According to the World Shipping Council, 241 million containers loaded with more than $7 trillion worth of goods cross our seas each year. It’s a highly competitive market served by over 100 international liner ship operators. While once-strained supply chains are slowly returning to pre-pandemic levels, frequently rough weather conditions and high resource costs continue to make bidding profitable voyages a significant challenge.
If bids are too high, potential customers may take their business elsewhere. On the other hand, profits can quickly plummet if estimates are too low or if unexpected weather threats develop en route. That’s why operational intelligence is mission-critical in today’s shipping industry. Solutions like our WeatherFactor API offer scientific approaches to accurate voyage cost prediction.
How WeatherFactor API works
This innovative solution supports data-driven decisions that find the sweet spot between competitiveness and profitability. Through its advanced analytics, WeatherFactor API provides probabilistic insights into key voyage cost drivers — including duration, fuel consumption, and emissions — well before the actual execution.
More than 20 years of proprietary verified weather and oceanographic data make it possible, offering a comprehensive view of expected risks. However, WeatherFactor API is about more than the weather.
It also simulates potential voyages using vessel digital twin models to show multiple outcomes including defined confidence intervals for enhanced risk assessments. And because it is an API, it easily integrates with most commercial shipping management platforms for a more seamless freight rate calculation workflow.
Let’s take a closer look at three of the main benefits of using WeatherFactor API.
1. More accurate bids
Traditionally, guesstimates and gut instinct have served as the basis for bidding voyages, along with studying fixed tables to determine likely timelines. While this approach sometimes works, increasingly extreme conditions driven by climate change, inflated resource expenses, and new regulations make bid accuracy more important than ever.
A data-driven approach is essential — especially when large sums of money are at stake. WeatherFactor API takes a methodical approach to forecasting voyage duration, drawing upon years of detailed, historical weather data and vessel-specific information to accurately determine costs upfront to support better deals.
2. Improved annual bunker plans
Navigating around a significant, unexpected weather event could add days to a voyage and lead to a much higher fuel bill.
But that’s not all. Ocean carriers don’t just actively vie against each other in the global marketplace; they also compete in the shipping lanes. This is especially true for U.S. trade, as reported by regulators last year. But the problem is not exclusive; European authorities have also confirmed it. With busy lanes contributing to delays and demand disruption, additional fuel often is required — a potential that must be factored into the bottom line.
Streamlining fuel consumption is also critical in the wake of new environmental regulations like CII and EU ETS, and WeatherFactor can assist there too. The API helps predict voyage CO2 emissions, which can help determine voyage-end CII scores.
3. Enhance competitiveness
The pandemic has had a profound impact on the shipping industry. Where container carriers were once in the red just a decade ago, temporary market factors driven by supply chain disruptions are creating new challenges and opportunities. Many experts predict that the industry’s financial performance will fall back as the pressures on the supply chain lessen. Yet, to add critical capacity in a very tight market, ship operators are chartering vessels — some at rates above $100,000 a day.
Operational intelligence is and will remain paramount to maintaining profitability now and in the future. Every voyage is different, and shipping companies must account for variables like location, vessel type, seasonality, weather, and more to keep bids accurate and voyage duration and fuel consumption on track.
Data alone doesn’t create cost savings, but how it’s used does, and there’s no more effective way to leverage data to safeguard bottom lines than WeatherFactor API.
A case study
Let’s look at how an individual shipping operation can benefit.
|Fleet size||15 [25000-50000 GT]|
|Average daily operational costs||$8,000|
|Number of bids||250 mixed coastal and long-haul|
|Average annual voyages||300|
|Average bid per voyage||$75,000|
|Mitigated loss or gain||13%|
|Data confidence level||85%|
|Potential financial benefits of using WeatherFactor API||$265,200|
Unlock the value of WeatherFactor API with a risk-free 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.