Maersk Line: Reducing Energy Costs
GORDAN E. VAN HOOK
© 2011 FrontLine Defence (Vol 8, No 2)

Navies have always been expensive, and they are even more so today. Rising procurement, manpower, and operations and maintenance costs are forcing navies to focus on cutting total ownership costs. While immediate savings can be quickly realized through energy efficient technology, navies could find greater savings by focusing on a more holistic energy management approach, as practiced by large commercial maritime fleets, where energy efficiency is crucial for profitability.

Energy management requires more than technological improvements – to be truly successful requires a focus on the processes, people and competencies of a corporate culture to maximize and sustain savings and efficiency. Each of these cultural components must be worked through lines of operation that include marine engineering, innovation, regulatory affairs, and ultimately, vessel performance management.

Superior marine engineering plays a crucial role in achieving the energy efficiency, environmental awareness, safety and operational reliability that keeps top commercial maritime companies cost competitive. Most robust navies have their own marine engineering organizations that can focus on many of the same technological solutions as a leading commercial company. However, while technological solutions can quickly reduce costs, tapping into corporate culture will yield greater sustainable savings.

Technological solutions can be seductive in how quickly and easily they can be installed, but changing processes, people and competencies can be far harder.

Innovation in successful companies is all about harvesting ideas, and the process to develop them into viable operational concepts for implementation. Energy efficiency is fertile ground for ideas, especially if a company works in coordination with their original equipment managers (OEM). Good ideas can come from all levels of ­corporate culture, and can be pulled across many fields within the company, the OEM or another commercial partner. A navy may be limited in its freedom to partner due to national acquisition regulations, but successful naval innovation can still allow good ideas to flourish through a comprehensive screening and development process that is internally transparent and understood by all levels.
 

Maersk’s Vessel Performance Management Service (VPMS) approach for monitoring and controlling fuel efficiency.
 

Commercial management of regulatory affairs goes beyond just observing safety and environmental rules and regulations, and focuses more on their development with relevant stakeholders. This approach can work for navies, some of which may appear to operate in isolation of regulatory agencies, running afoul of their own national or provincial environmental regulations, or the broader international standards adopted by host nations while deployed. A navy can benefit from the commercial perspective of keeping a “weather eye” toward the onset of regulations and early participation in their development.

Addressing corporate culture through the operating fleet and its shore support is the key to making energy efficiency a fundamental way of doing business. A successful ship and shore support framework empowers leadership to make decisions that increase fleet operating efficiency and reduce energy costs. Investment in performance monitoring ­systems can provide immediate access to current and historical technical data, however, effective vessel performance management must use specific fuel efficiency targets to drive behaviours toward proactive corrections before poor performance becomes a trend. A set of operational Key Performance Indicators (KPIs) forms the basis for performance initiatives applied to existing vessels and new designs. This identifies technical issues early for further analysis and correction, but more importantly, it stimulates accountability and the motivation, teamwork, competition and ideas at the heart of the human spirit. As an example, Maersk Line was able to achieve over $470 million in energy efficiency savings through the use of its proprietary Vessel Performance Management System (VPMS).

Focussing on the processes, people and competencies can achieve and sustain real savings.

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Retired from the US Navy, Gordan E. Van Hook is the Senior Director for Innovation and Concept Development with Maersk Line, Ltd.
© Frontline Defence 2011

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