For any business, unplanned expenses can quickly consume profit margins. That’s especially true in the shipping industry, where additional, unexpected time at sea can add up fast — often to the tune of $20,000 a day per vessel. Those numbers can easily make or break a voyage’s bottom line. Thankfully, there are solutions, like WeatherFactor API.
When used with a voyage management system or planning platform, WeatherFactor API helps minimize voyage duration risks. The solution provides vessel digital twin technology modeled with continuously updated forecast and hindcast insights, including more than 20 years of historical weather data. This provides a more accurate view of likely voyage conditions and duration, which allows freight traders to quickly create and proactively evaluate multiple scenarios before making profitability comparisons.
Delivering benefits across the shipping industry
Freight traders aren’t the only ones who can benefit from WeatherFactor API. Here’s a brief look at a few key benefits for three sets of stakeholders. Clients who fall into any of these categories need this level of data on their platforms.
Integrating with commercial platforms
WeatherFactor API integrates with commercial third-party vessel management system providers to drive a more seamless freight rate calculation workflow. When a freight trader makes a spot voyage bid, the platform will request a WeatherFactor component, which calculates the basis variable value, and returns the data within seconds. Knowing how long a voyage will take is essential for both parties in the deal to reach a pricing agreement.
Previously, guesstimates and gut instinct have served as the basis for bidding voyages, along with fixed tables. While sometimes successful, increasingly extreme conditions driven by climate change, inflated resource expenses, and new regulations demand a more accurate process.
Accounting for a more extreme climate
The weather has an enormous impact on voyage costs. Not only are there fewer available voyage days during bad weather, but fuel consumption is also heavily dependent on the conditions. With the stakes so high, vessel owners must determine profitable freight rates. They don’t want to price themselves too high that they discourage potential customers but going too low leaves very little room for error.
The scientific approach to voyage cost prediction — and by extension, profitability — through accurate data is where WeatherFactor API excels. With it, shipping companies can determine costs well before a voyage, and traders can ascertain where their margins sit on comparison bids.
Supporting environmental regulation compliance
With the recent launch of new environmental regulations for the shipping industry, like CII and EU ETS, emissions are now part of the process. Both mentioned regulations impact voyages on the back of CO2 emissions tied to fuel consumption. For example, EU ETS can mean extra costs per ton of CO2 emitted. WeatherFactor API allows CO2 regulations to be applied to voyage cost predictions, providing the complete picture with no unwanted surprises.
WeatherFactor API also helps to streamline internal operations. For example, at every stage of voyage preparation, there is a transition where responsibility for the voyage transfers from the company’s commercial team to its operational team. This is often a friction point as the commercial team may have made promises on which operations must deliver. Data from WeatherFactor API allows the commercial team to forecast more accurately, improving alignment between both groups.
Take a closer look at WeatherFactor API today to see more benefits.
About the author
Jarco van den Brink oversees the DTN shipping product portfolio. A meteorologist with a background in physics, he has more than 15 years of experience in the marine and shipping industry. He and his team combine metocean analytics with innovative technology to keep vessels safe, maximize fleet performance, and help DTN customers advance their digitalization and decarbonization journeys.