The most efficient cargo ships are the ones that travel further, research shows
New Northeastern University research discovered that the most efficient crude oil tankers spent more time traveling between regions than their less-efficient counterparts.
In shipping, efficiency is everything.
Take the shortest (safe) route between two points. Offload cargo as quickly as possible to the person who will pay you the most. Pick up your next load as fast as you can and start it all over.
But the effective management of these shipping vessels’ routes, and the kinds of voyages that really are most efficient, has gone understudied by an industry that can be set in its ways, according to István Z. Kiss, a professor of network science at Northeastern University London.
New research from his team identifies the most efficient vessels — defined by a higher ratio of time spent carrying cargo than running empty — and the lengths of routes these vessels most regularly undertake. Surprisingly, the vessels more willing to travel further distances were shown to be more efficient.
The research, which looked at a massive dataset of over 3,000 crude oil tankers and their journeys over a four-year timespan, could provide the owners and managers of these vessels with valuable input on improving their ships’ efficiency, possibly cutting down on costs and increasing profits.
Specifically, the researchers focused on the laden-ballast ratio, which they said is a measure of efficiency. That ratio is calculated by looking at the amount of time a vessel spends with its hold full of cargo, or laden, compared to its total operational time, including when the hold is empty. The ship being empty of cargo is also called the ballast period, as the ship’s ballast tanks are filled with seawater to keep it steady.
The more time a vessel spends filled with cargo, and the less time empty, the better that ship is performing. “It tells you that the ship is managed really well,” Kiss says, also noting that, from a sustainability perspective, “you don’t want the ship to wait around for a long time to seek the next cargo.”
The laden-ballast ratio is especially applicable to crude oil tankers. Dry cargo vessels ideally pull into port to offload one kind of good and take on another in the same location, spending minimal time being empty. Crude oil tankers, on the other hand, pick up their oil from an exporter and deliver it to a refinery. They then run empty to another exporter, restock and head back to another refinery.
At first blush, it might seem most efficient to travel back and forth between the same exporter and refinery to avoid extra travel, but the data shows otherwise.
Kevin Teo, a Ph.D. student in the Network Science Institute, was the first author of the study. The research, published late last month in Nature Communications, found that ships that travel between regions, for instance, from the Middle East to China, or China to Southeast Asia, spend almost 50% more of their time actively transporting their cargo rather than running empty and seeking cargo.
Some ship owners or managers “seem to be more willing to explore and go to many different places,” which translates to much higher performance and efficiency, Kiss says.
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Michael Coulon, another author on the paper, is the co-founder and chief technology officer for AlphaOcean, the industry partner that provided Kiss and Teo with the dataset for their work. Coulon says that his company focuses on helping ship managers decide when to refuel.
He sees Kiss and Teo’s research as a first step toward predicting where tankers are most likely to go next and in determining optimal routes. “There are so many market factors that are affecting things, and a lot of uncertainty, but there are clearly trends there that can be exploited through academic techniques [and] mathematical tools,” Coulon says.
Kiss says that there are several other directions they can take this research. In addition to the predictive work that Coulon envisions, Kiss hopes that adding prices into their measurements will help them achieve a better understanding of regional trends and how prices might impact shippers’ decision-making. Second, Kiss notes that nothing is stopping this kind of analysis from being applied to other supply chain industries, like trucking, air freight or non-crude oil cargo shipping.
Teo notes that the team has also been able to identify seasonal trends in the dataset, showing how the vessels congregate within different regions as the forces of supply and demand change crude oil prices. During the northern hemisphere’s winter, as a simplified example, crude oil prices often increase as the demand for heating also increases, drawing more tankers to ports in Europe or North America, Kiss says.
With this information, Teo says, “we can try to predict where [it] would be a good place to position our ship at a particular time of the year.”
