"K" Line

Kawasaki Kisen Kaisha, Ltd. (“K” LINE), TIS Inc. (“TIS”) and Miotsukushi Analytics Inc. (“Miotsukushi”) are pleased to announce that we have jointly developed a draft survey application. The application is designed to use artificial intelligence (AI) to recognize the water surface and the draft mark from the image captured with a smartphone and to display the accurate draft level with the impact of waves removed on the screen to help accurately measure the draft*¹. At the end of July, the three companies jointly filed a patent application for this newly developed application.

The draft is measured to calculate the weight of cargo loaded onto dry bulk carriers. Today, it is done by crew members and surveyors using the naked eye. It is possible to survey the draft with the human eye. However, it is done at the anchorage, which in some ports may be susceptible to waves. There have been cases where draft measurements even by experienced maritime professionals display a greater margin of error than expected.

The jointly developed automatic draft survey application makes use of the “AI and data analysis service” offered by TIS and Miotsukushi and combines smartphones with the AI to supplement draft measurement that traditionally depended on the experience of maritime professionals with the AI. That helps equalize the degree of safety in navigation and cargo operations and maximize the cargo transportation volume.

At “K” LINE, digitalization is underway as a functional strategy for realizing the business strategy in the medium-term management plan*² announced in May 2022. With the use of data and digital technologies, “K” LINE will enhance the core values of safety, environmental conservation and quality in a bid to boost its competitiveness and corporate value.

*1:The vertical distance from the bottom of the hull to the water surface when the vessel is afloat

*2: Medium-term Management Plan (announced on May 9, 2022)

https://www.kline.co.jp/en/ir/management/strategy.html

Reference

DX Strategy 2023 (announced on December 22, 2022)

https://www.kline.co.jp/en/sustainability/dx_strategy.html

About TIS Inc. (https://www.tis.com/)

TIS Inc., a member of TIS INTEC Group, is a business partner to more than 3,000 companies in various sectors, including finance, industry, public services, and distribution services. It provides IT to support growth strategies, tackling various management challenges faced by its customers. Leveraging the industry knowledge and IT development capabilities it has cultivated over more than 50 years, TIS aims to realize a prosperous society by providing IT services that have been cocreated with society and customers in Japan and Asian region.

About Miotsukushi Analytics Co., Ltd. (https://mioana.com/)

Miotsukushi Analytics is a consulting firm that specializes in data analysis that combines statistics, machine learning, data mining, mathematical optimization and many other approaches with a focus on solving business problems. As a group of specialists that bring value to big data, it has an advantage not only in analytical processes but also in creating benefits for clients through the application of data sciences to business.

Features of the application

• A model of high-accuracy detection of the draft mark and the water surface with the use of deep learning technologies.
• A coordinate computing algorithm developed for calculating the draft through image detection.
• Finally calculating an accurate draft through different approaches including leveling of continuously measured draft levels.
• Designed for smartphones, the app can be used at sea where Internet access is unavailable since the processing is completed locally at the terminal.

Sumitomo Corporation (Sumitomo), Toho Gas Co., Ltd. (Toho Gas), Kawasaki Kisen Kaisha, Ltd. (“K” LINE) and Woodside Energy Ltd (Woodside) have signed a non-binding memorandum of understanding (MOU) to jointly conduct a feasibility study to establish a CCS (*1) value chain between Australia and Japan.

This study is to investigate the feasibility of establishing an entire CCS value chain among the four companies, whereby CO2 emissions from various industries and companies in the Chubu region, Japan, are hoped to be captured/accumulated, and liquefied by using such technology as CO2 separation and capture using unutilized LNG Cryogenic Energy” (*2) being developed by Toho Gas and transported to Australia by a low-temperature, low-pressure liquefied CO2 carrier for injection/storage at Australian storage site. Through this study, we will estimate the amount of CO2 to be captured, examine the optimal CO2 capture, accumulation and transportation methods, estimate the amount of CO2 that can be stored at storage sites in Australia, evaluate the necessary storage technologies and monitoring systems. In addition to the technical requirements, we will assess the relevant regulatory frameworks and the costs in each segment of the CCS value chain. The four companies aim to work together to assess the commercial viability of the CCS business.

The Japanese government has set a goal of reducing overall greenhouse gas (GHG) emissions to Net Zero by 2050 and implemented a policy to develop a business environment to initiate CCS projects by 2030 in its “Basic Policy for the Realization of GX” (*3). CCS is expected to play a very important role in achieving GHG emission reduction targets as one of the primary decarbonization solutions.

Sumitomo Corporation, Toho Gas, “K” LINE, and Woodside plan to exchange information, knowledge, and experiences through the progression of this CCS initiative.

■ Sumitomo Corporation
Sumitomo Corporation has highlighted mitigation of climate change as one of its key areas of focus and has committed to being carbon neutral by 2050. Sumitomo Corporation recognizes that CCUS (*4) is a key technology to combat climate change, and in January 2023 established a dedicated global CCUS team within the Energy Innovation Initiative. This new team will capitalize on existing resources to establish new business along the whole CCUS value chain, including CO2 separation and capture, transport and storage and utilization of the captured carbon.

■ Toho Gas
Toho Gas Group is now accelerating efforts to reduce carbon emissions and even support decarbonization of its customers based on the ‘Toho Gas Group 2050 Carbon Neutrality Initiative’, centered on the use of three energy sources of gas, hydrogen and electricity. In the field of CCUS, Toho Gas Group is focusing on the development of technologies, including CO2 separation, and capture, and will contribute to the realization of a sustainable society by implementing CCUS in society across the full value chain, including CO2 separation/capture at the customer’s site, utilization and storage.

■ “K” LINE
“K” LINE group is promoting a variety of initiatives to support the low-decarbonization of its own operations and the low-decarbonization of society in accordance with its long-term environmental policy, “Environmental Vision 2050”. In the field of CCS, we are planning to start the world’s first full-scale carbon capture and storage (CCS) transport from next year. We will apply the knowledge gained through the operation of these vessels, which will be launched sequentially in Japan and overseas, to future business development, including this project, with the aim of realizing a sustainable society and enhancing corporate value.

■ Woodside Energy
Woodside Energy is an Australian energy company that is progressing CCS initiatives

*1 CCS: Carbon Capture, and Storage.

*2 CO2 separation and capture technology using unutilized LNG cryogenic energy
Technology to separate/capture CO2 contained in factory exhaust gas by chemical absorption method using a small amount of energy by using unutilized LNG cryogenic energy. This technology was adopted by the New Energy and Industrial Technology Development Organization (NEDO) as a “Green Innovation Fund Project / Development of Technology for CO2 Separation, Capture, etc.”

*3 “Basic Policy for the Realization of GX” (Released as of Feb 10th, 2023 by METI (Ministry of Economy, Trade and Industry, JAPAN)

*4 CCUS: Carbon Capture, Utilization and Storage.

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) is pleased to announce that in Japan it has today started using AIplicity Chat Powered by ChatGPT API (hereinafter “AIplicity Chat”) provided by Japan Business Systems, Inc. across “K” LINE offices in Japan.

It is an AI chat service based on the Azure OpenAI Service which Microsoft offers on its Azure cloud.

“K” LINE has been proactively assessing the various latest technologies to provide superior services in the rapidly-changing business environment. In this, it has studied ways to use ChatGPT. It has decided to quickly introduce this service for several purposes including the streamlining of employees’ operations, encouraging the utilization of technology, supporting the implementation of duties in a secure and reassuring environment and piquing employees’ curiosity and their spirit of trying new things.

To prevent data leaks, AIplicity Chat is designed in consideration of security. For example, it does not make secondary use of the information entered. It stores the information exchanged on an internal network of offices in Japan in the Azure tenant. “K” LINE has prepared guidelines for the use of generative AI and made them accessible across the company to make its personnel aware of the risks involved in inputting and outputting data and to draw their attention to these risks. In the future, it will discuss the utilization of AI from different perspectives and test the service itself to continually upgrade AIplicity Chat.

At “K” LINE, digitalization and efforts to actively use data and digital technologies are underway with a view toward laying a solid business foundation for the realization of the business strategy in the medium-term management plan announced in May 2022*¹. Through this digitalization, “K” LINE will continue to enhance its business processes and support its core values of safety, environmental conservation and quality to achieve continuous growth and increase its corporate value.

References

*¹Medium-term Management Plan (announced May 9, 2022)

https://www.kline.co.jp/en/ir/management/strategy.html

(Reference)

DX Strategy 2023 (announced on December 22, 2022)

https://www.kline.co.jp/en/sustainability/dx_strategy.html

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) has adopted NavFleet as a fleet monitoring system platform provided by NAVTOR A.S. (NAVTOR), and witnessed by Norwegian Embassy in Japan, “K” LINE signed a MoU with NAVTOR regarding the development of “K” LINE 24/7/365 global fleet monitoring and support system through the use and functional expansion of NavFleet on August 25.

NAVTOR is Norway-based company developing the maritime DX business that is well known as a provider of electronic navigational charts, who has advanced software development capabilities and extensive experience.

NavFleet a total ship operations platform that provides a monitoring of vessel position, weather and route information on shore through automatic and seamless data communication via the cloud, and automatically alert users potential navigational risks to prevent navigational accidents. Future, NavFleet is capable to unite business critical data from various systems and provide overview of the fleet operation at a glance, while assisting to automate tasks, simplify regulatory compliance and ensure safe navigation of the fleet at all times.

“K” LINE is promoting the strengthening of a worldwide organization system covering Safety and Quality Management to achieve the business strategy in its medium-term management plan announced in 2022. “K” LINE will continue to develop its competitiveness and corporate value by targeting supremely safe navigation and transport quality management supported by the contributions of the knowledge and experience of competent human resources and the technologies complementing the human factors.

References

Business Briefing (Released on May 26, 2023) p. 57, 58

https://www.kline.co.jp/en/ir/library/event.html

Medium-term Management Plan (Released on May 9, 2022)

https://www.kline.co.jp/en/ir/management/strategy.html

Kawasaki Kisen Kaisha, Ltd. hereby make amendments to “Allocation of Treasury Stock to Board Benefit Trust” announced on August 2, 2023.

Reason for amendment

The amendment was made because the wording could have led to a misunderstanding that the stock repurchase and the allocation of treasury stock to the Board Benefit Trust were a series of events.

Details of the amendment (excerpt)

The amendments are underlined in below.

(Before amendment）

Kawasaki Kisen Kaisha, Ltd. (hereinafter referred to as “the Company”) stated in the “Notice Regarding Cancellation of Treasury Stock” announced on March 14, 2023 that, the Board Benefit Trust that was established for officers’ performance-based share remuneration was scheduled to acquire the Company’s stock by underwriting the disposal of the treasury stock for its expanded cap of funds around August, 2023.

However, the Company hereby announces that it plans to delay the allocation of treasury stock to the Board Benefit Trust stated above to around November 2023 following the completion of the stock repurchase by the Company during the period from August 3 to October 31, as announced today in the “Notification of Stock Repurchase and Share Buyback through Off-Auction Own Share Repurchase Trading (ToSTNeT-3)”

(After amendment)

Kawasaki Kisen Kaisha, Ltd. (hereinafter referred to as “the Company”) stated in the “Notice Regarding Cancellation of Treasury Stock” announced on March 14, 2023 that, the Board Benefit Trust that was established for officers’ performance-based share remuneration was scheduled to acquire the Company’s stock by underwriting the disposal of the treasury stock for its expanded cap of funds around August, 2023.

However, the Company hereby announces that it plans to delay the allocation of treasury stock to the Board Benefit Trust stated above until after the completion of the stock repurchase by the Company announced today in the “Notification of Stock Repurchase and Share Buyback through Off-Auction Own Share Repurchase Trading (ToSTNeT-3)”. The method and timing of the allocation will be announced as soon as it is decided.

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) currently uses the Port of Kobe Rokko Island RC4-5 container terminals leased from Kobe-Osaka International Port Corporation. Talks with Kobe-Osaka International Port Corporation and Mitsui O.S.K. Lines have resulted in the conclusion of a written basic agreement on the relocation from the RC4-5 container terminals to PC14-17 container terminals (PC14-17), among the PC13-17 container terminals of the southern pier in the Port of Kobe Port Island (Stage 2) area, which is currently undergoing construction for expansion and functional reinforcement. We are coordinating the timing of the relocation with the parties involved by the end of fiscal year 2025, at which the construction will be completed.

The relocation will enhance the specifications of the terminals, thereby building an environment where large containerships can be accepted. With the relocation, we also expect to offer shipping companies and customers more flexibility for berth arrangement and for more convenience with transship containers.

After our involvement, PC14-17 will be among the largest container terminals in West Japan, handling nearly 40% of foreign trade containers at the Port of Kobe. The “K” LINE Group will offer high-quality services with Nitto Total Logistics Ltd., a company of the Group that operates the facilities.

Through this project, “K” LINE will actively and flexibly respond to customers’ needs, including the expected rise in demand for environmental and DX-related action. Based on the “K” LINE Environmental Vision 2050, we will also seek to preserve the environment through business activities and contribute to sustainable economic and social development in an effort to enhance our corporate value.

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) signed a service contract agreement on port expense settlement services with DIABOS Global (DIABOS) in July 2023. DIABOS is a company in the JM Baxi Group, which is “K” LINE’s business partner in India. Based in Mumbai, its expertise is contracted services for port expense settlement, serving a large number of shipping companies around the world. With an abundance of practical experience, it has accumulated a great deal of related data.

“K” LINE is pressing ahead with digital transformation from five perspectives specified in its DX Strategy*¹, namely DX ashore, DX at sea, DX of data, DX of human resources and security that supports DX. As an initiative for DX ashore and for DX of data, it is set to introduce the VESON IMOS Platform (VIP) in 2024. It is a platform provided by Veson Nautical (Veson) to cover a series of ship operation management processes including charter contract conclusion, financial management and fuel management. Today, “K” LINE operates the tramp service business -*² globally. The agreement is aimed at increasing “K” LINE’s business efficiency and budget management accuracy and broadly improving its business quality by outsourcing to DIABOS port expense processing operations, including assessment and journalizing of port expenses that occurs in huge numbers every day and data entries into the VIP system.

At “K” LINE, digitalization is underway as a functional strategy for realizing the business strategy in the medium-term management plan announced in May 2022. With the use of data and digital technologies, “K” LINE will enhance the core values of safety, the environmental conservation and quality in a bid to boost its competitiveness and corporate value.

*¹DX Strategy 2023 (announced on December 22, 2022)
https://www.kline.co.jp/en/sustainability/dx_strategy.html

*²Car carrier transport is excluded.

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) has been selected as a constituent of the “FTSE4Good Index Series”, one of the leading global indices for ESG investing, for the second year straight and 19^th time in total. “K” LINE has also been listed as a constituent of “FTSE Blossom Japan Index” for six years in a row and “FTSE Blossom Japan Sector Relative Index for the second consecutive year respectively, since those indices were initially launched.

Created by the global index provider FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company), the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices, selecting 1,074 companies from developed countries including 226 Japanese companies, and 566 companies from emerging countries. On the other hand, FTSE Blossom Japan Index and FTSE Blossom Japan Sector Relative Index reflect the performance of Japanese companies that demonstrate strong ESG practices (310 companies and 605 companies are selected respectively out of 1,424 constituents of FTSE Japan All Cap Index). These indices have been adopted as a benchmark of ESG investing by Government Pension Investment Fund (GPIF) in Japan. Those indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.

“K” LINE has been addressing sustainability as a priority issue of its corporate management, and advancing various initiatives to respond flexibly to various needs. These include not only changing customer needs, but also the needs of nations and the global community, especially for the achievement of the UN Sustainable Development Goals, and measures to mitigate climate change. Going forward, “K” LINE will continue to pursue greater corporate value, creating both economic and social values sustainably, through proactive sustainability efforts.

We will participate in the Joint Technological Development Program for the Demonstration of Fully Autonomous Ships under the MEGURI 2040 Fully Autonomous Ship Project* (hereinafter MEGURI2040) administrated by the Nippon Foundation, as a member of the Designing the Future of Fully Autonomous Ships Plus consortium (hereinafter DFFAS+)** consisting of 51 companies in Japan.

On July 20, the Nippon Foundation held a seminar*** on the MEGURI2040. At the seminar, an overview of the second stage of MEGURI2040 and the project’s initiatives were presented.

This program is positioned as the second stage of MEGURI2040, which started in 2020, and aims for full-scale commercialization of fully autonomous ship technology by 2025, which was developed in the “Joint Technological Development Program for Demonstration of Fully Autonomous Ship,” which was carried out as the first stage, in cooperation with the Nippon Foundation.

In addition to designing next-generation ships that will support the coastal shipping industry in the future, a demonstration of ship-land operations will be conducted to simulate the future coastal shipping industry that will be supported by fully autonomous ship. The demonstration will use four different types of ships (a newly built full package container ship; with fully autonomous operation system, an existing container ship, a RORO cargo ship and a remote island route ship; with some autonomous operation system) and two Fleet Operation Centers.

• Standardization of developed technologies

To refine the fully autonomous ship technology developed in the first stage, and by standardizing these technologies into international standards, to strengthen Japan’s maritime industry and lead the international competition in fully autonomous ship technology.

• Reinforcement of development process infrastructure

Based on the development process infrastructure established in the first stage, reinforce it further by upgrading simulation technology, generalizing risk assessment, etc.

• Social Implementation

To commercialize an autonomous navigation system (including land-based monitoring system) and to establish a certification scheme necessary to commercialize the system.

In addition, to improve the environment for social implementation, we will utilize our knowledge of technological development to establish international and domestic rules for fully autonomous ships, examine human resource requirements and training methods to accommodate new working styles, study the use of deregulation and other methods to ensure the continuous commercial use of fully autonomous ships, and examine insurance and freight rates for fully autonomous ships.

Our Approach

We, Kline, are collaborating with Kawasaki Kinkai Kisen Kaisha, Japan Radio Co., Ltd., and YDK Technologies Co., Ltd. to retrofit the existing RORO cargo ship ‘Hokuren Maru No.2’ (operated by Kawasaki Kinkai Kisen Kaisha) with unmanned and autonomous navigation capabilities.

By leveraging our expertise in safe operations, we are developing a system that replicates the sequence of piloting actions—namely ‘perception, information processing, analysis, planning, and execution’—that were previously carried out by humans, using cutting-edge AI technology and other advancements. Our goal is to further enhance the safety and quality of transportation provided by our operated vessels.”

In order to solve social issues in Japan’s coastal shipping industry, such as reducing labour shortages and the workload, preventing maritime accidents, and maintaining remote island shipping routes, and to support stable domestic logistics and transportation infrastructure, the Nippon Foundation, DFFAS+ participating companies, and domestic and international partner organizations will continue to work together toward the commercialization of fully autonomous ships by 2025.

*A subsidization scheme to cultivate further momentum for technological development in the field of crewless maritime autonomous surface ships, promoting changes in logistics, economies,  and social infrastructure in Japan, and supporting such technological development through the success of the world’s first crewless autonomous operation trials by domestic coastal vessels.

** Companies participating in the DFFAS+ project include Japan Marine Science Inc. (project leader); Akasaka Diesels Limited; IKOUS Corporation; Imoto Lines,Ltd.; Weathernews Inc.; Uyeno Transtech Ltd; EIZO Corporation; SK WINCH CO.,LTD.; MTI Co., Ltd.; NX Shipping Co.,Ltd.; NTT Communications Corporation; Kawasaki Kisen Kaisha, Ltd.; KAWASAKI KINKAI KISEN KAISHA,LTD.; KANDA DOCKYARD Co., Ltd.; KYOKUYO SHIPYARD CORPORATION; Kinkai Yusen Kaisha Ltd.; Kokusai Ryobi Ferry Co.,Ltd.; Sunflame Co., Ltd.; Sanwa Dock Co., Ltd.; JRCS Co.Ltd.; JAPAN HAMWORTHY CO.,LTD.; Japan Marine United Corporation; Mitsui O.S.K. Lines, Ltd.; SKY Perfect JSAT Corporation.; Suzuyo Marine Co., Ltd.; Space Compass Corporation; TERASAKI ELECTRIC CO.,LTD.; Tokio Marine & Nichido Fire Insurance Co., Ltd.; TOKYO KEIKI INC.; TST CORPORATION.; MIRAI R＆D (Research & Development);Nakashima Propeller Co., Ltd.; Nabtesco Corporation; NIHON SHIPYARD CO.,LTD.; Japan Radio Co., Ltd.; NYK Line; The Hanshin Diesel Works, Ltd.; BEMAC Corporation; pluszero, Inc.; FUJIWARA SHIPBUILDING CO.LTD.; FURUNO ELECTRIC CO., LTD.; Honda Motor Co., Ltd.; Honda Heavy Industries Co., Ltd.; Marindows Inc.; Marubeni Corporation; MIURA CO.,LTD.; Mitsui E&S Shipbuilding Co., Ltd.; Mitsui Sumitomo Insurance Company, Limited; Mitsubishi Research Institute, Inc.; Mitsubishi Shipbuilding Co., Ltd.; YDK Technologies Co.,Ltd.

*** Presentations on technologies and rules for fully autonomous ships and a panel discussion on expectations and challenges for the commercialization of fully autonomous ships.

The Nippon Foundation Fully Autonomous Ship Project MEGURI2040 Seminar on Fully Autonomous Ship

The “K” LINE Group companies conducted worldwide simultaneous cleanup activities, during a period before and after World Oceans Day on June 8.

More than 450 employees and their families from 14 group companies around the world participated in the activities as volunteers, to collect garbage on land, which is said to be the source of 7~80% of marine plastic, at beaches, the area around offices, mountain forests, canals and rivers. The amount of garbage collected amounts to about 7,800 liters.

These days, threats on ocean environment such as plastic pollution are becoming hot issues, while protection of oceans is set as one of Sustainable Development Goals (SDGs) , namely, “Conserve and sustainably use the oceans, seas and marine resources for sustainable development.” For the “K” LINE Group, whose corporate principle is “as a logistics company rooted in the shipping industry, we help make the lives of people more affluent”, the oceans are essential for our business activities, and as an opportunity to reconsider marine environmental issues together with Group employees, we conducted the cleanup activities during the period before and after World Oceans Day, from late May to early July this year.

Going forward, the “K” LINE Group will continue to make every effort to realize one of Values the “K” LINE Group prizes, “Contributing to the global environment and a sustainable society”, by raising employees’ awareness of environmental conservation through such activities.

(*）World Oceans Day was officially designated by the United Nations in 2009 to raise global awareness of the benefits humankind derives from the ocean and our individual and collective duty to use its resources sustainably. On that day, awareness-raising events such as ocean cleanup are held over 100 countries every year.