Investing in digital tools that counteract carbon dioxide emissions not only benefits the climate. It is also a profitable business for shipowners, according to a new international report.
Since the IMO, in July 2011, introduced mandatory measures for the reduction of greenhouse gas emissions from shipping great progress has been made in the development of alternative fuels. At the same time, there has been a digital revolution that has so far meant at least as much in the pursuit of sustainable shipping. 40 percent of all technology companies that offer digital solutions that result in efficiency improvements in the shipping sector are founded after 2011, Imarsat and Thetius write in the report The Optimal Route.
Of course, much of the discussion is about, as the title reveals, the optimal route. Just in Time (JIT) is an important part and the report refers to several other studies, for example to one from Aalto University’s University of Technology which shows that profitability can be improved by up to 17.8 percent among mid-range tankers using digital technology for travel optimization. But technology can also make savings in other ways, for example by offering
digital doctor “house calls”, which means that ships do not always have to be redirected when sick crew members need treatment.
According to the report, investing in digital technology is worth a lot of money. In fact, much more than investments in alternative fuels (although the authors of the report do not think that one should exclude the other). Digital optimization is estimated to account for up to 38 percent of the reduction in hydrogen emissions by 2050, but will only cost a fraction of the total cost of nearly $ 2,000 billion that shipping conversion is estimated to cost.
Investing in digital technology and embracing innovation in the field is therefore not only wise, but more or less necessary, the authors say. Those who do not do so risk becoming redundant in the shipping sector, where development is rapid at the same time as changes emerge in several parts of the global supply chain – from trade financing to standards and regulations.
But it’s relatively easy to hook up. The report provides three steps that all shipping companies can take immediately and with relatively modest investment:
- KNOW YOUR NUMBERS. Gather as much data from your ships and assets as possible and measure current performance against recognised benchmarks such as the EEXI and CII.
- IMPLEMENT A DIGITAL DECARBONISATION STRATEGY. Use the results from the measurements gathered to draw up a digital transformation roadmap, identify data silos and investigate how to liberate them, identify cargo blindspots and consider how to bring visibility to cargo owners, and build flexibility into your fleet renewal program that allows for an uncertain trajectory for global decarbonisation regulations.
- PREPARE TO PARTICIPATE IN GREEN CORRIDOR SCHEMES. There is reason to believe that participating in them will bring commercial and competitive advantages which might prove very impactful over time.