How to get vessel uptime, fuel savings or reduced emissions – guaranteed

It’s time to shift your focus from short-term fixes to long-term goals. Are you targeting uptime, fuel savings or lower emissions? What if achieving your target was guaranteed? With outcome-based business partnerships, it is.

A new approach to maritime service agreements with big-picture thinking and long-term goals at its core is on the horizon. Taking a holistic instead of a transactional approach is the best way to:

• achieve your strategic business goals
• secure your future profitability
• hit your decarbonisation targets, and 
• squeeze every last drop of value from your investments.

But this requires a change of mindset and a new way of thinking about service agreements. An outcome-based business partnership will help you get the best bang for your buck from your investments in hybrid systems, future fuels and novel energy-saving technologies.

A commercial partnership instead of a one-way street

In an outcome-based business partnership, your supplier guarantees that a certain quantifiable outcome will be achieved. For example:

1. If you’re in the offshore industry, uptime is almost certainly your top priority.
2. If you’re a cruise operator then you’re probably focused on cutting emissions above all else. 
3. If bulkers are your business, CII compliance is likely your number one concern.
   

Focusing on a quantifiable metric instead of micromanaging individual systems and technologies provides a solid framework to achieve your goals. If your agreed outcome is achieved then you and your supplier share the rewards; if it isn’t then you share the losses.

This is what makes an outcome-based partnership a genuine commercial collaboration instead of a one-way street. It’s based on joint key performance indictors and shared benefits.

An outcome-based business partnership will help you get the best bang for your buck from your investments in hybrid systems, future fuels and novel energy-saving technologies.

Sharing is caring

The three main steps to building a viable outcome-based partnership are:

1. Identify the quantifiable goals
2. Agree the metrics to measure them
3. Define a payment model that benefits both parties.

For example, if your goal is to cut fuel consumption the agreed metric could be fuel efficiency, or tons of fuel burned over a specific period. If your fuel consumption drops during that period, you and your supplier share the financial gains from the common savings pot.

Because they’re playing for the same side, your supplier will be doing everything they can to make sure the outcome is realized. This might mean:

• Taking care of asset maintenance
• Optimising hardware like engines for maximum efficiency
• Advising on and installing energy-saving technologies
• Optimising your vessel’s propulsion system.
  

This is in contrast to a regular service agreement, where your supplier gets paid for these kinds of activities whether you succeed or not.

An agreement that fits like a well-tailored suit

Wärtsilä’s vision for outcome-based partnerships is based on a series of building blocks. These start from the equipment and powertrain level and go all the way up to the overall vessel level.

The powertrain-level building blocks are: 

• Power System Uptime ¬– optimising your engine room for maximum availability
• Fuel and Efficiency Optimisation – optimising your vessel’s engines to improve efficiency
• Asset Usage – actions such as crew training to maximise the benefits of new systems and technologies.

The vessel-level building blocks are:

• Voyage Optimisation – optimising vessel routing to reduce overall fuel consumption
• Vessel Fuel Optimisation – a two-level approach to optimising fuel consumption through engine and propulsion upgrades plus energy-saving technologies
• Emissions Optimisation – minimising fuel consumption in order to achieve a specific CII rating.
  

Like a well-tailored suit, these building blocks are combined into a whole that is far greater than the sum of its parts to maximise your profitability.

Outcome-based partnerships already making headway

This all sounds promising, you might think, but is it anywhere near becoming a reality? The answer is yes. Several vessel owners and operators are already onboard with this new way of thinking. Let’s look at a few real-world examples:

• A cruise operator looking to improve vessel fuel efficiency is looking to net fuel savings in the region of EUR 2.5 million with the help of an outcome-based service agreement from Wärtsilä.
• A platform support vessel operator has secured a guaranteed potential fuel saving of 20% under a proposed agreement with Wärtsilä.
• A tug operator has agreed an overall equipment reliability guarantee of 98% with Wärtsilä, with guarantees for vessel engine room reliability, duration of overhaul and the availability of the fuel gas supply and storage system.

Whether you’re targeting uptime, fuel savings, or lower emissions, with an outcome-based partnership you can invest with the extra peace of mind that a guarantee brings. This true win-win approach is set to revolutionise the maritime service agreement landscape. 

Want a cast-iron guarantee for fuel savings, emissions reduction, or vessel uptime? Then read our white paper: Outcome-based business partnerships – Why they deliver superior results in complex marine markets.