This is a shortened version of a white paper by Dr Henry Chen, chief naval architect at navigational information provider Jeppesen.
According to the International Chamber of Shipping (ICS) at the 2013 United Nations Climate Change Conference (UNFCCC), lowering emissions by improving fuel efficiency is an economic “no brainer” for the shipping industry.
The high cost of fuel, coupled with environmental concerns, already provide ship owners with ample justification to continue improving fuel efficiency and reducing CO2 emissions. In support of this transformation, structural impediments such as outdated charter party clauses need to be removed, and the use of applicable new technologies embraced. One thing is certain: in today’s (and tomorrow’s) fiercely competitive globalized economy, only the most efficient shipping companies and modes of transportation will survive.
The immediate focus at IMO, pending the conclusion of a replacement to the Kyoto Protocol in 2015, is the development of a mandatory system for the monitoring and reporting of the fuel consumption and CO2 emissions by every individual ship in the commercial world fleet. This could be cost-effectively implemented as an extension of the existing shipboard VDR.
Such a monitoring system, similar to the airplane ‘black box’ flight data recorder, provides an ideal platform to host other applications such as charter party performance verification, condition based maintenance scheduling, voyage optimization, and e-navigation.
For spot and voyage charters, the ship owner could use advanced voyage optimization tools to quote fixed charter rates in advance of the passage. For example, pricing could be based on a range of arrival times selected by the charterer.
A typical example of fuel consumptions for a range of arrival times for a VLCC delivering crude oil from Akpo Terminal, Nigeria to Rotterdam during winter, according to simulations of the ship’s passage in forecasted weather, would see the earliest arrival, 18 hours earlier than the planned schedule, costing 57 tonnes more fuel, whereas arriving one day later would reduce fuel consumption by a similar amount.
Reflecting on past experiences of adopting double bottom hull designs, the unification of class society rules, and mandatory carriage of ship VDR, the maritime industry is better off being proactive than reactive. The concurrence of skyrocketing fuel prices, growing environmental concerns, increasing regulation, and advancements in relevant technologies, further underline that now is the time for more efficient and intelligent approaches in ship operations and chartering.
Proven technology from the airline industry is available and can be adapted for use in marine. Working together with shipping organizations such as BIMCO, INTERTANKO, and OCIMF to update charter party agreements based on rational thinking and proven technological innovations, the outcome will be win-win-win for the ship owner, charterer, and the environment we all live in.