Ocean commerce is the backbone of the world’s economy, transporting 90% of global trade. But it’s also massively inefficient, resulting in carbon emissions amounting to 3% of global anthropogenic greenhouse gases.
Danelec was founded with the mission to increase safety and decarbonize the ocean supply chain.
Building our business over the last 30 years, we have consistently encountered one of the biggest barriers to achieving these goals: the fundamental framework that underpins the owner and charterer relationship, charter party agreements. These documents bind shipowners and ship charterers in legal relationships that were defined before 21st-century technology was available. Subsequently, these frameworks constrain companies from effective collaboration that could maximize economic and environmental efficiency.
As we explained in our joint white paper with BIMCO, relying on contracts that use clauses created generations ago has negative consequences for both parties – and the wider world. It results in an adversarial, zero-sum dynamic that promotes mistrust, ensures suboptimal performance, and keeps the ocean supply chain locked in the pattern of “hurry-up-to-wait” (or “sail-fast-then-wait”) behavior. The net result: excess emissions and reduced profits, to the order of 200M metric tons of CO2 and $30 billion per year of waste.
That’s why Danelec has launched Green Charter, our path to breaking down barriers between owners and charterers. Using machine learning-based data streams to implement new legal frameworks within charter party agreements, we’re giving owners and charterers an independent, shared source of truth for their charter parties. Green Charter unifies the interests of counterparties and empowers them to make joint technical and operational decisions for mutually beneficial commercial and environmental outcomes, removing claims from the center of the owner-charterer relationship once and for all.
Legacy charter parties present several challenges that hinder optimal vessel performance and efficiency.
First, static vessel descriptions in charter parties lead to mismatched performance expectations, as they fail to reflect the evolving capabilities of ships. Green Charter addresses this by providing dynamic performance baselines that accurately reflect the true performance of a vessel as it evolves.
Second, legacy charter parties include static speed and consumption clauses, which prevent optimal efficiency. In contrast, Green Charter establishes a dynamic fuel table that unlocks dynamic speed ranges, allowing for optimization based on commercial or environmental outcomes.
Third, traditional charter parties contribute to the "hurry-up-to-wait" behavior, which leads to excess emissions and reduced profits. Green Charter counters this by enabling Just-in-Time arrival, allowing vessels to reach port at an agreed-upon date and time, thereby avoiding unnecessary fuel consumption.
Lastly, managing emissions and CII is challenging under legacy systems due to the siloed nature of operational and technical data. Green Charter promotes collaborative management of both operational and technical performance through the use of Digital Twins, ensuring vessels maintain peak efficiency and achieve agreed-upon CII scores.
With this technology, we’ve made a giant leap towards our mission of increasing safety and decarbonizing the ocean supply chain. Green Charter applies the expertise we’ve amassed with data engineering, machine learning, and Digital Twins toward tackling one of the core barriers to maritime decarbonization. But Green Charter is more than the sum of the years we’ve devoted to building leading-edge maritime software – we believe it will usher in a new era for the industry, empowering owners and charterers to engage in transformational ways that benefit business, people, and the planet.
It’s beyond time for the shipping industry to embrace collaboration as the new modus operandi. Decarbonization is a team sport, and we need to come together now if we are to meet the carbon reduction targets set out by the International Maritime Organization. Join us in changing the way our industry operates for good.
