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Hapag-Lloyd renews and expands Inmarsat Fleet Xpress commitment

Hamburg Express. Hamburg Express.

Inmarsat has expanded its agreement to deliver maritime broadband to Hapag-Lloyd, after the global transport group renewed its Fleet Xpress contract for a further five years and committed 33 more ships to the market’s leading very small aperture terminal (VSAT) service.

Under the extended agreement, which now covers 77 ships, the Fleet Xpress hybrid of Ka-band and continuous L-band back-up service replaces Ku-band systems onboard ships merged into the Hapag-Lloyd fleet following the earlier acquisition of United Arab Shipping Company (UASC) in May 2017. Scheduled Fleet Xpress installations enable seamless service migration based on the end of the outgoing supplier’s contract.

“The further standardisation of our vessel communication systems is central to our Maritime IT strategy,” said Florian Liebetrau, director IT - marine & maritime operations, Hapag-Lloyd. “The outstanding reliability and robustness of Inmarsat’s Fleet Xpress as a product played a key role in our decision to expand our commitment. Hapag-Lloyd has a mature strategy for its vessel connectivity and management which demands systems-wide predictability, reliability, and integration to sustain our global vision for container transport.”

Hapag Lloyd was one of the first major global shipping companies to commit to Inmarsat’s Fleet Xpress following service launch in 2016, transitioning all of its in-house managed ships to Inmarsat’s maritime broadband service for vessel operations and crew connectivity. The five-year contract envisaged expanding data traffic and scalability to handle fleet growth.

“We are delighted to renew and expand the work we do with one of shipping’s most advanced owners for IT, ship-shore connectivity and digitalisation,” said Ronald Spithout, president, Inmarsat Maritime. “Standardisation and integration are pivotal enablers for corporates. This agreement and its expansion to 33 additional ships clearly demonstrate Hapag-Lloyd’s objectives are being met by the reliability, performance, and service support provided by Inmarsat’s Fleet Xpress.”

The new agreement includes the flexibility for Fleet Xpress-connected ships that are managed out of house and linked to Hapag-Lloyd operations to be brought under the same contract terms without renegotiation.

Offering an insight into the major developments in shipping’s digital journey in recent years, Spithout said “The average committed information rates of data acceptable to deep-sea container lines today are roughly double the maximum information rates they expected in 2016. On average, a container ship’s monthly data traffic in 2021 is around three and a half times the level experienced five years ago. Inmarsat is meeting this rapid growth in demand for connectivity at sea.”

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    Many years ago and in another industry, not so distant from maritime connectivity… I wrote a piece providing viewpoints on “how much an airline would pay for an early release movie (early window content is the industry term). The piece got me into a considerable amount of bother, writes Joshua Flood, senior research consultant at Valour Consultancy.

    The fundamental issue being how secretive these negotiations were and Hollywood studios, airlines and their content service providers did not wish to shed any light upon the subject. Or I was terribly wrong in my viewpoints. I will stick to the former point.

    Now after many years elsewhere, (similar to Yoda in swamp planet of Dagobah), I have decided to return to one of my favorite types of pieces.

    To push myself further, I plan to write a series of pieces talking about how each type of commercial vessel (merchant, fishing, passenger, offshore and leisure) would pay for their connectivity solutions, typically VSAT and MSS.

    Merchant satellite subscriptions

    Addressing the title of this piece, merchant ships come in a number of shapes, sizes and purposes.

    Breaking out the merchant market from a bird’s eye view; there are roughly 150,000 MSS and VSAT satellite subscriptions in the market. This may confuse some, due to the popularly touted figure of 80-90,000 merchant vessels (depending on your source and classifications). Clearly, this number is less than the number of maritime satellite subscriptions.

    To quickly quash this, a significant number of large merchant vessels require multiple terminals for safety purposes. In addition, some vessels will also subscribe to a multitude of solutions for certain purposes. An example could be subscribing Ku-band VSAT services from Intelsat or Eutelsat, Fleetbroadband from Inmarsat and Certus from Iridium.

    Emergence of VSAT technology

    In the past, merchant operators were satisfied with just MSS (L-band) services, however, over the last decade the use of VSAT technology has become a dominant force within all commercial maritime vessels. There are around 20,000 VSAT merchant vessels active today.

    Looking into the key types of merchant vessels. There is an array of different variations. And when speaking about shipping, certain regions are known for their trade. Asia and Northern Europe for commodity and container vessels, as an example.

    Extra special LNGs

    One of my favourite research interviews of 2021 was with a Cypriot service provider. I won’t say which one or whom, however, it was most definitely one of my most entertaining.

    It was almost like having a conversation with the Cheshire Cat in Alice of Wonderland. I went through a list of vessel types with “the Cat” providing their average monthly airtime fees the company gets for connectivity airtime packages. Bulk carriers, a short grunt and allocated to the bottom of the list of data usage and associated ARPU revenue. MPP and ro-ro vessels followed in quick succession, just above bulk carriers. General cargo and container vessels pique his interest and were placed in middle position of the rankings. PCC and vehicle carriers excite Mr Cat further.

    Finally, we reached tankers, and LPG and LNG types cropped up.

    With a delightful purr, “Beautiful, Joshua! We love both, although LNGs are extra special. LNGs are our favourites!”

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    Average Monthly Connectivity Revenues in Merchant Vessel in 2019

    MSS only

    <$500

    MSS & VSAT

    $800

    Ku-band

    $1,500

    Ka-band

    $1,300 (this will have increased in 2020 & 2021)

    Bulk Carrier

    $1,300

    LNG

    $3,000 to $4,000

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