Quality & Quantity: Data Delivered
The obscure, but arguably most important variable in energy transportation has at long last been standardized. Driven by client demand, Navarik’s web-based software brings petroleum inspection into the 21st century.
It wasn’t too long ago that the typical liquid cargo inspection consisted of a couple of bleary-eyed inspectors calculating cargo volumes on ten-key calculators at 0230 hours in the grimy control room of your oil tank vessel. Those numbers, along with a report of laboratory analysis of cargo samples would (eventually) make it to your desk in any number of ways, depending on who was preparing the report and where that was happening. Analyzing that data to determine trading exposure, cargo losses and ultimate profitability for that particular deal was anything but standardized. Thanks to Navarik’s web-based petroleum inspection software, that is no longer the case.
Today, the Navarik reporting system enables better loss control and streamlines maritime inspection operations to expedite the delivery and analysis of cargo quantity and quality information. According to Navarik, the data of as much as 40 percent of U.S. seaborne crude oil imports is accounted for using this unique system. Founded in 2000, the privately owned firm has just 22 employees, but boasts global reach. The Inspection software is just one of three applications offered by Navarik, housed with Navarik Claims Management and the Navarik Vetting module, facilitated by the “Common Data Storage” of the Navarik master platform. For commodities traders and staff, the platform represents a powerful management tool.
A Better Way
Navarik Inspection™ is well on its way to becoming the industry standard for cargo inspection management within the petroleum industry. The software automates, standardizes and provides business intelligence necessary for companies to more effectively identify oil loss claims, reduce off-spec cargoes, speed deal settlement and drive better inspection firm performance. That the software’s inception was driven by experienced ship agents, who felt that the agency side of the business could be better organized, was no accident.
Navarik originally focused on operational and documentation issues but eventually grew into the inspection side of the business. Nathan Dobie, Navarik Product Manager told MarPro, “We still support legacy systems for agency and information collections, but we decided that those were customized solutions. We then developed what we call the Navarik platform and data systems. On top of that platform, we have our flagship application ‘Navarik Inspection’, a system called ‘Navarik Claims,’ which focuses on claims management. We also have a vetting application. The vetting system supports shipping assurance teams when clearing vessels for specific voyages.”
In the beginning, large scale trending of petroleum inspection data was difficult because the four major inspection companies and the ‘Mom-and-Pop’ outfits all had their own way of reporting the numbers. The original demand for the software came from oil major Shell. Dobie adds, “We knew that there was demand for the collection, organization and standardization of operational data, particularly for global organizations. Shell knew that they had to standardize business processes, especially around compliance issues related to inspections. These included health and safety compliance, or missing inspections because the nomination got hung up in someone’s E-mail folder. They knew that there had to be better way.”
As the software’s standardized format became more widespread, customers began to insist that third party inspection personnel input data, invoices and key data associated with a particular custody transfer. Taking a lead role, Navarik made a substantial investment in traveling worldwide to train people in the system. Dobie insists, “A lot of people didn’t think it could be done. And, I think that’s where we got the jump. We’ve got inspectors all over the world using our application over the WEB.”
At least one inspection company, Camin Cargo Control, already had their own in-house system. Navarik, in an effort to avoid time consuming duplicate data entry, extended the “Navarik Certified Inspection Partner Program.” Today, Camin uses their in-house tool to submit results directly into the Navarik Inspection System. Dobie says, “Camin was the frontrunner, a little more agile and using a standardized in-house system. They were the first inspectors to use the electronic web services. The driver is our customers wanting the inspection companies to come to the table. The other option is to input the data into our system manually, which is what everyone else is doing – except Camin.”
What it Does
Navarik offers the WEB service free-of-charge to inspectors as a benefit to customers. With oil majors – BP, Chevron and Shell – among that group, a substantial volume of the world’s petroleum inspection data now simply has to go through the Navarik system. Where no real standards previously existed for the exchange of structured inspection data, Navarik standardized these entries – in accordance with American Petroleum Institute (API) and Energy Institute (EI) guidelines – online. Dobie admits, “That’s not a new concept – but the wide dissemination of it, perhaps, is. We make that standard available to the inspection companies and other industry particpants through our membership in LEAP (Leadership for Energy Automated Processing).”
GHG Emissions – more than cargo Q&Q
Beyond cargo quality and quantity, Navarik has also pioneered – at the insistence of their customers – the management of Green House Gas (GHG) emissions data. Starting out as a voluntary reporting scheme, the EPA wanted to track what was out there, whether it came from a refinery, flare stack or waterborne cargo. Dobie reports, “The official numbers on an inspection report couched inside the Navarik System platform are well suited to track some aspects of that. This might include parties of record, and/or the quantity of grade being handled. At any point in time, you can extract and apply emission factors against that data.” Clients who choose to do so can now take this enterprise-wide, for their own reporting system. He adds, “Navarik can be a big part – the marine piece, if you will – of how a particular firm might reduce or control their environmental footprint.”
The software – what does it do?
The software provides trending compilations – VEF, port and terminal data, to name just a few – to help traders make better decisions. These trends that can be tracked over time to give a better understanding of what the front-end risks entail. In other words, better information before the custody transfer starts translates into smarter trading and increased profitability. And, Navarik’s utility extends well beyond the world oil majors and traders.
For oil producing countries, Navarik Inspection also generates a detailed account of total volume of petroleum exports. In this case, the data supports tax requirements and reporting, but it provides the client state with more than one stream of data from which to reconcile data. Nathan Dobie insists, “It’s more important than it sounds, actually.”
Navarik and Energy Trading and Risk Management (ETRM) Solutions
Although Navarik decided to focus directly on the physical operations niche, the need for a central repository of petroleum data for ETRM providers was obvious. Dobie explains, “ETRM people look to us as being as the data repository or bridge to third parties for collecting that information. All of this contributes to the big picture and ultimately provides a better understanding of profitability.” Last year, Triple Point Technology®, a provider of multi-market commodity and enterprise risk management software solutions, announced a strategic partnership with Navarik™. The move allowed Triple Point to broaden its logistics functionality to manage cargo inspections and operational activities associated with cargo quality management and ship-to-shore transfer. The partnership also introduced Navarik to another subset of potential clients, widening its footprint across the broad spectrum of energy trading and transportation.
Noting the agreement, Patrick Rooney, Navarik’s President and CEO, said, “Navarik was the first software company to recognize the critical need for cargo inspection management in the petroleum industry, and the benefits were easy to calculate. If a single cargo of crude oil is understated by just one percent during a shore-to-ship transfer, several hundred thousand dollars can be lost. We are pleased to partner with Triple Point to bring our unmatched technology and expertise in cargo inspection for crude and petroleum products to Triple Point’s broad portfolio of customers across geographies, industries, and commodities.”
Supply Chain Security
Navarik boasts one of the most robust data centers in North America. Dobie adds, Navarik boasts using one of the most robust data centers in North America. Dobie adds, “We are proud of the infrastructure we’ve set into place – a military / banking grade data center. This is enterprise class software for network infrastructure and data security.” Within Navarik, data remains proprietary and segregated. Only the customer itself releases access for user interface – through their own system administrator.
What’s Next – What’s Possible?
Although clients have expressed interest in data sharing, there are rightful fears concerning this practice; among them, anti-trust issues. Navarik, however, spurred by industry demand, is working on a process where Vessel Experience Factor (VEF) data – load and discharge – can be aggregated. Standardizing this information and making it more widely available, in the best possible format and with maximum accuracy, is the ultimate goal. The effort represents a “leap forward” – not necessarily a software, but an adjunct service. And the VEF is just one of a number of areas where sharing data in a secure fashion might someday provide more value.
As Navarik way gathers steam in its quest to become the industry standard for physical barrel accounting and reporting, the software is also seeing interest from banks and trading houses who for the first time might be venturing beyond paper trades into wet barrel transactions. Some customers already use Navarik to move sulfur and petcoke. And, while there are differences in how a dry commodity is handled, the overarching principal of how to organize and report that data does not.
According to Dobie, client interface remains a keystone of Navarik’s focus. “We want industry to drive the product – not us. We respond to customer requirements, going out into the field, staying in tune with industry and using that knowledge to improve the software.” Dobie continues, “That said, and although our relationships with companies like Triple Point require us to accommodate the dry sectors, our focus does remain on the petroleum side of things.”
Cargo inspectors are still crunching numbers on grimy tankers at 0230 AM. Today, they upload numbers directly from their laptops in the field. What happens next at Navarik is anyone’s guess. For sure, future enhancements will be customer driven, standardized and streamlined business solutions for energy transportation professionals. For petroleum commodity players, this translates into a job well done. At Navarik, they call it “data delivered.”
(As published in the May 2011 edition of Maritime Professional)