By Olav Eek Thorstensen, Executive Chairman
The Shipping Industry has always been cyclical. These fluctuations are apparent in all sectors of the maritime market – ship building, ship finance, ship owning and related services including ship management.
The oil & gas and dry bulk markets has been through a particularly tough time, especially last year. However with an over capacity of tonnage being built, all shipping segments will be affected.
The demands of the charterers and industrial bodies are becoming more stringent and with reduced charter rates, there is pressure to be more cost effective. The knock-on effect for ship managers is that clients are demanding lower opex costs yet they still want improved efficiencies.
Manning costs have always been the largest part of a vessel’s operational expenditure and crew wages have drastically increased during the last few years driven by supply and demand.
This means that trying to operate vessels at a profit is becoming very challenging and not even financially viable in some cases.
As a result of the current market downturn, owners are demanding a reduction in manning costs and have asked us to also look at alternative manning sources.
This means that our managed vessels will have a more international blend of crew onboard in the future as we recruit from nations where the wage levels are lower. There will additionally be pressure to reduce crew staffing levels onboard which will put further pressure on our human resource planning.
We take the “Human Element” very seriously and through events such as officer conferences, training and onboard kits, we are focusing on better communication both onboard, ship to shore and with third parties such as pilot and marine inspection bodies.
With an increased variety of nationalities onboard, higher work pressure, and a reduction in human resources, the Human Element will become ever more important to us.
As Thome’s CEO, Olav Nortun, pointed out in his latest interview with Shipping Watch online “Thome is under pressure to work smarter”.
I agree that this is the case and we need to utilize IT solutions and organizational structural changes to improve productivity.
In the current market downturn we need to work together to reduce costs, work smarter and more efficiently while keeping compliance and safety as our first priority.
The year will be used to restructure and re-align the organization, positioning us for future growth. I believe we have made a good start this year to reach our goal of constant improvement. Let us keep the focus and remember that complacency is our worst enemy.