What will change for the business of shipmanagement in the remaining years of the 2020s?
Splash asked more than 200 senior executives how they see the role of managers evolving from now through to 2030. Condensing these thoughts down into three pages gives readers some obvious trends as well as a few outlier predictions.
Setting the scene, OSM Maritime’s CEO Finn Amund Norbye sums up three central themes which many of his peers then delve into greater detail.
“Assisting shipowners in handling the increased complexity in shipping and offshore, develop seafarers with the right skillsets to operate environmentally friendly vessels, and evolve towards business partnership models,” Norbye lists.
“For sure, there is a huge shift ahead of us,” says Carl Schou, president of Wilhelmsen Ship Management. Just how many of today’s managers will be able to keep up with the pace of this transformation remains to be seen.
Second-party partners
According to Rajesh Unni, the CEO of Synergy, the role of a shipmanager has already evolved away from the older fee-based relationship with an owner to one that is essentially a technical and thought partnership. Shipping, with its increased regulatory, technological and environmental challenges, is simply becoming too complicated for the relationship between owner and manager to be anything less than a partnership, he says, suggesting that as shipping gets even more complex, shipmanagement will continue to move away from the transactional to the collaborative with Wilhelmsen’s Schou telling Splash that as well as evolving to be partners, managers will become competence centres for owners to tap into when needed.
David Borcoski, CEO of ASP Ships, agrees, saying the management model will likely lean more towards partnerships and “gain-sharing contracts” rather than the old “arms-length” relationship for a fixed fee.
Ex-V. Group high-flier Manish Singh maintains the best managers will go beyond the cost plus fee model of basic shipmanagement which has defined the industry for the last four decades.
“I see the most able managers will go further in fixed opex contracts for a greater number of operational cost items, thereby taking a larger share of operational cost risk,” Singh says.
Getting more nuanced, John-Kaare Aune, CEO of Hong Kong’s Wallem Group, sees this partnership framework evolving too, but in a hybrid model where certain elements of shipmanagement will be outsourced, or part of the fleet.
Mark O’Neil, president of Columbia Shipmanagement, neatly describes this flourishing era of collaboration as the end of third-party management, to be replaced with “second-party partners”.
“Similarly,” O’Neil says, “as shipping becomes more and more integrated and absorbed within the larger global logistics and transportation network, managers will have to themselves integrate and be compatible with that network, managing the varied assets involved in the same and providing their integrated maritime and logistics services to that network.”
Warming to this theme Bjørn Højgaard, CEO of Anglo-Eastern, tells Splash: “A good shipmanager knows how to manage well-run ships. A great shipmanager knows how to be a true business partner to his or her clients, so as to make sure that they not only have well-run assets at the right cost, but so that the owner’s business agenda is augmented through the relationship with experts and technology that can further this agenda.”
The successful shipmanager of 2030, according to Højgaard, will meet this criteria, and the client will appreciate the scale benefits of pooled resources, with the Hong Kong-based manager one of many to talk up prospects of greater consolidation in the coming years.
“Only those shipmanagers with good infrastructure and experienced man-power – both ashore and onboard – will remain in business and we may see increased consolidation amongst managers,” says Vinod Sehgal, the CEO of SeaQuest Shipmanagemen
Murky fleets
With greater global sanctions, an increasing so-called dark fleet and general unease when it comes to safe, secure and compliant operation, shipmanagers will have to invest a lot of time and money to continue to provide the input both to the ships and to shipowners to help them navigate through this difficult period, says Philip Fullerton, managing director at Northern Marine Group.
Sanctions are indeed a very hot topic for owners, something that requires expertise, scale, tech and global knowledge to stay on the right side of western governments. By Splash’s own count, the dark tanker fleet, as of February 20 this year, stood at 421 ships, a figure that has grown significantly in the intervening weeks.
Decarb guides
Rajiv Singhal, who heads up MTM Ship Management, says managers will play a key role in the unfolding decarbonisation era.
“Large investments in resources, technology and skill are needed to keep up with developments and rise above them,” Singhal says, adding: “It is inevitable that more owners will inquire to outsource the technical management of their ships to managers that not only have the capacity to do so, but also have the agility to absorb new information and are able to adapt to new requirements without any burden.”
The drive to decarbonisation and utilisation of alternative fuels requires a higher crew competence across the industry, says Philip Fullerton, managing director at Northern Marine Group.
“Through this decade the role of the manager has to be to drive up crew competency to meet the challenges that we see coming towards the shipping industry at a faster and faster pace,” Fullerton says.
Quite so, says Pankaj Khanna, head of tanker pool major Heidmar, a company which has recently stated its intention to get into shipmanagement.
“Trading of ships is becoming more and more complex and going forward the industry will have to comply with far stricter environmental regulations mainly related to decarbonisation. A manager will have to be at the forefront of this change,” Khanna says.
Digital directive
Another of the big driving changes this decade will be the intense focus on digitalisation, not only embracing new technologies, but implementing them.
“Analysis and review of the information being churned out from these implemented systems will require expertise,” says Arvind Mohan, managing director of Viridian Maritime.
“A lot needs to be done by managers in terms of the development of skillsets of the crew to handle and manage the ships of tomorrow,” says Vinay Gupta, managing director of Union Marine Management Services. “Training would be the key for the survivability and sustainability of the business,” he stresses, adding: “Anyone caught napping would be left behind in this extremely competitive and professional industry.”
The risks of losing out
The adage about doing the same thing over and over again comes to the ever sardonic mind of Frank Coles when quizzed on the managers’ evolution this decade.
“Where managers may lose out is if the large companies like Hyundai, Wartsila, MAN, etc start to provide monitoring and technical services directly to owners on long-term contracts,” the ex-Wallem boss warns. “This relegates the manager to a largely crewing operation, and perhaps an audit of the various environmental requirements,” Coles says, suggesting that this could be an area that sees a change in the division of responsibilities and relationships in the husbandry of ships.
This article is one of many reports carried in our brand new 68-page Shipmanagement Market Report. Splash readers can access the full magazine for free by clicking here.
Well put