Rooted in one of the world’s most famous shipping families, ZeroNorth does not claim to have any expertise in maritime transport.
Wholly owned by Maersk Tankers, the Copenhagen tech start-up formally began operations last week with 48 staffers with backgrounds in software engineering and data science, among others.
But chief executive Soren Meyer told TradeWinds that most of his employees do not have a shipping background. “We don't have people that, to a large extent, know anything about shipping.
“We have people who hold a combination of shipping expertise and data expertise. And we do that on purpose as it helps us to really be customer-centric at the same time as thinking new solutions for the customers.
“We need to talk to our customers. We need to be engaging with our customers to ensure that the solutions and the software we are building are something that will yield value for them in the long term.”
ZeroNorth’s first product is the Optimise software, developed by its parent in-house last year to reduce bunker consumption by determining optimal sailing speed, factoring in freight rates, bunker prices, weather and individual vessel specifications.
Links to the Maersk brand
The software is used by 300 tankers and bulkers from six shipowners, operators or charterers. As one of the clients, Maersk Tankers contributes 225 vessels.
“We are very proud of the heritage of coming out of Maersk, and we will continue to [follow] the values of Maersk,” Meyer said.
Maersk Tankers is owned by AP Moller Holding, which controls large bunker and container shipping businesses via Copenhagen-listed AP Moller-Maersk. Could there be any future chance to cooperate with the giant of Danish shipping?
Meyer, who was OW Bunker’s vice president before joining Maersk Tankers in 2015, said ZeroNorth will be “part of the overall network ... if that gives us any specific opportunities to partner further”.
But he stressed that any business decision will be made independently.
“The important [point] for us to make is really to run as an independent tech start-up. The culture has to be independent. We have to be seen and act as an independent company to succeed,” added Meyer, who served as Maersk Tankers' chief asset officer before launching ZeroNorth.
Ambitious expansion plans
“Carving out [from Maersk Tankers] is giving this company the best possible opportunity to succeed.”
One concern about being integrated into a shipping company is that software is focused on in-house needs, he said.
“And then, you forget to ask the other customers. And then I don't think we'll succeed [in] being an industry-wide software platform.”
ZeroNorth charges clients a fixed US dollar fee per vessel per day, via software service agreements negotiated individually. The fees are roughly equal to 10% of savings in fuel costs, according to Meyer.
Targeting the tramp sector, it aims to have 1,000 ships using the Optimise software this year.
“The tramp shipping industry is really where we see that there is the biggest opportunity to use [our] software,” Meyer said, noting that the tanker and bulker sectors are very fragmented.
“We have 33,000 vessels in a very fragmented market. We believe that can give us a good opportunity. We see the liner industry being more consolidated, with much larger companies, where they are investing a lot in [bunker software] on their own.”
Gaining scale
With a plan to boost its staff size to up to 100 over time, ZeroNorth is looking for strategic investors. They could take equity and be customers at the same time, Meyer said.
“We will focus on really gaining scale on Optimise now. And then from that we will begin to see what other opportunities are there.”
In the next phase, he wants Optimise to find the best bunker procurement strategies. Vessel operators will be able to find “where, when and how much bunkers” they are going to take.
ZeroNorth’s offerings will be the same to all users, but each of them can put in its own assessments of bunker prices, freight rates and other variables to maximise time-charter equivalent earnings.
“We only do industry-wide software. But the data point that comes in is customer-specific,” he said. “By [putting] your own data in, you get a bespoke solution out.”
