BIMCO Shipping KPI System and Standard

Here's Why KPIs Are Linked To Your Success 29th October 2015NAMEPA Annual Conference2 Mike Harden, CEO of Clarity Group KPIs are tools that organizations use to define, measure, monitor and track its performance over time toward the attainment of its stated organizational goals KPIs must be quantitative, quantifiable, and measurable ….it may be extremely difficult to measure your success if your targets are not quantitative in nature…. Need to know vs. Nice to know …."nice to know" data and information is really not worth the expense, and will typically use up many of the scarce resources…. Source: Huffington Post

BIMCO Shipping KPI System The BIMCO Shipping Key Performance Indicator (KPI) System is based on a standard of 64 different performance indicators to allow for the most specific and accurate comparison of ships – within each sector and more broadly across the industry. It is a global industry system for defining, measuring and reporting information on operational performance. 29th October 2015NAMEPA Annual Conference3

Why BIMCO Shipping KPI System? Meeting end user and supply chain transparency requirements Internal improvement in company Ship/fleet/industry benchmarking Evidence tracking - tanker industry programmes like TMSA Communication of industry standard measurement to external stakeholders Evidence gathering for industry policy and regulatory implementation System for the industry – by the industry Cost-effective to use 29th October 2015NAMEPA Annual Conference4

Shipping KPI Terminology 29th October 2015NAMEPA Annual Conference5

BIMCO Shipping KPI fundamentals A BIMCO Shipping KPI must be: Valid indicator of performance Observable and quantifiable Easy to understand Robust against manipulation Sensitive to change Transparent Comparable 29th October 2015NAMEPA Annual Conference6

BIMCO Shipping KPI Pyramid 29th October 2015NAMEPA Annual Conference7

BIMCO Shipping KPI components Performance Indicators (PIs) are the building blocks giving the basis for KPI Value calculations PIs are directly observable parameters (measurements) for each ship. A PI may be used in the calculation of several Key Performance Indicators (KPIs). 29th October 2015NAMEPA Annual Conference8

BIMCO Shipping KPI components Key Performance Indicators (KPIs) are expressions of performance within a specific area. KPI Value which is a mathematical combination of relevant Performance Indicators Values KPI Rating which is an expression of the KPI Value on scale between 0 and 100 where a high rating (100) is a result of high/excellent performance. The KPIs ratings form basis for the Shipping Performance Index (SPI) score. 29th October 2015NAMEPA Annual Conference9

BIMCO Shipping KPI components Shipping Performance Indexes (SPIs) are aggregated expressions of performance within a particular area. The SPIs are expressed as a weighted average of relevant KPI Ratings on a scale between 0 and 100. The objective of the SPIs is to give external stakeholders information about the overall performance of a ship. 29th October 2015NAMEPA Annual Conference10

Ship Performance Indexes (SPIs) 1.Environmental Performance 2.Health And Safety Performance 3.HR Management Performance 4.Navigational Performance 5.Operational Performance 6.Security Performance 7.Technical Performance 8.Other (user defined) 29th October 2015NAMEPA Annual Conference11

BIMCO Shipping KPI briefly... The BIMCO Shipping KPI Standard is only as good as the user’s understanding of it so clear definitions and explanations is a must! Using individual Shipping KPIs might be misleading so important to have the full picture in mind when using the BIMCO Shipping KPI System! Ship performance is relative: Navigational versus operational Last year versus past years Ship versus fleet Company versus competitor/industry The core value is setting targets and benchmark! 29th October 2015NAMEPA Annual Conference12

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BIMCO Shipping KPI components Meta data is used for grouping and filtering during statistical analysis It represents an attribute of the ship, like its flag or the ship type and size Meta data allows a user to benchmark it's ships against ships of the same ship type 29th October 2015NAMEPA Annual Conference14

Ship performance overview - example 29th October 2015NAMEPA Annual Conference15

Benchmarking examples The following slides contain extracts from a BIMCO Shipping KPI benchmarking example report The benchmarking report is based on 35 ships from “own” account against 205 ships from 6 other “accounts” The time frame is based on reports submitted in one quarter User can filter in terms of time period, ship/fleet data, ship type–flag- DWT-trading areas, etc. 29th October 2015NAMEPA Annual Conference16

Benchmark SPI001 (Environmental Performance) 29th October 2015NAMEPA Annual Conference17

Trend SPI001 (Environmental Performance) 29th October 2015NAMEPA Annual Conference18

Shipping KPI system benefits Boosts performance of company, fleet and ship Provides benchmarking reports Provides an efficient communication platform for shipping performance data Increases transparency within the shipping world Free of charge for BIMCO members Data collected is anonymous to other companies 29th October 2015NAMEPA Annual Conference19

Next step Refinement of KPIs in the Standard Elimination of “nice to have” KPIs Addition of “need to have” KPIs Ship speed/power performance DRC performance Other financial KPIs Expansion of the user base The preferred benchmarking tool in the shipping industry 29th October 2015NAMEPA Annual Conference20

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