Splash Shipmanagement Market Report 2023

SHIPMANAGEMENT

BY

The future of the industry

THE LINEUP

‘Regulation, cost and technology are driving the need for scale in shipmanagement’

13

‘Although annual fees are edging up, these are doing so at a slower pace than global inflationary levels’

17

‘The days of profits being made up of undeclared commissions are hopefully long gone’

‘Speaking together with one voice on key industry issues is important’

‘The best financially yielding trading strategy may not automatically yield the best CII’

29 61 63 68

‘Shipmanagement is in desperate need of re-imagination’

Bjørn Højgaard, CEO of Anglo-Eastern

—Harry Banga, chairman and CEO of the Caravel Group

—Tim Huxley, chairman, Mandarin Shipping

—Mark O’Neil, president of InterManager

—John Michael Radziwill, CEO of C Transport Maritime

—Manish Singh, CEO, AboutShips

CHAMPIONING TOMORROW

First we pioneered digital shipping. Then we promoted fuel transition. Now we deploy non-flammable rechargeable batteries.

SHIPMANAGEMENT

Shipmanagement’s special place in Splash coverage

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Although every effort has been made to ensure that the information contained in this review is correct, the publishers accept no liability for any inaccuracies or omissions that may occur. All rights reserved. No part of the publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means without prior written permission of the copyright owner. For reprints of specific articles contact grant@asiashippingmedia.com.

In 23 years of covering shipping, I guess the most amount of close contacts I have is from within the shipmanagement segment, and I’d like to think this is reflected in the series of exclusives Splash has mustered in its coverage of the sector over the years. It is also testament to the fact that the management community are, by and large, an affable lot, willing to engage and share.

Over the following pages I really hope that you get a feeling for what is important today and tomorrow for this business.

stump up the cash for these third-party managers, something that we hope to have rectified for this bumper edition.

The coverage shows clearly - well, I hope it does - that this is a slice of the industry on the cusp of enormous change brought about by the needs of its clients.

Importantly, for this issue, we’ve engaged shipowners far more than in the 2022 version. We were rightly criticised last year for not including enough

Up next in our magazine publishing schedule will be specials on Singapore and Hong Kong with 2023 also seeing the publication of Ship2030, our investigation into what the shipping industry will look like in seven years’ time.

Sam Chambers Editor Splash

For all the latest shipmanagement news, follow our dedicated coverage here

This is a slice of the industry on the cusp of enormous change

YOUR GLOBAL MARITIME SOLUTIONS PROVIDER

Where the sector is at today

Splash takes the pulse of shipmanagement ahead of what will unquestionably prove to be a tumultuous few years ahead

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In Q2 2023 it strikes Splash that the shipmanagement sector is ready to be unleashed.

Shipmanagement has been though its own period of consolidation over the past decade, but remains far too fragmented.

Sources tell Splash that discussions are being had among top shipmanagement brands looking at consolidation opportunities, talks made all the more imperative following the conclusion of the coming together of OSM and Thome earlier this year - a marriage fused with private equity money, with plenty more PE cash sloshing around looking to create giants within the sector.

Who is the Maersk of the managers?

Shipmanagement has come a long way over the past decade in terms of scale (see chart on page 31), yet it has lagged many other shipping sectors such as heavylift, terminals, and liners.

If we look at the container space, the top four carriers had a 41.8% market share as of the start of 2012, according to data from Alphaliner. Today, these four carriers have leapt in size and control 57.6% of the market, and, bolstered by record earnings during the pandemic and their sheer scale, are now all embarking on transformative corporate upscaling,

delving into every rung of the logistics space.

Talk to today’s top shipmanagers and they will all push their far ranging capabilities.

They’re here to guide their clients through the complex future, holding their hands along the twin pathways of decarbonisation and digitalisation, as well as offering all manner of other services.

Yet to be true masters of such a diverse

range of services requires immense scale, something which the sector has yet to achieve. While there are big names, there are no Maersks or MSCs yet.

The last few years have seen strong growth in the shipmanagement sector fuelled by non-traditional vessel owners which, having little internal commercial and technical management expertise, prefer to outsource to dedicated shipmanagement companies as opposed

To be true masters of such a diverse range of services requires immense scale

to hiring a full team internally.

Attracted by the potential of strong profits which can be generated in the shipping industry and the low barriers to entry in certain sectors there has been strong growth in vessel ownership by non-traditional shipowners and there’s been a subsequent proliferation of management companies, negating the

consolidation moves by bigger names.

Less than 20% of the merchant fleet is outsourced

The concept of using a third-party manager is relatively new and only gained traction in the 1970s.

Because it is still considered a novel idea by some, it is estimated that less than 20% of the global merchant fleet is currently outsourced to third-party ship managers.

Until recently the main or even only attraction of handing vessels over to third-party managers was because they could do it more cheaply. And the most successful managers in the early days

Win an iPad

could do exactly that. But thanks to ever more stringent regulation and the fact that shipping has become a much more transparent business with an incessant public and media gaze, the managers had to develop their strategies and change their sales pitch to owners under increasing pressure to do the right thing.

More recent events such as covid and the invasion of Ukraine have also accelerated the change in the business models of many managers. The pandemic has thrown much light on how different managers deal with their principals’ ships and crews.

The increasingly complex regulatory environment ought to see shipmanagers grab a larger slice of the pie.

Shipping has long complained about negative perceptions and a general focus on all that is bad. Now shipmanagement association InterManager is attempting to address this by running its own global positivity campaign.

Using social media to spread the word, InterManager is urging members

of the maritime community – including seafarers, shore workers, and their families – to post a positive image of shipping on social media alongside the hashtag #shippositive, tagging InterManager too.

Up for grabs are five iPad devices which will be awarded to the five photographs which the judges decide

best demonstrate a positive image of shipping.

By demonstrating shipping’s positive side, particularly the camaraderie and opportunities of a life at sea, Kuba Szymanski, InterManager’s secretarygeneral, said he believes the industry can reach out to the next generation of seafarers.

“Shipping has to fight for the talent of tomorrow against strong competition from shore-based industries like IT. We need to show young people that we can offer an exciting, interesting, and rewarding career path beginning at sea and progressing to shore if they choose,” he said. “There are many roles and opportunities available to motivated men and women and our #shippositive campaign gives us an opportunity to highlight the plus side of our amazing industry.”

InterManager’s #shippositive competition runs to June 30 and the iPad winners will be announced during London International Shipping Week in September.

There’s plenty of private equity cash sloshing around looking to create giants within the sector

Shipping has to fight for the talent of tomorrow

Disruption inbound

Much of this magazine is focused on how the business model of the shipmanagement sector will change - see also the Pricing section on page 17, the Years Aheads pages starting on page 53, and most pertinently columnist Manish Singh’s thoughts on the matter carried on the back page.

Rajiv Singhal, who heads up MTM Ship Management, is not alone in saying he sees the business as a whole growing in no small part thanks to greater statutory and regulatory compliance coming into force.

Kristofer Karlsen, business development manager at Norbulk Shipping, says the increasingly complex regulatory environment is especially felt among smaller-sized owners.

“The complexity of the trade and

the convenience in outsourcing are the two major drivers that have kept shipmanagers in the game for decades,” says Vinay Gupta, managing director of Union Marine Management Services (UMMS). “Both the factors today are more relevant than ever before and therefore it is only natural for this business to flourish,” he asserts.

“Increased regulatory demands, zero tolerance for sub-standard shipmanagement by cargo majors and a shrinking crew pool are some of the key drivers of increased demand for shipmanagement services globally,” says Harry Banga, chairman and CEO of the Caravel Group, parent of Fleet Management.

Marlon Rono, president and CEO of Philippines-based Magsaysay People

Resources Corporation, says that the business of shipowning is getting harder as requirements and expertise are constantly evolving, however while this ought to be great news for all managers, Rono says the only managers set to profit are those with suitable scale.

Alex Albertini, who runs Monacobased shipowner Marfin Management, agrees, telling Splash: “With critical mass and scale managers can provide a good profitable service, and with the increase in regulation prove their relevance.”

The current business model is sustainable, argues Philip Fullerton, managing director of Northern Marine Group, as long as the shipowner / shipmanager relationship is allowed to mature, and the output is seen as collaborative whereby the shipowner

How managers have conducted their businesses for decades is coming under pressure. Splash explains why

The industry will move to a more results-oriented pricing

acknowledges the added value a good shipmanager can supplement their business.

“Shipmanagement should not be viewed by shipowners as being commoditised as there is much more to differentiate shipmanagers than simply price alone,” cautions Fullerton.

Qualitative approach

From a quantitive perspective, shipmanagement continues to grow in line with the expansion of the merchant fleet, but, according to the boss of Synergy Marine Group, the real growth going forward will be qualitative.

“As the complexity of both the regulations and the ships themselves increases, so the shift away from feebased outsourcing morphs into more substantial win-win relationships,” says Rajesh Unni, who founded Synergy in

Shipowners don’t want to simply offload their shipping needs to a thirdparty manager, Unni claims. The best now seek out long-term constructive and proactive relationships with technical partners who can help them achieve their strategic goals.

Increasingly, Unni says managers are selected and remunerated based on the value they create for the owner, with that value transparently benchmarked via contracted key performance indicators.

Whether the challenge is operational or commercial, whether it’s about digitising or decarbonising, the leading owners want a “thought partner” willing and able to help them meet their goals, Unni says.

Ripping up the old parameters for how we judged shipmanagers evolving, Unni claims: “The real growth for shipmanagers is not about vessel numbers or revenue, it’s about creating value for owners.”

And this, he says, is achieved by helping them meet the qualitative targets of their stakeholders, and their own customers.

In-house managers in peril?

Flipping the business model question on its head, Bjørn Højgaard, CEO of AngloEastern, questions whether in-house shipmanagement is sustainable.

“The reality is that regulation, cost and technology are driving the need for scale in shipmanagement, and what the shipmanagement industry is doing is simply to allow like-minded owners to club their ships and take advantage of the scale benefits that this provides,” he says.

Mark O’Neil, president of Columbia Shipmanagement, nails it when observing: “If managers are not able to offer more for less than owners are able to offer, and more for less and better, then the model is unsustainable.”

The standard shipmanagement contract needs to be torn up

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Finn Amund Norbye, group CEO of OSM Maritime Group, says that while shipmanagement as a business is growing, organic growth is “quite limited” hence why the significant growth at OSM has been through the take over of shipping companies’ own shipmanagement organisations.

Mindset change

David Borcoski, CEO of ASP Ships, concedes that a mindset change is needed.

“Margins have certainly reduced markedly in the last 20 years, so we think that the industry will move to a more results-oriented pricing that rewards improved operating efficiency,” Borcoski says.

Tanuj Balani, a director at marine compliance firm Stag Marine, is one

of many respondents who sees plenty of mergers and acquisitions coming, a recurrent theme throughout this magazine.

Another important trend he sees is managers seeking out cheaper climes to base parts of their business.

Shipmanagement veteran Manish Singh, previously CEO of Ocean Technologies Group and prior to that with V.Group, reckons that the old mindset whereby anyone with a Document of Compliance (DOC) is by default a shipmanager is no longer sustainable.

“We will see a handful of blue-chip managers break ranks in the next few years and disrupt what shipmanagement is as an outsourced service proposition. The standard shipmanagement contract needs to be torn up and re-written in the current context,” Singh says, arguing

that while barriers to entry remain low, barriers to success have become a great deal higher over the past decade.

Singh is predicting that the shipmanagement total addressable market will grow at least by a high single digit compound annual growth rate with as much as a third of the global merchant fleet outsourced by 2030.

“Under pressure by end customers, stakeholder demand for demonstrable ESG adoption will make many also rans unviable in a few years,” Singh predicts.

“The current model of managing assets is certainly transitioning,” concedes Arvind Mohan, the managing director of Viridian Maritime. “It still remains sustainable, however in a short span of time, this will need to change,” he says, stressing that managers today need to have an “ever evolving mindset”.

Shipmanagement should not be viewed by shipowners as being commoditised

When fees fail to tally with inflation

Shipmanagement margins are being buffeted by global inflationary pressures. Is there a remedy?

As with any consumer or business, shipmanagers have had to fight soaring inflation issues over the past year. Their problem? The hefty competition keeps a lid on how much they can raise their fees. This has led some to question the very business model of thirdparty managers.

The International Monetary Fund predicts global inflation to cool to 6.6% in 2023 and 4.3%in 2024, which is still above pre-pandemic levels of about 3.5%, but significantly lower than the 8.8% observed in 2022. All these numbers are a far cry from what most managers are able to negotiate in terms of annual fee increases.

“The shipmanagement sector remains highly competitive,” concedes Harry Banga, chairman and CEO of the Caravel

Group, parent of Hong Kong’s Fleet Management. “Although annual fees are edging up, these are doing so at a slower pace than global inflationary levels,” he says.

Ian Beveridge, CEO of Bernhard Schulte Shipmanagement (BSM), admits shipmanagement fees remain a “challenge”.

“Market levels often don’t reflect required investments of managers in areas like digitalisation, expert teams and crew training infrastructure,” Beveridge tells Splash.

BSM is observing minor fee increases, but these are not in line with the inflationdriven cost increases the company is having to absorb.

“Profit in shipmanagement activities will continue to decline or

remain stagnant at best,” says a none too optimistic Vinod Sehgal, CEO and managing director of SeaQuest Shipmanagement.

Scale, scale, scale

Danilo Fumarola, CEO and chairman of Monaco-based shipowner Gestion Maritime, says that increasingly the thirdparty model is based on scale, and profits are derived from the fleet size versus fixed costs ratio. Fixed costs include employees, training, welfare, offices, networks, partnerships, marketing, and finally technology and data management systems.

“With fixed costs rising quicker than annual fees, marginal profitability is heading south,” Fumarola says, suggesting this inevitably is leading to a scramble for greater consolidation with scale the overriding key to remain in the black.

Wrong focus

There’s a risk though for managers to be drawn into this scale-above-all-else argument, warns Carl Schou, the president of Wilhelmsen Shipmanagement. The current shipmanagement model is not sustainable, he says.

“Shipmanagement has become a volume game. Everybody is talking about economies of scale to make a profit –very few are really focusing on the other value creating dimensions,” Schou says.

The current model, he says, is focused on volume instead of focusing on how shipmanagers can play a role in collaborating with owners and industry towards safer and greener operations.

“As long as the industry is only focusing on size we are more or less trapped in our current mould,” Schou says, adding: “Looking at the challenges

ahead, we must think and operate differently.”

A shipmanager is paid a fee for managing the vessel, which has remained “more or less stagnant” in the past decade, according to Schou.

If this fee becomes unsustainable, Schou warns it becomes difficult for shipmanagers to do much beyond the minimum in order to be profitable to survive.

“It has become a catch-22 situation,” Schou explains, “as shipmanagers are not able to create value for owners, hence it is difficult to increase the fees.”

Good fit partnerships

Much of the problem lies in old school mindsets, argues Bjørn Højgaard, CEO of Hong Kong shipmanagement giant AngloEastern.

Fees follow fulfilment

“Too many owners think shipmanagement is all the same, and too many shipmanagers think they can serve any shipowner. Both are wrong,” Højgaard reckons.

Getting a good fit is important on both sides of the partnership, he says.

“When those principles are aligned, however, fees follow fulfilment, as it’s the provision of services aligned with the resources put in that create good solutions,” the Anglo-Eastern boss maintains.

Why managers must lead the digitalisation debate

The rise of digitalisation ought to be a boon for managers, according to Splash’s in-depth survey.

Speaking with Manish Singh, a long standing proponent for consolidation and change within the shipmanagement sector and now leading a boutique maritime investment and M&A advisory firm, he argues that greater digitalisation brings more transparency and data, thus unlocking greater insights to improve fleet performance, while also, importantly, giving owners greater confidence to outsource.

The number of shipping tech companies has increased rapidly in the last few years. It’s vital for managers to keep up with the new digital tools available to them as the same tools are also available to owners, says Kristofer

Karlsen, business development manager at Norbulk Shipping.

“Technology can be incredibly democratising in that sense,” he says.

All too often owners want their own tools and push back against a standard from the managers, points out Frank Coles, ex-head of Wallem Group, and now a maritime consultant.

“Only the larger managers have been able to prevail in pushing a standard,” Coles says.

Quite so, agrees Bjørn Højgaard, CEO of the largest manager in the world, Anglo-Eastern.

“Joining a well-run and forwardinvesting shipmanagement club,” he says, “comes with the automatic benefit of a high-end digital solution – and one where there is space for individual

customisation.”

Splash seeks the opinions of top names in the industry on tech and staff Technology can be incredibly democratising

Rajesh Unni, founder of CEO of Synergy Marine Group, says that by and large owners understand that to generate the savings, efficiencies and emissions cuts that digitalisation and smart shipping facilitate, they need to have access to vast pools of data.

“But that is only one element of the challenge because the data is obsolete unless it can be processed and turned into actionable solutions,” Unni says.

Owners also increasingly understand that digitalisation is not a plug and play, buy it and deploy it, type of challenge, he says.

Many managers talk up the reassuring importance of the transparency that digitalisation brings.

“The kitchen now is open to the

client and there is very little left to the imagination on how a particular manager is doing or the value being added or destroyed,” says Vinay Gupta, managing director of Singapore-based Union Marine Management Services (UMMS).

“Increasing digitalisation assists with visibility of what is happening on a daily basis, demonstrates achievement to shipowners’ requirements and complies with the various reporting requirements that have been mandated by various stakeholders,” says Philip Fullerton, managing director of Northern Marine Group.

Digital savvy staff

In terms of how managers can ensure their staff are more digital savvy, Singh argues that few companies are investing substantially in bespoke learning. Singh, whose career includes senior management positions at V. Group and Ocean Technologies Group, says he expects accreditation programmes to become the norm, wherein companies will invest in the onboarding of their personnel and upskilling them with various skills in

digital, data, and regulatory compliance.

“Shipping is moving away from a jobbased economy to a skills-based economy. Nimble, tech-savvy, multi-disciplinary individuals and teams are now critical to success,” argues Unni from Synergy.

Focusing specifically on seafarers, Henrik Jensen, the founder of crew supplier Danica, tells Splash: “As systems become more advanced, with a greater degree of automation of machinery and vessel control systems – maybe even autonomous – then the crews’ situation awareness skills become a much more important factor.”

Arvind Mohan, managing director at Viridian Maritime, says shipping could learn a bit from other industries to create a culture of change within an organisation, promoting people not only based on experience or a hierarchical view, but also for being technologically advanced, performance driven and based on delivery.

Culture of innovation

Hybrid is the order of the day, suggests Gupta from UMMS.

“People and process go hand in hand and it is therefore essential the technology should be made keeping people in view and people should be hired who are ready to buy into the processes,” Gupta says.

This buy-in can only happen, he reckons, when digitalisation helps people achieve results in a faster and more reliable manner. If staff are involved in the development process or the initial implementation process, that gives the technology a greater chance of success.

Overall, fostering a culture of innovation – such as running small-scale pilots to enable staff to see the latest technology products and involving them to gain feedback early – supports higher levels of trial and adoption, advises Angad Banga, chief operating officer at the Caravel Group, the parent of Fleet Management.

David Svensson, chief technology officer at online maritime training firm Seably, advises managers to promote cross-functional collaboration between different teams and departments, enabling staff to learn from one another and share digital best practices. He also urges managers to create a culture that encourages experimentation and innovation among their staff.

Only the larger managers have been able to prevail in pushing a standard

‘Get out of their way!’

Having digital savvy staff is not the problem, argues John-Kaare Aune, CEO of Wallem Group. Demographics mean that a majority of staff - both at sea and ashore - have either been exposed to digital technology from a young age or grew up with digital technology around them, he says. The focus ought to be, Aune says, to equip staff with the knowledge to make best use of the digital technology available for doing their jobs.

Quite so, agrees Carl Martin Faannessen, CEO of Manila-based crewing specialist Noatun Maritime.

“Get out of their way,” Faannessen advises in typically blunt fashion. “I think it is fair to say that all people below the age of 40 are more digitally savvy than most superintendents and senior managers.”

All people below the age of 40 are more digitally savvy than most superintendents and senior managers

What do clients look for when choosing a manager?

Of course price is important, but other factors are in play

In the previous edition of our Shipmanagement Market Report we were rightly criticised for not featuring the views of clients, the shipowners, enough. Any business needs to be in tune with what their customers are after, and in this issue we endeavour to address this in greater depth. So just what it is that owners seek when opting for a manager?

Finn Amund Norbye, group CEO of OSM Maritime Group, reckons he knows as he surveyed his customers.

“Reliability and technical quality, focus and responsiveness and transparency were all important, and also our track record and segment expertise,” he reveals,

adding: “Going forward, our experience in operating environmentally friendly vessels will be important.”

Price, price, price

Able to speak freely as a consultant these days, having given up his role as CEO at Wallem Group a couple of years ago, Frank Coles says owners focus on reputation, experience with the type of ship, nationality of crews used, office locations and then “price, price, price”.

Coles advises owners to carry out a full audit of the training facilities and detailed evaluations of the reporting tools and

reports provided.

Alex Albertini, who heads up Monacobased shipowner Marfin Management, is able to crystallise into four words what he looks out for when selecting a manager: service, knowledge, reactivity and efficiency.

Not beating around the bush in answering is John Michael Radziwill, the CEO of dry bulk owner GoodBulk.

“The answer is simple – make money for your clients, keep the cost structure lean and be transparent,” Radziwill tells Splash.

For a technical manager, owners expect the manager to maintain the vessel at

Make money for your clients, keep the cost structure lean and be transparent

impeccable standards, keep abreast of rules and regulations coming into force and make sure they have highly skilled crew and a reasonable cost structure, Radziwill says.

Danilo Fumarola, CEO of shipowner Gestion Maritime, says owners will always look for the best quality/cost ratio services. Moreover, he points out owners will look at it only when they cannot do better on their own and remain cost effective.

That’s a point picked up by Mark O’Neil, head of shipmanager major Columbia Management, who points out: “If managers are not able to offer more for less than owners are able to offer, and more for less and better, then the model is unsustainable.”

Looking ahead, Fumarola can see more owners opting to outsource to take advantage of the greater digital/data setups on offer by the big managers.

“More scale more data. Data will be the

name of the game,” Fumarola tells Splash.

Transparency important

Value, transparency and a good level of communication are the three most important aspects picked out by Tim Huxley, chairman of Hong Kong-based owner Mandarin Shipping.

“Shipmanagement is going to be needed more than ever,” says Huxley.

In an earlier part of his career Huxley was involved a joint venture between broker Clarksons and manager Univan.

“The days of profits being made up of undeclared commissions are hopefully long gone. Owners want better transparency,” Huxley says.

“A growing world fleet, the economies of scale an owner needs that he or she gets with a shipmanager, and the ability to grow and scale back a fleet more easily if you don’t have to keep growing and contracting your own shipmanagement

department will all drive growth,” Huxley says, adding: “It is going to be increasingly difficult for a small shipowner to deal with all the new regulatory and technical environment so outsourcing as much of this as possible is going to be vital.”

Shipmanagement is going to be needed more than ever

Towards 700 ships

Anglo-Eastern has cemented its place at the top of the shipmangement ranks

1. Anglo-Eastern

Cementing its place at the top of the shipmanagement podium, the fleet at Hong Kong’s Anglo-Eastern is about to surpass the 700-ship mark.

Speaking at the company’s annual conference in Mumbai this February, CEO Bjørn Højgaard said Anglo-Eastern manages more than 2.5% of the global merchant fleet’s 2bn tonne carrying capacity. Last year Anglo-Eastern’s managed fleet carried about 450m tonnes of cargo, approximately the same total as passed through all British ports. The company employs over 30,000 seafarers and has a port call every 20 minutes, on average, with a seafarer signed on or off every 10 minutes. In Mumbai, the company recently opened a brand new flagship training centre.

Speaking to delegates, a mix of owners and employees, Højgaard admitted: “The shipmanagement industry is sometimes looked at as the lowest denominator in the operation of ships. And I will be the first to admit that our industry also contains companies that want to be everything to everybody, and where cost is the only competitive differentiator. Or where gimmicky gadgets and snake oil displace a genuine focus on building for the long haul, with good, competent people at the core of how we operate.”

The Anglo-Eastern boss then stressed that his was a very different company.

“We are owned by a group of private shareholders, who have a passion for well-run ships, well-maintained, safe assets, in partnership with a club of blue-chip shipowners who share the commitment to a higher standard,” Højgaard said.

While shipmanagement is undergoing considerable consolidation, with private equity coming to the fore, Højgaard insisted Anglo-Eastern would remain a private concern.

“The vision for Anglo-Eastern is to remain a private company,” Højgaard said, adding: “In a world where there’s

a lot of private equity investment, hot money, and lofty goals about expanding margins and focus on shareholder value, our commitment as a company is to continue the principle of customers first. That means putting people over profits, and ensuring that everyone shares in the progress we create together over time.”

In June last year Anglo-Eastern diversified into a new sector, buying Miami-based Cruise Management International (CMI).

Anglo-Eastern, founded in 1974, has grown through both organic growth and sizeable acquisitions over the years, including the 2001 merger with Denholm Ship Management and the 2015 merger with Univan Group.

Recently the company disclosed it made the biggest on the record investment in Starlink at sea to date. The manager has earmarked at least 200 installations of Elon Musk’s new satellite communication system across its fleet by year-end.

The vision for Anglo-Eastern is to remain a private company

In tune with owner needs

Staff at Fleet Management have solutions on hand for pressing concerns posed by shipowners

2. Fleet Management

In the space of less than a decade the size of the assets controlled at Hong Kong’s Fleet Management has more than doubled, placing it comfortably in silver on the shipmanagers podium. This has been achieved not by mergers and acquisitions, but by what Kishore Rajvanshy, managing director since the company was founded 29 years ago, describes as a “laser focus”, attune to the needs of clients.

What owners want, Rajvanshy says, are first and foremost low-cost, highquality services yielding more returns on investment. Secondly, owners tend to seek an alignment in the crew, ship and ESG goals. Another consideration is local proximity to services, having managers in their backyard, something Fleet has done well by establishing a global network of full service offices at key shipping hubs.

“Cost control, zero downtime and sustained quality against a backdrop of freight and supply chain upheavals have always been the prominent demands of our owners,” Rajvanshy tells Splash. In recent times, there has also been increased demand for digitalisation superiority, he adds.

“To respond to our clients’ requirements, we will continue our laser focus on our core service of full technical management and take every measure to keep our finger on the pulse of how the regulatory landscape is evolving,” Rajvanshy says, stressing the importance for his staff to understand the challenges and opportunities in today’s increasingly complex shipping environment.

On the decarbonisation front, Fleet is building upon its own technological and alternative fuel expertise, and making every effort to collaborate with owners and partners to find sustainable solutions that are viable both from an environmental and commercial point of view.

The company is also continuing to strengthen its digital and IT platforms to deliver solutions that will empower its people and owners to make what

Rajvanshy describes as the most informed decisions, while improving operational efficiency.

In June last year Fleet launched a new integrated ship management unit –MaruFleet Management– in Singapore in collaboration with MMSL, a Singapore

subsidiary of Japan’s Marubeni Corporation.

Fleet is part of the Caravel Group controlled by Harry Banga, who took the management company with him when he quit Noble Group to form his own business a decade ago.

We must keep our finger on the pulse of how the regulatory landscape is evolving

V. for all

V. Group has had a rebrand

3. V. Group

Late February saw a rebrand of one of the biggest names in shipmanagement. V. in a chunky, green format is the new brand, which brings all of V. Group’s diverse businesses together.

The company is widely believed to be up for sale again, although top management have declined to comment on the speculation when contacted by Splash.

René Kofod-Olsen, the company’s CEO, spoke at last October’s Maritime CEO Forum held at the Monaco Yacht Club, during which he urged shipping to overhaul its mindset when it comes to outsourcing, something that could be achieved via proper auditing.

Kofod-Olsen also spent time

discussing crew welfare, telling delegates: “The brain drain in certain nationalities in not selecting a career at sea should keep us all awake at night.”

This is being made all the more acute, he said, by the great fuel switch the industry is embarking upon.

“What is coming are a lot of ships propelled in a totally different fashion. We are not ready for that. If we don’t invest in people, and if they don’t have line of sight of where they can go they might not choose a career at sea,” KofodOlsen said, adding that shipping had also failed to get women to work onboard.

“How do we figure out to get a more inclusive crew?” Kofod-Olsen mused. “We have not been good enough to ensure as an industry that life onboard is safe.”

Private equity makes its play

4. Synergy

The big news at Rajesh Unni-led Synergy over the past year has been the mega investment by New York-based private equity firm Searchlight Capital Partners, which spent hundreds of millions of dollars to take a minority stake in the Singapore manager last October.

Commenting on the deal, Unni, who founded Synergy 17 years ago, said: “We have always believed in and implemented a strong culture of customer centricity in Synergy. Now, to be able to further continue creating incremental value for our clients, we need to look at newer operating models focused on a value driven partnership as opposed to the present vendor mindset in the shipmanagement industry.”

Unni said this could be driven by digitalisation especially considering the increased regulatory complexity and ever growing ESG considerations.

Other notable recent developments at Synergy include the decision to partner with US-based battery developer Alsym Energy and Japanese owner Nissen Kaiun to produce non-flammable rechargeable batteries for ships and the news this March that Synergy is rolling out new tailor-made personal protective equipment (PPE) to its growing number of female seafarers.

We need to look at newer operating models

‘The challenges are not getting any less’

Ian Beveridge, the CEO of Bernhard Schulte Shipmanagement, on the complex issues facing owners and managers

5. Bernhard Schulte

For Ian Beveridge, the CEO of Bernhard Schulte Shipmanagement (BSM), managers need to be more of a consultant and solution provider for clients than ever before.

“The challenges are not getting any less: the digital transformation, the shortage of skilled personnel, and the increasing requirements in decarbonisation,” Beveridge tells Splash, citing the forthcoming integration of shipping into the European Union’s emissions trading scheme (ETS) as a good example, something that Beveridge

says as a shipmanager will immensely expand his responsibilities and tasks.

In October last year BSM celebrated 50 years of third-party shipmanagement with a lavish party in Limassol.

At the event, with some 600 guests in attendance, Beveridge laid out the long-term thinking that goes with being a global shipmanager.

“As a company, we have to decide today on large investments, the success of which we can often only see after a decade or even later. That’s why we need stability and a clear course, but also the flexibility to hold our own in a very volatile market,” Beveridge said.

The latest merger

create a shipmanagement powerhouse called OSM Thome.

The two parties, both of Norwegian heritage, were negotiating the merger for many months, the latest in a stream of consolidation moves seen within the shipmanagement sector.

The deal catapults the merged entity high up the ranks in full technical shipmanagement and makes it also a dominant name when it comes to crew management.

OSM Thome will be based in Arendal, Norway, with technical management hubs maintained in Singapore and Europe.

6. OSM/Thome

In January this year OSM Maritime Group and Thome Group agreed to a long-telegraphed merger which will

Thome turns 60 this year. It is the first independent shipmanager to set up shop in Singapore, run by Norwegians Olav Eek Thorstensen and his son Claes Eek, with Olav Nortun serving as CEO.

Established in 1989, OSM Maritime

is the largest shipmanager in Norway, backed by private equity in the form of Oaktree. Its last sizeable acquisition was three years ago, when it bought SeaTeam Management from Frontline and Golden Ocean.

OSM Maritime’s CEO Finn Amund Norbye (pictured) is taking the role of CEO for the merged OSM Thome, while Nortun has taken up the position of COO for the consolidated shipmanagement activities. OSM founder Bjørn Tore Larsen becomes chairman of the new board with Claes Eek Thorstensen serving as vice chairman.

“Size and scale is increasingly important for shipmanagement companies,” Norbye told Splash as the merger news emerged, adding: “Further consolidation is expected and we will play a role.”

Further consolidation is expected and we will play a role

We need the flexibility to hold our own in a very volatile market

Partnerships across the world

Columbia Shipmanagement is forging new pacts at key hubs

7. Columbia

At a time where many managers are having frank merger discussions with their peers one fell through.

In October last year two Cypriot managers - Columbia Shipmanagement and Marlow Navigation - ditched their nuptials after a lengthy five-year engagement.

Despite this merger setback, Columbia has been busy expanding its global footprint.

In June last year the company signed an agreement with Aurus Ship Management to explore shipmanagement opportunities in the Indian market.

Aurus has now been renamed Columbia Aurus Ship Management (CASM), offering recruitment of crew, purchasing, payroll management and technical services.

Columbia has made similar moves around the world, joining forces with Monaco-based Sea World Management a year ago and with Saudi Arabia’s Spectrum in 2021.

Another area of expansion has been in finance. In May last year subsidiary Columbia Finance Solutions took a stake in Ahorn Capital, a Hamburgbased platform for institutional and professional investors.

In December, Mark O’Neil, CEO of Columbia, was given another term as president of InterManager, the association for shipmanagers.

On his reelection, O’Neil commented: “The maritime world is evolving quickly in this post-pandemic era and shipmanagers need to speak out loudly and in unison on international issues to ensure ship management concerns and crew welfare are properly taken into account.”

Competence building

8. Wilhelmsen

At the Maritime CEO Forum held in Singapore last autumn Carl Schou, the president and CEO of Wilhelmsen Ship Management (WSM), told delegates that the business model of shipmanagement has been the same for nearly half a century, but will face some kind of disruption soon.

“I think there will be other businesses that will try and get a large piece of the pie,” Schou said.

Schou said economies of scale were paramount in his business in order to to build competencies to face the growing regulations coming shipping’s way, with smaller managers facing a challenge to build up this competence.

With this in mind, earlier this year WSM and shipbroker Affinity Shipping signed a memorandum of understanding to jointly establish an independent company that will provide comprehensive

compliance services related to the European Union’s emission trading system.

The service integrates technical shipmanagement and carbon allowance procurement to support shipowners, managers, and operators in the new era of emissions compliance.

WSM brings technical management expertise to the table, including verification of emissions reports and compliance with the existing EU Monitoring, Reporting and Verification (MRV) framework, while Affinity brings experience in the sale and purchase of carbon products, EU Allowances (EUA) registry management, analysis of ETS exposure, and regulated advice on emissions markets.

Other businesses will try and get a large piece of the pie

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Upcoming maritime tech breakthroughs

Splash identifies the potential big advances readers can expect in the coming months

Setting the scene in our tech survey, Osher Perry, CEO and co-founder of artificial intelligence (AI) firm ShipIn Systems, tells Splash: “Technology trends transforming the maritime industry come in various forms on the back of increased regulation and stakeholder pressure.”

To this end, it is not surprising that many respondents chose to focus on shipping’s pressing carbon footprint issue as the most important tech topic in the coming 12 months.

Green ships

Carl Schou , president of Wilhelmsen Ship Managment, thinks 2023 will be the year where the demand and supply equation will solve shipping’s greatest riddle – the choice of fuel for the next generation of ships.

“We are seeing an increase in traction for methanol and in my opinion this will be the year that methanol is embraced by the wider industry which includes shipowners, suppliers like engine-makers and tank and infrastructure in the main bunkering ports,” Schou says.

Analysis from class society DNV shows methanol was the second most popular alternative fuel choice for newbuild orders last year after LNG, with 35 ships ordered, bringing the total count to 82 ships.

In addition to a growing clamour for methanol-fuelled ships, Esa Jokioinen, director of sales and marketing at ship designer Deltamarin, expects that wind-assisted propulsion will gain more traction in 2023 both for retrofits and newbuilds.

Maritime has become a hot area for

both entrepreneurs and investors.

“With increasing fuel prices and carbon taxation, the payback times are expected to keep declining,” he says.

Aleksander Askeland, chief sales officer at Yara Marine Technologies, also believes 2023 will herald market recognition of the importance of wind-assisted propulsion technology’s flexibility and versatility for shipping’s future.

He has a few reasons for this. Shipping’s initial hesitation to incorporate wind propulsion technology has waned in the last few years, he says, as fuel availability and prices pose a growing challenge. At the same time, discussions of future fuels indicate that while progress is being made, mainstream uptake is unlikely to occur before the incoming 2030 deadline for emissions

targets. Additionally, Askeland says shipping needs to consider the potential costs associated with future fuels when it comes to infrastructure and retrofitting.

“These factors,” Askeland says, “together with a growing need to consistently reduce emissions wherever possible, suggest that wind-assisted propulsion technologies can and should take centre stage this year.”

Ulrik Dan Frørup, chief commercial director at Bureau Veritas Marine & Offshore, believes shipping already has a great deal of technology available to address the principal challenges it faces of decarbonisation and the need for less carbon intensive ships.

“What we need right now,” he says, “is not only a greater adoption of existing digital technology and energy efficiency devices and systems in ship design, in retrofitting and in onboard operations –but also a radical change in how we work together as an industry to share and make sense of data.”

We need a radical change in how we work together as an industry to share and make sense of data.

Like many other respondents Frørup reckons 2023 is shaping up to be big for wind propulsion systems and a year when projects such as green corridors will show how technology and collaboration can play their part in decarbonising specific routes and bringing together industry pioneers in new multiparty contractual relationships for mutual benefit.

“Where we need breakthroughs is in incentives, in industrial scale projects and in capturing and using data while knitting together the interests of designers, owners, banks and insurers to drive technology adoption. If we can drive that system change, then new technologies will, naturally, and more easily, emerge in a virtuous circle,” says the class society executive.

Cheaper comms

Green shipping was only fractionally ahead of the envisaged communications revolution in this year’s Splash’s maritime tech survey.

Tore Morten Olsen, president, maritime for Marlink, is by no means alone in reckoning the biggest change to hit shipping this year tech-wise will come

from the integration of low Earth orbit (LEO) satellite services and their first applications for maritime users.

“We are currently testing both Starlink (pictured) and OneWeb so full commercial availability will not happen immediately, but the levels of interest we are fielding from customers suggest it can’t come fast enough,” Olsen reveals.

Bjørn Højgaard, CEO of Anglo-Eastern, an early adopter of Starlink, comments: “The addition of Starlink’s LEO network –and OneWeb and Project Kuiper thereafter – will change life onboard in a way that we have never experienced in the history of shipping. Soon seafarers will be always-on, enjoying the same connectivity that we ashore have been used to. The ship will become a seamless extension of the office, where members of the team just happen to be closer to the machinery.”

Incremental improvements

“Looking into the horizon, I think there will be no such thing as a single technical breakthrough in 2023, but a combined effect of many incremental improvements,” predicts Tor Svanes, the CEO of NAVTOR, a Norwegian vessel performance software firm. “Wellintegrated and optimised solutions will continue leading the maritime technology industry developments this year. Those integrated solutions will increasingly gain terrain against standalone products,” he predicts, arguing that maintaining several standalone systems is too demanding in operations and service compared to quickly evolving integrated systems.

Thomas Zanzinger, CEO of Ocean Technologies Group, reckons 2023 might be the year where maritime’s siloed nature finally gets solved.

“The big breakthroughs I see coming through this year are in bringing a hitherto disparate technology landscape together. By integrating applications and overlaying multiple data sets we will start to identify opportunities for incremental gains across operations,” Zanzinger says.

Linked to this, Olga Kadeshnikova, customer success leader at data provider Spire Maritime, is one of many people polled by Splash who argues that consolidation in the maritime tech industry in the form of more acquisitions will be a very important trend to keep an

eye on in 2023.

Michael O’Brien, vice president at StormGeo, a Norwegian weather forecaster, believes the technology surrounding AI will begin to truly shape the direction of the industry this year, helping shipping to understand trends, data, and utilisation in a way never seen before.

Emma Mark, chief operating officer at CargoMate, a digital tool for crews, suggests there is a huge opportunity for the industry to refocus its digital journey by employing the knowledge and valuable viewpoints of those that are at the very heart of it: the seafarers.

“Seafarer-reported data could potentially be the key that unlocks the efficiencies the industry is so desperately seeking,” Mark argues. “Vessels and their shore-based teams are at the mercy of ports and terminals whilst undertaking cargo operations, with little to no data flowing to enable a fully optimised port call.”

Supply chain resilience

“In 2023 the phrase of the year will be supply chain resilience,” predicts David Levy from New York-based OrbitMI, a vessel performance software company.

“Maritime has become a hot area for both entrepreneurs and investors, not to mention increasing its profile in the public’s mind. As such, we’ll continue to see significant activity in the maritime tech space in terms of M&A, consolidation and new entries and you can expect at least one non-traditional player to make a major investment in maritime as a strategy to shore up supply chain resilience,” Levy predicts, suggesting this could be a global retailer, logistics player or transportation giant.

For unrivalled ship tech coverage

Familiar disappointments

Shipping is used to waiting for big tech breakthroughs

Shipping is regularly lambasted for its lack of innovative spirit. The disparity between stated ambition and actual developments can be enormous.

Splash columnist Kris Kosmala argues that maritime is full of technology improvements of which a few could be called innovations, but he says he would be hard pressed to name a true breakthrough in 2022.

Can 2023 and the entry into force of the International Maritime Organization’s Carbon Intensity Indicator (CII) and the Energy Efficiency Existing Ship Index (EEXI ) bring a stunning change?

Voyage optimisation solutions came with “big promises” but have thus far proved less than Earth shattering, Kosmala reckons.

Kent Lee, CEO of navigation specialist Voyager Worldwide, agrees with Kosmala,

admitting there is a “long way to go” until voyages can be truly optimised.

“As we now know,” Kosmala says, “behind every marketing pitch of an artificial intelligence (AI) meteorologist the startups also employed solid human expertise.”

Likewise, there’s been plenty of action in the vessel performance optimisation space over the past 12 months, but, Kosmala argues shipping’s inherent unwillingness to share data has stymied progress.

“Part of the problem with maritime technology breakthroughs is also the fact that many startups are too small,” Kosmala says. “They either lack their own scale to research and build solutions or lack the scale of their client base. The obvious answer is for the startups to merge to achieve that scale.”

Frank Coles, a Florida-based shipping

consultant, and former head of brands such as Wallem and Inmarsat Maritime, warns readers there is unlikely to be any great breakthrough in 2023 from a technology point of view.

“We have an industry largely full of small technology companies and startups,” Coles says, echoing Kosmala’s comments. “Like the sectors of the industry it creates a fragmented approach to the solutions required in the industry.”

Regulatory hurdles

Many polled for Splash’s tech survey cite the likely disappointments emanating from the regulatory field this year.

“At the end of 2022 we have already seen quite strong pushback from major industry players when it comes to the efficiency of the International Maritime Organization’s new CII. It is quite

apparent that this is a regulation which has probably been put together with the best of intentions but has failed to hit the mark on the overall objective,” says Carl Schou, president of Wilhelmsen Ship Management, joining a growing chorus of

“The CII scheme has flaws, and technology investments that are made simply to reach the minimum regulatory requirements will disappoint both the industry and our environment,” argues Michael O’Brien, vice president at StormGeo, a Norwegian weather

CII might seem to be a good approach to reducing the shipping industry’s emission of global warming gases, but as Thomas Pitschel, a project manager at KBB Turbochargers points out, the truth lies in between, as long as the production of alternative fuels is not carbon neutral or green, the effect of greenhouse gas reduction is limited.

“The biggest disappointments this year will be lack of common government incentives and policies to drive new clean fuel supplies and so assist owners to invest confidently in new tonnage with common clean fuel propulsion technology,” says Andrew Airey, managing director of Bangkok-based shipmanager Highland Maritime.

Jussi Puranen, head of product line at Yaskawa Environmental Energy / The Switch, a Finnish green tech firm, says shipping still has too many future fuel options to choose from, making it impossible for proper global infrastructure development to get underway this year. Furthermore, like others polled, he says implementing new rules and regulations will take time, slowing down investments that would help the industry’s green transition.

The fact that there still are misaligned emissions reduction ambitions and measures across IMO, and locally by the European Union, is causing the focus to be on discussing decarbonisation targets instead of focusing on solving the issues, notes Esa Henttinen, executive vice president at NAPA Safety Solutions.

“This might not be a tech

disappointment per se – but it sets the context in which tech develops,” he says.

Alf Kåre Ådnanes, a regional manager at ABB Marine & Ports, admits his frustration at the likely lack of speed and delayed deployment of fuel cell technology and hydrogen as a marine fuel.

The frustration for many surveyed is the failure to harness existing technology to get the industry to its green goals.

“The biggest tech disappointment for 2023 lies with the recognition, or lack thereof, that what the industry needs to reach sustainability goals within the maritime sector, is largely under our noses, and greatly underutilised,” says Paul Sells, president and CEO of software firm ABS Wavesight.

Out on a limb

With more and more column inches spent writing about the advent of autonomous shipping, Splash readers have been told not to hold their breath waiting for any big breakthroughs this year.

“While there has been a lot of interest in developing autonomous ships that can operate without a human crew, it is unlikely that such vessels will see more progress in 2023, as the focus shifts to be on remote sensors and system integrations,” predicts Mike Coomber, executive chairman at Rivertrace, a British bilge monitoring firm.

Similarly, Grant Ingram, CEO EMEA at Innovez One, a port management information system, tells Splash: “We will also see a lot of systems claiming to offer AI and machine learning, without actually deploying the technology.”

Disintegrated

Many people polled believe shipping –and the systems the industry uses – will become far more integrated this year. Not everyone is convinced it will happen so quickly, however; the required change in mindset being a very big ask.

“The integrated as a part of the global responsibility chains takes investments and willingness to collaborate within the

industry. The industry is cost savings driven by nature – I am afraid that takes time to change,” says Morten Lind-Olsen, who heads up Norwegian software firm Dualog.

“We hear a lot about the need for collaboration but the truth is that without the right model and partnerships, the kind of technology innovation we need will struggle to gain a foothold,” says James Collett, managing director at navigation specialist Sperry Marine.

Data disparity

Additional failures will come this year where shipowners or technology providers attempt to roll out digital solutions that lack high quality data, proper data management standards or a clear understanding of the problem that they are attempting to solve, warns Osher Perry, CEO and co-founder of artificial intelligence company ShipIn Systems.

Data availability and data quality will prove to be sizeable stumbling blocks for shipping this year, according to Søren Meyer, the CEO of ZeroNorth, a well known optimisation brand.

“As the use of technology platforms increases, the new level of transparency will reveal the lack of standardised, quality data that each organisation and our industry currently holds,” Meyer says.“Disappointment will emerge as the industry comes to see that it doesn’t have the right data it needs for different use cases, but also that the data that it does have has room for improvement in quantity and quality. Owners and operators will see that they are missing the key information they need to report on emissions, or that they are not getting enough of the right data to fully optimise their vessels.”

Likewise, in the whole data debate sensor data utilisation may very well become a major maritime breakthrough in 2023, but it may also turn out to be a disappointment unless the data is properly utilised, warns StormGeo’s O’Brien.

“Data acquisition for the sake of harnessing data is pointless,” he says. “The role of sensors must be clearly aligned with the ability to make use of and act on the data they generate. This means leveraging data not only for predictive but also prescriptive purposes.”

There’s a fragmented approach to the solutions required in the industry

‘Good ships, good times’

How to get owners and managers to agree on certain decent working conditions at sea

Steven Jones, founder of the Seafarers Happiness Index, reckons seafarers fall into three basic camps these days.

There are those lucky enough to work for good companies, with careers mapped out, mentors, support, good wages and conditions which make them feel good about themselves, what they do and how they do it. They can call home, message freely, and feel connected.

Below that halcyon level – that’s where things get trickier. At the bottom levels of the industry, in the dark corners, there’s thousands of crew in danger.

Above them is an “odd” part of the industry, according to Jones.

“These are the owners that on a good day can be pleasant enough, they may even seem to care,” Jones explains. “They are the bipolar employers – who would be happy on one freight rate to buy some gym equipment or a new TV, but then on other days work their people too hard, and who pay only cursory lip service to standards. This is the biggest part of the industry, sadly.”

Now while managers talk a good game in terms of crew training and welfare, how can this become independent so managers are not held hostage by owners who aren’t willing to invest in this area? It is an issue that has become increasingly important in today’s ESG era.

Budget mindset rethink

“Managers are their worst enemies as they compete to drive budgets and fees to the lowest common denominator. That needs to change which requires both owners and managers to change their drivers,” says Pankaj Khanna, who heads up commercial manager Heidmar.

Tanuj Balani, a director at Asian marine compliance firm Stag Marine, urges for a mindset change in how owners and managers haggle over opex budget negotiations.

Crew training, welfare and auditing, if done as per industry requirements whether in-house or using third party auditing and training companies, should cost around 1% of the annual opex budget, and we see that even with this owners and managers included are negotiating it,” Balani says, hence why accidents continue to happen and to be repeated.

Managers compete to drive budgets and fees to the lowest common denominator

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Pay and internet

Timely payment of wages and internet onboard are now the two most desired expectations of the crew, observes Vinod Sehgal, CEO and managing director of SeaQuest Shipmanagement. Every manager knows this, he says, but some owners turn a blind eye.

While the Maritime Labour Convention (MLC) was a “good step” in the right direction, Sehgal says it did not go far enough.

“This needs to be regulated by statutory bodies like IMO, ILO, etc instead of being left to individual companies,” Sehgal tells Splash.

Staff shortages

Taking good care of crew has never

been more important, argues Ian Beveridge, CEO of Bernhard Schulte Shipmanagement (BSM), at a time where shipping is grappling with an increasing shortage of skilled seafarers and shore staff.

“Everyone involved must be aware of this. This challenge can only be solved together,” Beveridge says, advising that shipmanagers must define their own standards regarding seafarer welfare, and then engage with shipowner customers to achieve these.

Kishore Rajvanshy, managing director at Fleet Management, says it all comes down to a manager’s target clientele, pointing out that in shipmanagement everything starts with the crew.

“We have seen it time and again – high performance, strong commitment and loyalty are built from a sense of being

This challenge can only be solved together

valued and respected,” Rajvanshy says.

This neatly ties in with clear data produced by British vessel inspectors Idwal over the past year - expanded upon on page 67 - which clearly shows happier ships bring an improved vessel condition, and vice versa.

“Good ships, good times,” says Jones from the Seafarers Happiness Index - now it is about transmitting that message to those footing the bills.

Optimize Your Payments

Empower Your Crew

sure, there is a huge shift

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 in to 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

‘For

ahead of us’

Anyone caught napping will be left behind in this extremely competitive industry

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 Shipmanagement.

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 is 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.

Shipmanagement will continue to move away from the transactional to the collaborative

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

Next generation manager

Splash asked the team at Thetius, a maritime innovation agency, to dig out their crystal ball and describe a day in the life of a shipmanager at the start of the next decade

April 1 2030. Today is a big day at Thetius Ship Management, after nearly five years of developing new systems and procedures, and two years of recruiting and training crew. We are taking over our first ammoniafuelled vessel. It’s the first of a fleet of 50 newbuild bulk carriers that we will be managing.

The EU 2030 Ammonia Price Guarantee has only been in force since January 1, but it’s been fantastic for us. The demand for shipmanagers capable of

working with ammonia has skyrocketed and there aren’t many of us around. For some reason, despite knowing about it for five years, most of the industry didn’t start training their seafarers to handle ammonia until late 2029.

Luckily for us, we were proactive and have spent the best part of five years preparing. When you take into account the recent ratcheting up of the carbon tax in China and the current price of the EU ETS, the effective cost of running carbonfuelled vessels has hit a record high.

Even methanol has become an expensive choice. With the price of ammonia fixed for the next decade, there are enough newbuilds on the orderbook to keep us busy for years.

The commissioning ceremony is later on, so today starts like any normal day. I log into the control centre on my phone and make a coffee. I’m responsible for the bulk carrier fleet so always start with the safety bulletins that came in overnight. There is a navigational compliance alert and an engine room near miss.

I tap on the navigational compliance alert and read the summary report. It looks like one of our ships was operating in unmanned bridge mode despite being within five miles of another vessel. I watch the video stream and can see that the captain comes onto the bridge within a

President Zuckerberg doesn’t seem to have improved things since he’s been in office

couple of minutes. It’s a minor infraction of the company’s standing orders. I call the captain to discuss it, and she suggests that all three crewmembers do a refresher on unmanned bridge procedures. I agree and wish them well on the rest of their voyage.

The near miss occurred while a crewmember on a different ship was working in the engine room. He was changing a filter and dropped an oily rag, leaving it behind. It was automatically reported by the ship’s computer vision safety system. I jump onto a call with the training simulation manager and we agree to add it to the daily training scenario.

All crewmembers do a VR training scenario every day while onboard our ships. We always include an emergency procedure, a standard maintenance task, and a navigation scenario. The simulation manager quickly loads up a filter change maintenance task for the day’s training and deliberately adds an oily rag to the simulation before pushing it out to the fleet.

The daily drills don’t take long but they keep skills sharp and allow us to create

new training scenarios within hours of safety issues arising.

Unfortunately, despite VR being the de facto standard for safety training in most industries, the Copenhagen amendments to STCW don’t come into force until 2032. There is currently no legal provision for VR-based training at sea yet. Sometimes it’s hard for us to convince owners that it’s worth investing in, but our safety record speaks for itself.

Just then, I get an urgent notification from a superintendent. A bearing has failed on a hydraulic pump on one of our ships. The windlass won’t work and the ship can’t weigh anchor. It is stuck outside port. The ship has already been delayed once because of a last minute change to its berthing slot. If we can’t get it moving quickly the owner is going to be hit with a just-in-time penalty.

If there was an issue with the hydraulics we should have been notified by the predictive maintenance system weeks ago. When we investigate, it turns out that the predictive maintenance system has been down for two months. No one saw that coming.

Luckily, spare parts are already on the way. Our automated procurement

team.

We are proud members of the Emissions Data Standards Coalition and we have set the ambitious goal of creating and adopting a universal data standard for maritime fuel consumption and emissions by 2037.

Thankfully, generating the reports into the right format only requires a few careful prompts to Proteus, our custom developed AI-driven fleet management system. Proteus automates most of our day to day tasks, which frees us up to deal with exceptions or issues as they come up. This means we can look after a much larger fleet with a smaller team than our competitors.

Between two people, we are personally responsible for 542 ships. Soon to be 543.

Unfortunately, the global political instability caused by the weaponisation of ChatGPT means tensions are particularly high between the US, EU and China. President Zuckerberg doesn’t seem to have improved things since he’s been in office. This has made getting a visa to attend the yard for the commissioning ceremony particularly difficult so today I’m attending virtually.

workflow is functioning fine.

A requisition for parts was automatically raised as soon as the crew reported the cause of the breakdown, suppliers automatically sent quotes and the best was selected and approved instantly by an algorithm. The delivery drone is due to arrive any minute now. I arrange for one of our shoreside support engineers to connect to the crew to support the repair work.

Now that the urgent issues are taken care of I can make a start on getting those emission reports done.

We need to issue separate emission reports every day to the owner, charterer, flag state, EU, IMO, UN and six different national governments.Unfortunately, they all use slightly different standards for the data which creates a lot of work for our

I flip my phone into immersive mode and admire the enormous, gleaming ship right in front of me. There are a few other virtual attendees here with me, including the owner. I try to engage him in conversation, but he’s on mute and doesn’t seem to be paying attention.

When the ceremony is over it’s time for me to log off for the evening. My counterpart on the other side of the world has just come online for a handover. We talk through the weather. There is a storm system building in the Pacific and a lot of ships are going to have to switch to manual watchkeeping for the next few days. It’s times like this I wish we had more crew onboard.

When my colleague makes a start on the safety bulletins I set my status as offline, satisfied with another day done.

I flip my phone into immersive mode and admire the enormous, gleaming ship right in front of me

Wealth of expertise

The global shipmanagement association has answers for many of the industry’s most pressing issues

In December last year Mark O’Neil (pictured), CEO of Columbia Shipmanagement, was given another term as president of InterManager, the association for shipmanagers.

O’Neil vowed to increase membership further at the association, encouraging in-house shipmanagement teams to join alongside third-party ship and crewmanagers.

O’Neil commented on his reelection at the time: “The maritime world is evolving quickly in this post-pandemic era and shipmanagers need to speak out loudly and in unison on international issues to ensure shipmanagement concerns and crew welfare are properly taken into account.”

Speaking with Splash, O’Neil says a priority for the association this year is on all matters pertaining to maritime decarbonisation and environmental

regulation, liaising with the International Maritime Organization, the European Union and other regulators to find sustainable and workable solutions.

Specifically the forthcoming EU emissions trading scheme poses some challenges for shipmanagers with InterManager in talks with the EU to ensure shipmanager opinions are taken into account.

Other areas where the association’s collaborative approach can be beneficial are safety, training, and crewing, O’Neil says.

“We are fortunate to have a wealth of expertise within InterManager’s membership and speaking together with one voice on key industry issues is important,” O’Neil says.

InterManager is growing steadily and now represents eight of the top 10 shipmanagement companies as well as

There is an increasing focus on the knowledge and expertise shipmanagers can provide

drawing membership from across the entire shipmanagement sector. These are mainly third-party shipmanagers but the association also has an increasing number of in-house managers joining as well as crew managers.

The associate membership of related maritime companies is also increasing. “Being a member of InterManager is a great way for maritime suppliers to engage with ship and crew managers,” O’Neil says.

Quizzed about how he sees the business of shipmanagmement evolving in the coming few years, O’Neil says that as the responsibilities on shipowners increase, particularly in relation to sustainability and ESG, third-party shipmanagers are able to deliver solutions to today’s challenges.

“With more non-shipping owners buying fleets there is an increasing focus on the knowledge and expertise shipmanagers can provide, both from the larger suppliers who benefit from economies of scale as well as the boutique managers providing specialist services,” O’Neil says.

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Navigating the regulatory minefield

The argument to join a commercial pool has a new impetus this year

The argument for pools has always tended to focus on their defensive qualities. Historically, pools have flourished, fleet-size-wise, in tough markets; strength in numbers, as such.

This year, however, there’s a new reason for pools to prove attractive: regulation from the International Maritime Organization in the form of the controversial Carbon Intensity Indicator (CII).

CII headache

All of a sudden, following the introduction of CII on January 1, owners and operators have more to factor in with every voyage, rather than simply following the money. CII will keep commercial pool managers very much on their toes, and ultimately will require greater investments in technology and data to ensure fleets are

trading in optimum conditions.

“Managers will need to take into consideration the impact that their commercial trading strategy as a whole will have on individual vessels’ CII. This will be a challenge as the best financially yielding trading strategy may not automatically yield the best CII,” says John Michael Radziwill, who is in charge of Monaco-based C Transport Maritime (CTM), a dry bulk pool founded in 2004.

Pankaj Khanna, who took over the running of Athens-headquartered tanker pool Heidmar in 2020, says that pools offer a great deal of flexibility to owners and have always been a great way to aggregate income and for cashflow purposes.

“Going forward,” Khanna says, “the trading of ships is going to determine the CII rating of vessels and access to the right commercial people, with the right tools, training, mindset and knowledge is going to be critical to ensure a good CII rating.”

EU ETS factor

It’s not just CII that is causing concern for owners. The European Union’s determination to get shipping included in the bloc’s emission trading scheme will also likely require a prepared and knowledgeable commercial operator to trade carbon offsets, according to Khanna.

“The scale of the decarbonisation

The best financially yielding trading strategy may not automatically yield the best CII

Access to the right commercial people is going to be critical to ensure a good CII rating

challenge is set to stretch many shipowners’ bandwidth and cash flow close to breaking point, while many parts of the industry are already facing pressure to deliver,” argues Matthew Smith from London-based VLCC pool operator Tankers International. “It is critical,” he says, “that tanker owners maximise the support that is available to them – from technical, to practical, to cash flow – and that charterers are provided with more options.”

Pool operators will have to be nimble and train their chartering and operations staff to deal with the coming decarbonisation regulations, Khanna advises.

Sourcing green fuel

With green, alternative fuels coming into the mix, their scarcity and price could be a big bonus for commercial pool operators, says Vinod Sehgal, who runs Hong Kong manager SeaQuest Shipmanagement.

“Environmental concerns and carbon footprints are a serious commercial consideration for commercial pool operators,” Sehgal says, adding: “Use of expensive alternative fuel and availability of compliant vessels will force shipowners to work with commercial pools rather than operating in isolation on fixed trades or routes.”

A commercial pool will have greater

flexibility in utilisation of vessels, Sehgal asserts, and for this reason he feels commercial pools will become more prevalent in the future.

When rates spike

The problem for pool operators this year might be the spiking markets. In tankers, spot rates have leapt above $100,000 for VLCCs, while bulk carriers are showing some uptick after a muted start to the year.

Danilo Fumarola, who heads up Monaco-based shipowner Gestion Maritime, warns that in the event of a prolonged period of elevated spot rates, owners will be tempted to leave the constraints of a pool in order to either sell vessels, or secure long period employment. Pools need to be flexible as possible, he urges.

Sharpening Poseidon’s razor

Newly released data clearly shows the better the welfare onboard, the better the condition of the ship. Steven Jones, the founder of the Seafarers Happiness Index, explains

In our busy data-driven world we are constantly seeing facts emerge out of the fog of digitalisation. All kinds of weird and wonderful trends and correlations which were invisible, or perhaps unprovable, to our maritime industry forebears are now writ large shaping the industry.

Much of what is produced by shipping companies, across fleets, or churned out from ships, is about performance. What speed is this spinning, how much is this emitting, how much of this has been eaten, etc. How often are we late, early, on time, how many of these have we broken?

Data becomes the all seeing eye. Watching everything, always…and the minute an interested party interrogates it, then the “truth” emerges. What a time to be alive!

Where such facts have been harder to pin down has related to seafarers. Now, however, with the latest data from the Seafarers Happiness Index combined with analysis by Idwal, we can now see the interplay between elements of crew sentiment and welfare provisions onboard ships, both transposed against the condition of the ship itself.

It is finally possible to take what we

probably all intrinsically suspected - that good ships are better for people, and people who experience better things are happier.

Starting in Q2 2022 Idwal began exploring the welfare conditions of seafarers, using a new inspection approach which explored the crew welfare conditions onboard. What they found? As the Crew Welfare Grade increases so too does the vessel condition, and vice versa. Good ships, good times.

There appears a definite and sustained trend/correlation between the overall condition of the vessel and the welfare conditions onboard. As such, happiness becomes the canary in the coal mine.

Happiness becomes the canary in the coal mine

Shipmanagement reimagined

Manish Singh lays out the change imperatives for the sector

Within this decade, shipmanagement will be materially redefined, not only as an offering, but also the market map itself. Shipowning customers as well as key shipmanagement players are seeking partnership models to deliver on the many challenges on the path to 2030 and beyond. Several shipmanagement companies will also address succession, geographical and demographical challenges during this time.

Mergers are set to continue within the top 20 shipmanagers, as they combine their strengths in people, managed scale, technological platforms and complementary operational bases. The covid years have left a lasting impact on the global maritime workforce.

Shipmanagers of all scale have started to prepare themselves to assemble the human and capital resources needed to address their demographical and technological debt.

In a bid to disrupt and accelerate change, mergers and acquisitions will intensify in the coming couple of years. We shouldn’t be surprised to see at least two shipmanagers at the above 1,000 ships managed fleet scale within 2024. However, surely consolidation cannot just be about scale. For the benefit of seafarers, shipowners, charterers and other stakeholders reliant on the shipmanagement industry, we need evidence of the other ‘C’ influence within the sector; collaboration.

Shipmanagement is in desperate need of re-imagination. Very much like the inflation-adjusted fees, the shipmanagement value proposition itself has mainly seen incremental changes since the mid-90s.

Often, when I introduce shipmanagement to people unfamiliar with the sector, I used to say shipmanagers are to shipowners, what ‘Marriott’ is to property owners in the hospitality sector. But with every passing year, this parallel appears less deserved. When top-tier hotel managers like Marriott take a property into management, they underpin optimal performance from the asset and take a much larger commercial and operational risk than the typical manager. The sentiment of shipmanager, acting for and on behalf of owners, as agents only is fundamental to the as-is shipmanagement offering. The principal-agent dynamic here is appropriate, as is the risk/reward apportionment of the status quo. However, with the profile of both shipowners and charterers evolving and expected to change more so in the future, a reimagination of this relationship is indeed overdue.

Shipmanagement is a congested space. When considering the incredibly complex operational, reputational and environmental risks that rests on shipmanagement’s shoulders, it is shocking how low the barriers to entry are. For the performance of

shipmanagement to transform, the barriers to success ought to be drawn higher.

I am not implying that size is the only key to success going forward. There are many examples of small-mid size managers collaborating on diverse issues such as procurement, training, piloting of new initiatives, etc. Stakeholders reliant on the shipmanagement industry will demand that collaborative innovation becomes more prevalent within the sector.

Are shipowners being left largely to themselves in taking risky capex decisions relating to new tech and fuels? The best shipmanagement partners are those who are playing a demonstrable role in maritime carbon response measures.

With the changing face of the shipowner going more institutional than family-owned, we expect to see greater fixed opex contracts or performancebased contracts. This will require a more progressive apportionment of risk -reward between the shipowner and manager than the cost plus fees approach to shipmanagement.

As freight and cashflow have improved on chronically suffering sectors, the emphasis on incident-free maximum availability has increased a lot more than lowest opex and cheapest fees as a key performance criteria.

With challenges as well as opportunities abound, the leaders of the sector will be those that are re-imagining shipmanagement.

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