Shipowners Must Focus on Operational Optimization to Survive Challenging Economic Climate

Broadband connectivity is vital to stay ahead of the competition, a maritime thought leader suggests during the Posidonia 2016 conference in Athens

Middletown, RI – June 9, 2016 – Brent Bruun, executive vice president of mobile broadband for KVH Industries, Inc., (Nasdaq: KVHI) and Mike Mitsock, the company’s vice president of marketing, told an audience of invited guests at the Posidonia maritime conference in Athens, Greece, that the market needs to face up to the realities of how 24/7 connectivity between ship and shore is a real business necessity, and is no longer a “nice to have,” especially with the intense competition in today’s shipping economy. Mr. Bruun outlined how satellite communications can provide real value to ship operations in one of the most challenging periods in maritime history. “The KVH ‘Power of One’ approach holds tremendous value and promise for the maritime world,” Mr. Bruun noted. “While satellite communications tend to account for less than one percent of ship operating costs, they are the lynchpin of optimizing the remainder of the operating cost equation.” KVH operates the mini-VSAT Broadbandsm network, which provides global connectivity to thousands of vessels worldwide.

Mr. Mitsock cataloged the major areas for potential operating cost savings and the role of KVH and its partners in focusing on big data to address each area. “The optimization of significant operational costs, such as fuel, through such measures as route planning and engine maintenance, can lead to sustainably lower overall costs,” said Mr. Mitsock. Citing an example from MISC Berhad, a leading Malaysian ship operator, Mr. Mitsock described further evidence of operational cost reductions. The ship operator recently credited improvements in maritime training supplied by Videotel, part of KVH Industries, with contributing to a 10% saving in dry-docking costs and a 9% reduction in MISC Berhad’s vessel operating costs. Connectivity is also a significant factor in crew retention, Mr. Mitsock said, using evidence from a Crew Connectivity 2015 Survey report by Futurenautics, which stated that “73% of respondents said that the level of crew communications services provided onboard did influence their decisions about which shipping company they worked for.” According to Mr. Bruun, shipowners and shipmanagers are realizing that transferring volumes of shore-to-ship data or multimedia content on a daily basis is made practical and cost-effective by using KVH’s efficient multicasting service, IP-MobileCast. The content delivery service allows mini-VSAT Broadband customers who subscribe to receive news, sports, and entertainment content with no data transmission costs.

“KVH is the one company delivering a total solution for maximum business performance and flexibility,” said Mr. Bruun. “Our solution gives users global onboard connectivity, licensed content, affordable content delivery, communications hardware, and network management, all backed up with a comprehensive global service and support program.”