- October 4, 2021
- Posted by: svm
- Category: Innovation
The shipping sector’s coveted “Goldilocks” scenario – where vessel, service, and revenue are “just right” – is now possible, thanks to the launch of Solverminds’ optimization and AI-powered OptiFleet solution
The shipping industry’s reaction to the rise and fall of global supply and demand, is much like a cork bobbing on the water, riding the crests and troughs created by an external influence. The pandemic, another external stimulus, has left its mark on supply chains around the world, with interruptions, inconsistencies and disruptions felt by all. The resultant container shortage, port congestion, high operational costs and low efficiencies means fleet and service planners are doing their utmost to find ways to optimize fleet and service schedules in a bid to maximize profitability.
Liner operation teams face a tremendous task of scheduling vessels optimally on manual or outdated systems. These systems provide the proforma of the vessels as they rotate through various ports in their voyage, at most providing a high-level fixed cost or slot cost. However, with a bid to increase profits and reduce costs to remain competitive in ever-expanding trade wars, compounded by economic instability, infrastructural speed breakers, a shifting ratio between chartered and owned vessels to name a few, it is evident that manual scheduling is simply not up to the task.
As a result, the complex challenges and outdated, manual processes cause admin bottlenecks, expensive delays, and costly frustrations in operations.
- Port congestion – Dealing with port delays and restrictions, which could be of a traditional complexity such as draft and air draft, tidal range, vessel age, vessel flag, dry docking, and so on, is now coupled with the risk that even a single case could cause a complete shutdown of a port, causing considerable admin and scheduling headaches. Compound that with day light arrival ports and scheduling within those port windows, port infrastructure limitations (minimal depth, allowed LOA, allowed beam, etc), and you’ll see the complexity of the task at hand when carried out manually.
- High costs – Fleet and service planners are tasked to keep costs down while working with variable freight rates. These are dependent on fluctuating markets, which makes it difficult to predict long-term costs. More than that, bunker prices – typically accounting for 40% of total costs – must be effectively managed to keep costs down and maximize profits.
- Low efficiency – Aside from the challenge of managing multiple vessels and cargo and balancing sensitive variables, the ongoing issue of minimizing costs is often unresolved. “The true hidden cost behind manual scheduling is the cost of operational inefficiency,” says Captain Vijay Minocha, Chief Commercial Officer at Solverminds. “This is seldom – if ever – computed or even discussed. Nor is the question broached as to whether the schedule could be generated in a better way. But we have asked ourselves that question, and the answer is unequivocally, yes! It must – as manual scheduling and high operational costs go hand-in-hand.”
- Unreliable scheduling – Fluctuations in demand and freight rates have a direct impact on schedule reliability, and customer confidence. Liner companies often compensate for this through blank sailing and idling of ships. Additionally, planners need to take into account how they will meet supply with demand and change pro forma schedules to match the cargo flow, and manually adjusting schedules to factor in disruptions reported by the vessel or at the port is tedious, error-prone, and time-consuming.
An example of how inflexible scheduling in the face of unexpected events produce considerable ripple effects throughout the supply chain is the closure of the port of Ningbo – the world’s third largest cargo port. This on the back of other recent port closures and liner disasters means global trade is, once again, under strain.
With so many limiting factors to take into consideration, liner companies also need to deploy the right-sized vessel on a service with the right port calls, proper empty repositioning, and vessel utilization, minimized fuel, charter, and port costs.
Add to this the need for the right cargo composition (TEUs, weights, and contribution) and right time decision-making and you’ll see why fleet and service planning is excessively time-consuming, complex, inflexible – and costly – when done manually. The need is clear for a platform that brings in commercial data in conjunction with operation vessel data, and allows schedulers to see the performance of various vessels of different sizes and types in the various services, in order to manage and maximize profitability, utilization and scheduling.
OptiFleet Maximizes Contribution through Optimizer and AI
Maximum contribution – or profitability – is the key motivation behind liner companies seeking to attain and maintain a cost-effective, stable, reliable liner schedule network. To solve this, Solverminds has launched the new OptiFleet solution that uses optimization engine, time series forecasts, and artificial intelligence (AI) to optimize fleet and service schedules, quickly and efficiently.
“The expansion from just an ERP to AI-powered solutions for the liner and maritime sector was organic and natural for the Solverminds team,” says Capt. Minocha. “Our in-depth domain expertise and advanced technology platforms mean that – not only do we know first hand what challenges the planning team face from an operational and commercial perspective – but we have the means and expertise to solve it.”
So quick, so easy, and so profitable.
OptiFleet plans, analyzes, and optimizes the network deployment, allowing the trade and operations teams to quickly and accurately make decisions that maximize profit, minimize costs and eliminate expensive delays. It also frees up the liner teams to focus on more profitable tasks.
OptiFleet is smart – super smart – and fast. So you don’t have to wait for, or worry about, your schedule.
How OptiFleet Quickly Optimizes Fleet and Service Schedules
From a scheduler’s point-of-view, the morning’s planning is simple, straightforward, and easy. All he has to do is sit back, enjoy his morning coffee, while OptiFleet creates the network schedule that is the most profitable for all services and vessels. That’s right! OptiFleet does all the planning for you.
It automatically takes every service detail for all services into consideration, such as port rotation, distance between each port leg, vessel speed on each leg, terminal productivity, port stay, total sea time, maneuvering time, and service frequency.
Each of the various vessels’ details are taken into consideration, such as fuel consumption at speed, charter hire costs, port costs, canal costs, insurance and maintenance, vessel max and eco speed, and bunker cost – as well as all various port capacity, port constraints, and cargo routing criteria to quickly identify optimal port pair allocation by container type, weight, and freight contribution.
OptiFleet can seamlessly integrate to client application data.
OptiFleet quickly and quietly takes port-based constraints and vessel-based constraints and costs into account, as well as the empty equipment availability. It then identifies the port pairs, quantity of TEUs and weights allocated for each port pair, contribution for each port pair, list of time-chartered vessels within the asset pool, spot chartered vessels (if applicable), services, preferred customer and commodity with equipment type, quantity of empties and repositioning between surplus to deficit locations, and further maximizes vessel utilization – and ultimately profitability.
The results are graphically displayed, making it easy for decision-makers to understand the financial profitability, commercial plan, operational plan, and empty plan outputs.
OptiFleet is more than a network scheduler, it also analyzes demand forecasts, optimizes routes for better fuel efficiency, monitors capacity by vessel size or engine capacity, forecasts market supply and demand data inputs — all with a few simple clicks. But never deviates from its most important objective: to maximize profitability.
Here’s to greater profitability, streamlined operations, and heightened efficiency, with OptiFleet.