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D/S Norden reports that it managed to slash its bunker fuel costs by $24.9 million between 2014 and 2016 thanks to the fuel efficiency measures it has put in place.

In 2012, the company decided to set up a specific department that was tasked with improving the fuel efficiency of its ships - regardless of whether the voyages were undertaken by owned vessels, long-term chartered vessels or on ships chartered for just one or a few trips.

Norden's fuel efficiency team was established at the start of 2013 and spent the first year monitoring all vessels. Since then, the Danish firm has implemented a number of measures that have helped it to significantly reduce its annual bunker bill.

Norden explains that, first of all, the fuel efficiency team needed to get an idea of the efficiency levels of each ship before deciding on a course of action.

"It is not a simple task to determine the efficiency of a vessel, because vessels are subject to conditions that change all the time - i.e. speed, draught and weather conditions, which all affect the vessels' consumption considerably," the company says in its latest newsletter.

The next condition to achieve fuel savings, Norden says, is that the data collected is shared and used by Norden's charterers, operators, the Norient Product Pool (NPP) - which is in charge of the commercial and operational performance of Norden's product tankers, and by colleagues in the technical and asset management departments - the latter being the department that buys and charters vessels for Norden.

Several meetings were also held to discuss what data was the most relevant in order to be able to perform the work of lowering fuel consumption in the most effective manner.

According to Peter Sinding, Norden's Head of Fuel Efficiency, perhaps the most important element of all is that fuel efficiency depends on everyone actively participating in reducing fuel costs rather than trying to optimise in their own area.

"It is no good if the technical department buys bottom paint of a low quality to minimise the immediate operating costs, if the vessel then does not glide as well through the water and increases its fuel consumption. It is no use either if a charterer or an operator avoids having the hull cleaned or the propeller polished on his or her voyage. This may increase earnings on this voyage, but the next will then be more expensive, as it will require more fuel," Sinding explains.

In order to measure data, share information and act on data requiring attention, Norden's fuel efficiency team has designed a set-up which consists of three key elements: a so-called propulsion module, which makes it possible to continuously measure the efficiency of vessels; a 'traffic light' system which distributes data and identifies where actions are required; and seven monthly meetings between the fuel efficiency, chartering and operations departments at Norden/NPP and the technical department.

Since oil prices dropped, bunker costs now make up around 45 percent of Norden's voyage costs, compared to approximately 60 percent in 2012.

Even so, Norden points out that additional savings can also be made by ensuring that the propellers are polished, that the hull is free from fouling, and by ensuring that vessels travel at the optimum speed.

So far, the company says that fuel efficiency improvements have primarily been achieved through increased hull and propeller effectiveness. But Norden also expects to see large savings in the future in two key areas: better tools for the selection of vessels for short-term charters, and a reduction in the use of the auxiliary engine at sea and in port.

Sinding also points out that the increased fuel efficiency has been achieved during a period when Norden's fleet on average is older. Generally, vessels become thirstier with age.

Fuel reduction figures

Between 2014 and 2016, Norden says its fleet of owned and chartered dry cargo vessels and product tankers have reduced their fuel costs by $24.9 million - entirely by utilising fuel more efficiently.

The company estimates that if the current efficiency level continues unchanged, total annual fuel savings this year will be $16.5 million.

At the end of 2016, Norden's ships were 10 percent more efficient than three years earlier. The long-term chartered vessels had increased their efficiency by 5.4 percent, while the short-term chartered vessels had improved theirs by 1.3 percent.

Sinding notes that the more control Norden has over a vessel, the more influence it will have on how efficiently it is run. "This is especially the case when we talk about technical measures such as vessel paint, propeller polishing and hull cleaning. Planned measures are always assessed in comparison to the expected fuel price, so that we know that financially they make sense," he says.