Microsoft Joins Tech Race to Clean Up Shipping With Big Data

Emily Chasan (Bloomberg) -- At noon every day -- when the sun is directly overhead -- the world’s fleet of commercial maritime ships report their position, speed and weather conditions. It’s the primary way ships track how much fuel they’re burning and how to to use less of it, and they’ve been doing it this way for at least 200 years.

Surely there’s a better way, and the world’s biggest tech firms are investing millions to figure it out before fuel prices spike under new shipping rules in January.

Microsoft Corp.’s venture arm, M12, just announced it’s leading an $11 million Series A funding round for Nautilus Labs, a New York startup that uses artificial intelligence for fuel efficiency on ships. California’s NVIDIA Corp. is working with another AI startup in San Francisco. Japan’s Hitachi Ltd. is pursuing similar technology in Europe.

Maritime ships, which transport around 90 percent of the world’s goods across the seas, generate about 3 percent of global carbon emissions. They also waste a lot of fuel on poor decisions.

“Most companies don’t know or aren’t confident about how much fuel their ships actually consume,” said Matt Heider, chief executive of Nautilus Labs. More frequent data on weather patterns and vessel speed can lead to better decisions that start to reduce fuel use, he said.

That’s where the tech companies come in. Nautilus says it can use artificial intelligence to deliver real-time analytics and alerts to ship crews that could help save more than 10 percent on emissions in a single voyage. For example, if a ship learns it’s traveling too fast at night, it could slow down to save fuel.

That’s increasingly important, as new international rules will require ships to reduce their pollution. Collectively, commercial ships already spend $100 billion a year on some of the world’s dirtiest sulfur-rich fuel oil, representing about 5 percent of global oil demand.

Cleaner, higher-grade fuel and biofuel are more expensive, an added incentive for companies to use less. Improving efficiency with data is potentially cheaper and faster than some of the other efforts under way now, including installing scrubbers on commercial ships that keep sulfur out of the air and developing new wind and air bubble technologies to reduce friction on their vessels.