Data-Driven Strategies: Achieving Net Zero in the Shipping Industry

While shipping is one of the most challenging industries to decarbonise due to the sheer volume of fossil fuels burned per voyage, advances in good data management practices present an invaluable opportunity to tackle the problem head-on. 

For insurance professionals operating in the marine insurance sector, accurate, well-managed data directly impacts the ability to make efficient risk transfer decisions. With the power of marine geospatial data, for example, organisations can better track the journeys of their assets to optimise routes better and, in turn, reduce shipping costs and emissions. 

Marine geospatial data is significant because it can give owners and mariners more insights into their surroundings. Insurwave’s platform utilises geospatial and navigational data to help track the journeys of its users’ assets, from vessels to cargo and planes, tracking when carriers enter and exit conflict zones or other customised areas. This data also supports other industry initiatives such as Just-in-Time arrivals (JIT), green shipping corridors, and voyage optimisation. 

JIT arrival is a concept where a ship maintains the optimal operating speed to arrive at its boarding place only when it is available to reduce the emissions released as the vessel waits for its spot. BIMCO, an international shipping association representing ship owners, estimates that vessels spend up to 9% of their time waiting at anchorage. As navigational data would partly power JITs in a more connected marine data ecosystem, they have the ability to unlock 11% fuel and emissions saving for shipping in the near term, according to the IMO.

Using data collection and reporting obligations for collaboration could also reduce shipping’s environmental impact. In a recent whitepaper report published by French digitalisation firm Opsealog, the organisation called for a more collaborative approach to digitalisation in the maritime sector so that all organisations can contribute their data insights and collectively share the benefits.

The paper, ‘Harnessing Technology for Ship Environmental Compliance’, argues for the importance of putting the right architecture in place to make data easier to collect, share and analyse by organisations, big or small. This includes standardising data formats to break silos and make data accessible.

“If each shipping organisation can take steps towards democratising data within its own communities, networks, and supply chains, we all stand to benefit,” said Arnaud Dianoux, founder and managing director of Opsealog. 

Bringing fragmented data together is vital in an industry which can sometimes struggle to gain insights into its exposures. Insurwave solves this issue as a single source of truth that brings together and presents insurance data to help risk professionals make smarter transfer decisions and ensure their stakeholders have visibility of the same data.

Looking beyond data, several innovative solutions have been proposed to help the industry reach, or even surpass, the goals set by the IMO. Slowing ships down, adding wind assistance, or even adding coatings to make boats more slippery in the water will all cut down on the fuel used. 

When it comes to ship speeds, here data comes in handy as a method of monitoring voyage durations, which can then be used to measure the effectiveness of the initiatives and adjust where needed to ensure the most significant reductions in emissions possible. Beyond just speed, changing up the fuel supply is also an option. While it will still produce greenhouse gases when burned, its production can be achieved via renewable energy sources and carbon dioxide taken directly from the atmosphere or from biological sources to help keep the balance of emissions low.

This method is being tested with some shipping companies, most notable of which is the shipping giant Maersk who announced just last month that it gathered enough bio-methanol to complete the world’s first methanol-enabled maiden voyage from South Korea to Denmark – more than halfway around the globe. The voyage will provide Maersk’s vessel operators with experience with the experimental fuel as it prepares to receive a fleet of new methanol-enabled ships starting from 2024.

Addressing delegates in a June meeting, IMO Secretary-General Kitack Lim described 2023 as the year of decisive action for the organisation. But it also has the potential to become the year of collaboration and better data practices. With its access to large data sets, the maritime insurance sector has a unique opportunity to contribute to the industry’s sustainability goals. 

Shipping organisations can be crucial in driving the transition to sustainable shipping by leveraging data to identify inefficiencies, optimising routes, and assessing climate change risks. Moreover, marine geospatial data offers valuable insights that can reduce costs, emissions, and better risk management.

However, this requires a multi-faceted approach, combining technological advancements, data-driven insights, and industry-wide cooperation. By embracing these measures, the shipping sector can mitigate its environmental impact and set sail for a more sustainable future.