption, speed, wave heights, schedules, fleet management data, and sensors throughout vessels you can not only simplify operations and automate tasks, but you can also fine tune performance and, interestingly, trouble shoot when you see deviations from expectations.
“This,” Svanes stresses, “is something that is of particular interest to today’s owners.”
Here he explains, as Tønnessen hinted, that it’s challenging to manage multiple, geographically scattered assets, and address issues, from afar. To really understand what is happening and deliver solutions you need to have “eyes on the ship” and, he says, data can deliver that vision.
“If you can integrate real-time navigation and weather data, engine shaft torque, rpm, and so on, you get an accurate insight not just of fuel consumption, but fuel consumption and engine performance under exact conditions and on exact routes. That allows you to benchmark performance, compare vessels and optimise operations across the fleet.
“Based on that you could even stream data in real-time to test performance of individual vessels. For example, if you know what rpm should produce a speed of 10knots in good weather conditions, you can set the engine accordingly and monitor ongoing speed. If the speed doesn’t meet expectations you may have a hull performance issue, with bio-fouling producing frictional drag, hampering performance, and adding cost… both for you, and the environment. You then know its time to schedule hull cleaning.
“Voila,” he smiles, “The trouble is well and truly shot!”
Importantly, Svanes adds, better real-time monitoring and data utilisation also enables owners to prevent issues in the first place: for example, by staying ahead of developing weather situations and allowing vessels to prepare for individual port and state requirements, avoiding delays and improving overall compliance.
In short, the NAVTOR chief sees smarter data utilisation and integration as the answer to all of the shipowners’ top challenges here – from better environmental performance to cutting administration.
“It’s clearly not a panacea,” he remarks in conclusion, “but it is a powerful tool for addressing day-to-day challenges and facilitating better fleet wide business decisions.
“I firmly believe data will be the key to unlocking smarter shipping, for existing vessels as well as newbuilds. We may not have the systems in place to enable this just yet, but they are on the horizon.
“This is the future. This will set a new course for a more sustainable, profitable and efficient shipping industry. For owners… and for everybody.”