Three Ways WeatherFactor API Enhances Voyage Cost Prediction

Calculating voyage duration is challenging, traditionally requiring gut instinct and a lot of guesstimates. With such high stakes, that’s far from ideal. If shipping companies, traders, or operators miscalculate duration and associated bunker costs, their higher freight rates may discourage potential customers. Bidding too low eats into their profit margins. However, scientific approaches to voyage cost prediction, such as WeatherFactor API from DTN, can eliminate ambiguity from the equation.

WeatherFactor API draws on more than 20 years of historical weather data, vessel-specific information, and advanced analytics to estimate not only voyage duration but also fuel consumption and emissions. With this information, costs can be better determined upfront, and freight correctly priced.

Let’s look at three things WeatherFactor API uses to enhance voyage cost predictions.

 

1. Weather

The weather has an enormous impact on voyage costs. Bad weather often requires vessels to add time to their journey to navigate around it, or they may be forced to continue at a slower speed. For example, a hurricane could delay voyage progress by several days — as much as 20 or 25. Even just one extra day at sea can easily add up to $20,000 to the voyage’s cost. The expenses can quickly become astronomical. Even at berth, rough climatic conditions can suspend loading and unloading activities, delaying the vessel from leaving port, thus prolonging its journey to subsequent ports of call.

Even just one extra day at sea can easily add up to $20,000 to the voyage cost.

WeatherFactor API uses over two decades of historical weather data to accurately predict voyage conditions. Numerous voyages are simulated over that historical dataset to calculate duration probability. Knowing your voyage will take longer than usual due to the weather allows you to price your freight rates accordingly.

 

2. Fuel

Fuel is the most significant cost variable. The market price and amount of fuel needed dictate a large portion of the voyage cost, and companies use it as the prime determinant of freight rates. Fuel prices are also subject to the vagaries of the market and prone to frequent fluctuations, often displaying extreme volatility.

Carriers typically charge an additional amount as a buffer to cover the risk, applied on a per-container basis. It depends on average oil prices and the average bunkering consumption for a corridor subject to slight revisions in the short and medium-term, depending on the extent of increase or decrease in global prices, which sometimes can add to the value proportion.

WeatherFactor API’s scientific approach ensures reliable voyage duration probability predictions, allowing the right type and amount of fuel and accessory costs to be determined upfront.

New environmental regulations, like CII and EU ETS released early this year, are also important considerations. For example, EU ETS adds extra costs per emitted tonnage of CO₂ to the voyage. WeatherFactor API provides insights into CO₂ emission costs, thus providing a more accurate and complete decision-making picture.

 

3. Vessel type

Every voyage is different, and many variables can affect the duration, including location, seasonality, fuel prices, vessel performance, and vessel type.

Vessel type can impact the route to get from one destination to another. For example, if the vessel’s height is over 40m, it could not travel through Germany’s Kiel Canal. That would add several days to the voyage to navigate around Denmark and get to the destination port.

WeatherFactor API incorporates vessel-specific data and digital twin technology to simulate the exact voyage a vessel can take. Its voyage duration predictions are fit-for-purpose, delivering greater confidence around pricing decisions.

 

Achieve maximum profitability with insights from DTN

The new WeatherFactor API, part of our vessel analytics solutions suite, seamlessly integrates into any system to create a single solution for accurate voyage cost forecasting. With the industry’s most reliable intelligence, you can select the deals that make the most sense. If you’re a ship owner using a third-party platform, ask your vessel management systems provider to include WeatherFactor API from DTN in voyage calculations.

Learn more about WeatherFactor API today — including how you can request a trial.

 

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.