Article

The alchemy of effective compliance

4 min read
Published
21 Sep 2022
Text
Wärtsilä
Photo
Shutterstock

Whether dealing with charter agreements or emissions regulations, the accounting and algebra of compliance reporting are a necessary ‘license to trade’ for ship operators. But the science of compliance can reveal opportunity far beyond meeting required conditions. Finding the most cost-effective way to meet charter conditions or the right vessel utilisation strategy to maintain Carbon Intensity Indicator (CII) ratings, for example, both depend on a company’s ability to draw insights from the data they record to prove compliance. 

Many ship operators are already familiar with data recording and reporting through both charterparties and existing regulations, including the European Union’s Monitoring, Reporting and Verification (MRV) regulation and IMO’s Data Collection System (DCS). Incoming regulations like CII, coming into effect in 2023, use much of the same data and reporting methods. 

“If you put out a regulation, you want to make sure that it can be enforced and that operators can comply,” says Kay Dausendschoen, Head of Product, Wärtsilä Voyage. “The MRV for example uses the same data that ship operators already collect in their traditional noon report. CII uses similar data and adds to that a ‘label’ indicating the vessel’s efficiency performance.” 

But while traditional manual reporting associated with noon keeping will be sufficient to evidence compliance, it has limitations. One is the amount of time needed to fill and then analyse these fields compared to a more automated logging solution. Second is the difficulty in spotting errors in raw data collected. Sometimes this is only evident after multiple calculations – and often only once raw data has been sent to contractors for evaluation - meaning that compliance or environmental departments need to painstakingly work back down the chain to identify the initial incorrect entry. 

Wärtsilä Voyage’s integrated optimisation solution FOS (Fleet Optimisation Solution) solves these problems. The solution’s Compliance and Reporting module, which allows operators to evidence both regulatory and stakeholder compliance in a transparent and partially automated manner, is ‘fed’ by SmartLog. This system pulls in data from noon reports and other sources to automatically populate compliance reports and formulae. Cloud-based plausibility checks minimise the risk of mis-entries or inaccuracies that can invalidate final reporting, saving valuable time in tracing back correction chains. 

fos-img-03

The dedicated ship-to-shore connectivity on which FOS relies means that data can be sent to the cloud for analysis and shared with on-shore teams and relevant stakeholders via dashboards and completed compliance reports. For users aiming for simple compliance, the task can end there. But the wealth of data collected and analysed can be interrogated even further by those with an eye for maximising value.

A keen eye on CII

Taking CII as an example, Dausendschoen outlines three primary uses for optimisation solutions. The first is to create transparency for what has happened in the past, enabling reporting. Beyond charting the CII rating, FOS can also show historic Annual Emissions Reduction (AER) and Energy Efficiency Operating Index (EEOI) from the same data – two calculations that are used in several other industry frameworks. The Poseidon Principles, a commitment signed by 28 banks to date to invest in vessels that meet the IMO decarbonisation trajectory, is one such framework that relies on AER. For vessel owners that may need to prove their emissions reduction progress to financers, FOS Compliance and Reporting module can generate the supporting documentation with minimal resources needed from office teams. 

“When you look downstream to the logistics chain, there are more and more requirements from consumers,” says Dausendschoen.

Customers are demanding transparency as they focus on their own emissions. But at the moment it is almost impossible for sellers to have an overview of the complete footprint. Our systems can provide that perspective to ship operators and their customers.

- Kay Dausendschoen, Head of Product, Wärtsilä Voyage

Forecasting compliance is another side of the same reporting function. CII demands stepped improvements to stay within the same rating band, meaning that vessels operating at the same efficiency in five years’ time will find themselves with a lower rating and possibly in another band. By projecting CII rating based on vessel performance, operators can clearly see the carbon intensity improvements they need to make across a vessel’s lifecycle. 

This is a critical element for making decisions on investments aiming to reduce emissions, helping operators identify when interventions are needed. The data needed to support improved energy efficiency is integral to FOS’ optimisation capabilities. So too is the ability to simulate or play back voyages with new boundary conditions – for example new machinery or energy saving devices – in order to validate energy efficiency investments. 

Dausendschoen notes that interest in long-term planning will vary between vessel sectors. Container and cruise lines own and operate their vessels and will be keenly interested in the efficiency improvements they need to make across the life of their assets. For bulk and tanker vessels, particularly those operating in the spot market, the focus is more likely to be on shorter-term means of staying within a particular CII rating band for the year. FOS can be used for these purposes too.

Optimising and advising

Each voyage will have an impact on the CII score of a vessel. Thanks to the integration of charting, ship data and voyage planning, that is central to FOS, this impact can be measured as the vessel’s itinerary is being planned. Operators can run through multiple itinerary options – factoring in speed, weather consumption and several other elements to adjust fuel consumption – in order to work out the best way to maintain their CII rating on that voyage. 

The final use of FOS is as an advisory system during operations. Integrated navigation, including connectivity to weather data, means that routing and speed can be optimised in real-time to avoid weather that may demand higher fuel consumption for example. Hull performance decreases, deduced by the amount of fuel needed to achieve a vessel speed under specific conditions, can be highlighted and the CII advantage of hull cleaning illustrated, enabling operator to take informed choices about real-time optimisation options. 

While CII is an immediate focus for many ship operators, the story is similar across all other compliance requirements. Once parameters and requirements are established, operators need to take a data-driven approach to decision making to make the most suitable investments and generate the best returns within those frameworks. 

The path to driving value from compliance is clear, says Dausendschoen.

Wärtsilä Voyage’s role is to equip customers with tools they need to manage compliance in the most effective way, take the right decisions and to track the effectiveness of their choices over time.

- Kay Dausendschoen, Head of Product, Wärtsilä Voyage

Monitoring and reporting are just the tip of the compliance iceberg. With effective data analysis and the tools to interrogate the data meaningfully, ship operators can invest wisely, adapting their operations, technologies and use of their fleet to turn compliance requirements into business opportunities. 

Related content
Related solutions
Fleet Optimisation & Safety

Wärtsilä Fleet Optimisation Solution

It saves costs and increases safety by automatically optimising route, providing the fullest and latest voyage data, while keeping the onboard and onshore parties informed and notified.

Voyage solution EXCLUDE

Compliance and Reporting

Ensuring charter party and environmental compliance (e.g., MRV)

Data Service Downloads

Wärtsilä Smart Support Centre

With remote maintenance, updates, issue detection and troubleshooting avoid costly on‑site visits and related costs and take advantage of minimal downtime.

Wärtsilä Voyage. Let's connect.