World’s top managers provide insight into 2020 challenges

According to Rajesh Unni, the CEO of Synergy Marine Group, the art and the science of the shipmanager is essentially “to manage the unexpected”.

If that is the case, then the biggest challenges facing managers this year are like what Poseidon found on the end of a trident, said Frank Coles, the CEO of Wallem Group in Splash’s special shipmanagement 2020 preview published today. The three prongs Coles referred to are security, crew and technology, themes many of his peers agree with.

Synergy’s Unni had this to say on the issue of technology: “The industry has started seeing IT as a differentiator rather than an enabler. Most companies have started work on creating or finding the right platforms. The challenge remains in trying to find ways to make the best use of technology.”

In typically frank fashion, Wallem’s Coles told Splash: “For all the maritime award dinners and lists of influential people, the biggest challenge in maritime remains the inability, or rather honesty to change and deal with the true realities of the industry. Possibly 2020 will bring some of these chickens home to roost, but then again turning a blind eye and hypocrisy knows no bounds when it comes to facing the situation in the industry.”

Kishore Rajvanshy, now into his 27th year heading up Fleet Management, had some sage words when pressed about key issues facing his sector this year.

Amid a deteoriating global security scene, the shipmanagement veteran said the biggest challenge in 2020 is to secure the safety of seafarers and ships. In second place in terms of importance, according to Rajvanshy, will be keeping abreast of all efforts to reduce shipping’s carbon footprint.

Rajvanshy, whose ship management career dates back to the early 1980s, cautions that shipmanagement is not set for any major makeover this year, but like in other sectors, the keenness for consolidation might tempt some to go on further buying binges.

“Ours is a nuts and bolts business and I don’t see that changing,” the 70-year-old said. “There will be more regulations to adapt to and the drive for cost effective management will notch up a few gears. I do predict that the bug to get bigger will bite the better of us. To that end I expect some more M&A activity in our space.”

Graham Westgarth, installed last year as CEO of V.Group, agrees with Rajvanshy that more mergers are on the cards. V.Group has been the architect of some of the sector’s most notable mergers in the past few years.

“I believe there is potential for further consolidation,” he told Splash while outlining how he felt that much like last year new fuels, scrubber installations and the environmental debate will dominate the agenda over the coming 12 months.

For Mark O’Neil, the president of Columbia Shipmanagement, 2020 could well mark the year where the penny finally drops and quality shipmanagement draws the plaudits, kudos and returns it deserves.

“Given the geopolitical, regulatory, environmental and operational challenges which present themselves, the overriding importance quality of management service – in people, training, technology, investment and service – will become ever more apparent in an already polarised market,” O’Neil told Splash, adding: “If ever there was a time to invest in quality management over simple price considerations, then this is it.”

As with many of the previous years since the global financial crisis, the state of the shipping markets continues to weigh heavily on shipmanagers and their own bottom lines going into 2020.

Andrew Airey, managing director of Bangkok-based Highland Maritime, argued the biggest challenge this year were all the economic uncertainties including trade disputes, bunker prices and Iran tensions, resulting in vessel income risks for his shipowner clients.

This market uncertainty was also picked up by other managers.

Carl Schou, CEO of Wilhelmsen Ship Management, taking a glance at how the Baltic Dry Index has nosedived 20% in the first few days of the year, told Splash: “The not so promising outlook for the bulk segments signals an industry slowdown that could lead to greater pressure on already low margins.”

This pressure on the bottom line has been something most acutely felt within the offshore space, something not lost on Arvind Mohan, managing director of offshore manager Viridian Maritime.

“Challenges remain predominantly with cash flow concerns, issues which naturally trickles further down the food chain,” Mohan told Splash today. “By taking prudent measures, costs for maintaining and operating assets can only be brought down so much and quite expectedly we continue to see owners expecting a further reduction in vessel operating costs. As such, the delicate balance and challenge remains – keep the asset operating, generating that valuable revenue and at the same time, manage day to day operating costs with a common sense approach.”

Wilhelmsen’s Schou is adamant that as the year plays out shipping will have to get more and more used to sustainable financing – or environmental, social, and governance (ESG) financing – and as this becomes the norm for business standards, shipmanagers will be vital in ensuring owners are on the right path for this new form of handing out loans.

“I foresee that shipmanagers will be expected to step up in their support to owners towards achieving compliance. The move towards a better world should not only be the shipowner’s responsibility – the entire value chain should play a part to compliment the owner’s ESG drive. Shipmanagers will not only be technical or crew managers, but will play a more holistic role in assisting shipowners with achieving their ESG goals,” the Wilhelmsen boss predicts.

Splash will be providing unrivalled shipmanagement news and insights throughout the year.