GL Best Practice Ship MGMT

www.gl-group.com | www.gl-maritime-software.
com
Best practice shipmanagement study 2013
Overview and study results, Hong Kong 07 August 2013
Kevin M. Brunn
Director Clients & Markets
Ivan Tam
Manager Clients & Projects
GL Maritime Software
Introduction
Best Practice Ship Management Study | 07 Aug. 2013 | No. 2
Best Practice comprises all approaches, procedures, business models or tools that ship
managers use to do their business smarter, safer, and greener i.e. to be on top of competition.
Ship managers are under increasing pressure. Overcapacity in the market is driving charter rates
down. Ship owners face higher costs to finance vessels. Ship operators fight for cargo and drive
down their main cost block, which is fuel. Ship managers sit in the middle with increasing burdens
for the same management fees.
In 2013, GL (Germanischer Lloyd) and Fraunhofer Center for Maritime Logistics and Services
conducted a study involving around 100 ship management companies worldwide to find out what
they are doing to improve their operations and what they consider as best practice in the
industry.
We would like to share these best practices with you and to give you the chance to reflect against
your own operations and get inspiration and ideas on additional improvement areas.
Presenters:
Ivan Tam, MSc Manager Clients & Projects, GL Maritime Software, Hong Kong
Kevin Brunn, MBA, BSc Director Clients & Markets, GL Maritime Software, Hamburg
GL Maritime Software is the software
provider and system integrator for the
maritime industry. We improve our clients
processes and decisions in ship
operations and fleet management, both
onboard and onshore.
GL-Group is the world class technical
advisor and trusted partner in
assurance, consulting and classification
for the maritime and energy industries.
We enable our clients to build and
operate their assets smarter, greener
and safer.
Key Figures
7,900 Vessels Served
6,700 Employees
200 Offices Worldwide
C
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A
Market Overview and Insights
Ivan Tam
B
Results of the Best Practice Study
Kevin M. Brunn
D
Drinks reception
Share your experience on Best Practice with us and others
C
Q&A / Distribution of your personal copy
of the study
GL classed Shanghai Express! 13.000 "#$! 3%%m &ong! de&i'ered March 2013
After only four months, Asia Northern Europe
box rates reached their lowest level in more than
a year.
Spot rates have fallen by more than 40% since
January 2013.
The intended rate increase by carriers failed
Despite the state of the market, newbuilding
ordering has not halted. Giants abound - Large
liner companies are focussing on maximising
economies of scale.
More and more smaller container lines are forced
out of the East-West trades, because they are no
longer competitive
Trend towards consolidation of services
Nevertheless, containerised trade to grow by
5.5%
With newbuild prices down, and advantages of
new efficient ships, vessel deliveries forecasted
at 1.4 m TEU for 2013 (up 10%)
Market Summary First half-year 2013
Liner companies suffer from low rates
CONTAINER
Global Containerised Trade
200
1(0
100
(0
201) 2013 2012 2011 2010 200* 200+ 2007 200% 200(
,ther
North-South
Non-Main&ane #ast-.est
"ransat&antic /#$-$S0
1ar #ast-#urope
"ranspaci2ic /1#-$S0
mTEU
+ 7%
+ 4%
+ 6%
+ 6%
*
(Expected) Contracting
mTEU
2!0
1!(
1!0
0!(
2011 200+ 2010 200* 201( 201) 2013 2012
334 "#$ 5124 "#$ 3-+4 "#$ +-124 "#$
Best Practice Ship Management Study | 07 Aug. 2013 | No. (
Stable growth of oil & product trade around
4%
Overcapacity of fleet continues
Earnings are at bottom, bunker prices
soaring
Time charter and spot rates continue to
decrease (both falling by further 2%
compared to 2012)
But, declining orderbook (down 11% from
2012) could diminish supply demand gap
in 2014
Future contracting is key to market balance
Newbuilding prices stable but low
Second hand market picking up (+10%)
Positive demand forecast, but still slow
Tanker
10
)0
20
30
2011 201) 2012 201( 2013 2010 200* 200+ 2007 200% 200(
A2rama6
Sue7ma6
89::
Panama6
;andy
mGT
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-)
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2
)
%
+
201( 201) 2013 2012 2011 2010 200* 200+
Fleet Expansion vs. Demand Growth
<emand =ro>th ?ate
1&eet =ro>th ?ate
% pa
Best Practice Ship Management Study | 07 Aug. 2013 | No. %
Despite demand growth (7%) driven by iron
ore and coal, overcapacity in almost all
segments keeps market down
3 consecutive years of double-digit fleet
growth
2013 deliveries significant, but declining
Calm contracting and melting orderbook will
balance supply and demand after 2014
Earnings currently at or below operational
costs, but rates expected to improve after
supply demand gap closes
But certain owners with good cash / funding
position (e.g. Frontline) are able to leverage
low newbuild prices to replenish fleet with
efficient vessels
Secondhand prices increasing
Bulker market to remain down
Bulkers
100
+0
%0
)0
20
201( 201) 2013 2012 2011 2010 200* 200+ 2007 200% 200(
;andysi7e
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mGT
Time Charter Rates
!!! US"
per da#
100
(0
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2012 2011 2010 2007 200+ 200* 2013
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C
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Ivan Tam
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Kevin M. Brunn
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Drinks reception
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of the study
The best practice study serves as a guide to reflect own
ideas, priorities and have a look over the fence
Collection of over 50 common qualitative
observation and quantitative statistics across
all companies
Derivation of 30 best practice measures in
the 5 key areas of all ship managers
Many connected context boxes with subjects
that came up
A Best practice is not understood as recipe that
fits in all circumstances to all companies.
Best Practice Ship Management Study | 07 Aug. 2013 | No. *
Shipping companies are using the crisis to sort
themselves our study should help
We have asked around 100 shipping companies
around the globe:
What are the areas you are working on to improve
your business?
What have you seen in other companies you
consider as best practice?
Best practice in this study comprises all
approaches, procedures, business models or
tools that ship managers are using to do their
business smarter, safer and greener, i.e. to be
on top of competition.
Recap: Is ship management an attractive market to be in?
3-5bn USD annual fee volume for
ship management services (not all 3
rd
party)
Growing fleet with
technically more challenging
assets
underlying stricter regulations
with more difficult to find crew
and
increasing pressure and costs
and quality
will nurture professional ship
management be they 3rd party or in-
house.
Growing, but...
... highly competitive
1 Clarksons Research, 2013
More than 1500 companies are managing 10+
vessels
Only 150 manage 40+
Many midsize and small companies in the
market
Is looking at best practice common?
Where are the biggest perceived challenges?
Results summary: Best practice in crewing
In 2010, there were around 1.4 million active seafarers
Best Practice Ship Management Study | 07 Aug. 2013 | No. 1)
There is particular concern over current and future availability of senior officers,
especially engineers, in the Far East and Indian subcontinent
Best Practice Ship Management Study | 07 Aug. 2013 | No. 1(
Of all respondents are actively looking at best practice measures in
crewing
77% - organizational measures
73% - process measures
52% - IT measures
69%
Best Practice Ship Management Study | 07 Aug. 2013 | No. 1%
Getting the same senior officers back onboard of the same vessel is
the ultimate goal of crew planning. Fewer crew changes mean lower
costs and more commitment from senior officers for their vessel.
Representative quotation:
Organizationally, many
shipping companies re-
insource crewing activities
again
Culturally, a lot of focus is
given to training, development,
welfare package and
teamwork.
Process-wise, re-insourced
crewing processes need
proper system support
Common observations Best practices
Invest in culture and teamwork
Invest in crew welfare packages
Integrate training, appraisal and
development management systems
Use a combination of personal and
computer-based training
Use an integrated crewing solution
onboard and onshore
Best Practice Ship Management Study | 07 Aug. 2013 | No. 1+
Of all respondents are actively looking at best practice measures in
technical management
69% - IT measures
65%
Results summary: Best practice in technical mgmt.
Best Practice Ship Management Study | 07 Aug. 2013 | No. 1*
Life Cycle Management is a growing trend in Technical Management
82% - focus on machinery
74% - focus on hull structures
We have focussed too much on papers and we are asking every day
for more and more paperwork, forgetting the hardware, i.e. the
ships structure.
Different organisational
options are tried out, fleet
teams becomes common
Planned Maintenance
Systems standard
Life cycle management view
with increasing importance
Organize along processes
Build processes around a state-of-the-
art planned maintenance system
Harmonize and centralize the
management of master data
Manage a key element of your
maintenance budget: dry dockings
Pay attention to hull maintenance
Embrace condition based maintenance
Of respondents are actively looking for best practice measures in
Financial Management
55% - IT measures
50 % - organizational measures
45%
Results summary: Best practice in financial mgmt.
Growing trend towards business intelligence applications in shipping
to integrate data and automate reporting
Managers with field experience should be employed in Finance.
Separation of finance from
operations seen as issue
Too much complexity built
up in last years
State-of-the-art finance
systems not common
Integrate Operations with Finance
Simplify and harmonize the accounting
structures
Centralize the invoice registration
process
Harmonize and automate reporting
Invest in cash management procedures
Best Practice Ship Management Study | 07 Aug. 2013 | No. 2(
Best Practice Ship Management Study | 07 Aug. 2013 | No. 2%
Fires and explosions are 3
rd
greatest reason for total loss of vessels,
5
th
largest reason for accidents at sea, and fire safety is no. 1 in PSC
findings (every 5
th
detention)
Results summary: Best practice in quality & safety mgmt.
Of respondents are actively looking for best practice measures in
Quality & Safety Management
58% - IT measure
45%
Best Practice Ship Management Study | 07 Aug. 2013 | No. 2+
The critical success factor is awareness of the individual crew
member that he can make a difference in both quality and safety, and
all focus of a Quality & Safety Management system is directed
towards this.
Dedicated QS teams reporting
to MD common
Staff awareness on QS issues
is critical success factors
Process supporting systems
start to come in
Move from QS to QHSE
Deploy and monitor regular crew
training on safety issues
Nurture a no accusation / blame
culture
Use integrated Quality & Safety
solution
Automatically produce regular quality
and safety KPI reports fleet-wide
Have risk assessment integrated in
regular processes
Best Practice Ship Management Study | 07 Aug. 2013 | No. 2*
Results summary: Best practice in procurement
Our goal is to move from just purchasing to a more strategic supply
chain management perspective. This includes materials and vendor
management as well as the whole transportation, storage, material
and information flow.
Organisational and process
measures common to increase
data quality
Purchasers are bound into
processing and have too little
time for sourcing activities
Supplier treatment changes to
a more long-term partner
approach
No purchase outside the system (no
maverick buying)
Harmonize and centralize the
management of master data
Communicate with suppliers
electronically
Plan demands fleet-wide
Embrace strategic sourcing activities
Reduce number of suppliers
The role of information and communication technologies
Shipping has in the past largely underinvested into IT (e.g. compared to Oil & Gas industry)
Despite crisis majority of respondents do not cut back IT budgets
Enabling function for best practices is well understood among respondents
The role of information and communication technologies
Trends:
1. IT budgets are not being cut
2. A generation change in management is lowering barriers
3. Software usage strategies vary but come closer together
4. Buying criteria are stable
5. Many implementation projects fall short of expectations
6. The need for services around software is increasing
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Ivan Tam
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Good fleet management solutions build in and support a
lot of shipping best practices
Best practice GL Solution
=9 Maritime So2t>are | 10.0+.2013 | No. 3%
Central and fleet wide management of master
data (equipment, spares, jobs, certificates etc)
Fleet Equipment register in
GL ShipManager
Use all available information to specify and
execute dry dockings
New Dry Docking tool in
GL ShipManager
Deploy a central purchase platform and
communicate with suppliers electronically
Procurement module with e-commerce
interface in GL ShipManager
Focus maintenance also on hull integrity GL HullManager
Connect available data in business systems to
management reports and KPIs
GL FleetAnalyzer
Reduce the own investment into onshore IT
environment
Managed Server solution
Examples
Ship management Ship operations
The most comprehensive and innovative portfolio in
the industry
GL CrewManager
Complete crew management
package supporting planning,
dispositioning, data / certifi-
cates mgmt., rest hours, ...
GL HullManager
Advanced hull integrity
solution supports inspections
and thickness measurement
processes based on
interactive 3D ship model
GL FleetAnalyzer
Business Intelligence solution,
gets you information out of
your different operational data
for flexible and powerful
reporting & analysis
GL ShipManager
Shipmanagers workbench to
support all key processes
(maintenance, procurement,
quality / safety, onboard
administration, etc)
GL SeaScout
Navigational decision support
system helps you navigate
through bad weather without
damages on shortest route
EcoAssistant
Software system to save fuel
without modifying your vessel
by optimal trim
GL MachineryManager
Integration platform for all
condition monitoring
machinery information (e.g.
visual inspections, vibration, oil
analysis, perf. monitoring)
GL FleetManager -
Finance module
Complete finance system incl.
Accounting, Controlling, Cash,
Intercompany for shipping
CFOs
GL EmissionManager
Smart solution for onboard
voyage reporting and onshore
emission- and fleet
performance analysis
Provided By FutureShip
GL Maritime Software | Software solutions for increased performance | Slide 37
Currently in pilot stage
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www.gl-maritime-software.com
Thank you!
maritime.software@gl-group.com
www.gl-maritime-software.com
Ivan Tam
Manager Clients and Projects
Tel. +852 6111 4320
Email: ivan.tam@gl-group.com
Kevin Brunn
Director Clients and Markets
Tel. +49 381 673 11 37
Email: kevin.brunn@gl-group.com

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