Shipmanagers are uniquely placed to speak for the industry
A Lloyd’s List webinar has heard that ship managers alone have a cross-industry perspective that will be critical to tackling shipping’s fragmentation and IMO’s emission targets
SHIPMANAGEMENT occupies a unique position in the shipping industry that has long been misunderstood. At the beginning of a tumultuous decade that is likely to see a seismic shift in shipping’s links with the broader logistics chain, a fragmented and uncoordinated industry should be exploring the cross-sectoral expertise of third-party ship managers, according to speakers at a Lloyd’s List webinar, sponsored by Wallem Group.
Third-party managers are currently responsible for about 15% of the global merchant fleet. Unfortunately, in bidding to increase the number of vessels on their books, some managers have slashed their fees to unsustainable levels in a move that has damaged the reputation of the profession. Many shipowners have lost faith in third-party managers’ focus on quality and safety.
“There is a large divide between shipmanagers who are prepared to turn away bad owners and bad ships and those managers who will scrape the barrel to take any ship,” said Wallem Group chief executive Frank Coles. “You end up being tarred with the brush of the lowest common denominator.”
Mark O’Neil, president of Columbia Shipmanagement, agreed there is increasing polarisation within shipmanagement, dividing “those managers that provide a quality service giving operational efficiency and real cost savings from those who are about cutting the management fee to a level that bears no real relation to cost of operations”.
Managers focused on quality and safety face even greater challenges than reputation. Among these are the lack of co-ordination within the marine equipment sector, and the reluctance of equipment manufacturers to work alongside the shipping — and specifically the ship management — sector.
Describing the capabilities of the company’s digital platform, V.Group chief executive Graham Westgarth called on equipment manufacturers “to engage in a dialogue where we can use our systems to interface more readily with their equipment”. He lamented that manufacturers are “resistant to doing that — they like to keep their intellectual property to themselves”.
All three speakers noted that much of the new technology being installed on board ships is unreliable. Mr Coles, describing himself as a big advocate for automated ships, said the industry would not see unmanned vessels until reliability issues had been resolved. Mr Westgarth added that, in his previous role as chief executive of GasLog, with highly automated ships of up to $200m each, “lack of [equipment] reliability must be a focus”. While technology has been proven to enhance the work of the crews on board, it has also brought problems.
New technology has driven a need to reassess training for both seafarers on board ship and shore staff. In the same way that a shipmanager must provide a bespoke service to each client depending on the particular requirement, so it is becoming clear that each seafarer has different training needs.
“We must change the way training is delivered,” explained Mr O’Neil. “Each client needs a tailored service and each crew member needs tailored training. It can’t be homogenous. The days of sending a CD or downloading group training are over.”
The future for shipmanagers lies in understanding the trends of shipping, which will find itself increasingly assimilated into the logistics chain. Speakers agreed that external market-movers such as Alibaba and Amazon won’t become involved in vessel operations or management, yet they will become increasingly influential through their focus on optimisation.
But optimisation will always be more difficult, said Mr Coles, for a shipping industry that lacks collaboration, where many sectors refuse to work together, and where there is no central ability to legislate or standardise. However, “ship managers have to be in the middle, able to adapt our expertise to whatever machinery, fuels, and engines are being developed”. Managers, with their central databases of expertise, will come into their own. “There are multiple technologies, engines, and systems, and we are very thinly spread. It would be better to centralise that information and leverage that expertise.”
For Mr Westgarth, managers’ greatest challenge will be preparation for the International Maritime Organization’s 2050 emissions target. “If managers are going to meet this target using assets with a 20-25-year life cycle, their clients will need to order carbon-neutral ships by 2030.” This means dramatic changes to fuels, with hydrogen and ammonia the front-runners for larger ships on longer voyages.
“Managers must look ahead to understand what technology, legislation, and fuel mixes will come to bear. What does that mean for the people in our organisations? How will we support our people to solve those challenges, what advice do we give our customers?”
Speakers agreed that very little clarity has emerged from the numerous maritime forums around the world as to how all the disparate industry sectors can work together to meet the IMO’s targets. The three chief executives on this webinar run companies that manage more than 1,200 ships; they have scale and competence, and the ability to analyse data that was not possible even five years ago.
Graham Westgarth urged shipmanagers to look beyond the internal measure that can be taken. “We must be more collegiate and muster our resources in a positive way,” he said, echoing Frank Coles, who called for a change of mindset. “Maybe it’s incumbent on shipmanagers to come together in a force that can be rational on the right solution.”
Smaller shipowners come to third-party managers for technical, crewing and operations support, together with advice on regulations, class, flag, and insurance issues, said Mr Coles. Larger owners come with specific problems, such as regulation. “That’s where third-party shipmanagers come into their own.”
Uniquely, shipmanagers work with stakeholders from across the industry. They see the whole spectrum of problems and can offer an industry-wide — not just the ship management — perspective. Speakers on this webinar urged managers to collate at a senior level and agree how best to engage with the maritime industry.