A smart way to tanker efficiency

Sep 02 2014


In this article, Peter Mantel, managing director of BMT SMART, a subsidiary of BMT Group, discusses the drivers that are pushing fuel efficiency to the top of the agenda in the tanker market and explains how fleet and vessel performance management systems can deliver on their promises.

Tanker owners, operators and charterers are currently facing unprecedented legislative and commercial pressures. In recent years, oil demand growth has been more than offset by high levels of fleet growth, with the global tanker fleet growing by a net 70.8 mill dwt, or 16.3%, from the start of 2010 until January 2014.

Moderate oil demand growth, combined with high tanker fleet growth resulted in a significant decline in crude tanker spot rates and secondhand tanker values from 2010 to the fourth quarter of 2013.

This price-softening and lack of demand in the market, mainly as a result of the economic recession, led to large numbers of vessels being laid-up in hot, or cold mode. Working tankers need to be operating as efficiently as possible, to ensure they deliver the optimum level of profitability. In reality, this equates to reducing operational costs wherever practicable.

The three major costs in tanker operation are crew, bunker fuel and drydocking for maintenance1. As crew numbers are governed by best practice and legislation, key savings must be made by ensuring that fuel usage is as economical as possible and timing drydocking for maintenance when most beneficial, in terms of performance and reliability.

Bunker fuel costs often account for up to 60% of total operating costs, so the assessment of fuel consumption is quickly becoming an integral part of tanker owners, operators and charterers operational strategies - having an understanding of overall fuel efficiency should be high on the agenda.

The introduction of the IMO Energy Efficiency Design Index (EEDI) and Ship Energy Efficiency Management Plan (SEEMP) guidelines were driven by a desire to reduce CO2 emissions, but greater efficiency should also lead to cost savings. But how is vessel efficiency to be calculated with the degree of accuracy required to make it more than just a best guess?

Smart data

The key to understanding vessel efficiency is the ability to collect smart data by accurately measuring all the different parameters relating to energy efficiency. Parameters that influence a tanker’s energy consumption include; technical efficiency, state of maintenance, prevailing weather and sea conditions and operational factors, such as load and trim conditions.

Using SMARTSERVICES, data from existing vessel systems is collected on board and combined with external environmental data including wind, waves and current, and further processed using the system’s unique coefficients and derived values to analyse many different performance parameters.

SMARTSERVICES automatically monitors vessel performance and visualises key indicators and trends using intuitive, interlinked on board and onshore applications. All parameters are measured through sensors installed during the initial fit-out or retro-fitted during routine maintenance.

Vessel performance monitoring equipment can also assist in compliance with emissions regulations. In the mid-1990’s, estimates indicated that the shipping industry’s share of global CO2 emissions could increase 20-30% by 2050. In response, the IMO introduced a raft of new regulations including the ship pollution rules contained in MARPOL 73/78. Since October 2013, every ship visiting French shores must report its CO2 emissions for their particular voyage.

Stringent requirements

Emission Control Areas (ECA) for the US Caribbean, including Puerto Rico and the US Virgin Islands come into force this year.

Worldwide, it is likely that increased regulatory requirements to reduce CO2, NOx, SOx and other effluents, as well as the general environmental impact of ships, will lead to even more stringent recording and reporting requirements.

Measuring and recording tools, such as SMARTSERVICES not only help address compliance issues, but also help tanker owners, operators and charterers to manage the restrictions on CO2, NOx and SOx production, within the context of the bigger commercial picture.

The importance of deploying an independently validated system cannot be overstated. When measuring, validating and benchmarking vessel performance, there are a wide range of stakeholders within the supply chain, each with their own vested interests. It’s far too easy for a vested interest to become a conflict of interest.

The most effective way of dealing with this eventuality is to ring-fence the measurement and validation process, keeping it completely separate from any other consultancy, or equipment supply arrangement.

Demand for fleet and vessel performance management (FVPM) is increasing, as growing numbers of tanker owners and contractors realise the benefits. The multitude of pressures on the global maritime industry means that tanker owners and contractors can no longer afford to ignore the performance of their fleet.

However, there is still scepticism within certain elements of the shipping community and some tanker owners, operators and charterers are still wary of the value a monitoring system can deliver.

Perhaps this is understandable having been used to an environment where Chief Engineers produced miracles on a regular basis, armed only with the data from dials in their engine rooms.

However, the industry is changing and there is a growing need to deliver stakeholder transparency on top of commercial and regulatory considerations. Cargo owners, charter companies, banks, investors and insurance companies are all increasingly demanding evidence of environmental and operational efficiency commitments when making contract decisions. Tanker owners, operators and charterers must be able to provide independently validated performance results to satisfy their stakeholders.

Arguably, the greatest value that performance monitoring tools such as SMARTSERVICES can deliver becomes clear when one looks beyond the benefit to a single tanker on a single voyage. Once multiple data-sets become available from multiple vessels over a period of time, the information can be used to benchmark performance and drive improvements across a fleet. Key indicators and trends that could lead to a positive change for future voyages can be leveraged, while single parameters causing a drop in efficiency can be identified and addressed. Drydocking for maintenance and renewal of antifouling can be timed to take place just before any rapid drop-off in vessel performance, highlighted by historical efficiency data.

Looking to the future, it is not unrealistic to envisage a time when all merchant vessels are equipped with a fully integrated bridge where performance parameters and emissions data is displayed alongside navigation systems and thruster controls.

Voyage planning can already be checked against efficiency and emissions requirements to identify the most appropriate routing, while performance management reports can be produced automatically. Such reports cover everything from environmental impact, hull and propeller efficiency and bunkering factors through to crew data, scheduled maintenance results, economic modelling and SEEMP/legislation.

The combination of more rigorous legislation and harder economic conditions has led to tanker owners and operators needing to have easy access to the emissions and performance data for their vessels. Yes there is still scepticism, but the tide is turning. The overall decline in tanker freight rates, both in the crude and product tanker markets, coupled with high bunker prices, should encourage shipowners to reduce their operating costs considerably and in particular, bunker consumption.

This is expected to continue into the future, on the one hand due to new energy efficiency regulations and on the other hand due to the fact that tanker companies traditionally maintain very high technical and operational standards for their vessels.

It is therefore expected that the tanker market will drive the shipping industry’s move towards increased energy efficiency. The benefits of being able to use real-time data to dynamically manage the performance of a fleet of vessels, or choose to analyse and review data over a period of time thus making informed operational and maintenance decisions, are hard to ignore.

Footnote-

1 - Moore Stephens OpCost 2013.



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