05 August 2025
The Value of Condition Monitoring to ship owners and operators
Two of the major costs to any ship owner or operator are energy and maintenance. Any reduction, even at small percentages of total spend, can mean millions of dollars to the larger fleet operators and even significant amounts to those with smaller fleets.
The financial impact on a business due to loss of reputation, caused by breakdowns and standstills, can be massive. A vessel off hire for just one day can cause significant losses, not only in lost revenue, but also in the time spent on extra administration and insurance claims, along with resultant higher annual premiums
Today, traditional planned maintenance regimes are no longer sufficient to meet the demands and expectations of global ship owners and operators. In the competitive landscape of global shipping, reactive planned maintenance leads to too many failures, resulting in periods of vessel downtime and increased running costs.
Classification societies around the world recognise that the cost of ‘doing’ maintenance is becoming too expensive, and consequently, there is a tendency to put off the tasks until they can be afforded. In doing so, owners are creating a bow wave effect in storing up problems for the future.
In addition to this, the past few years have seen an explosion in vessel digitalisation opportunities for ship operators. Big data, artificial intelligence, the Internet of Things, and the increase in ship applications have all been made possible with the improvements in available communication technologies, and the realisation of the benefits that can be gained.
Encouragement to be ‘green’ along with legislation, such as SEEMP, has meant that owner/operators have concentrated on energy savings to maximise their profits. For the most part, the initiatives adopted to obtain energy savings concentrate on the whole vessel. This approach ignores the link between greener operations and individual asset condition. If an asset and/or component condition is monitored, then it becomes possible to identify the high energy users (especially those operating outside of their design specification), and action can be taken.
This condition assessment can also be used to drive maintenance. When used in this manner, it constitutes a Condition-Based Maintenance (CBM) strategy, which is a well-known and used approach to maintenance
CBM, in its many different processes, techniques and approaches, forms a critical part of the vessel digitalisation journey. Ships today create and collect huge amounts of condition and performance data. CBM demands the effective use of this data to drive insights into the health and condition of assets to drive the correct maintenance activities.
Using smart maintenance techniques will mitigate potential incidents and therefore reduce risks, which in turn reduces the hull and machinery’s risk.
The benefits of CBM
CBM has several major benefits as machinery is closely monitored to determine its condition, optimal performance conditions and the required maintenance activities include:
- The ability to eliminate disruptive breakdowns that affect operations and revenue.
- The elimination of the often excessive, costs associated with revering from unplanned breakdowns and activities.
- An increase in maintenance and engineering productivity (doing more with less).
- Information-based decision making, where lessons are not only learnt but the knowledge of the organisation is continuously increased.
- A better-managed, more predictable work rhythm.
- Improved reliability.
- Reduction in spares inventory.
- Improved safety by identifying potential safety hazards, such as leaks, excessive vibration, or abnormal temperatures. Early detection of these issues can prevent accidents and injuries.
- Optimised vessel scheduling and costs.
- Less maintenance-induced failures.
- Reduced insurance risk.
- Reduction in Classification Opening up surveys.
- Improved operational efficiency resulting from improved fuel efficiency, reduced emissions, and increased profitability.
Condition monitoring (CM) - A fundamental component of CBM
Whilst there are many publications written about the virtues of CBM and its derivatives, little is written about the operational improvements to ships through the introduction of CM. The first and foremost reason for owning a ship is to make a profit. As this is achieved by carrying cargo (containers, oil, gas, people, etc.) from A to B, the fundamental questions that any owner must ask are:
- Is my ship fit to sail?
- Is it likely to complete the voyage?
- Will it arrive on time?
- And, of course, will it do so in a safe and environmentally acceptable manner?
The only way to know the answer to these questions is by measurement and monitoring. Old-fashioned maintenance strategies did not - and still do not - provide sufficient clarity of answers. Just after build or following a long refit, the owner may be in a position to have confidence that they can answer these necessary questions, but weeks or months down the line from build or refit, leaves many answers to the questions as guesswork.
CM, when introduced as part of a CBM strategy, can provide those answers, but CM, introduced to aid and judge ship operations, can also have a significant effect.
Indeed, operational information (such as pressures and temperatures, etc.) has always been used to measure condition. Any experienced engineer will use those indicators, plus their own senses, to determine condition and the likelihood of failure. What modern CM can provide is a detailed, auditable method of determining condition and, as such, determining the answers to those questions.
If good quality, considered, and evaluated CM is employed across the vessel’s assets, then CM can provide the answers, especially on those machines considered critical to the voyage completion and the handling and safe transit of the cargo, as well as assurance of human and environmental safety.
The value of CM
CM provides confidence to the ship owner, and confidence reduces risk. By having a clear and accurate statement about the vessel’s condition, then:
- Potential defects are reported and dealt with rather than waiting for ‘full’ failure
- Defect repair time can be allocated and planned rather than by a reactionary response
- Repair resources can be allocated at a time of the owner’s choosing
- If appropriate, machines can be used as a ‘standby’ during a voyage to avoid failure
- If appropriate, machines can be used on light load duties only
- Spares can be ordered with normal delivery dates rather than ‘panic purchasing’ to solve immediate problems
CM has proven to deliver significant savings
Before installing a CM system, a small tanker vessel operator suffered a main engine lubricating oil pump failure, resulting in direct costs of GBP157,000. There was a subsequent cost to his insurance deductible (from GBP40K per claim to GBP60K per claim) and an increase in annual premiums by GBP90K. The Operator has to declare every machinery incident to his customer (Oil Majors): this may result in loss of revenue and business (costs per month GBP270,000). Since installing the CM system, no similar incidents have occurred.
Shaun Rowe, Account Manager at BES Group, said:
“There are many ways of adopting CBM. Those that ultimately fail or return very little benefit are initiated with good intentions but without a considered background.
BES can help companies set up CBM across a small or large number of assets. We can be employed by the company to manage the whole process of CBM adoption or brought in at the places and stages where advice or help is required by the company.
The degree of change should not be underestimated. Changing processes and computer data is simple, but changing the hearts and minds of those people on the ships (those that are relied upon intimately to make this work) presents the greatest problems. Starting small (no more than 10 assets) and concentrating on those assets that give the crew (and maybe the company) the greatest distress (working on the 20/80 Pareto rule) often leads to quicker and greater success”.
Q3 2025 Marine Hull & Machinery and War Risk Market Update
Geopolitical tensions, major vessel losses, and shifting war risks reshape marine insurance, prompting market caution and heightened risk management.
Zelim Case Study for Insurers
As part of our Q3 2025 Marine Hull & Machinery and War Risk Market Update, we’re pleased to feature a guest contribution from Zelim addressing the growing complexity of maritime risks, such as man overboard incidents, collisions, and security breaches, through ZOE, their AI-powered technology suite designed to enhance situational awareness and safety at sea.
Let's talk
In association with
Author
Shaun Rowe
Account Manager
Andy Howard
Broker Business Development Manager
BES Group
The Walbrook Building 25 Walbrook London, EC4N 8AW
Arthur J. Gallagher (UK) Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company Number: 119013.