How Optimized Weather Routing Helps Mitigate the Cost Impact of New Regulations

When IMO 2020 comes into effect on 1 January 2020, it’s expected that the requirements for low sulfur fuel will increase overall fuel costs for shipping companies. Industry estimates put the predict fuel bills will rise by 30 - 40%, which will have significant impacts on freight rates.

Ultimately, the increased costs are expected to be passed onto consumers. Goldman Sachs has estimated full compliance with IMO 2020 could impact consumers by approximately $240 billion. As a result of these expected cost rises, efficiency gains from optimized weather routing will become even more important to mitigate the impact of new regulations on the bottom line.

What is Optimized Weather Routing?

Today, weather routing is not only crucial for avoiding adverse weather conditions but also to ensure each ship runs at peak performance. From pre-voyage planning to compliance and beyond, weather routing supports sustainable, cost-effective shipping.

Importantly, an optimized route is not always the shortest route. Sailing the shortest distance between two ports isn’t necessarily the quickest or most fuel-efficient route. Instead, optimum means maximizing the safety and comfort of the crew, while minimizing fuel consumption, managing time underway, ETA / Lay-can or any desired combination of these factors, all within the specific constraints of the weather and sea condition limits on each voyage.

Vital to all of this are the Three Essential Factors for Weather Routing Success: the perfect combination of weather routing, the weather-optimized route network, and the experience of Master Mariners.

By combining the experience of Master Mariners and the advantages of the weather-optimized route network with weather routing, it’s possible to offer a genuinely optimized service - a real strategy for success.

Three Ways Optimized Weather Routing Helps Save Money by Reducing Fuel Consumption

#1 Reduce overall fuel consumption
Optimal weather routing can offer fuel savings between 2- 5%, depending on the type of vessel, the season, and the conditions. Taking a fuel saving of 5% and a bunker price of $5000/ton, a ship burning 50 tons of fuel per day would see savings over $8500 on fuel costs during a seven-day transit.
 

#2 Manage speed effectively
Studies show the shipping industry can reduce emissions by up to 55% through measures to reduce fuel consumption. Specific techniques, like speed reduction and weather routing, can reduce emissions by 17-34% and 1-4% respectively and save up to €280 per ton of fuel.

Reducing emissions through speed reduction does have limitations because time is always a key consideration for shipping. However, full knowledge of circumstances can allow a vessel to slow down. For example, if adverse weather at a terminal means it cannot handle the cargo, relaying this information to the captain means he can reduce the speed. Otherwise, the vessel has to wait outside port until the weather improves. The same can also apply if the lay days and the canceling clause in a charter party allow.


#3 Reduce fuel consumption without compromising efficiency
Weather routing ensures that the benefits of reducing fuel consumption and saving costs does not compromise on efficiency. Taking into consideration the KPIs of the voyage, the optimal route means you can reduce fuel consumption without missing ETAs, breaking charter party agreements, or impacting on safety.

Want to find out more? Download the Three Essential Factors for Weather Routing Success whitepaper

 

Download Whitepaper