FreightWaves: More tech startups are focusing on voyage optimization at the same time the IMO 2020 rule is being implemented, requiring the use of more expensive low-sulfur fuel, and at around the same time the industry is pushing to cut greenhouse gas (GHG) emissions by 50% by 2050. I assume the timing's not a coincidence?

Heider: "The way I think about it at the highest level is that when you look at the GHG emissions from ocean shipping, it's roughly the same as the emissions from a country the size of South Korea. For our team, the environmental component is what's most important. From a ship owner's or operator's perspective, saving on fuel and spending less on fuel is where the rubber meets the road. And if you focus on one [fuel savings], the other [emissions reduction] comes along for the ride. There's a perfect correlation between tons of fuel used and the GHG emissions. So, the way we think about it is: Let's help the industry operate more efficiently."

Can you explain in general terms how many ships of which type are using your platform, and how you're getting this real-time data from ships on the water? I see your confirmed clients include Eagle Bulk (NASDAQ:EGLE), Dorian LPG (NYSE:LPG), Teekay Corp. (NYSE:TK) and Eastern Pacific Shipping.

"We combine those with a third set of data, which is sensor data from the ship — high-frequency signals coming from either the engine control room or bridge — signals on heading, speed, fuel flow, engine data, that kind of stuff. There are three different ways we access the sensor data. Sometimes it's coming to shore already in an OEM [original equipment manufacturer] system like Kongsberg or Honeywell or MAN. Another way is by developing a network of partners who get the data off the ships. The best example to date is the partnership we announced with [satellite company] Inmarsat in December; we'll be announcing another partnership in the next two weeks. The final way is to basically install a computer in the bridge that connects via a network and sends the data off the ship."

"There are documented savings in the 5-10% range. The savings are in a few different buckets. One is what I would call operational efficiency. One example that sounds simple but is more complex to solve than you might think is generator optimization. You might have more than one generator onboard, and it's not uncommon for those generators to be run in an inefficient manner. Most companies just don't have the data to optimize that, but if you do, it's potentially worth a quarter of a million dollars a year in fuel savings. 

With IMO 2020, there's also the question of: Where do you get your marine fuel? Whether you have an exhaust-gas scrubber and you're burning 3.5% sulfur fuel or you don't and you're burning 0.5% sulfur fuel, the pricing and availability is all over the map, depending on where you refuel, which in turn has a huge effect on fuel costs. Your system is about saving fuel from point A to B, where the customer has already decided to go from A to B, right? 

"It's an interesting question, which is representative of a lot of the siloed decision-making inside the industry. People think: I've already made this commercial decision and here are all the decisions that follow, as opposed to thinking about decision-making in a more holistic way. A big part of what we're doing and what we evangelize is unifying that decision-making. If there's a trade opportunity and you need to bunker [refuel], what are the trade-offs? We think it should be a unified set of decisions based on real-time data."

"I'd like to just double-click on that point. Baselining for performance is one of the things that companies like Maersk have done really well, and it has helped them be more competitive in a lot of ways. It's difficult to do — to establish an expectation or baseline for performance and track against it — unless you have a system of truth that has all of that historical information and you can see what your past decisions have been and what the outcomes have been."

I want to talk more about speed because this is something your platform covers and it's also a topic being cited by Wall Street analysts, on the theory that post-IMO 2020 fuel hikes will cause the fleet to slow down, which will decrease capacity and improve rates. I'm not convinced, because in a spot voyage deal, the speed is dictated on the fronthaul by the charterer, and if rates are strong, you're not going to slow down on the backhaul. So, one could argue that slow steaming is something that can make a bad market less bad, but it doesn't create a good market. What's your view on speed and how it affects the market?

"From my perspective, it doesn't really matter what the outcome is in the market as long as people are basing their decisions on a dataset that's reliable and they're making a decision that's optimized for the outcome they're looking for. There are a lot more decisions in play than ‘which speed do I go?' That oversimplifies a really complex set of decisions that requires a lot of different data points — decisions that have to be made about a vessel in real time, every day, 24 hours a day, seven days a week.

"In the five-year time frame, the vision we have for the shipping industry is that it can be the most efficient part of the global supply chain. So, you as the maritime guy at FreightWaves will be reporting on what is actually the greenest part of the global supply chain. There's no reason why that can't happen when you think about the potential for the different types of fuel and different types of ships and people getting more advanced in their commercial and operational thinking. We want to support all of that and if we can play a small part in that change, we will have achieved what we wanted to."