Digitalization strategy in Shipping company A case of a Korean shipping company

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Korea Norway Green Shipping Seminar Digitalization strategy in Shipping company A case of a Korean shipping company 16 Nov. 2017 HYUNDAI MERCHANT MARINE Co.,Ltd.

Table of Contents Shipping Industry today HMM Activities - Vessel Insight - Big Data analysis Digitalization strategy 2

Shipping Industry today Mega Vessels Container ship Hyundai Freedom Nominal Capacity : 5,500TEU Born in 1990 Recorded the world largest container ship 3

Shipping Industry today Environmental Regulation US BW requirements EU Recycling Regulati on EEDI phase 1 EEDI phase 2 0.1% ECA sulphur limi t NOx tier III for new b uilds in North Americ a EU CO2 monitoring, r eporting and verificati on EU 0.5% sulphur cap EEDI phase 3 2015 2016 2018 2020 2025 2030 Ballast Water Convent ion - entry into force Operational requirem ents to CO2 emissions BC, noise, bio-fouling and VOC regulated? EEDI phase 4? Additional ECAs establ ished 0.5% global sulphur c ap EU recycling effective IMO fuel monitoring, re porting and verification Carbon pricing / MBM 0.5% global sulphur c ap HK Recycling conventi on ratified? 4

Shipping Industry today New Technology 5

Shipping Industry today Decision making 6

Table of Contents Shipping Industry today HMM Activities - Vessel insight - Big Data analysis Digitalization strategy 7

HMM Activities IT System Maintain cooperation with affiliates IT solution company Advanced ship management by IT technology Ship s System Shore Management VIP System FMS MMS CAS EDMS Shipmail Smart Ship System i-vms MMS CAS EDMS Account/SAP FMS : Fleet Management Sys. MMS : Maintenance Management Sys. CAS : Crew Administration Sys. EDMS : Electronic Document Management System i-vms : Vessel Monitoring System VIP : Vessel Integrated Portal 8

HMM Activities IT System [ Fleet Monitoring ] [ Maintenance Monitoring ] [ Crew Management ] [ Hull Maintenance system ] 9

HMM Activities IT System [ Performance management ] [ Web Integrated Monitoring System] [Electronic Document Management System ] [ Electronic drawing ] 10

HMM Activities IT System [ Hyundai Intelligent Total Ship Service] [ Supply Chain Carbon Calculator ] [ Greenhouse Gas Monitoring System ] [ Energy Efficiency Monitoring System ] 11

HMM Activities Vessel Insight VESSEL SHORE Optimum Voyage Evaluation/Improve Management Weather Informatio n Engine Data Automatic Data Gathering (VDMS) Operation Information Weather Forecast Optimum Routing Optimum Speed/RPM Optimum Trim Economic Speed (Eco Steaming) Cost Analysis Performance Monitoring Engine Performance Machinery Performance Energy Efficiency Ship Performance Damage Prevention Inspection Cost-Saving GHG Monitoring Weather Normalization Analysis/Reporting Satellite Feed Back Safety Operation Optimum Operation Optimum Ship Performance Fleet Energy Management Minimum Cost Asset Management by vessels performance ranking Optimized Business Planning Cargo Information Hull/Propeller Performance EEOI Regulatory Response 12

HMM Activities Vessel Insight Features Service Procedure Cost-based voyage optimization Asset management by vessels performance ranking Optimum trim service Automatic data gathering system Quantification through weather normalization Monitoring by real time sensing Cloud platform for operating service Flexible service offering Mobile application Hull/Propeller condition monitoring Auto SEEMP 1) Recommend cost saving Damage prevention Loading computer Sloshing add-on module Optimized business planning Energy saving equipment evaluation Self evaluation & improvement Fleet follow-up Energy saving devices Optimization modules Performance analysis Planning Selecting ship and company specific measures Training Target setting Monitoring Fully automatic onboard Cloud service Assisted by shore personnel Continuous & consistent Implementation Tailoring of solution Interfacing Required sensors Turn key delivery 1) SEEMP : Ship energy efficiency management plan 13

HMM Activities Vessel Insight Wi nd 14

HMM Activities Vessel Insight Operational data are collected by automated data collection system. The data from outside sources e.g. weather routing service is included. The comprehensive data are analyzed using pre-defined analysis module. Any navigational abnormalities are identified and the deviation is recognized as a warning to the shore operators. Simultaneous warning to the seafarers will lead to the adjustment of the on-board operation. 15

Table of Contents Shipping Industry today HMM Activities - Data Gathering system - Big Data analysis Digitalization strategy 16

HMM Activities Modeling, analysis and optimization of ship energy efficiency Hydrodynamic & Mechanical Engineering Big data analysis 17

HMM Activities Modeling, analysis and optimization of ship energy efficiency dependent variable Independent variable LW S LG S POWER RPM SFOC FOC DFOC Efficie n cy FOC/Miles LW S Linear Linear Power Linear Power Exp. Exp. Power Exp. LG S Linear Linear Power Linear Power Exp. Exp. Power Exp. RPM Linear Linear Power Linear Power Exp. Exp. Power Exp. Draft Linear Linear Linear Linear Linear Linear Linear Linear Linear Displacement Linear Linear Linear Linear Linear Linear Linear Linear Linear Wetted surface Linear Linear Linear Linear Linear Linear Linear Linear Linear Trim Linear Linear Linear Linear Linear Linear Linear Linear Linear Wind resistance Linear Linear Linear Linear Linear Linear Linear Linear Linear POWER Power Power Linear Power Power Linear Linear Linear Linear Propeller im m ersion Linear Linear Linear Linear Linear Linear Linear Linear Linear 18

HMM Activities Modeling, analysis and optimization of ship energy efficiency 19

HMM Activities Modeling, analysis and optimization of ship energy efficiency : BFS1~6 : BFS7~9 : BFS1~3 : BFS4 : BFS5~9 20

200 400 600 800 1000 1200 1400 1600 1800 2000 0 0 200 400 600 800 1000 1200 1400 1600 1800 2000 6 8 10 12 14 16 18 20 22 24 6 8 10 12 14 16 18 20 22 24 500 1000 1500 2000 2500 0 500 1000 1500 2000 2500 0 6 8 10 12 14 16 18 20 22 24 6 8 10 12 14 16 18 20 22 24 HMM Activities Modeling, analysis and optimization of ship energy efficiency East -bound West-bound 340 BFS4 380 BFS2 320 BFS5 BFS6 BFS7 360 BFS3 BFS4 BFS5 BFS8 340 BFS6 300 BFS9 BFS7 320 BFS8 SFOC 280 260 300 280 240 260 240 220 220 200 8 10 12 14 16 18 20 22 LGS 200 6 8 10 12 14 16 18 20 22 LGS 130 120 BFS4 120 BFS4 110 BFS5 BFS6 110 BFS5 BFS6 FOC 100 90 80 70 BFS7 BFS8 BFS9 100 90 80 70 BFS7 BFS8 BFS9 60 60 50 50 40 40 30 30 8 10 12 14 16 18 20 22 LGS 8 10 12 14 16 18 20 LGS 21

500 1000 1500 2000 2500 0 6 8 10 12 14 16 18 20 22 24 HMM Activities Modeling, analysis and optimization of ship energy efficiency Input Ship energy efficiency Model Output 380 360 340 320 300 280 260 240 220 BFS2 BFS3 BFS4 BFS5 BFS6 BFS7 BFS8 Fuel Consumption, Speed 200 6 8 10 12 14 16 18 20 22 LGS 22

Table of Contents Shipping Industry today HMM Activities - Data Gathering system - Big Data analysis Digitalization strategy 23

Digitalization strategy On going project Container Box Tracking Condition Based Maintenance 24

Digitalization strategy On going project 3D Printing Smart Glass 25

Digitalization strategy On going project Hybrid Cloud Platform 26

Digitalization strategy Autonomous vessels Autonomous vessels and crewless ships could be coming soon (From the Shipping News, 1 Nov. 2017) 27

Thank you for your attention! HYUNDAI MERCHANT MARINE CO., LTD 28