Thursday, January 7, 2016

New Product Might Save Millions in Freight Charter Costs by Predicting Tide Heights Precisely

Funding Received for Learning Algorithms Which Include Weather Conditions in Equation
Shipping News Feature
UK – WORLDWIDE – Most seagoing folks, from fishermen to submariners, rely on some form of tide table to predict depths of water at any given time, but the experienced know that the general weather has a varying degree of influence on the lunar driven patterns which, up to now, could never be precisely predicted. These variations can have a dramatic, and expensive effect on those relying on exact depths to enable the passage and mooring of ships waiting to load or unload cargo, particularly bulk freight such as crude or refined oil products and the new breed of ever larger container vessels.

Now Sea Level Research, a company founded by Dr Simon Holgate, a former scientist with the National Oceanography Centre in Liverpool, has developed a way to reduce shipping costs by more accurately predicting sea levels and, as a result, has received a £200,000 investment to bring its product to market. The investment comes from The North West Fund for Venture Capital, managed by Enterprise Ventures. As part of the deal, Mike Finn, formerly Chief Executive of the shipping line CSAV UK & Ireland, has been appointed as the company’s new Chair.

Dr Holgate spent two years developing his software, which combines machine learning algorithms with real-time information on weather and sea levels, and the company claims it could help oil refineries and the shipping industry to save millions of pounds each year by reducing demurrage. Dr Holgate’s software can predict sea levels up to 36 hours in advance to within 20cm, 95% of the time, compared to just 75% of the time using traditional tidal estimates. Dr Holgate explains:

“The ability to predict the surge, that is the weather on top of the tide, enables us to move vessels much more efficiently. These vast ships enter the river with only 60cm clearance under their keel, so having an additional 20cm of water can make all the difference as to whether a vessel can berth or not, and between a profitable and an unprofitable voyage.”

The North West Fund for Venture Capital is financed jointly by the European Regional Development Fund and the European Investment Bank and Rajesh Sharma of Tilston Ventures advised Sea Level Research on the funding arrangements. Will Clark of Enterprise Ventures, which manages The North West Fund for Venture Capital, said:

“Petrochemical companies are highly effective at minimising their trading and operational costs but the problem of shipping delays has been largely unresolved. The new system from Sea Level Research is far more effective than the traditional method of forecasting and is the only product that can accurately predict sea levels in the same way and for the same cost. In the coming years, the introduction of new sea routes, bigger vessels and the development of the Liverpool 2 super port will lead to more traffic and greater focus on operational efficiency which, coupled with the desire to reduce fuel costs, will help drive demand.”

The company’s first product, Petro Planner, is targeted at oil refineries which rely on sea levels to be able to load and unload cargo and has been developed with assistance from pilots working on the River Mersey, of whom over 50% are now regular users. With additional charter costs for each day’s delay to a typical vessel often costing between $30,000 to $100,000, some estimates put the cost to the industry of such delays at $1.3 billion a year worldwide. Mike Finn observed:

“As a mariner who has operated liner and spot shipping services for many years, I am acutely aware of the huge costs that can arise from vessels being delayed or deadweight opportunities simply being missed. With the suite of products being developed by Sea Level Research, petrochemical and other bulk commodity companies, together with terminal and liner operators, will be able to deliver significant annual savings, reducing delays and demurrage whilst also maximising stowage and facilitating better works programmes.”

Photo: (L to R)Simon Holgate, Mike Finn, Rajesh Sharma and Will Clark.