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1 INTRODUCTION

Growing cargo flow all over the world leads to some

difficulties, connected to the time of cargo handling,

waiting for cargo and some other unexpected delays,

like weather conditions or acts of piracy or any other

unpredicted delay. Any delay can cause critical

problems in the logistic chain, which will lead to

financial loss. There are many ideas and procedures,

designed for the prevention of such situations,

however, they are mainly serve the purpose of

reacting for the problem appeared. Moreover, existing

methods of information exchange and

communication, sometimes, are not guarantee proper

level of decision making and delay with taking

decision. Another matter – very often the decision is

not discussed with all parties of transport process,

every stakeholder plays his own game.

There are many negative factors, which affect

transport process: unexpected weather changes,

political and war factors, unpredictable situations,

ships’ traffic, and many others. Among mentioned, we

can predict just weather changes, but even this could

not be done very accurately, moreover, sometimes,

they are not taken into account, not having scientific

background.

So, the task of optimization of transport process

include at least communication between main

stakeholders – ship and cargo owners, per example.

Such communication to be fulfilled in the real time

mode with constant prognosis of the future

development of the situation.

Nowadays we have some projects, aimed to find

the solution for better cooperation and coordination

between stakeholders: “Pronto” system, testing now

in the port of Rotterdam, allows to trace the situation

in the real time mode. According to the information

from designers, this system uses public data,

distributed by port and ship, data of AIS system, and,

also – prognosis of artificial intellect systems. The

Ship-Cargo Interface: Concept of Optimization, Using

Risk Assessment Methods and Network Data

Exchanging Technologies

A. Sagaydak

& V. Torskiy

Odessa National Marine University, Odessa, Ukraine

National University “Odessa Maritime Academy”, Odessa, Ukraine

ABSTRACT: The idea of the proposed concept is to optimize information exchange between ship managers and

potential charterers. There are many attempts to create electronic system for facilitation of information

exchange, but all of them are aimed to find solution in particular area: container or oil trade, collecting data on

ships or some other Port State Control issues. Existing technical solutions in most cases are not taking into

account possibility of data change, which may vary significantly during ship’s trip. Moreover, there is no deep

analysis of each proposed variant, which can take into account all variable factors. Also – there is no complex

solution, applicable to any ship / any cargo. Proposed concept describes the system of electronic data exchange,

which assists in decision-making and based on risk assessment of changing scenario in the process of choosing

the best solution for fixing the ship.

http://www.transnav.eu

the International Journal

on Marine Navigation

and Safety of Sea Transportation

Volume 15

Number 2

June 2021

DOI: 10.12716/1001.15.02.12

360

specific of this system is an attempt to unify standards

of development of such systems (in particular –

standards of draft, fairways, and other similar

standards, developed by International

Harbourmasters Association). This gives the great

opportunities, however, “Pronto” does not operate

cargo data [4].

Actually, the idea of automation of cargo

transportation process is not new: fertilizers’

transporting optimization system was developed in

Australia in 1999. This project is still interesting

because the designers took into account not only

accurate planning of the ships’ schedules, but

financial aspects as well: the cost of the cargo and

freight of the ship. They considered data on presence

of empty space in the warehouses, presence of the

cargo and presence of the proper tonnage in the

market. Proposed programme gave an opportunity to

pay attention to the prognosis of fertilisers’ cost

(which is variable in Australia, depending on the

season, weather forecast, and many other factors) and

to the freight prognosis. Finally, the developed

programme allowed Customers to optimize ships’

schedules on yearly basis, but also to minimize freight

rates [2].

Container optimization systems are also have wide

application. They usually take into account financial

aspects of particular container line. Such systems can

arrange optimal ports’ rotation (taking into account

presence of loaded and empty containers in each port,

distance between ports, bunkering facilities in the

ports, presence of bunker on board of each particular

ship, and many other factors). They also can calculate

optimal bay plan, ship’s stability, and many other

details [3]. As disadvantage of such systems, could be

mentioned narrow targeting in the frames of

particular “container” tasks.

Naturally, tanker fleet was also in need of the

similar optimization system. Proposed programmes

give the opportunity for preparing ship’s call in

advance. Financial aspects, connected to laytime,

freight price and it’s changes, are taken into account

[5]. Again, the main disadvantage of such systems is

concentration on the particular problems of tanker

fleet, which are very important, but very specific,

which not allow to expand positive experience for the

dry fleet as well.

Moreover, the whole port digitalization does not

look fantastic nowadays. We know the project of

Hexagon Company on implementing multifunctional

digital technologies in the port of Lisboa. This is not

only optimization of paperwork (which might be

considered quite simple in our time), but systems of

analysing the situation in the real time mode and

visualization of the most important processes, which

allows to many stakeholders to take their decisions at

the same time, avoiding delay [7].

The other example – the product, proposed by

Kazakhstan Company “KTZ Express”. They can

operate not only digital documents, but scanned

copies as well (including Cargo Manifests and Bills of

Lading). Moreover, this Company implements

blockchain technologies in the frames of Transcaspian

way, which allows to make all paperwork in the

electronic format [1].

It is also necessary to mention one of the most

useful platforms for ship Owners and Charterers:

“Shipnext”. This system allows to the participants to

find the best solution, most suitable for the particular

ship and particular cargo, taking into account many

factors, including specific of fleet and specific of

cargoes. Tracking of cargo is also available in the

system, same as producing of electronic Bill of

Lading, as well as wide database of ships and ports.

Close integration with financial institutions and other

service providers gives the possibility to make the

next step – integrated system, based on block-chain

technologies [6].

There are also some programmes existing, which

allow automatic search of cargoes and available

tonnage for these cargoes. However, all mentioned

systems do not have an opportunity to predict the

development of the situation. Moreover, sometimes

the decision taking process becomes even more

difficult because of data overload. They facilitate work

and mutual cooperation of the stakeholders, however

there is always room for improvement.

2 SHIP’S OWNER – CHARTERER RELATIONS

Probably while transporting goods by sea, the main

relations, affecting all other aspects, are relations

between “Ship”, means “Ship Owner” and “Cargo”,

means “Cargo Owner” or “Charterer”.

We can consider as a “Ship’s Owner” not only the

owner of the ship himself, but all persons, acting on

behalf of him: Master of the ship, Ship’s

operator/manager, agent and many other persons,

acting on behalf of the owner, and who are in need of

updated information.

If we are talking about “Cargo Owners”

(“Charterers”), we can consider also charterer’s

agents, or any other persons, acting on behalf of cargo

owners.

Let us look how we can assist in the cooperation

and relations of “Ship” and “Cargo” parts of the sea

transport process at least on the first stage of their

relations – cargo search. There are several players at

this stage: Ship Owners, Charterers, Brokers,

Insurance Companies and some other minor players

(which we will not take into consideration at this

moment, because the principle of their collaboration

with the system is the same).

Imagine, we have several Ship Owners (see figure

1) – Owner 1, Owner 2 and Owner 3. Every of these

Companies has several ships, some of them will be

open for charter soon. The ship are various by types,

size, age and other particulars.

On the other hand, there are several Chartering

Companies – Charterer 1, Charterer 2 and Charterer 3.

Each of them needs to transport the cargo of various

nature, quality and quantity.

We have also several Brokers as the mediators –

Broker 1, Broker 2 and Broker 3. The task of the

Broker is to find the optimal variant ship/cargo, which

will be the most efficient from economical point of

view, keeping in mind also safety aspects of course.

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Figure 1 Example of connections while searching the cargo

We have created this diagram as a simple example

of possible connections between stakeholders. In

reality they are much more sophisticated, to achieve a

good result necessary to analyse all possible variants.

Let us look through the process of searching cargo for

just one ship by one owner, which have 3 brokers.

These 3 brokers are in contact with 3 Charterers

(Charterer 2 is in contact with all 3 brokers on various

conditions).

Usually, the process of the cargo/ship search

begins from the mutual evaluation of Brokers and

Charterers on one side and Brokers and Owners – on

another side. Naturally, for the most of the

Companies, which are long time in the market, and

knows the abilities of potential stakeholders, this is

not necessary, because of long time connections,

proved quality of service and long term contracts

(however, it is not always true). If we assume that we

have companies, which are completely unknown to

each other (it is quite often situation), thus we have to

use risk assessment methods for making decision

making process more grounded. It seems this will be

better for all stakeholders.

So, we have for the each segment of this scheme

some certain set of parameters, which should be

assessed from the potential risk point of view:

For the Ship Owner: how long the Company

operates the ships, presence of Safety Management

System, number of ships, their types, flags, trading

area, specific of construction (availability of cranes per

example), positive Port State Control history and

many other factors.

For the Charterer: how long the Company is on the

market, history of fixes, cargoes in possession of the

Company, usual ports of loading and discharging,

size of the Company, proposed freight rate and

others.

For Broker: experience, number of fixings per year,

cargoes and ships, normally operated by this broker,

announced broker’s commission, and is this broker

works on ship’s or cargo side.

For insurance Company: work experience, if the

Company P&I Club member, main Clients, if they had

insurance cases, insurance payments and level of

insurance coverage, cargoes and fleet, usual for the

particular company.

Let us make risk assessment on behalf of Ship first.

It is clear, the decision of choosing cargo is to be taken

by Ship Owner, but the specific of the particular ship

to be taken into account before taking a decision (such

as, per example, if Chief Officer does not hold the

Polar Waters Certificate – if the cargo bounded for

polar area).

2.1 Data involved on Ship’s (Ship Owner’s) side wile

searching cargo

Basic data: ship’s type; size of the ship (deadweight

and cargo capacity); speed; date/place when the ship

will be available for new employment; present

position; list of cargo, allowed for transporting by the

ship; specific of construction; trading area; any

existing limitations on construction, trading area,

crew complement and/or qualification; other

important data.

Data to be analysed with the help of risk

assessment system are mainly connected to the

evaluation of level of trust to every of available freight

brokers: how long this particular broker operates in

the chartering market; reputation; number of fixes for

the last year; if any problematic fixes happened; if the

broker operates on ship or cargo side; how long this

broker cooperates with particular Charterer, which

propose cargo; Broker’s commission; if the freight

proposal has the signs of circular from the market.

At this stage it is possible to adjust the system in

the following way: to commence the next stage after

choosing the best broker only. But in the real

conditions of the real market, it seems not feasible,

thus seems better to make general risk assessment,

taking into account all data available, as following:

− level of trust to Charterers, which have cargo

proposals: how long time this particular Charterer

operates in the market; size of the company; core

business; last fixes’ information; if non-payment of

freight ever happened; usual cargoes; ports of

loading and ports of destination.

− information about the cargo itself: proposed

freight level; cargo, quantity of cargo, specific of

cargo (like specific of cargo operations,

transporting, etc.); cost of cargo; specific of the ship

for the particular cargo (for example availability of

cranes, size of cargo holds and hatches, etc.);

proposed Charter Party; proposed freight payment

conditions; dates of cargo readiness; place of cargo

storage; name of the port of loading, specific of the

port of loading, cargo handling rates; name of the

port of discharging, specific of the port of

discharging, cargo handling rates; notice of

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readiness tendering conditions;

dispatch/demurrage conditions.

− other information, concerning proposed charter:

necessity to refill ship’s store during voyage

planned; if it is necessary to pass canals;

navigational safety aspects and hazards on the

route; usual weather condition on the route;

weather forecast for the dates of the voyage;

possible delays on the route and in the ports of

loading/discharging; length of the route;

possibility to find next employment for the ship

after fulfilling proposed voyage; if proposed

charter (route and/or cargo) could affect next

employment of the ship; necessity of the crew

change during voyage; cargo insurance conditions.

2.2 Risk assessment

From the commercial point of view risk is economical

category, therefore it is logical to provide most of data

in monetary form (wherever it is possible) – this will

simplify analysis and decision making process.

However, there are many factors, which are difficult

for monetary assessment. Sometimes it is really

impossible. Such factors recommended providing in

digital form (10 points scale). It is clear, that some

factors hard to put in digital format too (like core

business of the company, per example). In such

situation the best solution is to take into account the

importance of every particular parameter and to make

correction after some time (on obtaining some

experience). It is necessary to keep in mind that every

parameter (from mentioned above) affects the final

financial result, even if it is indirect influence. Basing

on the results of the analysis (risk assessment), the

Owner can take the decision on choosing proper

charter variant.

Proposed algorithm will work if it will be applied

to all proposals – not only circulars from the market,

but to analysis of proposals of existing trustful

partners. This will allow to avoid any mistakes and to

choose really best proposal.

On the other side, broker and charterer might not

have exclusive long-term agreements with each other,

so the same cargo could be proposed by various

brokers. In order to avoid mistakes in such situation,

it is necessary to make separate analysis and risk

assessment for each proposal (all the chain must be

analysed: broker- charterer-cargo). The same could be

recommended for the situation when different

charterers propose similar cargo of almost similar

quality and quantity.

The remark to be made here: in most cases broker

does not disclose the name of the charterer, when

making proposal, thus we have to evaluate broker

more carefully. Evaluation of charterer to be done on

the stage of fixation in this case (but this does not

mean it is not necessary to evaluate charterer at all!)

Following forms could be proposed for the risk

assessment of main factors (Owner’s point of view).

Of course, each from to be developed according to

particular company’s standards, needs and

experience.

In case of absence of information on problematic

fixings in the both tables above, some average level

might be accepted (5 per example). If there is

information about more than 10 problematic fixings –

it seems better not to cooperate with such company at

all.

Table 1. Risk assessment of the broker

__________________________________________________________________________________________________

Coefficient of Parameter Min evaluation (0) Max evaluation (10) Financial

importance evaluation

__________________________________________________________________________________________________

50-1 Lifetime New company 100 years

50-2 Reputation Bad or no info Very good

50-3 Time of cooperation with “Ship” No 10 years

50-4 Fixings No 100 fixings

50-5 Problematic fixings 10 No

50-6 Time of cooperation with Charterer No 10 years

50-7 Broker acts onside of Ship Cargo

50-8 Operates by cargoes Unusual for “Ship” Usual for “Ship”

50-9 Is the proposal circular from the market? Yes No

… … … … …

50-n Commission Amount

__________________________________________________________________________________________________

Table 2. Risk assessment of the Charterer

__________________________________________________________________________________________________

Coefficient of Parameter Min evaluation (0) Max evaluation (10) Financial

importance evaluation

__________________________________________________________________________________________________

50-1 Lifetime New company 100 years

50-2 Reputation Bad or no info Very good

50-3 Size of the Company Small Very large

50-4 Proposed cargo Unusual for this Company Usual for this Company

50-5 Time of cooperation with “Ship” No 10 years

50-6 Fixings No 100 fixings

50-7 Problematic fixings 10 No

50-8 Unpaid freight Several cases No

50-9 Time of cooperation with Broker No 10 years

50-10 Operates with cargoes Unusual for “Ship” Usual for “Ship”

50-11 Is the proposal circular from the market? Yes No

… … … … …

50-n Freight Amount

__________________________________________________________________________________________________

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Table 3. Risk assessment of the Cargo

__________________________________________________________________________________________________

Coefficient of Parameter Min evaluation (0) Max evaluation (10) Financial

importance evaluation

__________________________________________________________________________________________________

50-1 Freight Amount

50-2 Cargo specific Very sophisticated Very simple transporting

transporting transporting

50-3 Cost Very expensive Very cheap

50-4 Is additional equipment Yes No Amount

necessary

50-5 Charter Non-Standard Standard

50-6 Charter conditions Many difficult No difficult conditions

50-7 Readiness of cargo Long waiting time Cargo is ready Calculation of time of

50-8 Location of cargo Far from ship’s place At the ship’s place Calculation of expenses for

additional trip

50-9 Rate of cargo handling Slow handling Fast handling Calculation of time of

waiting when the cargo

operations idling

50-10 NOR conditions Tough conditions Usual conditions Calculation of expenses if

conditions would not met

… … … … …

50-n Dispatch/Demurrage Tough conditions Usual conditions Calculation of expenses if

conditions would not met

__________________________________________________________________________________________________

Table 4. Other information – risk assessment

__________________________________________________________________________________________________

Coefficient of Parameter Min evaluation (0) Max evaluation (10) Financial

importance evaluation

__________________________________________________________________________________________________

50-1 Stores refilling Necessary Not necessary Calculation of expenses for additional

port call

50-2 Passing canals Calculation of cost

50-3 Navigation on the route Many hazards No hazards Calculation of expenses in case of

navigational accident with probability

calculation

50-4 Traffic on the route Tough Small traffic Calculation of expenses in case of

collision with probability calculation

50-5 Risk of pirate attack Big No risk Calculation of expenses in case of

attack with probability calculation

50-6 Military operations High probability Low probability Calculation of expenses in case of

attack with probability calculation

50-7 Usual weather on the Very bad Good Calculation of expenses in case of

route fixings storm with probability calculation

50-8 Weather forecast for Very bad Good Calculation of expenses in case of

the dates of voyage storm and expenses for deviation

from route

50-9 Other delays on the High probability Low probability Calculation of expenses in case of

route delay with probability calculation

50-10 Delays in the ports High probability Low probability Calculation of expenses in case of

(inspections, etc.) attack with probability calculation

50-11 Length of the route Very long Short Calculation of expenses for fuel, etc.

50-12 Possibility of the next Low probability High probability Calculation of probability of the next

fix in the port of fix

discharging

50-13 Is it necessary to Yes, a lot of work No Calculation of expenses for ship’s

prepare the ship for cargo preparation

50-14 Crew change Necessary Not necessary Calculation of expenses for crew

change

… … … … …

50-n Insurance conditions Not so good Good Calculation of expenses, taking into

account possible additional insurance

__________________________________________________________________________________________________

To achieve better results of the risk assessment, we

need to assign priority to each parameter. For this

purpose, we have to rate them in the sequence of

decreasing priority, means the most important

parameters to be the first. It is clear that very company

will choose own sequence of priorities: for one

company main priority could be the freight rate, for

other – long term contract with famous and reputable

company. We’ve chosen 50 minus sequence number of

the parameter as a coefficient of importance of the

parameter. Of course 50 is not compulsory, it is

chosen assuming that total number of such parameters

will not be more than 50 in any case. Usually, it is less,

than 50, but we have to have some spare numbers for

the situation, if new parameters will appear.

Moreover, such approach will give an opportunity to

the user to make some “break” between parameters

(for example, in Table 1 time of cooperation with the

“Ship” might be much more important for the Owner,

than next parameter (number of fixings in our case),

thus Owner can assign coefficient 50-3=47 for the time

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of cooperation and 50-6=44 – for the number of

fixings, thus coefficients 46 an 45 would be absent).

From time to time Owner can change mentioned

coefficients, basing on the experience and particular

policy of the Company, it’s strategy and tactical tasks.

Such changes to be reflected in calculations.

When all lines of the tables above will be filled in,

the simple sum of the data to be calculated (monetary

figures to be calculated separately, of course). Finally,

the bigger result we would have, the better variant we

choose. This task could be fulfilled manually, when

we have just one ship, and just one or two cargoes

proposed. But even in this case, we have quite big

number of variable data – like different possible

routes, different bunkering places, changeable

weather conditions, etc. So, even for very simple task

better to use special programme. We are not talking

about analysing of all possible variants and

combinations, which might appear (See Figure 1 – it is

not most difficult situation, which could be).

Methods of the risk assessment are not simple,

they are variable and definitely would be different not

only for the each factor (Broker, Charterer, Cargo,

Other factors), but for the particular parameters. For

some of them (like number of problematic fixings or

risk of pirate attack) statistic analysis is applicable; for

others – might work just expert assessment (for

example – reputation of the company). In some cases

Markov chain or Monte Carlo method application will

be suggested. Moreover, some of the parameters allow

several methods (statistic and expert assessment) – it

is on decision of particular Ship Owner to decide

which method to choose.

Another problem – possible correlation of the

parameters, which will require building up scenario

tree and detailed analysis of each possible way of

situation development, including extraordinary

situations.

All various methods require various mathematic

approach, which will give us quite sophisticated

model, description of which is out of the frames of the

present article.

3 CONCLUSIONS

Our idea is to handle the task of cargo search, using

risk assessment, with artificial intellect systems, which

could be trained before on big number of typical

situations, proposing to the Owner the best solution.

Moreover, current abilities of IT technologies allow

automatic transmission of weather data (per example)

to the system with automatic calculation of

probability of storms and possible damage. Also –

programme allows calculating several variants of

future job (various routs per example), proposing to

Owner’s decision maker all possible variants of the

situation development for all proposals. Of course, the

decision to agree or not (or which proposal to choose)

still remains on human – the final decision could be

not optimal from the financial point of view or from

the point of view of formal logic: nowadays manager

should have the opportunity to take risky decisions

with the aim to achieve long term (or postponed)

profit. Therefore programme has to show to manager

all calculation results, including negative. Other task

to be fulfilled – to remind to the manager all similar

decisions, their logic and their results. This will allow

learning on mistakes.

It is clear, that for the optimization of cargo search,

it is necessary to analyse the future agreement on

cargo carriage from both sides – from the side of the

“Ship” (as we did above), but also from the side of

“Cargo”. This algorithm will be different a bit from

the previous one (different data, first of all). But the

result will be the optimal correlation of the ships and

cargoes for them, taking into account economical

factors for the all participants of sea transporting

process.

Implementation of proposed concept will allow

fixing the ships in the real time mode with optimal

results.

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