The CargoMetrics systematic investment platform links data from satellite signals, historical shipping movements and proprietary analytics (including weather) for trading purposes; it tracks 120k+ ships through VHF radio transmissions and satellites. The agreement hands over exclusive rights to this tool for Maersk Tankers giving it a competitive edge over an industry whose competition is shrinking. A few years ago there were 20 big shipping lines, now there are just 12.
Maersk group have a total fleet is 590 vessels, one of their vessels calls at a port every 15 minutes; so if the tool proves effective and is scalable it could be rolled out to their other entities. The Maersk tankers entity has 158 vessels that will be managed.
“It’s important to have tankers at the right place at the right time. It’s an industry that has been based on gut feeling on where and when to move capacity, but we want to challenge that industry paradigm. Our investment in CargoMetrics will speed up our digitalisation.” -Soren Christian Meyer, Head of Strategy, Maersk Tankers
The tanker market is volatile, with rental rates fluctuating every day and varying across different regions in the world. In just a week, the daily rate for a medium-range tanker in the Atlantic can roughly double or halve. That is in normal market conditions without wild cards like natural disasters. The U.S. hurricane season is more severe than the last 12 years, with the most recent Hurricane Harvey shutting the second-largest U.S. port, Houston, and the sixth, Corpus Christi. With 6 refineries, Corpus Christi is a critical port for the Texas oil and gas industry. Having diversion options and port information regarding re-openings after such events could be the few seconds of better information than other tanker owners.
Higher fuel costs to all ship owners like Maersk will be impacted from the IMO's (International Maritime Organization) decision to cut global bunker sulphur limits to 0.5% in 2020. Marine gasoil cost about $146/MT more than fuel oil at Rotterdam toward the end of last week; however, the market may price-in the IMO change late and this may widen meaning that the cost becomes much higher and gain will need to be made up by charging a higher cost of freight. Mounting pressure that the vessels should always be made available at the right place at the right time to justify inflated costs.
Also, added to this mix is also the Ballast Water Management (BWM) rules which impact the tanker market that require any ship owner to install an on-board ballast water treatment system which is expensive; around 2 million USD for a VLCC (super tanker). Some of these costs will be able to be swallowed up from the recent sale of Maersk Oil to France's Total; who can now take over their North Sea operations while Maersk can focus solely on the core shipping business entities
Maersk Tankers said on Wednesday it has entered into an equity agreement with U.S. hedge fund CargoMetrics, giving it access to analytical models and algorithms to better manage its tanker operations. Maersk Tankers, a unit of shipping group A.P. Moller-Maersk, has invested a “significant” but undisclosed amount in the Boston-based hedge fund, which will give the firm exclusive right to its analytical models, algorithms and capabilities. CargoMetrics links satellite signals, historical shipping data and proprietary analytics for trading purposes in its systematic investment platform. “Data about the ninety-percent of global trade that moves by sea is a powerful trading edge,” said Scott Borgerson, Chief Executive of CargoMetrics in a statement. The investment is in line with the more than 100-year old conglomerate A.P. Moller-Maersk’s push into new technologies as global trade becomes increasingly more digital.