Plotting a Course to Better Profits: How E-Navigation Can Reduce Costs
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- Published on Saturday, 05 April 2014 15:43
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On the face of it, the International Maritime Organization's ECDIS Carriage Requirement, requiring vessels to install at least one ECDIS on the bridge, was probably met with similar limited enthusiasm. Hardly a reason to put the champagne on ice in anticipation of all mandated vessels switching to ECDIS and ENCs by July 2018... or so you would think.
By Zeiler, Willy
Navigational Technology Facilitates More Profitable Ship Management
Increased regulations are rarely a cause for celebration among the ship-owning fraternity. Compliance inevitably incurs cost, time, training and hard work while delivering few direct benefits to a shipowner's day-to-day operations.
On the face of it, the International Maritime Organization's (IMO) ECDIS Carriage Requirement, requiring vessels to install at least one ECDIS on the bridge, was probably met with similar limited enthusiasm. Hardly a reason to put the champagne on ice in anticipation of all mandated vessels switching to ECDIS and ENCs by July 2018 ... or so you would think.
Safety, Security, Environment and Profit
To date, discussions relating to the ECDIS Mandate have focused on the safety and security enhancements associated with moving to ECDIS as the industry's primary navigational tool. This will, it is believed, help counter the ever-increasing number of groundings and collisions which, according to the International Union of Marine Insurance, can be attributed to human error in 60 percent of all recorded cases.
ECDIS and ENCs are reliable, user-friendly and safe, and this should not be overlooked. However, this focus has made the industry lose sight of other compelling benefits of adopting the latest, state-of-the-art e-navigation solutions, particularly with regards to ship management. What if we told you that exploiting such technology could save shipowners between 5 and 10 percent of their annual fuel costs, lead to more efficient man and time management on board and onshore, help protect cargo, and give a better overview of fleet performance and status, and therefore provide superior decision making tools? Would that be reason to chill something celebratory?
In the ultracompetitive world of international shipping still blighted by over-supply, low rates and often nonexistent profit margins, we think so.
Fuel Efficiency
Fuel is usually the number one concern for shipowners. Fuel costs have climbed by an average of 16 percent year-on-year since 2005 (Wall Street Journal), with escalating maritime demand (an increase of 2.2 percent to 3.37 million barrels a day was forecast for 2013 by JBC Energy GmbH) unlikely to lead to a long-term reversal of this trend, despite current price fluctuations.
In general, fuel accounts for between 50 and 80 percent of total vessel operational costs-dependent on size, performance etc.-for the nearly 100,000 strong global SOLAS fleet. This means that any efficiencies have the power to instantly impact a shipowners' or operators' bottom line. As a result, huge investments are made in adding more fuel-efficient ships to an already oversupplied industry, negatively impacting rates. Isn't it equally, if not more, important to switch the emphasis to more effective route planning and voyage monitoring?