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Part 1: Commercial Operators
Shipping is a strongly intermediated market where three sides interact and have unique strengths and challenges. On the one hand, ship owners/commercial operators seek to maximise the employment and the revenues of their vessels. Shipbrokers, the intermediaries, have to facilitate large deals in volatile market conditions, while relying on incomplete information. Finally, charterers, as controllers of the world’s cargoes, are constantly trying to assess the ideal time, quality and price to book transportation for their goods.
The shipping sector has been slow to adopt technology tools needed to facilitate decision-making. Information on vessel bookings (“fixtures”), vessel availability (“positions”) and service requests (“cargoes”) are still primarily communicated via email/chat in non-standard formats that have seen very little change in structure and content since the time of TELEX. Many daily tasks are done manually or through spreadsheets, databases, and person to person communications.
In recent years, commercial shipping has become an even more complex and competitive market due to the surge in the availability, variety and quantity of data. With this “data boom,” it is estimated that the shipping industry generates between 100-200 million data points every day. In order for commercial decisions to be made based on factual information, this data needs to be absorbed, understood and cross referenced against a growing array of detailed information related to vessels, ports, routes and trading patterns, as well as a range of commercial, legal, regulatory and environmental factors.
Today, Artificial intelligence (AI) and machine learning (ML) technologies are enabling the processing of vast amounts of data and turning that data into valuable and easily understood market insights. Most of these technologies are now available securely in the cloud which eliminates the need for costly, custom in-house installations and maintenance. Technology can help professionals and increase transparency in a largely opaque market such as shipping, but only sophisticated solutions, based on a deep understanding of the industry, can meaningfully solve some of the very complex problems involved.
In a series of three articles focused on digital transformation, we describe how The Signal Ocean Platform enables each of the key players of the commercial shipping market (the commercial operators, shipbrokers and charterers) to gain market intelligence while respecting and supporting the current processes, information flows and overall way of doing business.
Part 1 of 3: How Commercial Operators can leverage ship management software to increase efficiency and profitability
Shipping is a highly competitive and volatile industry. Success is ultimately based on the most effective utilisation of assets. When a vessel is underutilised, the owner assumes the cost burden of crew wages, port fees, and maintenance, among other things.
In addition, a detailed view of the market is something that has historically been difficult to achieve. While an operator will know the movement and specifications of his own fleet, together with information fed via brokers, he may lack overall market visibility and the tools to make informed pricing decisions and cargo load choices.
Optimising pricing decisions and cargo load choices
Knowing how many vessels are available in each part of the world, how busy they are and when they will become available again is critical. This level of insight can help estimate how strong the market is going to be and how the freight rates will fluctuate in the foreseeable future. This is exactly what Signal Ocean does.
The Signal Ocean Platform, a ship management software, is designed to provide all the stakeholders in the shipping supply chain with the intelligence to make better commercial decisions. The shipping platform was created by a team that comes from a long history in commercial shipping and who, therefore, understand and respect the existing market structure, and want to serve it without disrupting its structure.
For commercial operators, Signal Ocean is a valuable tool that processes the large influx of unstructured information that operators receive daily, combines and cross-references it with additional data provided by the platform and runs it through advanced analytical algorithms that help users interpret and predict competitive market pressures in the global spot freight markets. For example, a commercial operator can monitor how the vessel supply is changing in the short-term and how the industry responds to those changes for multiple markets. Ultimately, this helps them decide the exact timing and the levels of their offers, while they are trying to complete a fixture of one of their vessels to a particular cargo.
The predictive nature of the Signal Ocean shipping platform enables users to see the vessel supply trend. For example, the graph above shows a 10-day forward looking tanker supply for Aframax vessel class at loading port Houston, in the US Gulf. The red line shows how the local spot market is responding to those changes and on the right side you can see the relevant fixtures.
Another example is that commercial operators can estimate daily profitability (TCE) by calculating profitability of future voyages in order to optimise how they deploy their fleet for maximum commercial efficiency. The advantage of this feature is that they not only can do this for their own vessels but also for any other competing vessel.
With Signal Ocean, commercial operators automatically obtain comparisons of alternative TCE estimation scenarios for future voyages and work out which cargo makes most commercial sense.
In summary, shipping platforms and ship management software tools are making the commercial shipping sector more efficient. Technology is an enabler and a valuable tool which can be a gamechanger for shipping companies. Leveraging Signal Ocean, commercial operators can support and refine their view and feeling of the market through fast and powerful data analysis. Designed by the shipping industry for the shipping industry, Signal Ocean is accessible anywhere in the world via a web browser, and on desktop and mobile devices.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
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Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
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