The new technological face of ship financing

ESG (Environment-Social-Governance) considerations are integrally linked to the financing of maritime transport. For example, the costs of ship loans (and soon hull insurance) are explicitly linked to the achievement of specific “carbon intensity” targets.

At the same time, rapid developments in data management and transmission technologies for all types of ship data are changing the scope of ship operations, from the bridge to the engine room (with a few wedges in between) .

With all of this in mind, this week’s Marine Money conference included an excellent session titled “Using Technology to Achieve Corporate ESG Goals”. Panel moderator Mr. David Levy, Marketing Director of OrbitMi Software, as well as panelist Peter Björkborg, StenaBulk’s Head of Sustainability and Transformation, are aware of all these trends. OrbitMI, now an independent company, was originally developed in-house by the Gothenburg-based crude oil, product and LNG carrier owner. Mr. Levy tossed out topical questions which the panelists then responded to; at the end of the half-hour session, some important themes emerged.

To date, “ESG” has mainly focused on the “E” part: fuel savings and (more recently) carbon intensity management. Panelist Osher Perry, CEO of Boston-based startup ShipIn, explained the importance of the “S” element (“social”, which includes seafarer issues), describing his company’s success in creating an environment that puts ship owners, managers and crew on one platform. He spoke of the need to “bring more visibility into what is happening on board ships” through the integration of sensor and camera feeds on board ships. He pointed out that the ShipIn solution is designed to integrate with other solutions, for example a weather routing feed. Another panelist, Matthias Ritters, managing director of Thome Ship Management, with a focus on health and safety, said: “A lot can be improved by having better data.”

On Part E, while industry insiders and outsiders fight over alternative fuels (methanol, ammonia, hydrogen, and even electricity for ships working closer), panelist Christian Nijst pursues technologies for capturing the carbon on board with its new Value Maritime. He explained that his work applying land-side technologies to the problem of carbon spewing from ship piles, and spoke of a rapid two-year return on investment and an ongoing project with the owner of the Eastern Pacific tanker (Idan Ofer) who would expect to see carbon reductions of 40% by the end of the year.

For its part, OrbitMI, founded in 2017 (when ESG was still called “corporate social responsibility”), has gone far beyond its initial mission of fuel optimization, turning to all sorts of other services. More recently, it integrated weather routing into its vessel management platform. Peter Björkborg explained that decarbonization (the “E”) will be solved by traditional technologies, but also digital technologies. He also alluded to the solutions of “E” spilling over into the “S” part (reinforcing the assertions of Mr. Perry of ShipIn). Mr. Björkborg’s remarks, in response to Mr. Levy’s questions about the timing of innovations, brought pragmatism to the discussions, saying, “We need to try new technologies because they have long-term value. He added that: “We have to try new things…”

At the bottom of these observations are discussions of money and gains, with Mr Björkborg acknowledging that: “The real problem is getting new products that are commercially viable.” Although not addressed explicitly in this panel, other panels (e.g. on scrubbers and energy efficiency upgrades) have discussed various “cost sharing” arrangements between owners and charterers. .

On a different panel (earlier today), Søren C. Meyer, CEO of ZeroNorth (which had spun off from Maersk Tankers) struggled with similar issues – in the context of ship performance and routing. When he was not talking about the need to expand “visibility” (for example, a vessel on a one-term contract with a charterer responsible for buying fuel and routing the vessels), he showcased a powerful story, with capital raises (including $50 million recently), acquisitions (including bunker supply platform ClearLynx – earlier this year, and Propulsion Dynamics before that) with dramatic growth workforce. Congratulations to the organizers of Marine Money who, more than most, have done a great job of making the connections between technology and ship finance. As was continually highlighted at the Marine Money 2022 conference, things have changed quite a bit since 2019.

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