Shell Marine: From molecules to services
By Aaron Stone
In 1874, Henry Wadsworth penned the notion of ships passing in the night, comparing it to a transitory, incidental encounter without lasting significance. Fast forward 140 odd years and the movement of modern fleets is anything but incidental. Challenging times and increasing cost pressures within the marine industry are forcing operators to think differently about their operation, in particular, how the use of data can improve decision making and efficiencies.
Shell has positioned itself as the number one global lubricants company for the past 11 years and is currently among the top three marine lubricants providers, supplying a fleet of 10,000 ships in more than 700 port networks across 59 countries. Speaking at a press conference following the opening of Shell’s second largest lubricant blending plant in Asia, located at Singapore’s Lube Park, last November, Jan Toschka, executive director of Shell Marine, confirmed ambitions to expand their network, noting the organization’s expansion into Australia in 2016 with the opening of 16 ports across all six Australian states and a desire to further their product range to cope with evolving engine designs. While this task sounds imposing, in an increasingly data-hungry world, Toschka believes these are now merely “hygiene factors.”
In early 2017, Shell Marine launched the concept of total fluid management for the marine industry — called Marine Integrated Lubricant Expert Solutions or MILES. The intention of MILES is to provide a lower and more predictable cost of operations, ease of purchasing lubricants and reduced operational complexity for customers, says Toschka, and is part of Shell’s strategy to move “from molecules to a true service-oriented partner.” Toschka contends their data-led approach is a new and unique method of lubricants management within the marine sector, “there is nothing like this,” he says.
Facing an industry enduring hard times over the past few years, Shell set about engaging more closely with customers to improve their marine lubricant offering and appreciate the difference the organization could make — beyond lubricants. It was clear that the lubricant manufacturer needed to shift from “trusted products to smarter solutions,” suggests Toschka. MILES is the output of this customer journey. The concept encompasses technical monitoring of an engine performance to optimizing lubricant consumption and providing guidance on future volume liftings and ports.
As part of the MILES concept, Shell Marine has launched a range of technical services. Toschka outlined one particular service called LubeMonitor, a cylinder condition monitoring programme for two-stroke marine engines. LubeMonitor uses sophisticated software to enable full data integration. Greater connectivity allows Shell to capture all data points generated onboard from engine and oil analysis sources, which are condensed and easily transferred from the vessel to Shell’s offices throughout the world. This allows the company to closely monitor indicators of engine performance such as the remaining base number of the drained oil, corrosive iron content, whether operators are using the correct product or volumes. Engineers provide customers with expert feedback and the latest updates on an engine’s running condition.
Despite “tonnes of data,” many shipping operations are still managed in a similar way as back in the 1990s, Toschka says. Many operators are very confident about their vessel trading patterns but grossly unaware of the cost of subtle deviations from their schedule if not planned properly, such as orders picked up at more expensive places, an inability to get fuel or missed orders.
During the development of MILES, Shell engaged a digital solution provider in London to assist in the creation of a complex programming algorithm designed to take the guess-work out of a vessel’s lubricant requirements. Fuelled with technical data from the agent, the algorithm can accurately determine consumption rates, predict demand and volume lifting forecasts when a ship comes to its next port. Toshka believes their system removes operational complexity for the crew and eliminates urgency from port operations.
Six months since the launch of MILES, Shell has 85 ships engaged in a trial of the program, including a mix of tankers, Ro-Ro vessels and containers, although Toschka admits containers are underrepresented in the sample at this point. The company aims to have 500 ships by the second half of 2018. Toschka is confident their new initiative is the way forward and will mean less frequent orders, in better places, and the avoidance of urgencies, plus the ability to quickly and easily compare operations on individual fleet vessels.
The algorithm opens the door to totally different pricing models, says Toschka, confirming a range of money-saving commercial offers that include ‘flexi,’ ‘pay as you consume,’ or even standardized billing where operators can spread costs over an entire year and take advantage of a commitment to savings. Charging customers perday of sailing or even per nautical mile are all potential commercial offers moving forward. In another six to nine months, the company will have more commercial proposals with various degrees of customization, confirms Toschka.
While technical monitoring and email prompting of customers is impressive, at the more extreme end of the spectrum the company has the ability to assume complete lubricants management of a vessel. “Give us the schedule and we make the decisions on where to fill the vessel.” Shell has recently launched this service with a major offshore vessel operator and another customer who operates container shipping — though Toschka concedes the importance of scale in its ongoing viability. Complete lubricant management is designed to optimize lifting behaviour of the vessel, but it is when extending this service to a fleet of 20 plus vessels that greater synergies occur that can impact the procurement side.