Maritime Informatics Is Ready for Prime Time

David Levy
September 10, 2020

Energy expenditure is a component of nearly every cost of business

Readers of this blog know we are obsessed with data.  We’ve compared data to crude oil, showed how it helps win the battle between man and machine, and advocated for sharing it to expand benefits for the entire maritime industry.  Many of us have spent our careers trying to understand data and how to use it to drive better decision making for ourselves, our companies and our customers.   Therefore, when asked to contribute to an article on the emerging field of “maritime informatics” which seeks to join “practitioners and researchers to explore the opportunities enabled by enhanced digital data sharing, digital collaboration, and data analytics,” I jumped at the chance. 

The article, A primer for a profitable and sustainable maritime business (which appeared originally on Windward’s Captain’s Insights blog) explores the relationship between the natural world and the abstract world of economics.  Survival in the natural world depends on how well organisms create, capture, store and consume energy (aka food).  Survival in the economic world depends on how well organizations create, capture, store and consume capital.  In both cases, consumption that exceeds the ecosystem’s ability to create, capture and store either energy or capital leads to a downward spiral and eventually extinction. 

Taken to the extreme over overconsumption, the dynamic explains our global sustainability challenge:  Are we consuming more energy than the natural ecosystem can provide? 

Similarly, the dynamic explains the struggle for business success:  A business that consumes more capital than its business operations or investors can provide will soon disappear faster than you can say “We Work.”  The other extreme—hording of energy or capital without consuming any of it—offers only the solace of survival, that is until activist shareholders demand a dividend.   

These ecosystems, of course, intersect:  All businesses consume energy of some type as they generate capital.  “Energy expenditure is a component of nearly every cost of business,” we write.  And in a capital-intensive industry like maritime, the relationship between the consumption of capital and energy is another way of describing the basic economics of moving cargo from one port to another. 

But maritime, as does the entire business ecosystem, requires growth, not mere survival.  For each firm, there is a level of capital generating activity that allows it to grow revenues and profits while using the optimal amount of energy necessary to do so. 

What if a business could measure that activity and tweak its operations in real-time to maintain those optimal levels?

Introducing Eʹ and Cʹ

Just so happens that one of the authors, Richard Watson, defined those optimal levels of activity as  Eʹ (or E prime) for energy and Cʹ (or C prime) for capital.   In maritime, as he writes, “Successful capital creation is measured by capital productivity or Cʹ (C prime)” which is “influenced by Eʹ because ships require large amounts of energy.”  More to the point,

Managing a ship requires balancing these two primes. To maximize Cʹ you want to spend the least amount of time traveling between ports and in ports and carry the largest possible cargo on each leg. In other words, you want to maximize port visits so you can carry more cargo with fewer ships. 

For cargo carriers, these concepts are reflected in the Energy Efficiency Operational Index (EEOI) which refers to GHG emissions per unit of transport work, such as grams of CO2 per ton-mile (gCO2e/tnm).  This KPI is a great way to measure the efficiency of a voyage.

But the paper addresses more than a single voyage; it addresses the entire industry.  How can maritime optimize E’ and Cʹ for the long term and remain a sustainable industry? 

For that, we need data. 

Data standards facilitate digital transformation

We need data sets. We need data standards. We need to share data.  We need analytics.  Once these pieces are in place, “data analysts can combine real-time digital data streams and historical databases to apply techniques such as artificial intelligence, machine learning, and digital twins to raise the quality of decision making” in maritime.

Orbit is one piece.  Orbit is a suite of five integrated business solutions comprised of dozens of features and data feeds that lets ship owners, operators and pool managers grow profitability, support sustainability and strengthen collaboration, while empowering the broader ecosystem such as insurance companies and port authorities to make better informed decisions.  As we’ve written elsewhere, our customers are aligning sustainability and profitability already.  In other words, they are optimizing for both Eʹ and Cʹ

We are not alone.  Other firms such as Windward (predictive intelligence that empowers actionable decisions in maritime safety, security, and compliance), ShipsFocus (a maritime venture studio & digital factory), Tototheo Maritime (vessel connectivity services), Circle Group (IT and intermodal logistics consulting) are putting some of the other pieces in place. 

 Read more about maritime Informatics here.

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