B&V’s Vision and Mission: Digital Transformation of the Laytime and Demurrage Process
Trade is the cornerstone of global civilization. Since humans first set out to sea with goods to trade, the shipping industry has continually worked to minimize uncertainty and risk inherent in ocean transportation, enabling efficient trade. At Burmester & Vogel we are charting a similar course to solve a persistent source of uncertainty inherent in every voyage: demurrage.
At its core, demurrage is a measure of inefficiency in loading and discharging cargo operations. On its own it is considered a secondary freight cost; in aggregate it is a tariff that impacts GDPs globally. Demurrage is so fundamental to trade that it impacts the commodity cost of the staples that underpin the world's economy. This “tax” is applied unevenly and compounds in developing countries that lack modern port and transportation infrastructure. This increases the cost of energy, food, and raw materials for local populations.
At the heart of B&V is a vision to transform demurrage from an unpredictable and manual, time-consuming process to a fast, efficient, and digitally enabled process thereby creating a world where demurrage can be accurately planned for and quickly settled.
In simple terms, demurrage impacts the entire bulk commodity trade chain, involving tens of billions of dollars being negotiated by global companies using a calculation and settlement process that has not fundamentally changed or improved over the past 50 years.
The reason for this lack of innovation is no mystery. Currently, there is a fragmented, entrenched process dependent on unstandardized physical documents, rudimentary spreadsheets, and email inboxes. Attempts at innovation to date have tried to standardize forms and change workflows to facilitate seamless communication between counterparties. The flaw in this approach is that the hardest thing to do is to change behavior, especially in an industry where stakeholders span the world and mistakes are costly. As a result companies are still stuck managing critical freight and commodity trading processes using spreadsheets today.
It is time for a new approach. With recent developments in Artificial Intelligence and Machine Learning, we can now support diverse processes, formats, and data-intensive workflows by incorporating them into a platform that streamlines, automates, and audits the demurrage process without changing the workflows of the people working in the field. By making existing processes more efficient rather than trying to supplant them, we can solve the demurrage problem seamlessly.
To deliver this vision requires software engineers, data scientists, and maritime experts with deep knowledge of how the industry works. B&V’s journey in this space began 40 years ago as a trusted partner supporting over 1,000 clients in 100+ countries with a fast, flexible and accurate laytime system. Since taking over the business in 2019, I have built on that foundation, intersecting our real-world industry expertise and proprietary data with technologists at the forefront of AI and ML to transform the demurrage process.
The platform that B&V has been developing over the past two years will enable the automation of demurrage workflows, digitization of key documents such as the Notice of Readiness and Statement of Facts, and auditing of the demurrage claim, producing actionable follow-ups for demurrage departments and their counterparties. This enables accurate claim audits, faster settlement of claims, and predictable demurrage cost – freeing up human capital and accelerating global trade.
Many companies are talking about digitalization. At B&V, the work to deliver the future of demurrage is a process that will be a joint effort between stakeholders and us as a service provider. We are already seeing value being created for these stakeholders as we work with them to deliver the future of demurrage as the industry embraces the physical to digital transformation. If our vision rings true for you, join us.
Chief Executive Officer
Burmester and Vogel Ltd