Pay per use ENCs

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Information about Pay per use ENCs
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Published on November 7, 2007

Author: Cuthbert

Source: authorstream.com

Increasing use/sales of Official ENC’s Proposing: Pay-Per-Use model Marine Press of Canada IHO – WEND committee September 2006 :  Increasing use/sales of Official ENC’s Proposing: Pay-Per-Use model Marine Press of Canada IHO – WEND committee September 2006 Increasing use/sales of Official ENC’s:  Increasing use/sales of Official ENC’s Discussion around Official ENC’s Paper charts Global Overview Potential ECDIS Market The concerns of the Customers The benefits of ECDIS – safety at sea We should not make direct comparison with private vector charts, except for the challenge they may present to the Hydrographic Office Community Why Modest Use Today?:  Why Modest Use Today? Hydrographic Offices: High production costs Complex pricing Complex sales policies Concern about future income Concern about copyright ……. Why Modest Use Today?:  Why Modest Use Today? Chart Agents: Complex sourcing Complex pricing Most do not have the technical savvy Shipping companies: Cost Limited Coverage Annual licenses are not appropriate License conflicts within ECDIS Other Technical issues Example: Cruise Ship In Canada:  Example: Cruise Ship In Canada Example: M.S. Cruise Ship in Canada One cruise in May and 2 cruises in September:  Example: M.S. Cruise Ship in Canada One cruise in May and 2 cruises in September Pricing Options: For 12 days in Canadian waters - calling to 4 ports A) Area CD’s with Update Service  3 x 1,200.00 = $3,600.00 per year B) Individual ENC’s with Update Service for one year  26 Paper Chart Equivalent ENC’s X 75.00 = 1,950 C) One Time Buy Without Updating Service  26 Paper Chart Equivalent ENC’s X 25.00 = 650.00  vessel requires to buy license twice to get updates = 1,300 Slide7:  Example – World Cruise + Summer and Fall Season Slide9:  Costs as calculated from UKHO ECDIS price list – April 2005 Admiralty ECDIS Service: ARCS + Some ENCs : Total Annual Cost: ~ 34 000 USD ! + Australian ENCs + New Zealand ENCs + Canadian ENCs + Others = ~ 50 000 USD + Paper charts Slide10:  Same Cruise Ship – New ECDIS Zones -2006 Slide12:  Costs as calculated from UKHO ECDIS price list – April 2006 Admiralty ECDIS Service: ARCS + Some ENCs Total Annual Cost: ~ 46,000 USD ! + New Zealand ENCs + Canadian ENCs + Others = ~ 56 000 USD + Paper charts Slide13:  The Admiralty ECDIS service is for this many ENC’s + ARCS ENC coverage is not quite complete – still a large ARCS component Slide14:  ENC’s + Costs available from Primar-Stavanger – August 31/2006 Plus: weekly update CD ($3 + packaging + postage) or Primar Online at $ 15.00 per vessel/per week Slide15:  ENC’s available from Primar-Stavanger As of August 31/2006 Slide16:  ENC Price Increase – a global view It should be noted that in above 2 cases, that ENC’s for Canada, and many other nations not member of PRIMAR and IC-ENC are not included. Please study the above pictures carefully !!! For some reason the UKHO ECDIS service, full option for Japan does NOT include Harbour and Berthing ENC’s !!!!! Slide17:  ENC Price Increase – a global view Slide18:  What happens to the costs when the World is populated with ENC’s ??? What is the ceiling for ENC’s costs ? How much are ship owners expected to pay ?? A cost increase that is unacceptable to the maritime community. Slide19:  As a result, mariners will attempt to reduce their ENC folio, thus resulting in possible unsafe situations. Your call is important to us, we will answer as soon as possible !!!:  Your call is important to us, we will answer as soon as possible !!! Slide21:  In-spite of these costs, What are the administrative and technical issues facing the users ? Slide22:  Australia ENCs and updates High Administrative Costs IC-ENC CD CD CD CD CD CD CD CD CD CD 0907D1FD 4-0701-0907DA0C1FDA 4-0701 4-0701-0907DA0C1FDA AC 416 221852 -0907DA0C1F 497DAC1A 497DEZ5H A proliferation of CD’s, licenses and licensing scheme. Slide23:  Legislating ECDIS to become mandatory carriage under current scheme is not realistic – Pricing not adequate – technical issues – monopolistic situation. The Maritime community will resist any such attempts. This will result in further delay in implementation, and will reduce income opportunities for H.O.’s and may even lead to challenges to H.O.’s status as the sole providers of nautical data. Pay-Per-Use Solution:  Pay-Per-Use Solution Having established that : - for most ship owners the current system is not economically viable - it is difficult to manage and creates much costs - it does not provide the best possible service Let us consider Pay-Per-Use as a possible Solution Pay-Per-Use – Basic Concept:  Pay-Per-Use – Basic Concept ENC’s only have value if they are being used Why worry about what ENC’s are on board individual vessels ? Give Mariners the ENC’s they need when they need them Pay-Per-Use Solution:  Pay-Per-Use Solution Basic set-up fee Suggested model of pay per use per vessel Daily fee per use Annual Reporting and Invoicing Pay-Per-Use Solution:  Pay-Per-Use Solution Basic set-up fee Distributor/VAR handles production of all base and update CD’s. Distributor/VAR handles licensing Distributor/VAR handles administrative duties, e.g. reporting of ENC usage Pay-Per-Use Solution:  Pay-Per-Use Solution A daily amount of (e.g. $40.00) levied for the time during which the vessel was in the national waters of a country Daily fee per use $40.00 is equivalent to on annual expenditure $15,000.00 per year. A daily amount of $50.00 would provide income of $18,250.00 per annum/vessel to H.O.’s Pay-Per-Use Solution:  Pay-Per-Use Solution Paper charts are sometimes valid for several years. Comparison to Paper Scheme Most ships use B.A. charts, a collection of ~ 3400 provides adequate world-wide coverage. From this collection of ~ 3400, the UKHO issues on average 400 new editions per year. Pay-Per-Use Solution:  Pay-Per-Use Solution Comparison to Paper Scheme Vessels will carry anywhere between 200 and 1400 charts depending on their characteristics, e.g. a) VLCC (Persian gulf to Japan) = B.A. 193 + 176 JHA b) Suez Max Tanker = B.A. 890 + 61 NOAA + 9 others c) 6900 TEU (Asia – Europe) = B.A. 280 d) Bulk Carrier Tramper = B.A. 1580 + 12 NOAA + 40 others e) Cruise Ship (World Cruise) = B.A. 986 + 75 NOAA Pay-Per-Use Solution:  Pay-Per-Use Solution Comparison to Paper Scheme Depending on their trade, the number of new editions issued will vary a) VLCC ~ 40 New charts per year = USD 1,300 b) Suez Max ~ 85 New charts per year = USD 2,762 b) 6900 TEU ~ 30 New charts per year = USD 975 c) Bulk Carrier ~ 177 New charts per year = USD 5,752 d) Cruise Ship ~ 140 New charts per year = USD 4,550 Pay-Per-Use Solution:  Pay-Per-Use Solution Comparison to Paper Scheme In addition to B.A. charts, some vessels involved in specific trades use some numbers of National charts because they want better coverage – better scale Unlike ENC’s which are issued for a specific vessel, paper charts can be transferred from ship to ship when a vessel a deployed to a new trading area. Storage at Marine Press:  Comparison to Paper Scheme Enclose picture of MPC storage and perhaps some stats……………… Storage at Marine Press Pay-Per-Use Solution:  Pay-Per-Use Solution Comparison to Paper Scheme Conclusion: Paper charts are less expensive and offer more flexibility than ENC’s as they are sold today. This comparison shows how distributors can add value to data (paper charts and publications) issued by H.O.’s Many Hydrographic Offices seem to believe that costs of ENC’s are equivalent to paper charts – they are not The business case on which H.O.’s developed licensing scheme was wrong – incorrect knowledge of the market Pay-Per-Use Solution:  Pay-Per-Use Solution Knowledge of potential market UKHO commissioned study evaluating SOLAS class vessels to ~ 45,000 We must be able to provide different solutions to different needs Some vessels trade in their national waters, some trade in regional waters and some trade internationally Pay-Per-Use Solution:  Pay-Per-Use Solution Knowledge of potential market Ships trading in National waters would likely choose the current annual licensing scheme – because.. They will use a limited number of ENC’s They will use those ENC’s on a very regular basis, e.g. daily or weekly. Pay-Per-Use Solution:  Pay-Per-Use Solution Knowledge of potential market Ships trading in Regional waters would likely prefer a pro-rated licensing scheme – because.. They will use possibly use a large number of ENC’s They will use those ENC’s on a irregular basis, e.g. depending on a spot charter (or seasonal cruise area) or once every few weeks. Pay-Per-Use Solution:  Pay-Per-Use Solution Knowledge of potential market Ships trading Internationally would likely prefer Pay-Per-Use licensing scheme – because.. They will use a very large number of ENC’s They will use those ENC’s one a very irregular basis, e.g. depending on a spot charter or once every few weeks or months. The usage would be limited from a few hours to a few days. Review Japan Study from NAV 52 Pay-Per-Use Solution:  Pay-Per-Use Solution Knowledge of potential market Assuming 20,000 vessels adopt ECDIS and Pay-Per-Use licensing scheme $15,000 X 20,000 = 300,000,000.00 That reads 300 Million dollars – Annually To be shared by the Hydrographic Community Pay-Per-Use Solution:  Pay-Per-Use Solution Knowledge of potential market Assuming 20,000 vessels adopt ECDIS and Pay-Per-Use licensing scheme How does this compare with H.O. revenues of paper charts How does this compare with current revenues of ENC’s Pay-Per-Use Solution:  Pay-Per-Use Solution Knowledge of potential market Providing ENC’s at reasonable prices, with fair and business sensible prices, various options for licensing will entice the Maritime Community to adopt ECDIS When the costs are known and reasonable, they will not generate opposition from the users Pay-Per-Use Solution:  Pay-Per-Use Solution Distributor/VAR reports vessel activity Reporting and invoicing National Authority or RENC issue invoice Report is detailed and auditable Slide43:  Total Annual Cost: ~ 520+100 USD X 28 vessels = 17,360 NEW REVENUES FOR JAPAN If Fleet subscribing to JPN S-57 Result: - Suitable cost for limited use. - Vessels subscribe to ENC’s for Japan. - Company had 28 vessels calling Japan during 2004 - Each stay 3-45 days (average: 13 days) Pay-Per-Use Solution:  Pay-Per-Use Solution Fair pricing for ship owners and National Authority Increase of sales Use of S-63 to encrypt data Improved distribution process and reduced expenses Reduced management process Slide45:  Various HOs IC-ENC NOAA/NIMA Value Added Reseller Updates Effective Process – Low Administration Product Delivery NDI (Canada) 4-0701-0907DA0C1FDA Pay-Per-Use Solution:  Pay-Per-Use Solution Improves safety of navigation, all ENC’s always on board and always available Pay-Per-Use Solution:  Pay-Per-Use Solution How is money paid to each National Authority or RENC ? How is the daily use of ENC’s documented ? Any question or interest ? Thank you for your interest and kind attention:  Thank you for your interest and kind attention Marine Press of Canada Tel: + 1 514 866 8342 george.arts@marinepress.com Contacting Marine Press

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