Article on Virtual Arrival
There is great pressure on shipping to reduce greenhouse gas (GHG) emissions,
which in general, at least in the medium term, means reducing fuel oil
consumption. Owners have a great incentive to reduce fuel oil consumption. Fuel
oil prices in general stayed below USD 200 per tonne until 2005, then until mid
2007 they increased to some USD 350 per tonne, in July 2007 prices were above
USD 700 per tonne. Now the level is about USD 450 per tonne and can
represent some 60-80% of owner's costs.
Because owners continuously take measures to reduce fuel oil consumption,
there are a few easy and quick ways to reduce consumption further and reduce
CO2 emissions. Basically emissions can be reduced by technological
improvements, more efficient operation, and by optimising the logistics. The
latter can mean reducing speed. Slow steaming is a well-known concept in the
tanker market used when there is an overcapacity of tonnage and often waiting
time to secure cargo. However, there are also inefficiencies in the market when
the market balance is tight, such as waiting to discharge because the terminal is
not ready to take the cargo. Often this is not known before the voyage has
started.
Virtual Arrival is a process that recognises known inefficiencies in the supply
chain and reduces the use of fuel and associated emissions by implementing a
mutually-agreed reduction in a vessel’s speed on passage in order to achieve an
agreed arrival time at a port.
It is inherently wasteful for a vessel to steam at full speed to a port where
known delays to cargo handling have already been identified. By reducing speed
to a mutually-agreed arrival time, the vessel can avoid spending time at anchor
awaiting a berth, tank space or cargo availability. Emissions can thus be
reduced, congestion avoided and safety improved in port areas.
Virtual Arrival involves reducing speed to meet a revised arrival time. The
reduction in speed will result in a lower fuel consumption and reduced (GHG)
emissions.
The Virtual Arrival process, by reducing emissions and costs, is of mutual benefit
to vessel owners and charterers. Furthermore, by minimising vessel waiting
times, safety within port areas is also improved.
2.
Environmental Benefits Associated with Virtual Arrival
By adjusting a vessel’s speed to achieve an agreed arrival time, overall bunker
consumption will be reduced and an associated absolute reduction in emissions
for the voyage will be realised, as depicted in the following
Figure:1
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Impact of Virtual Arrival on reducing fuel consumption and GHG emission
Bunker consumption - ts
50
45
Full speed
Virtual Arrival speed
40
35
30
25
20
15
10
5
0
1
Start
Voyage
3.
2
3
4
5
Virtual Arrival
Agreement
VA NOR tendered
to port
6
7
8
9
10
11
12
13
Assumed 25% speed reduction:
Bunker consumption full speed: 66o ts
Bunker consumption VA speed: 583 ts
Bunker Saving:
77 ts
Saving CO2:
339 ts
14
15
16
ETA
contracted
speed
Days
17
Actual
arrival
Pre-Conditions for Virtual Arrival
Virtual Arrival is a simple concept and the basic pre-conditions are:
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A known delay at the loading or discharge port.
A mutual agreement between two (or more) parties.
An agreed charter party clause that establishes the terms for Virtual Arrival.
An agreement on how to calculate and report the performance of the vessel
and acceptance of the vessel owner's/operator’s data for information that
includes fuel consumption, speed and estimated time of arrival (ETA).
Virtual Arrival should not effect the daily running of the ship and the normal
practices and terms of trade should be applied. It is emphasised that at all times
the safety of the vessel remains paramount and the authority of the vessel’s
Master remains unchanged when implementing Virtual Arrival.
Trust between the parties is a precondition for all good deals, and normal
practices will in the most cases be sufficient. However, to ensure the accuracy
and independence of the calculation of a vessel’s performance and to avoid the
risk of post-fixture disputes, it may be beneficial to employ a Weather Analysis
Provider (WAP). A WAP is a company that specialises in expert weather and
vessel performance analysis. It is recommended that only those WAPs are
employed that work to an industry approved standard, having been certified by
an industry-approved body.
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The industry is currently working to set up certifiable standards for such weather
analysis providers and will probably also produce some guidelines to be applied
in connection with the use of such services.
How is Virtual Arrival done
It will normally be the charterer that first sees that there is a delay at the
discharge port, for example congestion at the berth, lack of berth space or lack
of ullage space. The cargo receiver or charterer may then suggest to undertake
virtual arrival for this voyage. If the ship-operator has not made special
arrangements for taking advantage of estimated extra port time, such as
periodical maintenance, a mutually acceptable agreement can be made and the
virtual arrival procedure can commence.
A weather analysis provider acceptable to all parties may then be engaged to do
the calculations for the voyage. The WAP would then request the standard data
required to make a proper analysis of the vessel's actual performance.
The WAP would then provide a one-page report to all parties stating the vessel's
position, calculated ETA and a provisional virtual ETA, Bunkers at Virtual Arrival
decision (metric tonnes), and any other relevant data.
Once the report is circulated, all parties would then need to agree that the facts
are correct, and that they are willing to enter into a binding VA agreement for
that voyage in accordance with and agreed CP clause.
The Master slows down the ship to the most economical speed, always
consistent with safety of navigation and taking into account other requirements
for the voyage within the vessels safe operating parameters, to make the revised
arrival time.
Once the voyage is completed, the WAP will issue a final report including :
Methodology used to determine speed and consumption calculation:
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Calculated ETA
Virtual Arrival ETA
Real Time of Arrival
Bunkers at Virtual Arrival decision (metric tonnes)
Bunkers on arrival
Calculated CO2 emissions
Route map Engine RPM-based verification using accepted algorithms.
Demurrage is calculated as if the vessel had performed a normal voyage.
The value of the bunker savings should be split between the interested parties.
The following graphic illustrates the above process:
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Figure 2: Visual demonstration of Virtual Arrival process
Issues Associated with Virtual Arrival
Traditionally, voyage charter parties have stipulated the speed that vessels must
attain throughout the voyage. However, the contracted speed may not reflect
the speeds achieved on a particular voyage as they will be impacted by issues
such as the prevailing weather. The charterer typically has no say in the route
taken by the vessel or the actual speed at which the voyage is progressed.
Under the terms of the charter party, the vessel is duly contracted to proceed at
the stated speed.
The adoption of Virtual Arrival provides the opportunity for the ship
owner/operator and charterer to discuss and mutually agree adjusting a vessel’s
speed if it is likely that the vessel will arrive at the destination port sooner than
required. The mutual agreement of a required time of arrival enables vessels to
be instructed to reduce speed with the potential to save fuel and reduce
emissions.
It is intended that the commercial benefits that accrue from the adoption of
Virtual Arrival are shared between the vessel owner/operator and the charterer.
Although developed for the tanker trade, the principles of Virtual Arrival are
suitable for adoption in other trades where the required time of arrival at a
destination port is not fixed or is subject to change due to operational or
commercial reasons.
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Virtual Arrival is not a short-term speed reduction measure introduced in
response to market and economic demands. On the contrary, it is a sustainable
and practical process aimed at improving efficiency within the transportation
chain, while achieving real benefits with regard to safety, fuel saving and the
reduction in vessel emissions.
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