Shipping KPI Project

External Stakeholders Workshop

Baltic ExchangeBaltic Exchange St Mary AxeSt Mary Axe

LondonLondon

September 23September 23rdrd 20092009

Work items of the workshop

• Brief introduction to the Shipping KPI Standard

• Stakeholders potential utilisation of KPIs

• Discussion of stakeholders requirements to KPI/PI

• Discussion of selected KPI/PI definitions

The KPI Project objectives

In order to:

• boost performance improvements

• provide an efficient communication platform of ship operation performance information to internal and external stakeholders

Develop tools to measure company and vessel performance and get these recognized as “the Standard of the Industry”

Develop tools to measure company and vessel performanceDevelop tools to measure company and vessel performance and get these recognized as and get these recognized as ““the Standard of the Industrythe Standard of the Industry””

What the Shipping KPI project is:

Creation of an industry standard to develop:

• An instrument to improve performance in shipping

• A tool to self improve

• A tool for a constructive benchmarking of industry performances

• A tool to improve transparency

• A tool to facilitate more effective communication on operational performance

Shipping KPI Phase 1 & 2 - Content

Shipping KPI Phase 2 WG Members

Odd Are Sletten Aboitiz Jebsen Ship Management

John-Christen Jensen

Wilhelmsen Shipmanagement

Bill Lunn Bernhard Schulte Shipmanagement

Dietrich Wulff Columbia Shipmanagement

David McFarlane ConsultISM Ltd

Ranjith Cheerath EMS Ship Management

David Turner Meridian Marine

Sanjay Mittal PB Maritime

Tarald Nomeland Hoegh Fleet Services

Stig Romby Nielsen Maersk Shipping

Terry Cornick Maersk Marine ServicesAlexandre Albertini

Marfin Management S.A.M.

Girish Mandlik NYK Shipmanagement Singapore

Hemant Pathania NYK Shipmanagement Singapore

Jude Correa Seaspan Ship Management

Peter Curtis Seaspan Ship Management

Bjorn Hojgaard Thome Ship Management Singapore

Athanasios Rozakis

Tsakos Shipping & Trading

Simon Pressly V.Group

Utilisation of the Shipping KPI Standard

• Internal improvement

• Fleet/industry benchmarking

• External communication

• Used in relation to TMSA - evidence tracking

• Performance based contracting

• Building public opinion

• Measuring policy and regulatory implementation effects

KPI development

Step 3Step 2Step 1

Stakeholder information requirement analysis

Phase 1:KPIs in use

MT Research group

MT Expert group

Ship Mgmt.Professionals

reuse

Stakeholders Areas of interest

KPI proposals

SPI proposals

KPI review board

KPI depository

Stakeholder Interaction / Validation

• Step 1: Evaluation of existing Industry KPIs• Step 2: Researchers & KPI working group iterative process

−

4 workshops conducted−

Document exchanges / reviews

• Step 3: Stakeholder Involvement and Dissemination

Applying theory

Application of theory to develop the Shipping KPI Model

+Industry KPIs+KPI Definitions

Validating and balancing the indicators

Ship conditionShip stabilityCrew training level Ship safetyVoyage safety

Cargo safetyCrew safety Crew and cargo safety Operational safety

Criminal eventsSecurity event (delays before berthing) Security

Humanitarian eventsOperational events Operational delays

Crew, ship and cargo readinessPaperwork delays Crew and documantation Timeliness of operations Safe, secure and cost-efficient operation

Statutory inspection induced delayOther inspection induced delay Vessel readiness

Value of ship managers operationsInitial costing levelsBudget variation Cost contolUnscheduled off-hire time

Budgeting and informationInternal informationExternal information Management information

New build supervisionSystem development Technical consulting

Other ship servicesShip survey and inspectionMaintenance of classification Ship services

Crew behaviourReputation of the company Crew & company performance

Reputation Reputation Liquid dischargeAir pollution Environmental performanceGarbage pollution

Creating a aggregation hierarchy

Identifying Stakeholder needs

Creating the mathematical model

Publishing the Shipping KPI Standard

Own development

Role

SPI

KPIs

PIs

Legislator

HR performance

Crew Planning

Crew Management

Lost Time Sickness

Officers retention

rate

Number of cadets per

vessel

Stakeholders

Politicians Port State Coastal StateFlag State

International Authorities

Multi-National Governmental Organisations

Non-complete mapping due to visual reasons

The role will also have interest in other SPIs but only one SPI is shown

Crew training

Not on time relief

of crew

Manning Level

Man-hours onboard vessel

Other roles (hence other stakeholders) will also have interest in the SPI but only one role is shown

Example of stakeholder mapping: HR Performance SPI

Crew behavior

External complaints against personnel

HR deficiencies

The Shipping KPI Standard - Concept

SPI

PI

Extended Balanced Score Card for internal improvement

Corporate measurements

Aggregated indexes for external communication

Proc

esse

s

Cus

tom

er

Lear

ning

HSE OthersFinancial

KPI

The Shipping KPI Standard - SPIs

• Environmental performance• HR performance• Safety performance• Security performance • Technical Performance• Navigation Performance• Operational Performance

• Environmental performance• HR performance• Safety performance• Security performance • Technical Performance• Navigation Performance• Operational Performance

The Shipping KPI Standard - KPIs

• Accidental releases of substanses as def by MARPOL• Ballast Water Discharge Violations• Budget control per vessel• Cargo incidents during cargo operations• Cargo incidents during voyage• CO2 emission performance• Condition of Class• Contained Spills• Crew behaviour• Crew management• Crew planning• Drydocking Planning Performance• Environmental deficiencies• Failure of critical equipment and systems• Fire and Explosions

• Accidental releases of substanses as def by MARPOL• Ballast Water Discharge Violations• Budget control per vessel• Cargo incidents during cargo operations• Cargo incidents during voyage• CO2 emission performance• Condition of Class• Contained Spills• Crew behaviour• Crew management• Crew planning• Drydocking Planning Performance• Environmental deficiencies• Failure of critical equipment and systems• Fire and Explosions

• Flawless Port state control performance• HR deficiencies• Lost Time Injuries Frequency • Lost Time Sickness Frequency• Navigational deficiencies• Navigational Incidents• NOx emission performance• Operational deficiencies• Port state control deficiency rate• Port state control detention• Safety deficiencies• Security deficiencies• SOx emission performance• Vessel availabilty• Violations of MARPOL

• Flawless Port state control performance• HR deficiencies• Lost Time Injuries Frequency • Lost Time Sickness Frequency• Navigational deficiencies• Navigational Incidents• NOx emission performance• Operational deficiencies• Port state control deficiency rate• Port state control detention• Safety deficiencies• Security deficiencies• SOx emission performance• Vessel availabilty• Violations of MARPOL

The Shipping KPI Standard - PIs

• Absconded crew• Actual drydocking costs• Actual drydocking duration• Actual off-hire• Actual running Costs and Accruals • Agreed drydocking costs• Agreed drydocking duration• Allision• Average number of vessel under

management • Ballast water violations• Collision• Condition of class• Criminal offence• Drug/alcohol abused• Emitted Mass CO2• Emitted Mass NOx• Emitted Mass SOx• Environmental deficiencies• Failure of critical equipment and systems• Fatalities due to injuries• Fatalities due to sickness• Grounding

• Absconded crew• Actual drydocking costs• Actual drydocking duration• Actual off-hire• Actual running Costs and Accruals • Agreed drydocking costs• Agreed drydocking duration• Allision• Average number of vessel under

management• Ballast water violations• Collision• Condition of class• Criminal offence• Drug/alcohol abused• Emitted Mass CO2• Emitted Mass NOx• Emitted Mass SOx• Environmental deficiencies• Failure of critical equipment and systems• Fatalities due to injuries• Fatalities due to sickness• Grounding

• HR deficiencies• Lost Workday Cases• No of crew not relieved on time• No of dismissed crew• No of logged warnings• No of violations of MARPOL Annex 1-6• Number of cases where a crew member is

sick for more than 24 hours • Number of new cadets• Officer working days• Officers retention rate• Permanent Total Disabilities• Permanent Partial Disabilities• Planned off-hire• PSC inspections resulting in zero

deficiencies • Severe spills of bulk liquid• Total Exposure Hours• Total no of contained spills of bulk liquid• Total number of accidental releases of

substances covered by MARPOL, to the environment

• Total number of cargo units/passengers transported

• HR deficiencies• Lost Workday Cases• No of crew not relieved on time• No of dismissed crew• No of logged warnings• No of violations of MARPOL Annex 1-6• Number of cases where a crew member is

sick for more than 24 hours• Number of new cadets• Officer working days• Officers retention rate• Permanent Total Disabilities• Permanent Partial Disabilities• Planned off-hire• PSC inspections resulting in zero

deficiencies• Severe spills of bulk liquid• Total Exposure Hours• Total no of contained spills of bulk liquid• Total number of accidental releases of

substances covered by MARPOL, to the environment

• Total number of cargo units/passengers transported

• Total number of damaged or lost cargo units/passengers injured during cargo handling

• Total number of damaged or lost cargo units/passengers injured during voyage

• Total number of explosion incidents• Total number of fire incidents• Total number of navigational related

deficiencies • Total number of operational related

deficiencies • Total number of port state control

inspections • Total number of PSC deficiencies• Total number of PSC inspections resulting in

a detention • Total number of recorded external

inspections • Total number of safety related deficiencies• Total number of security related deficiencies• Training days• Transport Work• Vessel running cost budget• Violation of rest hours• AAE (Additional Authorized Expense)

• Total number of damaged or lost cargo units/passengers injured during cargo handling

• Total number of damaged or lost cargo units/passengers injured during voyage

• Total number of explosion incidents• Total number of fire incidents• Total number of navigational related

deficiencies• Total number of operational related

deficiencies• Total number of port state control

inspections• Total number of PSC deficiencies• Total number of PSC inspections resulting in

a detention• Total number of recorded external

inspections• Total number of safety related deficiencies• Total number of security related deficiencies• Training days• Transport Work• Vessel running cost budget• Violation of rest hours• AAE (Additional Authorized Expense)

The SPI Matching matrix

SPIs/KPIs Envir

onmen

tal

HR Safety

Securit

yTe

chnical

Naviga

tion

Operatio

nal

Crew management L H L L L L LViolations of MARPOL H L LFailure of critical equipment and systems L L H L LCargo incidents during cargo operations L L L L HCrew planning L H L L L L LLost Time Sickness Frequency HCO2 emission performance H L LNOx emission performance H L LSOx emission performance H L LCrew behaviour H L LBallast Water Discharge Violations H LVessel availabilty L L HBudget control per vessel HPort state control deficiency rateCargo incidents during voyage L L L L HPort state control detention L L L L HLost Time Injuries Frequency L HFlawless Port state control performance L H L L LAccidental releases of substanses as def by MARPOL H L LContained Spills H L LNavigational Incidents L L L L H LCondition of Class HEnvironmental deficiencies HHR deficiencies HSecurity deficiencies HOperational deficiencies HSafety deficiencies HNavigational deficiencies HFuel Efficiency L HDrydocking Planning Performance HFire and Explosions H

The Concept of the Shipping KPI Standard

SPI

PI

Pro

cess

es

Cus

tom

er

Lear

ning

HS

E

OthersFinancial

KPI

PI – textual definitions of measurements (PI Values) and guidelines for data collection

SPI – mathematical definitions (linear calculation using weighted sum of KPI Ratings)

KPI – mathematical definitions based on the PI Values. Two concepts are defined

The KPI Value (natural number calculated directly from PI Values)

The KPI Rating bringing the KPI Value into a 0-100 range)

KPI: Cargo incidents during cargo operationsThe total number of received claims concerning damaged or lost cargo or injured passengers during cargo operations in a calendar year. Made relative to the total number of cargo units transported in a calendar year. Measured per vessel for internal improvement as well as external communication (input to SPIs)

Relevant PIs:•Total number of damaged or lost cargo units or passengers injured during cargo handling•Total number of cargo units or passengers transported

KPI Value Formula=

Total number of damaged or lost cargo units or passengers injured during cargo handlingTotal number of cargo units or passengers transported

KPI Rating Formula= 100-(Z*KPI Value)

Rating Parameters: Z= 100000

This KPI represents a ratio between the total quantity of damaged or lost cargo or injured passengers (during handling operations such as loading cargo or boarding passengers) relative to the total quantity of cargo or number of passengers handled in a calendar year. By defining the KPI as a ratio, benchmarking is feasible even between different vessel sizes.

KPI: Cargo incidents during cargo operationsCalculation Example

Relevant PIs:•Total number of damaged or lost cargo units or passengers injured during cargo handling 4•Total number of cargo units or passengers transported 150.000

KPI Value Formula=

Total number of damaged or lost cargo units or passengers injured during cargo handlingTotal number of cargo units or passengers transported

KPI Value Formula = 4/150000 = 2,67*10-5 =26,7*10-6 = 26,7ppm

KPI Rating Formula= 100-(Z*KPI Value) = 100 – (105*2,6*10-5) = 100 – 2,6 = 97,4

Rating Parameters: Z= 100000 = 105

A KPI Value of 0,001 will give zero rating, 1000 units destroyed out of one million transported, or a damaging rate of 1000ppm

Two Strategies for Scaling KPIs are applied

KPI Formula Rating scaling factor

Ballast Water Discharge Violations =∑

Ballast water discharge violations0 = 100 rating 1 = 50 rating > 1 = 0 rating

Crew planning = A*No of crew not relieved on time + B*Violation of rest hours

= 100-(z*KPI Value)

Number of Violations

KPI

100

50

1 2

Ballast Water Discharge Violations

KPI Value

KPI

100

50

5 10

Crew Planning

Z=10

A=1

B=1

SPI Calculation (example)SPI Name SPI Formula (with weighting of KPIs)

Navigational Performance= (L*(Crew management + Failures of critical equipment and systems + Crew planning)

+ H*(Navigational incidents + Navigational deficiencies))/SUM LH

Environmental Performance

= (L*(Crew management + Failures to critical equipment and systems + Cargo incidents during cargo operations + Crew planning + Cargo incidents during voyage + Port state control detention + Flawless port state control performance + Navigational incidents)+ H*(Violations of MARPOL + CO2 emission performance + NOx emission performance + SOx emission performance + Ballast water discharge violations + Accidental releases of substances as def by MARPOL + Contained spills + Environmental deficiencies))/SUM LH

∑∑ ∑+

=HandL

weightHwithKPIsHweightLwithKPIsLSPI

________

The weighting factors proposed are: L = 1

H = 3

The weighting factors proposed are: L = 1

H = 3

Validation work in progress 1/2

• Definitions:– KPI Working Group will perform three sessions in 2009 and in

2010 validating:−

The PI descriptions−

PI data capture feasibility−

The KPI descriptions−

The KPI value calculation formula−

The KPI rating formulas (z-value scaling)−

The SPI weighting formulas– External stakeholders are invited to two workshops in 2009

and will be invited to two workshops in 2010 validating:−

The PI descriptions−

The KPI descriptions−

The KPI rating formulas−

The SPI weighting formulas

Validation work in progress 2/2

• KPI Working Group members are collecting data from three vessels (PI values for all quarters in 2009-2010), this is used to:

−

Evaluate data capture feasibility−

Perform sensitivity analysis on KPI and SPI sensitivity of PI−

Perform sensitivity analysis on SPI sensitivity of KPI−

Evaluation of natural spread of PI determining better values for the rating parameter z and weighting factors

– To calculate some benchmarks for the participating companies−

To evaluate the required meta data used to characterise each vessel reporting data into the database

−

Evaluate the requirements for benchmarking application

A conceptual model for the Shipping KPI Database System

Corporate SW(3rd party)

Shipping KPIDatabase SystemShipping KPI

Database System

Corporate end-user

Corporate end-user

Shipping KPIWeb client

XML PI report

XML Benchmark report

Shipping KPIDepository

Shipping KPIDepository

Web client

Generalend-user

Free use

Transactional Cost?

www.shippingwww.shipping--kpi.comkpi.com””www.shippingwww.shipping--dB.orgdB.org””

A benchmarking application/service

• Benchmarking is comparing:

– Ship vs ship

– Ship vs fleet

– Fleet vs fleet

• Fleet is here a general concept which allow comparison of user defined selections of data

• Strict security system are applied to secure anonymity and confidentiality of data.

Environmental Performance - MS Olivia

Absolute Contribution to Environmental Performance Reduction

http://raga3.marintek.sintef.no/TOCC/Admin/

Industry Benchmark

Thank you for your attention!