Unique Shipbuilding Contract Guarantees Performance in Actual Seas

In a first of its kind shipbuilding agreement, a shipyard and shipowner agreed to the inclusion of a guarantee of a vessel’s propulsion performance in actual sea conditions in a shipbuilding contract. This unique contract was entered into by Japan Marine United Co. and NYK Line.

Traditional shipbuilding contracts typically guarantee the ship’s speed and horsepower in calm sea conditions. The results are confirmed during sea trials which are usually conducted in controlled conditions without excessive winds or waves.

In explaining the new contract, the shipbuilder said that it recognizes calm voyages without wind and waves are rare during commercial voyages, and stormy weather conditions are often encountered. They explained that ships navigating in waves, which are an irregular phenomenon, require more horsepower to achieve the same speed than when navigating in calm waters due to factors including hull sway and increased resistance. Other factors, including wind direction, wind speed, wave height, wave direction, and ocean currents, of course, all impact the power required to maintain a ship’s speed. The ship’s designers, builders, and owners also factor in a broad range of other conditions including displacement and load condition making their theoretical estimations during the design stage. 

The shipbuilder noted that with recent improvements in satellite communications at sea and the progress of IoT technology, it has become possible to efficiently collect a variety of useful data during operations. As a result, the language in the new contract defines the propulsion performance as "relationship between speed and metric horsepower in the actual sea service."

Japan Marine United noted that they have been focused on propulsion performance in actual sea conditions and have been developing technology for improving the performance in the actual sea area for many years. It is this experience that gives them the confidence to include these new elements in their shipbuilding contracts. 

For the shipowner, NYK, it says that in the midst of fierce competition in international shipping, this guarantee will aid it in further differentiating itself in ship performance. They also believe that by providing customers with well-performing vessels, that they will also contribute to improving environmental consciousness throughout the supply chain.

After a ship goes into service, the shipbuilder will collect the necessary data for a certain period of time, verify the data, and confirm the degree of achievement of the guarantee. The performance guarantee will confirm the relationship between ship speed and horsepower under sea conditions that include wind and waves.

The two companies noted that they have been working on various R&D projects, including joint research on the utilization of big data for large container ships, since February 2016. Both companies are also considering expanding the verification of propulsion performance to additional ship types. NYK said that it would enter into discussion with other shipyards about including similar language in future contracts.