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Fuel Efficient Container Liner Fleet Operations

Digital Ship Hamburg, March 2015

Andreas Mrozek

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Hamburg Süd

Challenges and

future factors to

consider

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Hamburg Süd2

Oetker-Group1

Fuel Saving3

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Divisions

Food Beer and Non-Alcoholic

Beverages

Sparkling Wine, Wine and

Spirits

Shipping Banking Other Interests

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Sales and Employees 2013

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10,844

Food Beer Sparkling Wine Shipping Other Interests

Sales:(Mio. Euro)

Employees: 26,907

2,577

12,272

1,843

5,689

687

2,028

5,254

4,491

483

2,427

Banking

Consolidated balance sheet total:(Mio. Euro) 3,051

628Employees

Total

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Hamburg Süd

Challenges4

Hamburg Süd2

Oetker-Group1

Competitive Environment3

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A global service structure

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Wherever you need us

Over 300 offices worldwide (around 100 owned)

Hamburg

Morristown Hong Kong

Sao Paulo

Miami

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Hamburg Süd – Development of Vessel Types

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Year

2013/14

2010/12

2004/09

2001/07

1990

1981

Class

Cap San

Santa

Monte/Rio

Cap San/Bahia

Cap Trafalgar

Monte Rosa

Length

(m)

333.2

300

272/286.5

254

200

185

Width

(m)

48.2

42.8

40

32

32.2

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Capacity

(TEU)

9,600

7,100

5,500/5,900

3,700

2,000

1,200

Reefer capacity

(Plugs)

2,100

1,600

1,365

800

650 (TEU)

540 (TEU)

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Hamburg Süd

Challenges4

Hamburg Süd2

Oetker Group1

Fuel Saving3

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Why is fuel saving essential?

Cost side: Fuel costs decreased significantly since Q4/14

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Total bunker costs ($$$)

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Bunker Price Development 2011-2015 IFO 380 Rotterdam

Source: Platts Oilgram Bunkerwire [CON-C]

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3

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Why is fuel saving essential?

Cost side:

Fuel costs have decreased significantly since Q4/14

However, bunkers are still one of the biggest operational cost items

However, the price advantages are taken by all competitors in the market

Saving potential still exists, whilst other cost categories have less room for

improvement

Marginal savings do still have a large effect on cost improvements

Environmental protection side:

Reduction of CO2- emissions

Target of Hamburg Süd: Reduction of CO2- emissions per transported teu km

by 45% from 2009 to 2020

Social responsibility and customer expectation: Detailed, competitive and

improving CO2 footprint

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Which fuel saving techniques are applied?

1. Slow- steaming

2. Excellence in operating / performance optimization

3. Weather routing

4. Trim optimization

5. Hull optimization & hull/propeller maintenance

6. Engine optimization

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1. Slow steaming

Traditionally Hamburg Sud operated in ‚slower-speed‘

trades, therefore less saving potential as in other main

trades

Average pro-forma speed reduced over years from around

20 kn to 16/17 kn

More port buffer

=> More realistic pro-formas

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30

40

50

60

70

80

90

100

110

120

130

140

150

160

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Knots

mts/d

OLD PANAMAX NEW 5000 TEU

Speed consumption curves of different vessel age classes

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diff =12t/d =7,800US$

diff =20t/d =13,000US$

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2. Excellence in operating / Performance optimization

Advance scheduling and operational instructions by improved

coordination

Minimize change instructions to vessel (earlier/late eta)

Routing

Optimize/harmonize speed profile

Cooperative approach with Master and crew

Improved flow of information and data

Effective controlling

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2. Excellence in operating / Performance optimization

Fleet Operations Center

Mission: Maximize fuel savings

Nautical expertise

Operating the vessel during

the Ocean Leg passage

Coordination of route, speed

and arrival time with the

vessels command

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Voyage Monitoring Tools

Decision Support Systems

World fleet AIS Satelliteposition tracking

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Monitoring Fleet Decision Support Tool

OPTIMIZATION

Route & speed

Considering vessel- & weather condition + schedule

Vessel actual track

Vessel initial track

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3. Weather routing software

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1st step: Weather forecasting software installed on board of all vessel which

permits dynamic route planning by Masters

2nd step: Shore-side routing support by 3rd party weather routing service

3rd step: Effective and timely controlling of chosen route

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GL-Emission Manager (currently being developed)

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Collects, reports and evalutes vessel operational data and consumption

Allows detailed analysis of vessel and fleet fuel and environmental performance

GL

Green Server

Evaluation Tools

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4. Trim-Optimizer

Data analysis result of energy loss:

Onboard installation of

sensors

Individual vessel data

analysis

Automatic crew guidance

to improve trim / draft

during ocean sea legs

Data analysis of energy

loss

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5. Constructive hull optimization and hull maintenance

Constructive:

Hydrodynamic hull optimization

Reduced/optimized bulb shape

and size for low speed (for

Hamburg Sud of less importance)

Becker twisted fins

Self polishing coating

(but still antifowling)

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Maintenance:

Hull polishing (exceptional situations only)

Propeller / seachest cleaning: upon demand depending on trade profile

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6. Engine optimization

More modern engine technology: Continous improvement

Common- rail- technology / electronic control:

-> Flexible injection optimized for partial engine load

De-rating: Modified nozzle ring of turbocharger for lower

performance optimization

Super Slow Steaming Kits (additional blowers, etc.)

Exhaust gas boiler is used for bunker pre-heating

With downsized, modern engines waste heat is not sufficient to

pre-heat bunker oil.

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Hamburg Süd

Challenges and future

factors to consider

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Hamburg Süd2

Oetker Group1

Competitive Environment3

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Future Challenges

Increasing cost pressure due to competitive environment in

container shipping

Increasing bunker prices

Environmental Regulations

2015: max. 0.1% Sulphur (= MGO) in ECA‘s

2020 (2025): max. 0.5% Sulphur worldwide

Additional local requirements

NOx Engine Limits (Tier III) for newbuildings as of 2016

CO2 Limits

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The latest innovations?

Succesfull managerial integration of the various saving

components is more important than the latest innovation.

Example: speeding up of vessels to maintain schedule integrity

Main Engine bunker costs transpacific (16 days)

Vessel A @ 17kts: 800,000US$

Vessel B @ 20kts: 1,4000,000US$ (speed up due port congestion)

Difference : 600,000US$ for one vessel

Additional costs for 9 vessels operated in this service:

2.2 Mil. US$ due speed-up on one leg only

3.8 Mil. US$ during whole roundvoyage

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What is the right investment into future?

Engineering

Highly efficient smaller engines

Propulsion improvement devices

Dual- fuel engines (LNG, conventional fuels)

Scrubber technology (dry, wet, closed-loop, open loop)?

IT

Information technology (on board & ashore)

Reporting technology

Data evaluation technology

Satelite communication technology

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Information Technology

Collection of vessel data from various sources

Vessel Operational Data

Weather Routing

Trim Optimizer

Others

Shoreside integration of vessel data for different user groups

Operators

Line Management

Ship Management

Controlling

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Thank you for your attention –

Any questions?