Maersk’s ZeroNorth – optimising vessels in commercial operations

Dec 17 2020

Maersk Tankers spin-off ZeroNorth is finding ways to optimise vessels which are being commercially operated – and Cargill has joined as a partner.

Maersk Tankers has spun-off a new digital start-up, ZeroNorth, to find ways to optimise commercially operated vessels worldwide.

ZeroNorth, which already works with 8 major owners and charterers, says its technology is being used on 1000 vessels. 

The software grew out of a system developed in house by Maersk Tankers, known first as SimBunker, and later as Optimise. Now it is an independent company. 

The software has been used by Maersk Tankers’ fleet since June 2019, and generated $8m in savings in its first 12 months of operation, the company says. 

In other words, these are vessels which the company charters in, rather than vessels it owns. Maersk Tankers itself operates over 200 vessels, but many of them are in a pool, and chartered in.

The charters are normally chartered in on a time charter basis, so Maersk Tankers pays for the fuel, as the charterer. But it does not do the technical operations, so it does not have direct control over the decisions which would affect fuel use, such as speed and route.

ZeroNorth has 38 employees with backgrounds in mathematical modelling, software engineering, data science, data engineering, product owners and shipping. Of these, only 3 explicitly come from shipping, reflecting the company’s focus on advancing digital technologies with perspectives drawn from outside the sector.

ZeroNorth’s CEO, Søren Meyer, is former CEO digital business – and also held previous roles as VP asset management and chartering director – at Maersk Tankers. 

With so much technology expertise among its employees, ZeroNorth can create software which is “super easy to use”, Mr Meyer says. “It should be as easy as any other software you buy.”

The company has already announced plans in June 2020 to grow its staff to 100 employees.

Maersk Tankers also said it was looking to attract “strategic investors from the tramp shipping industry to develop the company and its products to the benefit of the industry as a whole.”

In September 2020, food corporation Cargill announced a “strategic partnership” with ZeroNorth, where it would commit its entire “operated fleet” to using ZeroNorth’s Optimise software.

Cargill has been utilising the software as a customer since 2019, testing it on part of its chartered fleet. It charters in a fleet of 650 vessels, including 120 Capesize, 180 Panamax, 120 Supramax, 130 Handysize and 20 Coasters, working with about 30 owners.

ZeroNorth believes the software could ultimately be used for the whole industry, covering tankers and the dry bulk fleet. 


How it works

The principles of the software are to “follow the dollar” (focussing on cost savings), utilising already available data, making the user experience as good as possible, and drawing on partner / customer knowledge where possible.

To feed the software, the company gathers all information it can find that has an effect on fuel costs, including fuel price, weather, vessel location and experience with that specific vessel, such as previous fuel bills. It also takes the vessel’s market price into consideration. 

If the software identifies an improvement which can be made to the vessel’s operation – measured in terms of the profit an owner who had the vessel on a time charter would make (known as “time charter equivalent”) – an updated instruction can be sent to the vessel, for example, asking the captain to reduce speed. 

If the vessel has a high day rate, it may make financial sense to speed the vessel up to reach its destination faster. Conversely, if the day rate is dropping, it may make more sense to slow the vessel down and save on fuel. If the fuel price is rising it may make more sense to slow down to reduce fuel burn, and vice versa.

Since these factors are continually changing, along with weather forecasts, the data needs to be managed accordingly.

Also, the terms of the contract with the cargo owner need to be maintained, which will typically state a certain minimum speed.

Alerts can be sent to the operators of the vessels if the software thinks they could be sailed more optimally, suggesting what changes could be made and what their impact would be.

There is a dashboard where the vessel owners, managers and operators can monitor the “time charter equivalent” earnings of a vessel, and then take action during the sailing.

CEO, Søren Meyer observes that there is something of a gap in the maritime operations system, where one party has control over decisions about how to operate the vessel (the technical manager), while another pays for the fuel (the commercial operator). ZeroNorth aims to cover that gap, by giving tools to the commercial operator to better understand how fuel is being used. 

“It is a gap in the market - that is not talked a lot about,” he said.

The charter party document will typically include a “fuel curve” stating the guaranteed maximum fuel consumption vs the different vessel speeds – but does not give much further insight into vessel performance, he says. The charterer also knows what the fuel consumption was after the voyage, when it receives the fuel bill. 

There are other situations where we see one party paying for fuel and another making decisions about how much is used, and see suboptimal outcomes. For example, a hotel guest who runs a bath with lots of hot water, or a building owner who refuses to invest in energy efficiency because the tenant pays the heating bill.

The algorithms don’t yet compare one vessel with another, or make a benchmark, but just work out if a vessel is sailing “optimally” at this point in terms of its “time charter equivalent” earnings.

“We are not building a model for the entire world. We keep adding bites of the market and learning from that,” Mr Meyer says.

But learning about one vessel can be replicated with similar vessels.

“It is about having an engaged data driven conversation with the vessels,” he says.


Related News

Tanker disabled in Bosphorus taken under control

(Mar 17 2022)

Product tanker “ATOLL” reported as disabled after mechanical failure while transiting the Bosphorus has been taken under control after drifting for some distance.

LNG fuel tank system for tankers and bulkers gains DNV preliminary approval

(Jun 15 2021)

An innovative liquefied natural gas (LNG) fuel tank system developed by Newport Shipping for crude tankers and bulkers has gained a key preliminary class approval to facilitate retrofits of such vessels in line with new environmental requirements to ...

DMC: flex tunnels 3 nozzles 3 manoeuvring systems 7 rudders for new tanker

(May 13 2021)

Damen Marine Components (DMC) is making a special contribution to the innovative inland waterway tanker that is being built for BASF and Stolt Tankers.

ABS awards industry’s first AIP for infection mitigating design to Samsung Heavy Industries

(Jan 07 2021)

In an industry first, ABS has awarded Samsung Heavy Industries (SHI) Approval in Principle (AIP) for crew accommodation and ventilation systems designed to mitigate the spread of infectious diseases such as COVID-19.

Nippon Paint Marine adopts novel solution for diverless hull inspections

(Nov 05 2020)

Nippon Paint Marine has developed a novel hull inspection tool that negates the need for divers or remotely operated vehicles.

Jun-Jul 2024

Tanker Operator Athens report: managing crewing, training challenges, views on SIRE 2.0