Harnessing data to enhance maritime operations: the critical role of pricing risk
In the dynamic world of commercial shipping, understanding risk is crucial for strategic decision-making, especially in relation to optimising freight pricing. The use of tools like PortLog, a pre-fixture data and risk management platform leveraging 38.2m digitised port events, has become essential for ship owners and operators looking to reduce the discrepancy between the estimated versus the actual P&L of a voyage.
This necessity was emphasised during the recent agri-commodities session at Geneva Dry 2024, where industry leaders from Pacific Basin and Norden discussed the profound impact of these technologies on maritime logistics.
During the Geneva Dry 2024 panel, representatives from Pacific Basin and Norden underscored the importance of data in pricing risk. In the context of maritime logistics, pricing risk involves accounting for various uncertainties such as weather conditions, port delays, and geopolitical circumstances. The ability to price these risks accurately is particularly vital for weather-sensitive cargos like grains, where the voyage P&L may be significantly impacted by adverse weather events in port.
Strategic advantages in a competitive landscape
PortLog provides a platform that integrates extensive maritime port data at terminal level, offering insights that can predict the most likely terminal and estimate the laytime impact of a port call on the voyage P&L. This enables chartering managers and freight traders to predict with higher accuracy whether they will go on despatch or demurrage. By utilising comprehensive data systems like PortLog, companies like Pacific Basin and Norden can obtain a granular understanding of port costs, time in port, and terminal restrictions. This information is crucial for making more informed fixture decisions at the pre-fixture stage and reduce revisions of estimated versus actual voyage results.
The competitive edge gained through data-driven strategies cannot be overstated. In an industry where timing and efficiency are paramount, having access to a tool like PortLog that provides detailed analytics on port costs, turnaround times and restrictions gives companies the ability to outperform competitors who may still rely on more traditional methods of sourcing data, such as reaching out to individual agents for every single voyage calculation.
By integrating these advanced data tools into their operational framework, they leverage deep, data-driven insights into the latent demurrage-related P&L risk in a potential new trade, providing support to frontline commercial teams. Fewer and fewer chartering managers or freight traders are spending the early years of their career painstakingly performing laytime calculations. PortLog bridges this experience gap by enabling laytime simulations based on actual charterparty terms instead of flat SHEX factors.
Insights from Geneva Dry: Managing risk with data
Jan Rindbo, CEO of Norden and Martin Fruergaard, CEO of Pacific Basin Shipping discussed at Geneva Dry 2024 in May how the massive growth in trade volumes over the past 25 years has increased the complexity and fragility of supply chains. This complexity underscores the necessity for tools that provide real-time data and analytics to manage and mitigate risks effectively.
Alex Haubert, Former Head of Ocean Freight at Amaggi from the panel mentioned that the sheer volume and economic importance of trades like soybean shipments to China make the efficient management of these logistics crucial.
Jan Rindbo emphasised the significance of using data to predict the most likely terminal, enabling charterers to price risk more intelligently. Tools like PortLog are central to this prediction, offering data that helps ship owners and operators understand and price risks more accurately.
Conclusion: The future is data-driven
The insights from Pacific Basin and Norden reflect a broader industry trend towards increased reliance on data to drive decisions and manage operations in the maritime sector. As the industry continues to evolve, the integration of advanced data analytics tools like PortLog will play a pivotal role in shaping the future of maritime logistics. These tools not only provide the necessary insights to manage day-to-day operations but also equip ship owners and operators with the foresight to navigate the complex and often unpredictable challenges of the maritime world.