Cut costs, not corners, using business rule engine to streamline bunkering decisions

Consider a common scenario faced by vessel operators: An arrangement has been made for bunkering a specific vessel. The tank still contains bunker from the previous purchase. Can the new bunker be comingled with the old? If not, then which tank to use to store the new bunker?

A vessel operator with responsibility for multiple vessels on active voyages might make these types of rules-based decisions as part of everyday business. Typically, operators make such decisions from memory or based on vessel-specific operating manuals. Running multiple vessels combined with increased volume and complexity of data-based decisions make it prudent to replace human decision with software to eliminate the risk of making wrong decision without thinking through the consequences. This is where a business rules engine provides organizations with a much-needed support system for rules-based decision management.

How does the BunkerPlanner rule engine work?

BunkerPlanner rule engine is a cloud-based tool that automates decision-making in situations where there are specific rules to operate and bunker vessels. The engine manages the entire process of connected decisions in the sequence determined by operational procedure(s) set by the ship owner/operator. Whenever a bunkering decision needs to be made, the engine uses static data (e.g. tank configuration on a specific vessel) and dynamic data (noon report specifying vessel’s voyage progress), evaluates that data against pre-programmed rules, and then delivers the recommended decision which is visible to the vessel operator and the bunker buyer.

The software rule engine mimics the manual decision process based on the logic and rules that have been specified by the operations team, while considering current situation reported by the crew. To minimize chance of an error, BunkerPlanner engine relies on two data-transfer models to carry out these decision-making processes:

  • Backward-chaining based on predefined goals (e.g. minimum/maximum or exact quantity of fuel upon arrival at the port of call; holding new fuel in quarantine for specific number of days)
  • Forward-chaining considering event condition rules (e.g. if passing the same port twice and future price is better, recommend buying at the later date)

What does your business gain?

Business rules engine enables the team to make decisions faster, while ensuring that all applicable rules are not broken in the process of deciding where, when, and at what price to bunker. The operator does not have to worry whether their decisions are compliant with business rules. The Operations team is able to edit, change or create new rules applicable to the vessel, voyage, or type of cargo. Any changes to the rules are announced clearly and applied in every single circumstance. Every decision proposed by the system is annotated by explanatory message(s) visible to the operator, so there is no confusion because any particular decision has been reached.

Shifting from manual decision management provides a huge operational advantage and assures error-free decisions. According to the shipping operations experts, many organizations underestimate the efficiencies they can gain by taking the decisions out of the hands of people. Typical organizations frequently struggle to assure consistent application of rules at all the times and in all processes that involve complex, rules-based decisions. As a result, the organization loses efficiency and often loses money.

If you are interested taking better business and operations decisions affecting your fleet and your voyages, the BunkerMetric team is available to perform a hands-on trial with your team. We are here to help you evolve your decision-making process from good to great.

Customers are always right, so how is BunkerMetric adopting feedback?

The times of transitions are unsettling, stressing people and business models. It is even more difficult when the business is changing at the same time as the technology evolves, often at different speeds. This can be clearly seen in the ship operations and voyage execution area.

In a major development, IMO changed the game of fueling the ship, while regional Sulphur Emission Control Areas made dual fuel usage an acceptable tactic. Modern engines equipped with array of new sensors produce more data about ship’s sailing behavior, allowing companies like BunkerMetric to employ more sophisticated algorithms capable of finetuning decisions taken between the ship and the land-based back office.

Proliferation of data produced by market, ship’s and as outcome of decisions taken in the back office tests decision capabilities of business teams. Relying on experience alone is still valued, but owners-operators investing in information technology platforms supporting human experience fare better than their competitors.

In the process of developing new technology to address fuel buying decisions, we have discovered a few interesting things of interest to people interested in improving shipping operations processes.

Efficiently distribute information to all parties to foster better collaboration and faster decision turnaround.

There is a tremendous need for the end-to-end decision + consequence visibility between various business function teams. From the chartering desk, through the operators’ desks, to the ship bunkering and supply desks. A lack of common insight into voyage decisions results in each team making decisions which in themselves are good, but taken together with decisions of other teams, lead to less than optimal outcome. This has a knock-on effect on the company achieving equally well on all Key Performance Indicators. Mixture of real-time and delayed data causes problems throughout the chain of decisions. Sorting out which data is important for real time response and which is only important for multi day (week) tactical plan is a mundane task and often leaves people at disadvantage, picking up the pieces and miscommunicating with other teams on the impacts of decisions taken by each team in separation. We noticed that companies using BunkerPlanner benefitted from keeping all three teams in the loop allowing them to embrace up-to-date automated planning centered on voyage performance, but also transparently considering interests of trader, ship’s master, ship’s operator, and the bunker manager.

Automate alerts and updates and make them visible centrally in dashboards, not hidden in e-mail messages.

In shipping operations, we learned to live with noon reports, from which we derive impacts on voyage commercials (TCE) and bunker procurement decisions. Many opportunities to improve TCE boil down to not implementing automated alerts based on continuous data analysis. For fast and most effective use of voyage data, automation is critical, so that updates, warnings, and communications are not constrained by the timing of the reports, whether created by the ships or the decisions taken on land. We designed BunkerPlanner with automatic alerting and visual clues directly on the ship journey dashboards in mind, because we studied how bunkering teams like to receive information, process data and communicate with other functional teams inside the company.

Learn why a major ship owner/operator empowered their vessel and bunker operators:

Download “Top 4 Signs that your Shipping Business is ready to Profit from Optimized Planning”

Manage by exception highlighted from automated analysis of data.

Management by exception gives employees the power, control, and responsibility to make informed decisions faster and with greater clarity. Automation, not manual process, improves responses to voyage data, because it allows managers to focus on problems requiring actual intervention, rather than tying them up with simple issues or insignificant delays. This method embraced by BunkerPlanner technology allows operators, traders, and ship masters to fulfil their obligations to accurately project cost/time/profit trade-offs and gives them time to find the most rational decisions, while maintaining certainty about voyage performance against promises made to the customer’s.

Ask technology to predict problems and suggest actions, then use human experience to decide, not the other way around.

Using voyage data powerfully and practically helps voyage operators predict and plan for problems and deviations with the bunkering team more accurately. The sooner everybody is aware of an issue, the sooner changes can be made and bad outcomes addressed. Effectively applying real-time data and prescriptive analytics applications makes difference between KPI-measured success and failure.  We saw how various teams of our customers used BunkerPlanner to achieve that, and we are certain that we took the right path when deciding on the development roadmap of our applications.

Learn more by contacting our team and don’t forget to click on the links to various useful management briefings highlighted  throughout this blog.

Learn how a specialized bunker strategy planning tool complements any typical voyage management system:

Download “Is having a voyage management system enough?” briefing

First customers take advantage of BunkerMetric and Dataloy integration to optimize bunker procurement

Maritime technology company BunkerMetric and the leading marine chartering and operations software provider Dataloy Systems have announced commercial availability of their integration supporting optimized bunker planning and procurement.

The integration allows BunkerMetrics’s bunker optimisation software, BunkerPlanner, to securely integrate with the Dataloy Voyage Management System, allowing a seamless exchange of data for customers who have implemented software from both vendors. The native data integration based on Dataloy API provides VMS users with advanced optimization solution increasing profitability of their voyages, cutting CO2 emissions, and improving financial KPIs related to fleet operations.

Combined with commercial and operational voyage plans established in Dataloy VMS, BunkerPlanner uses vessel-related data (specifics, position, route, ETA, and tank capacity), bunker prices, primary and alternative bunkering port details, sailing distances and rules, Emission Control Zones requirements to generate an actionable bunker strategy for each vessel of the fleet.

An advanced algorithm developed over three years of extensive testing in real world, BunkerPlanner considers relevant parameters and constraints to recommend operators’ voyage bunker procurement strategy in concert with a Dataloy-generated voyage plan. The unique scenario-planning capability of BunkerPlanner optimization recommends bunkering ports, including primary and alternative, and ranks those bunkering scenarios by costs and efficiency savings. This creates a seamless link between decisions taken by bunkering desk, vessel operator, and cost controller, and results in better voyage profitability.

The strategic product partnership between Dataloy and BunkerMetric enables operators of tramp fleets to break down function and data silos fulfilling the promise of benefits generated by smart digitalisation of business and operations processes. The success of this integration has already been proven by joint customers of Dataloy and BunkerMetric, something which has not been reproduced by other software companies operating in this space.

Commenting on the partnership, Fernando Alvarez, CTO of BunkerMetric said, “The shipping industry is continuously searching for technology information management technologies that improve profitably, while helping with decarbonisation of the fleets. Due to the large sums of money spent in bunkers, our solution offers an unusually high ROI and a very short payback period when combined with Dataloy Voyage Management System. We believe that our partnership with Dataloy gives tramp fleets’ owners and managers ways to generate higher returns and achieve their sustainability objectives. By working with Dataloy, we enable our joint customers to achieve higher efficiency than possible with legacy voyage planning and optimization solutions”.

Hege Jacobsen, Managing Director of Dataloy Systems, said, “Our integration partnership with BunkerMetric demonstrates our strong commitment to provide fleet owners and operators an avenue to digitalise their business and technical operations to achieve their decarbonisation and sustainability objectives. Collaborating with BunkerMetric extends the value of the data contained in Dataloy VMS and provides means to gain actionable recommendations to make each and every voyage sustainable and more profitable, something that benefits fleet owner’s and operator’s financial position. This API-driven integration extends our VMS’s capabilities in efficiently digitalizing broader range of our customers’ processes in a cost-effective way not possible with custom-developed solutions based on only loose integration or rudimentary file transfers”.
Contact and for more details.

Make your vessel voyages more profitable

The fragmented nature of many shipping companies creates a complex landscape of competing objectives, key performance indicators and decisions. Reconciling impacts of decisions taken by the chartering desk, the operations desk and the fleet management desk consumes major part of any day in life of a shipping company.

As the shipping market continues to evolve, operators must make decisions at a faster pace, sometimes without the chance for multiple teams to agree on the most beneficial strategy. Whenever objective of one team affects objectives of another, opportunities to profitability and efficiency rapidly diminish.

Since the voyage is the keystone block of shipping company performance, great attention is paid to fulfil the promised objectives of the charter contract, while optimizing a series of controllable and uncontrollable events arising in the course of each voyage. Delays at cargo origin port, weather-related routing changes, or delays at the freight destination port require operators to juggle charter commitment, vessel performance, and bunker inventory.

While the most common approach to accumulate data from all voyage-related events in a voyage management system, the complex dependencies between the data preclude operators’ efficiency in maintaining originally estimated voyage profitability, not to mention improving the yields from each voyage by adjusting vessel sailing strategies and vessel bunkering strategies. For this reason, operators benefit greatly from prescriptive form of analytics, where an algorithm mimics the thinking of the human operator, but considers many more factors and many more scenarios than a human operator would do. The area of the greatest impact from employing a specialized planning optimization solution is not surprisingly the bunker procurement area. While bunker generates in excess of 50% of a typical voyage cost, shipping companies long considered bunkering strategies as impossible to digitalize. Lack of transparency, opaqueness of decisions and bunker pricing dynamics were long cited as key obstacles to employ smart technology solutions in this area. No longer. Clever technology startups like BunkerMetric brought to market bunker procurement planning tools that seamlessly integrate with voyage management systems to improve voyage KPIs and influence major corporate-wide KPIs.

Learn how a specialized bunker strategy planning tool complements any typical voyage management system: Download “Is having a voyage management system enough?” briefing

In an increasingly competitive freight shipping world, operators need advanced planning optimization platform that integrates bunker-related information from within the shipping company, as well as, external data sources. The BunkerPlanner platform is the market-leading cloud solution for bunker procurement strategies. The bunkering optimization platform integration with the voyage management solutions ensures that chartering, voyage and bunkering strategies are aligned and that all key performance indicators are improved.

BunkerPlanner tie together all planning and execution processes required to improve voyage yields from optimizing the most costly component of voyages. As one of the BunkerMetric customers summed up “[Having BunkerPlanner daily prescription] facilitates a good starting point for bunkering discussions between bunker trader, the operator and the master.”

Learn how a major ship owner/operator empowered their vessel and bunker operators: Download “Top 4 Signs that your Shipping Business is ready to Profit from Optimized Planning”

Stop losing money choosing wrong port to bunker your vessels

Sustained volatility of bunker prices creates headaches for bunker desks of shipping companies and charterers alike. Over the last 6 months, the price spread between low and high sulphur fuel oil remained negligible creating even more options to buy bunker strategically, comply with various (S)ECA bunker usage regulations, and make better than assumed net margin contributions to voyage P/Ls.

Existence of the opportunities doesn’t mean that many bunker buyers are able to realize these potential savings. It comes down to the overload of pricing information, rules, constraints affecting where and when to pick bunker a vessel. While bunker buyers may not readily admit it, the software that could support their decisions is not up to par.

Generally speaking, the bunkering port selection problem is currently solved by utilizing voyage management software. In its absence, bunker managers rely on spreadsheets providing only the most rudimentary decision support for what amounts to managing approximately 50% of costs of each voyage. Over the year, a ship may be used on approximately 8 voyages, adding up to the bunker cost cutting opportunities.

Learn why a major ship owner/operator empowered their vessel and bunker operators: Download “Top 4 Signs that your Shipping Business is ready to Profit from Optimized Planning”

But let’s assume that our shipping company implemented one of the commercial-off-the-shelf voyage management system (VMS). Using this software, the company is able to create a voyage plan including potential bunkering stops. The voyage plan is share by the vessel operator with the bunker manager to set up bunker purchases along the way. the bunkering port selection problem is solved.

For this method of selecting the bunkering port to work optimally, the bunker buyer should know volumes and qualities of bunker needed, prices available, and the precise date of ship’s arrival at the bunkering port. Therein lies the first problem. This can only work optimally when ship arrivals can be forecasted very accurately, and the primary limitation of using VMS for this decision is that it ignores unforeseen circumstances in actual operations. If the ship arrives a day late, the price of bunker will change creating uncertainty of voyage P/L. But a much bigger opportunity is given up by not considering potential bunkering ports that are not precisely on the planned course of the vessel, but are offering lower bunker prices, thus justifying course deviation.Now, every deviation has a trade off. A vessel can sail faster to reach the lower-price bunkering port and arrive on time at its final destination OR sail steadily and arrive late at the final destination port and pay a late arrival penalty. Bunker manager who could make all those calculations of alternative bunkering scenarios, assess the value of trade-offs and make the most profitable decision from the perspective of voyage P/L would be star.

Well, let’s not pop the champagne corks just yet. Bunkering port selection is typically a multi-criteria group decision problem, and in majority of practical situations, bunker managers cannot form proper judgments using incomplete and uncertain information in an environment with exact and crisp values. The help comes from specialized optimization tools like BunkerPlanner, which considers and processes the complex relationships of the relevant key performance indicators, sorts through strengths and weaknesses of each plausible bunkering strategy, and prescribes ranked selection of those strategies to the decision maker.

Learn how a specialized bunker strategy planning tool complements any typical voyage management system: Download “Is having a voyage management system enough?” briefing