INTERVIEW: 30% of Shipping Playing 'Wait and See' on CII

The firm launched a tool to support CII compliance by shipping firms earlier this year. Image Credit: Bearing

AI-backed vessel performance software firm Bearing sees as much as 30% of shipping companies taking a laid-back approach to the upcoming Carbon Intensity Indicator rules.

The firm launched a tool to support CII compliance by shipping firms earlier this year. While a majority of companies are paying close attention to the new rules, a significant minority is being less proactive, Dylan Keil, CEO of Bearing, said in an interview with Ship & Bunker.

"There's those folks that have been thinking about this for a year and have their own solutions they've been building in-house and are very much at the cutting edge on this," Keil said.

"That's a pretty small percentage of companies that we've talked to, probably less than 20% of the companies.

"The second bucket, which is probably the biggest, say, we know this issue is coming, this is something we're clearly paying attention to, maybe spun up an internal team, we care about this but we're not really sure what exactly this is going to mean for the industry.

"We're not really sure how this is going to change the market, what kind of premium there might be placed on a vessel that has a good rating.

"They want to comply, but are not necessarily sure what the best option is and how to tackle that."

Two further groups are those that are not yet concerned about the regulation and may consider compliance from 2024 onwards, and those that are showing little interest until an outside factor forces their hand, Keil said.

"There's a majority or close to a majority that are paying attention to it, and then there's probably another 30% saying wait and see," he said.

From January 1 all vessels larger than 5,000 GT will need to have calculated for them a CII rating based on historical data submitted to the IMO. The rating is a calculation of the CO2 the vessel emitted per unit of cargo capacity per nautical mile.

The rating will come as a letter between A and E, with A at the top of the scale, and ratings will be determined on an annual basis. Ships receiving a D rating for three years or an E rating for a single year will need to implement a ship energy efficiency management plan setting out their plans to improve their performance.

Bearing's Service

Bearing takes data from each ship in a company's fleet to feed into its systems to analyse the overall performance, Keil explained.

"What we do ... is take noon report data from the vessel -- regardless of format -- and we automatically take that and feed it into our front-end user interface," he said.

"So as long as you CC Bearing on the noon report emails, we will automatically show you the current CII score for your entire fleet.

"You can see which vessels have good ratings, which vessels have bad ratings and so on."

The company can then make predictions about CII ratings for the entire year.

"It's great to know where your fleet is today, but ultimately what matters is the end-of-year rating," Keil said.

"This is a cumulative score, and what's going to matter to you is the rating that you have on December 31.

"We take advantage of a lot of these advanced models that we have with artificial intelligence, and we use those to predict what the score will be at the end of the year."

The company can future traffic pattern forecasts, performance in previous years and weather modelling to build a picture of where the vessel might travel for the rest of the year, the ports, the speeds, the number of days sailing and the conditions it might face while doing so.

"The third part of the product, which I would say is probably the most important, is its ability to simulate," Keil said.

"Let's say that you have a vessel that's rated a D; obviously you want to get it into a C because you want to be compliant.

"What are the levers at your disposal? That might be adjusting speed; but if you are adjusting speed, exactly how much do you need to adjust by, and what is the trade-off of doing that?"

The software can allow shipping firms to assess the impact of a potential underwater cleaning on CII compliance and fuel efficiency. Next year the firm plans to add the functionality to assess the impact of installing an energy-saving technology like an air lubrication system.

No hardware is required on the ships for the Bearing service.

"We recognise that January 1 is coming up pretty soon, and getting the company to install a lot of sensors or a complicated system would take time and be a slow process," Keil said.

The service is charged for on a per-ship, per-month basis, and the total amount will depend on the number of vessels in a fleet and what functions are included in the service.

Varied CII Report Card

Bearing is seeing a wide variety of CII scores across the shipping industry.

"Most of the companies we're working with have a pretty broad range of vessels, because a lot of these are fairly large companies, some with hundreds of vessels, and in that scenario they run the full gamut from A to E, and are pretty representative of the global fleet," Keil said.

"We've been able to essentially profile the global gleet, because we have AIS data and these powerful models, so we know approximately what the CII rating is for each vessel and we see that it varies heavily depending upon the type of the ship and the size of the ship.

"If you're a Panamax container ship, more likely than not you probably have a failing grade right now.

"If you're a Handymax bulker, then a much smaller percentage of those vessels are failing.

"In general, if you're a vessel that has been travelling very quickly over the past year or so, there's a decent chance that you might have a failing grade.

"It's quite segment-dependent. If you've been in a particular segment where the market rates are very strong and your motivation has been to go as fast as you can based on that, you've not been particularly efficient.

"The other thing is that, if you are a vessel that spends a lot of time in port, a lot of time stationary, that's going to hurt you."

How to Boost Your Grade

While improving a ship's CII score can be relatively simple, it will depend on how far you are into the year when you start trying, Keil said.

"If they take actions at the right time, it's quite easy to turn around," he said.

"Especially if you reduce your speed by 10%, you can make a significant jump in your grade.

"The challenge is that the score is cumulative; if I make my change in February it's easy, because for the majority of the year I'll be operating in an efficient way.

"If I make my change in, say, November, that's a lot more difficult because at that point, I have 11 months of bad behaviour and in many cases you won't have enough time left in the year feasibly to get a better grade."