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Best Practice Ship Management Study 2013 Fraunhofer CML

Foreword

Ship managers are under increasing pressure. Overcapacities in the market are 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 and have to look after more and more for the same management fees to gain owners management contracts. At the same time lie the requirements on availability of the vessels. Quality and safety of operations, management and treatment of crew and transparency of costs spend are increasing. GL and Fraunhofer CML experts conducted a study involving about 100 ship managing companies across the globe to find out what they are doing to improve their operations and what they consider as “best practice” in the industry.

“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.

We invite the reader of this study to check these best practices against his own operations and get inspiration and ideas on additional improvement areas. Especially in the process and supporting tools part, we see a Iot of hidden potential that will make a big difference in costs, quality and/or speed of a ship manager.

We wish you find some interesting points in this study. Enjoy reading!

Prof. Dr.-Ing. Carlos Jahn Dr. Torsten Büssow Head of Fraunhofer Center for Head of Maritime Software Maritime Logistics and Services CML Germanischer Lloyd

2 Introduction

Table of contents

Foreword 2 Best practice – a management view 5 Best practice in Crewing 8 Best practice in Technical Management 12 Best practice in Financial Management 16 Best practice in Quality & Safety Management 20 Best practice in Procurement 24 The importance of ICT 28 Appendix 30 Methodology 30 Company profile 31

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List of abbreviations bn Billion EDI Electronic Data Interchange ERP Enterprise Resource Planning ICT Information and Communication Technologies IFRS International Financial Reporting Standards IMO International Maritime Organization ISM International Safety Management ISO International Organization for Standardization KPI Key Performance Indicators LCM Life Cycle Management MLC Maritime Labour Convention MSC Mediterranean Shipping Company PMS Planned Maintenance System PSC Port State Control QS Quality & Safety QHSE Quality, Health, Safety & Environment SEEMP Ship Energy Efficiency Management Plan

4 Management

Best practice – a management view

Best practice is an accepted procedure, duced. Given the current pressures described systematically in the existing shipping is in, this is not surprising. solutions and experiences of successful companies. It can be therefore used Those respondents who negated this by practitioners as a reference for the question mostly mentioned the fact that possible adaption. the investments are planned mid-term. Few companies referred to other prior- A comprehensive restructuring of an ities, or indicated that so far everything organization / company is usually not works fine. practical, and the conditions under which different companies operate dif- The great interest in best practice within fer significantly, rendering “blueprint” the shipping industry shows that almost solutions impractical. However, the 90% of respondents are actively seeking organization’s success can be improved, best practice within their field of action. at least in certain areas through the Over two-thirds compare their operations implementation of ad-hoc measures to the competition and 38% are looking (good practice). to take advantage of external consult- ants. Other stated options were: 77% of the respondents said that their benchmarking, internal and external organizational structures or processes working groups in the industry or to are being changed at the moment, or seek more integration / combination new methods / tools are being intro- with other companies in the group.

Are you actively changing your organizational processes, approaches, or inventing new tools to master the current market today?

Yes 50%

Partly 27%

No 12%

Not involved 12%

Figure 1 – Active change of processes

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Which part of your companies’ ship management faces the biggest challenges regarding the mid-term future (several indications possible)?

Crewing 88%

Technical 62% Management Financial 50% Management

Quality & Safety 27%

Procurement 12%

Figure 2 – Biggest challenges of ship management (mid-term future)

Are you actively seeking A first indication for the need of best of a company depends on the pure examples for best practice practice is the question of which topics in number of best practices is adopts. The as an organization? ship management are currently of par- collection should rather be seen as food ticular interest, and for what reasons. for thought for shipping companies to

4% improve their performance, to trigger No Among the top three, the surveyed discussions for areas to look at and 8% shipping companies place Crewing, assess sensible changes. Technical and Financial Management as the greatest challenge for the mid- term future, followed by Quality & What are the reasons Safety Management and Procurement. Yes (several indications possible)? 88% We will use this ranking as the guiding agenda for this study. Cost pressure 62%

As reasons, besides the dominant issue New regulations 58% of cost pressure, are especially the large Not Compliance involved number of new regulations and com- 54% demands pliance requirements to be named. Competitive Among others were “lack of financing, 50% situation By looking at and low level of earnings for a prolonged 65% Environmental other companies 38% period” cited. requirements By external advice 38% Availabilities of 23% The collection of best practices in this new technologies Others 31% study should not be seen as a recipe, as many companies have different Other 19%

Figure 3 – Actively seeking for pre-conditions to work from. It would best practice examples also be difficult to see that the success Figure 4 – Reasons for the mentioned challenges

6 Management

Technical Management

Quality & Safety Crewing Management

Financial Procurement Management

Figure 5 – Core tasks of ship management

The market of ship management

Ship management comprises functions / as an enabler to provide the services entities. These ship managers in total services like Technical Management, rendered in an efficient and transparent manage approx. 25,000–30,000 vessels, Procurement, Crewing as well as Quality way. which leaves another 20,000 vessels & Safety Management. The Financial managed by smaller entities. Potentially Management aspect was added into this More than 1,500 companies are globally this would result in a market size of 3–5 study which is less a service provided managing more than ten vessels each. billion US dollars, i.e. a fee / revenue to a ship owner but relevant to the Only 150 manage more than 40 vessels, volume of 3–5 billion US dollars p.a. to ship manager himself and functioning which results in a long tail of mid-size the ship managers.

There are three types of ship managers: 24,000 1,500 comp. •• Many ship management activities are 20,000 > 10 ships integrated into large owner-operator 450 comp. > 20 ships 16,000 companies, like the big container Iiners (such as Maersk, MSC or Hapag 12,000 Lloyd) or exist as separate group 140 comp. > 40 ships 8,000 companies (such as NYK Shipmanage- Number ships of 40 comp. > 80 ships ment, Columbus Shipmanagement 4,000 from Hamburg Süd), that also serve 0 external ship owners. 0 200 400 600 800 1,000 1,200 1,400 1,600 Number of ship managing companies1

•• Many tanker and bulker owners Figure 6 – Size distribution of ship managers (Clarksons Research, 2013) manage their own vessels in own ship- ping entities and charter them out. The market presents itself substantial Larger entities will have advantages •• However, a significant portion of that with, despite the current challenges, a here though. market is served by 3rd party ship good outlook. The global fleet is grow- management companies, which pro- ing. Technically more challenging assets lf ship owners are asked what they vide ship management services to underlying stricter regulations with more require from a ship manager, the prior- ship owners (such as V.Ships, Anglo difficult to find crew and increasing ities lie in high reliability, low operational Eastern or Columbia Shipmanage- pressure and costs and quality will costs, high crew quality and good com- ment) without being a significant nurture professional ship management munication with the ship managers. owner themselves. services be they 3rd party or in-house.

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Best practice in Crewing

Crewing is a key ship management ser- vice and field of competency of any ship Current supply of seafarers by geographical region manager globally and rated as biggest current challenge for a shipmanager in 747 this study. Especially the big 3rd party 700 108 625 ship managers offer their crewing 600 services to many shipping companies 80 and in-house ship managers. 500 275 184 400 In 2010 almost 1.4 million seafarers 50 Indian subcontinent were active. The situation for global 300 112 seafarer supply and demand was one 127 Far East of approximate balance for ratings and 200 109 Africa/Latin America Eastern Europe a modest shortage of officers. There is 100 184 143 particular concern over the current and No. of seafarers available x 1,000 OECD countries 0 future availability of senior management Officers Ratings level officers, especially engineers, in the Far East and the Indian subcontinent. Figure 7 – Current supply of seafarers by geography (BIMCO/ISF Manpower 2010 update)

69% of respondents are actively looking at best practice measures in crewing, the highest value among all areas. 77% much more in the vessel management, •• Process-wise, re-insourced crewing follow organizational measures, 73% quality control and financial perform- processes need proper system process measures and only 52% IT ance. This can be done by employing support also given the increasing measures, the lowest IT measures value them themselves or at least managing requirements of the Maritime Labour in all fields. this pool closely together with the Convention (MLC). In the past this agency. This requires proper integrated has been an investment area of the Based on the in-depth interviews of systems to do so. big global crew managers, but many Fraunhofer and GL we could identify respondents stated they look into three areas of activities among all •• Culturally, a lot of focus is given to this area more intensively now. ship managers participating: training, development, welfare package and teamwork. Many expe- As one respondent put it: “To get the •• Organizationally, many shipping com- rienced seafarers say: gone are the same senior officers back onboard of the panies re-insource crewing activities days when the crew would hang out same vessel is the ultimate goal of crew again to gain more control and together in their spare time, making planning. Lesser crew changes means quality than with purely “temporary music, playing games and enjoying lower costs and more commitment from workers” via crewing agencies. As their time together. Today everybody senior officers for ‘their’ vessel.” qualified crew becomes harder to stays in their cabin with their note- find, many ship managers build up a book, which poses a challenge to Based on the interviews of this study pool of own officers that keep com- teamwork and a “feeling part of” a and research conducted by GL and ing back to their vessels. It is then company or a bigger task. Fraunhofer, we would summarize key possible to involve senior officers elements of best practice in crewing:

8 Crewing

Invest in culture and teamwork Especially as multi-cultural teams pose a challenge to human interaction, to invest in teamwork and a team culture is still seen as worthwhile and highly recommended. At the end, the quality of the work depends on the whole team, not a smart chief engineer. The team should also include the shore-side personnel. This requires time and opportunities to be given by the management (I) for proficiency in a common language (English) and (II) personal interaction, be it in common trainings or regular company events, be it on the vessel fostered by a master doing something for the team culture.

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Invest in crew Integrate training, Use a combination of personal welfare packages appraisal and development and computer-based training management systems Apart from efforts to retain qualified With higher safety concerns, technically crew members with attractive remu- The next level of crewing best practice more challenging vessels and younger neration and leave packages, along comes when training, appraisal and crew, training is a key concern for crew with providing ongoing training, ship development schemes run integrated as managers. Many computer-based managers look at an additional field of a Human Resource Development Man- training offers are available in the investment. As young and qualified crew agement system. Training is adapted to market that will not substitute personal, become harder to find, many quality current development needs that come on-the-job or classroom-style applica- ship managers invest in infrastructure from the current work appraisals but also tion but complement them. Timing that connect the employees onboard from the laid out career development and speed can be better adapted to to the outside world as the young path of the crew member. Active personal preferences, checking learning generation has got used to in the last feedback of the superiors as well as the success and results can be integrated decade. This typically involves allowing crewing manager is driving this process. and trainings can be well suited to an easy option to call home, Internet Demanding tasks and developing skills onboard work hours. Crew training access onboard and private notebooks go hand in hand. A transparent hiring should include the day-to-day skills, in the ship’s network. Although there and development process from cadet to personal safety, regulations etc., but are significant costs involved and cheap master, regardless of their nationality, is more focus should be laid on new bandwidth is still an issue, it is currently another building block to that. technologies and time for emergency a best practice to attract good crew response on bridge and engine simula- that always has a chance to choose. tors, as respondents in the study put it. This trend is solid. Crew welfare will also be the driver to better connect vessels to shore communication-wise, much stronger than any business application.

10 Crewing

Use an integrated crewing solution onboard and onshore The Maritime Labour Convention (MLC)

The times of Excel sheets and pinboards The “Maritime Labour Convention, with the national regulations of the ves- for crewing activities are definitely over 2006” (MLC 2006) of the International sel’s flag state based on the MLC 2006. for those who want to be involved in Labour Organization (ILO) will govern crewing processes. Integrated crewing the working and living conditions on- The convention is seen positively by software packages offer functions for board a ship for more than 1.4 million many quality shipping companies, which all data, certificate etc. administration seafarers worldwide. It defines require- have many of the standards for their as well as the crew planning and sched- ments concerning occupational health crew in place anyhow, as it prevents uling, (automatically) matching manning and safety, fair employment contract unfair shipping practices and competi- requirements with available crew for conditions, adequate accommodations tion on the back of crew. The real the next months. The integration also as well as access to medical care, health effect on administrative burdens and the links up processes in-house with local care and social security. The new enforcement of e.g. Port State Control crewing agencies that work in the convention brings together more than needs to be seen. Many shipping same system, receive requests for open 60 existing ILO standards. When the companies use their MLC projects to positions, enter all master data etc. In Convention enters into force, in August review their crew-related processes and addition, upcoming MLC requirements 2013, all international merchant ships information flows and implement a need a further proof of compliance, i.e. of 500 gross tons or more will be supporting IT system that helps to get documentation that is best prepared obligated to carry a Maritime Labour the right information to the right place and managed electronically. Many ship Certificate and a Declaration of Mari- and keep their crewing experts focusing managers get ready for MLC process- time Labour Convention compliance on finding good crew, not typing data wise and use this change to implement onboard, documenting its compliance from A to B. an electronic crewing system, as it achieves two goals in one go.

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Best practice in Technical Management

Ensuring the (technical) availability of a the industry, one sticks out: 50% of all Life Cycle management (LCM) as a fairly vessel and balancing maintenance costs respondents focus their improvement new thinking in Technical Management with costs of defects or even off hires programs on processes, a distant second receives quite some attention. Three- is a key competency in every ship man- being investment strategy (19%). fourths of the respondents are familiar ager. Chief engineers onboard and the with the concept, with over half of it superintendents in the office combine 65% of all respondents are looking at regarding it as important for the future. their skills and practical experience to best practice measures in the Technical 82% of these focus on machinery and achieve that. Technical Management Management field. 77% of those 74% on hull structures. Lower total is, after crewing, considered the 2nd respondents state organizational mea- cost is the number one advantage, most challenging area for the mid-term sures, 85% process measures and 69% followed by higher information avail- future. Increasing regulatory and com- IT measures. ability and very interesting evidence of pliance pressures are seen as adding environmental performance. to the complexity of this equation.

When looking at clusters of answers, How do you see the new concept of Life Cycle Management? 77% of all respondents checked either cost or competitive pressures – making commercial questions the number one Lower total cost 50% issue of the industry, closely followed Never by 72% who checked compliance or heard of it Higher informa- 27% 42% regulatory pressures. tion availability Important Evidence of 54% These pressures are perceived as intense environmental 31% performance with less than 5% of respondents judging Not important 19% that in their organization “everything Others 23% works fine”. Of the many areas where improvements are being thought by Figure 8 – Assessment of relevance of LCM 12 Technical Management

Reporting, monitoring and verification of emissions

Although shipping is considered the Ship Energy Efficiency Management most efficient mode of transport, it Plan (SEEMP) and (still voluntary) the is carrying 90% of world trade today. Energy Efficiency Operating Indicator

Shipping emissions account for ap- (EEOI) as a KPI to measure CO2 emissions proximately 3% of current global CO2 from vessels (taking into account the emissions, but are expected to more transport output). than double by 2050 if no additional measures are taken to reduce the sec- Energy management, environmental tor’s carbon footprint. At the end of matters and performance monitoring 2012 the European Union turned away are increasingly important subjects for from the discussed emission trading Technical Management departments scheme to agree that “a simple robust today. Technical managers today often and globally feasible approach towards work in close cooperation with the setting a system for monitoring, report- marine operations teams to achieve this ing and verification of emissions based task. We also see dedicated “Energy / on fuel consumption is the necessary Environmental superintendents” taking starting point.” This direction fits very over these tasks, which become more nicely into the newly introduced IMO and more supported by professional

measures to reduce CO2 emissions tools. This subject is so important and for ships in operation, which are the complex that it deserves its own study.

The in-depth interviews conducted in •• Planned maintenance systems are Based on the interviews of this study the course of this best practice study clearly a central part of the increas- and research conducted by GL and revealed a number of similarities across ingly integrated process and IT Fraunhofer, we would summarize key ship managers: landscape, but the innovators in the elements of best practice in Technical ship management community look Management: •• Many ship managers move away beyond. Life cycle management, from a pure vertical organization to hull integrity and condition based a more process-based one. The best maintenance concepts, expecting Organize along processes known example are the so-called fleet further cost efficiencies and uptime teams, where technical, purchasing, Human behaviour in business follows improvements. crewing and/or accounts experts sit a lot of organizational boundaries together in one organizational unit to •• With cost pressures rising and forcing and structures, despite the everywhere serve a certain number of vessels. comprehensive approaches, this life seen work on a collaborative company cycle management increasingly fo- culture. Organization still matters and •• The days of paper-based workflows cuses on hull and structures as well, many ship managers move away from in ship management are gone. The beyond the traditional machinery- a pure vertical organization to a more increasing complexity of commercial, based approaches. The challenge process-based one. The best known regulatory and other challenges here is to stay close to the vessel example is the so-called fleet teams, seem to leave ship managers with no itself, despite the administration where technical, purchasing, crewing option but to build their processes around it. As one respondent put it: and/or accounts experts sit together around IT solutions that “cut” across “We all have focused too much on in one organizational unit to serve a units and departments and provide ‘papers’ and we are asking every certain number of vessels. This reduces consistent and “real time” informa- day for more and more paperwork, interfaces and waiting times, gives clear tion to the many stakeholders. Most forgetting the ‘hardware’, i.e. ship’s ownership and accountability of results. ship managers see IT investments structure.” It is also easier to put clear KPIs to those increase even in these commercially teams and trigger process improvements challenging times. within the teams.

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Build processes around a and central responsibles. Individual users Pay attention to state-of-the-art planned are blocked from changing master data hull maintenance maintenance system themselves. ln this manner, ship man- agers typically reduce the number of Attention of the Technical Management Although planned maintenance systems maintenance jobs to a manageable size team onboard and onshore is largely (PMS) have become commonplace or combine tasks to real jobs. 500– paid to all machinery equipment across the industry, the way they are 1,000 recurring jobs are often enough onboard. For many good reasons: used differs. A PMS is much more per vessel. Many jobs need to be done according than just an onboard documentation to manufacturer specification, there is of jobs. The use of the PMS as a central a Iot of “wear and tear”, systems and communication platform for all techni- Manage a key element of procedures fit well to machinery parts, cal matters and tasks in a shipping your maintenance budget: the persons in charge are “engineers” company is a first best practice. This dry dockings (not naval architects). Often, the “hull not only reduces calls and e-mail traffic, maintenance” (and structures main- but creates a central task Iist for all Dry dockings are the biggest chunk in tenance) rests on the surveys of class people onboard and onshore. Planned a ship manager’s maintenance budget. societies. maintenance systems of today are However, most ship managers report highly integrated with procurement / that a 20–30% cost overrun to the dry ln the dry dock at the latest, the neg- purchasing systems and quality and dock budget is rather common than ligence of the steel structure becomes safety software systems both process- an exception. Several measures are apparent and creates unwanted cost. wise and data-wise. All three functions attempted to improve that situation. This can be avoided by a more structured typically come from the same vendor hull integrity management approach. to reduce interfaces and issues around Not the superintendent for that vessel This typically comprises regular visual updates / upgrades. These systems but special and dedicated (teams of) inspections of all compartments and include maintenance planning as well superintendents take care of all dry ratings according to different criteria to ensure that skills, spares and time docks across the fleet. This allows a (such as coating, corrosion, deforma- are available before the voyage. better building up of competencies tions and cracks), the specification of for that field. failures and assignment of short-term maintenance measures (e.g. recoating Harmonize and centralize the Personal visits to the vessel to prepare of an area), to prevent structural defi- management of master data the dry docking specification often are ciencies from getting worse until the employed. In best practice organizations, next dry dock. Very often, hull integrity Many ship managers have learned their specific dry dock tools are introduced systems are implemented to support lessons how freely it allowed their techni- that collect all technical information, this process and combine this information cians to put equipment or maintenance specify a tender, come to final orders with the mandatory thickness measure- job data into the PMS. At the end, for the yard and the equipment ments. As one respondent put it: each vessel, even technically identical manufacturers and allow the project sister vessels, looked different and any management on site for the dry dock “Best practice integrates these hull synergies in managing a fleet get lost team. Especially in the dry dock prepar- integrity tools with the PMS used and or at least harder to uncover. Today ation one deficiency becomes often are accessible onshore and onboard.” equipment and planned maintenance apparent. How much does the shipping data are entered and managed fleet or company know about the condition of vessel-group wide via a central source the steel structures?

14 Technical Management

A simple guide to condition monitoring

Conferences are filled with condition comparing them to warning and Extend the view across monitoring and condition based main- alarm Ievels of the manufacturers. the vessel’s life cycle tenance expert advice. However, ship The method is proven and reliable, managers’ and experts’ views can be the set-up is easy. Systems are avail- Common in the manufacturing industry, condensed in a few key aspects: able to support this. the view across the complete life cycle of a product becomes more important •• Trust your visual inspections: Looking, •• Do regular oil analysis: The information in shipping today. The effectiveness and listening, smelling or manual mea- received from it tells you a Iot about suitability of an equipment or system suring has always been a trustworthy your main engine, if you capture the re- is not decided at the purchase but source of condition information to sults from the laboratory systematically. over its lifetime, taking into account all the engineers onboard. To enhance maintenance and repair efforts, possible using this data, an electronic capturing •• Enrich your Information base with off-hire hours and other costs involved. to allow trend analysis or comparisons some performance measures: For this the right information sources might be added. As the crew cannot Pressures and temperatures already need to be built and maintained. Often be everywhere at the same time, measured somewhere put into the today this knowledge sits in the head of we observe intensified use of simple right context can enrich the above experienced chief engineers or superin- digital cameras to monitor a room gained information. tendents, with the risk that this is more or equipment. anecdotic than systematic. Only if you did this, putting more sensors •• Take vibration measurements: and cables for e.g. crank bearing wear Rotating auxiliary machinery can best analysis or monitoring of combustion be condition monitored by taking chamber parts and other online mea- regular vibration measurements and surements will make sense.

Embrace condition based maintenance

Maintenance schemes in shipping still following condition based maintenance follow a typical planned schedule approaches become more wide-spread according to running hours or calendar, among technical managers in ship no matter whether maintenance is management companies. Large industry technically needed or not. It would be pilot projects have proven the advan- helpful if chief engineers could Iook tages of the concept. The benefits do inside the equipment to assess its actual not so much lie in saving maintenance condition. Following the well-known work, but more in reducing defects, concept of “never touch a running especially defects stemming from badly system”, condition monitoring and executed maintenance.

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Best practice in Financial Management

While Finance and Accounting depart- respondents each) while organizational •• State-of-the-art process supporting ments normally do not have much measures this time are last (50% of and data collecting and reporting influence on a company’s financial respondents) related. This is not systems have found only little use performance directly, they play a huge corresponding well to the importance so far. Many small local providers role in providing accurate data and and mid-term challenges seen in the built accounting systems 10–15 years thereby enabling other departments Finance area, which ranked 3rd in this ago which are still in use. The large and the management to make the study. However, among the respond- ERP suites are not shipping specific. right decisions. On top in the current ents finance staff had the smallest Modern systems would not only financial situation, having solid and representation, which might distort enable more reliable numbers in less true numbers produced and reported this picture a little. time but also help integrate finance to banks and investors is vital. We processes with operational ones. received open feedback from ship We summarize the findings in the in- Based on the interviews of this study financing banks that the current state depths interviews done by GL and and research conducted by GL and of Financial Management in many Fraunhofer as follows: Fraunhofer, we would summarize key shipping companies has room for im- •• Finance teams are not well integrated elements of best practice in Financial provement, but the ability of providing into the operational business, which is Management: accurate and consistent figures often more and more seen as problematic. plays a role for them in investment One respondent stated a possible decisions (as much as financial perfor- Integrate Operations cause and solution: “Managers with mance as such). field experience should be employed with Finance in finance.” The separation not only But not only banks play a role in ship While it is evident that commercial com- has an organizational or cultural financing. According to a survey from mitments are extremely important to dimension but is also caused by dis- Norton Rose in 2012, 31% of shipping the company’s fate, it has now become integrated processes and systems. executives expect private equity invest- best practise to integrate operational ment to be the main source of funding •• The complexity build up in the too- functions like Purchasing closely with over the next few years. separated Finance departments is his- Accounting and Financial Management. torically grown with many businesses This ensures that for example any order Despite the stated importance, only and needs to be reduced, which will placed by the Purchasing department 45% of the respondents actively look help also the re-integration into the will immediately appear as a commit- at best practice measures in Finance business. We have seen chart of ac- ment in the liquidity forecast, giving measures, of which again the majority counts with 1,000 and more accounts the company’s treasurers a much more are process and IT measures (55% of for relatively “small” businesses. reliable basis for liquidity planning.

16 Financial Management

In general, liquidity drains can be seen Simplify and harmonize the •• This chart of account should not be much earlier, giving the company more accounting structures “misused” to fulfil any reporting leeway e.g. to secure further funds. need you have. From a management Extending the focus also to operational Shipping companies often work with a accounting perspective, it should only figures, the company gets a much more large number of legal entities, having to hold the cost elements like personnel, complete picture of its commercial pos- work with and to report to many owners spares, lubes, insurance, travel etc. ition and its exposure to certain market and charterers in different environments. costs, which will keep the chart of circumstances, enabling the company The more important it gets to simplify account handy. You end up with to define hedging strategies against the accounting structures: much more simplicity if you use cost dangerous scenarios on time. On a centres (where is the cost located, e.g. more micro perspective, it also helps in •• Use a harmonized chart of accounts a vessel or a department) and cost calculating KPIs measuring the quality that is valid for each legal entity and objects (why do these costs incur, e.g. and effectiveness of the company’s is administered centrally with a clear a voyage or a contract with an owner) day-to-day activities in order to identify guideline on what to post where. Al- as additional dimensions. Modern room for improvement. though some minor differences might accounting programs handle a vast exist for local accounting standard number of such financial dimensions. This will also foster the much needed reasons, 90% can be harmonized. •• Last but not least, management ac- close cooperation between the Finance Integrating all group companies on counting should follow legal account- department and all other departments a single accounting platform with ing standards, so a second (internal) immediately involved with vessel’s day- worldwide access under a standard evaluation e.g. for a financial instru- to-day operations. group chart of accounts will speed ment or depreciation should be avoided up the process of preparing group (“One true number”). The now widely A last integration area is planning and accounts extremely, e.g. by defining spread tonnage tax systems all across forecasting with the actual figures and standard intercompany transaction the world also eliminate the need the actual operations throughout the accounts and automatic intercompany for different accounting practices for year. To ensure you report on items you posting, which can be eliminated in commercial and tax depreciation and have planned to be able to compare, group accounts later easily without other tax-related issues, so establishing to easily produce forecasts on the year any manual intervention. This is also “one single version of the truth” end throughout the year and to do so supported by slimming down the additionally covering the management without “Excel monsters” is a definite extent and the level of complexity reporting is becoming standard – this best practice. of intercompany transactions. also includes harmonization of e.g. IFRS and local GAAP accounting wherever possible.

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What are Business Intelligence Systems

A standard technology is receiving a Intelligence Systems. They are built to They allow a flexible analysis trail through lot of attention especially from finance integrate data from different source the figures presented and a differentiated managers, but also purchasing manag- systems, e.g. a finance system, a crewing reporting per target group “in a few ers or Quality & Safety managers in system and a PMS/purchasing system, mouse clicks”. The technology is built the industry at the moment: Business to perform reporting and analysis asks. for only that purpose, so linking up

1418 Financial Management

Centralize the invoice Harmonize and registration process automate reporting

lt is still common practice that invoices Some professionals in management coming to the shipping companies arrive accounting feel they spend their day directly at the desk of the receiver in producing the same numbers to different any department. When the supplier addressees in different reports. Best sends a reminder or at the latest end of practice in the industry is the use of a the year, the responsible employee real- specific analysis and reporting software ized that there are costs missing on the packages, often called Business Intel- P&L and on the reports that were sent ligence Software. They are made for to the bank, shareholders etc. in the exactly that purpose, sit on top of all last months. This can be avoided if you operational systems, such as accounting define a central place where invoices systems or ship management systems, arrive and are registered in your finance and are able to produce various kinds of system right away. This can be done in reports, even more allowing a flexible the Accounting department or simply reporting and analysis of information at the front desk. From now on this (Why do we deviate from the budget?). invoice can take its approval steps up This will give you more time to under- to the payment and it can no Ionger stand and analyze the wealth of the be forgotten in a drawer. information you typically have hidden in your operational systems. lt will also A further improvement of this procedure give you room to work along a pre- would be an electronic approval workflow defined reporting calendar with a from this point onwards. A proper scan- slimmed-down reporting package for ning solution with modern OCR (Optical the management or introduce so-called Character Recognition) techniques does flash reports, the key figures very close not only register any invoice’s existence, to month end, as another two best but also the contents, so that the need to practices we have collected. pass on physical documents disappears. A document management system would take up the scanned invoice and route Invest in cash management it through the departments for approval procedures up to an audit-proof archiving proce- dure and link to the accounting system. When budgets get squeezed along the value chain in shipping, cash becomes a highly important figure for the existence of a shipping company. Nevertheless, a pure accounting view on revenues and source systems, producing reporting ap- deploy them for the user. And the expenses does not help here for oper- plications etc. is no longer a big IT project. technology is inexpensive coming from ational purposes. What is needed and The technology is non-proprietary, so a more corporate world 20 years ago a definite best practice is a smart and typically a full eco-system of know-how and is now easily available and applic- short-term (e.g. 13 weeks) and mid-term and resources exist in the market to able for small and mid-size companies. (e.g. twelve months) cash forecast and active cash management based on this. Expected payments from customers must be combined with needed pay- Automated three-way matching (order, ments of suppliers given payments to packing slip, invoice) will reduce trans- own personnel and to banks. Cash action processing and give the company should be pooled to make best use greater control on acceptance of suppli- of cash-at-hand. There should be ers’ behaviour, with automated posting dedicated experts dealing with it, to vastly enhancing accounting productiv- get the right attention and focus of ity. All this also greatly increases the all management in the company that quality of the data provided. “cash is king”.

19 Fraunhofer CML

Best practice in Quality & Safety Management

With the rise of regulations and com- The number of yearly maritime incidents Maybe this improvements is the reason petitive pressures, the role of dedicated is showing a downwards trend, after a that only 45% of the respondents Quality & Safety (QS) or even Quality, period of strong yearly increases during actively look at best practice measures Health, Safety & Environment (QHSE) 2000–2007. While more than 1,100 cas- in Quality & Safety measures, of which officers has increased significantly. ualties were officially reported in 2007, again the majority is organizational (79% Whereas the safety part is typically not a little more than 900 were counted of respondents) and process (73% of disputable, as it is about colleagues’ in 2011. An increasing percentage of respondents) related. 58% of the health and life, the quality part of the maritime incidents occurs in ports or respondents also look at IT measures. role always has to find the right balance docks or in restricted waters, whereas between helping the operative work to the share of incidents at sea is decreas- In the in-depths interviews, we could improve quality without overly increas- ing, according to casualty statistics in again see some similarities among all ing administration. Looking at some 2011. For 2012, the same trend is being participating ship managers: statistics, fires and explosions are still the observed. 3rd largest reason for the total loss •• The set-up of dedicated Quality & of vessels and in 5th place among all This trend is also valid looking at the Safety (QS) teams that report directly reported accidents at sea. With regard total number of ship losses, which has to a senior executive or the CEO of to PSC statistics, the lack of fire safety decreased from 177 in 2001 to 106 in the shipping company has found its onboard remains in 1st place and 2012, the reasons though remained way throughout the industry. Many contributes to every 5th detention relatively stable. respondents stated that the most ex- of vessels in port. perienced and best personnel should

What does Port State Control often find? Where do maritime incidents happen?

6% Ship’s 5% SOLAS-related 1,145 certificates & operational deficiencies documents 103 Load 76 lines 934 5% Fire safety 143 84 Other locations measures 19% 80 Restricted waters 107 MARPOL Estuary/river Annex1 335 7% In port/harbour/dock 286 ISM-related At sea Safety of navigation deficiencies 8% 15%

Stability, struc- 488 ture & related 377 equipment Life-saving 9% Propulsion appliances & auxiliary 13% machinery 2007 2011 13% Figure 9 – Port State Figure 10 – Maritime incidents development Control findings (DNV Jan. 2012) (IHS Fairplay Casualty statistics, November 2011)

20 Quality & Safety Management

be given these tasks. This gives the Move from QS to QHSE Deploy and monitor regular important subject the visibility and As environmental and occupational crew training on safety issues the professionals the power they health subjects become more and more need to accomplish their tasks. The More than everything else, the quality important, the scope of QS departments influence and budgets assigned to the and safety of operations depends on widens to Quality, Health, Safety & QS teams have increased significantly crew awareness, which is kept on a Environmental (QHSE) matters. The in the last years. However, there high level by continuous training and benefit lies not only in additional subjects is the feedback that there is some information. The means are many – getting attention, but also that combined frustration from the operational from simple weekly update “pictures” procedures ease implementation as teams that QS has not developed to complete computer-based training well as reduce conflicting information beyond guidelines and manuals in programs. Given that messages need and paper being given to the crew. many cases. to be sent to more practical than aca- Respondents recommend that industry demic staff, less text and more pictures •• The critical success factor is awareness certification schemes, not only manda- are the preferred mode. of the individual crew member that tory ISM / ISPS or MLC but also ISO he can make a difference in both 9001, 50001 and OHSAS 18001, help directions and all focus of a Quality & to establish integrated and state-of- Safety management system is directed the-art procedures. Not only give they to this. A lot of creative ideas could good guidance but prove compliance be identified in getting Quality & to the highest degree in an increasingly Safety issues into the minds of seafar- competitive market. ers. Formal training schemes with the superiors or with video or computer- based material are possible, but also What caused shipping losses in 2012?

simply a regularly changing picture 2% Collision (e.g. harbour wall) in the crew area of the last accident 1% Miscellaneous happening in the fleet, which is 5% Hull damage (holed, cracks etc.) selected and explained by the QHSE 6% Machinery damage/failure officer. 6% Collision (involving vessels) •• Process supporting information systems allow the Quality and Safety experts to look up from their desks

with a much faster and easier infor- Foundered mation access and basis for targeted Fire/explosion (sunk, submerged) actions. 10% 48% Based on the interviews of this study and research conducted by GL and Fraunhofer, we would summarize key Figure 11 – Causes for shipping Wrecked/stranded elements of best practice in Quality losses in 2012 (Lloyd’s List Intelli- (aground) & Safety Management: gence Casualty Statistics) 22%

21 Fraunhofer CML

Nurture a “no accusation / amount of paper, forms, checklists and developed? What have been the major blame” culture reports that can no Ionger be processed causes of near misses? What incidents manually. The solutions typically com- have caused environmental damage? Quality and especially safety improve if prise a complete onboard–onshore With proper process automation, the there is an open culture among all staff reporting for all findings and incidents, production of such KPIs in a state-of- to name issues without accusing some- structured descriptions, conditions, the-art reporting and analysis solution body. Especially pinpointing a “near root cause analysis functionality, fleet- (often called Business Intelligence Solu- miss” and discussing how to avoid it the wide action tracking etc. A key part tions) is no Ionger a time consuming next time is challenging, if everybody of the Safety Management Manual Excel exercise but is available at a mouse involved feels bothered or even blamed becomes electronically available and click. The time can much better be used for something. All senior staff together manageable. Other functionality that to understand the information given with the QHSE expert depend on this supports QHSE professionals are and derive the right actions from it. culture and need to invest in a com- certificate (expiry) control, document mon understanding that avoiding any handling and onboard distribution, incident is worth openly discussing any drills and trainings planning and control. Have risk assessment integrated improvement areas in Quality & Safety All the available data are used for a in regular processes together and not because somebody comprehensive and up-to-date reporting. did it wrong. Although mandatory in the ISM code for some time now, there is still uncer- Automatically produce tainty how to best conduct and docu- Use integrated regular quality and safety ment risk assessments onboard. Best Quality & Safety solution KPI reports fleet-wide practice is a close integration with the processes that need these risk assess- Process support for QHSE departments Many QS departments use comprehen- ments, e.g. critical inspection or cargo has in the last years come to some sive KPI reporting as a key management operation. Again, if additional paper broader usage and acceptance. On tool to assess performance of the fleet is to be avoided, integration in the QS the one hand because good tools are and the impact of taken safety mea- solution is helpful. Documentation is available, on the other hand as QHSE sures to the performance. How have then done automatically and keeping professionals see an ever-increasing the accidents or non-conformities an overview becomes easier.

22 Quality & Safety Management

Non-maritime standards to look at

Management systems as laid out in •• The Environmental Management at improving the energy performance. different certification standards, if System standard (ISO 14001) sets With the requirements to reduce introduced and managed properly, help criteria for an environmental manage- emissions from shipping and rising to keep good processes in place that ment system to use resources more bunker prices, this standard becomes produce quality services and to show efficiently, produce environmental a high attention from shipping com- that to their customers at the same time. products and services and compliance panies at the moment. A few key non-maritime standards find with relevant legislation. It ensures their way to shipping companies that that that environmental impact of an •• The Occupational Health & Safety are worth to look at: organization is being measured and standard (BS OHSAS 18001) improved. promotes a safe and healthy work- •• The Quality Management System ing environment by looking after standard (ISO 9001) is the most •• The Energy Management Systems a management system that helps widely used management system standard (ISO 50001) should help an organizations to consistently identify certification today and looks after how organization to follow a systematic and control health and safety risks, companies produce quality products approach in achieving continual reduce the potential for accidents and services while meeting the needs improvement of energy performance, and aid legislative compliance. It of other stakeholders and comply to including energy efficiency, energy was developed outside of the ISO regulations. For shipping companies, security, energy use and consumption. schemes above but allows it to inte- it makes sense to combine this certifi- While the ISO 9001/14001 standards grate well into the larger system of cation with the ISM / ISPS certification, are looking at improving a manage- ISO certifications. as there are overlaps / synergies to ment system, the ISO 50001 is raising be taken advantage of. the bar by actually looking

23 Fraunhofer CML

Best practice in Procurement

The procurement of spares, supplies less attention compared to Technical The in-depth interviews conducted in and services is another elementary Management. However, the budgets the course of this best practice study task of every ship manager to keep handled are still significant with a revealed a number of focus areas in the vessel ready to sail. He does that steady trend to rise, as the following Procurement across all ship managers: on the account of the owner. Although pictures show. Tighter regulations and low operational costs are a key differ- new international maritime conven- •• Many respondents look at organiza- entiator for ship managers, there is no tions on safety, manning and the tional and process matters to improve immediate effect of good purchasing environment will continue to exert data quality and reduce manual in their pockets. This might be a pressure on budgets post-2013. effort. Purchasing systems have reason why this function often gets become commonplace, however to make everybody work within the processes remains challenging. Also, What is spent to operate a vessel p.a.? 3,138 € data quality is still a big issue to many shipping companies to reduce 2,539 wrongly ordered parts or a lot of € 942 Manning communication with the supplier. •• This will give purchasers more time 853 for real sourcing activities that also 1,768 involve proper demand planning, Repair & € 956 which is supported by organizational maintenance adoption of purchasers’ roles. Although 723 this is seen by many respondents, the 837 way to this is still long, as day-to-day activities consume too much time 735 Stores / lubes 519 from staff. 274 •• Increasing reliability and quality de- 180 307 316 Insurance 165 mand will also change the treatment 181 268 189 Admin of suppliers to a more long-term, less transactional manner. Even if the 15,000–20,000 DWT Panamax 3,000–4,000 majority sees this change of suppliers’ general cargo dry bulk TEU container

Figure 12 – Annual operating budgets for a vessel in K€ (Drewry, Ship Operating Costs 2010–2011)

24 Procurement

role happening, there seems to be No purchase outside the Increase of total ship operating costs in % a cultural difference in regions where system (no “maverick buying”) bargaining each transaction is per- 7% 6.7 6.7 ceived as the purchaser’s value to the The days that purchasing is done by fax 6% company. and phone are definitely over. Software systems are commonplace and for ship •• Another common result of a more 5% managers they need, as said above, to long-term and strategic view on be closely integrated with the Technical 4% procurement is the extension from a 3.3 3.4 Management information, i.e. spare pure purchasing to a whole supply 2.8 parts need to be connected to equip- 3% chain management perspective which 2.2 ment and to maintenance jobs. Since is added to the role of purchasers 2% there is money leaving the company, a according to many respondents. This best practice procedure is the need for 1% not only includes materials and ven- a system-generated purchase order for

dor management, but also the whole Overall LPG carriers Large dry cargo ships Containerships carriers Bulk Tankers all things purchased. lnvoices will not be 0 transportation, storage, material and 2011 compared to 2010 accepted without prior purchase order. information flow part, which can be These procedures not only enforce Figure 13 – Annual operating budgets optimized to a shipping company’s approvals for purchases and give early development per ship type (Drewry, benefit. Ship Operating Costs 2010–2011) indication of committed expenses. They Based on the interviews of this study also keep the Procurement department and research conducted by GL and involved and a chance to consolidate Fraunhofer, we would summarize key demands from different angles of the elements of best practice in Procurement: organization in a professional way.

25 Fraunhofer CML

Harmonize and centralize the Automate and simplify Communicate with suppliers management of master data the process electronically

Following the best practice in Technical If the master data are set up in the Unlike in other industries, shipping has Management a central and harmonized background, the purchasing process not yet found a standard for electronic management of spare parts, supplies can be simplified, reducing the manual data interchange (EDI) that exchanges and services as “articles” in the system, correction needs for the purchaser. A messages (inquiries, orders, invoices) supplier trade agreements and storage request from board is based on specific electronically from the procurement information is a key foundation of any articles, leaving no room for interpreta- system of the ship manager to the sales professional purchasing work. There tion. The superintendent can approve system of the manufacturer. However, are defined processes for setting up the request in the system. Many ship this is a clear best practice in many which master data with approvals and managers allow direct purchases for shipping companies that have found four-eye principles (e.g. for supplier small ticket items from board to the individual solutions with their key bank data). The ship management supplier (within the system), keeping suppliers. With the rise of the Internet company uses fleet-wide standard cata- this away from further processing in the in the last decade, the popular e-com- logues for any supplies and “templates” office. Order, delivery note and invoice merce marketplaces could take over or “articles” for recurring services. match together. The mere invoice that role of managing the electronic Spare parts are the same across vessel registration enables this fully automatic communication with suppliers, next to groups. Supplier information comprises “3-way match” to post the invoice. their original purpose, which is provid- commercial conditions and trade agree- Manual checks and approvals are only ing access to a global supplier base ments. There is a harmonized storage needed if deviations occur. for better quotations. management across the fleet.

26 Procurement

Plan demands fleet-wide Embrace strategic agreements and where to individually tender. There will be time to assess, Given a well-fed Technical Management sourcing activities whether it makes sense to participate system in which spares are connected A buying decision is typically twofold: in purchasing pools and in which. to maintenance jobs, a proper history (1) buy from whom – sourcing (2) how Consideration can be given to assess of supplies and services needed and a to buy it – purchasing. Up to now this the risk of a failing supplier and how fleet-wide transparency of material on study shed light on the second part and to mitigate etc. stock, purchasing managers can well the processes involved. However, a sig- in advance plan what they need to buy nificant best practice in ship managing by when. This not only reduces the companies is to dedicate enough time number of “urgent” transactions but Reduce number of suppliers for taking the right sourcing decisions. increases Iot sizes, drives down costs ln other industries, a clear organizational As a common result of a more long-term with suppliers and reduces logistics separation in the Procurement depart- and strategic view on procurement, the efforts and costs. Typical supplies then ment can be witnessed. There are role of the supplier is changing. An often come in a “standard box” per voyage / commodity / category managers or stated, best practice is the reduction of round trip. Critical and expensive spare Iead buyers that are responsible for the number of suppliers and intensify- parts are held in logistically sensible certain “markets” (e.g. electrical ing the relationship with the then key locations – not on every vessel. Purchas- equipment, safety equipment, steel) suppliers. Building relationships of trust, ers can strike an economic balance with and there are purchasers that process common understanding and commit- the technical team on maintenance the requests, place the actual orders ment with suppliers and service provid- planning. etc. To a large extend, this is hardly ers will often much more guarantee a found in shipping companies. Some- responsive and cost-effective approach times purchasers have a part-time to procurement. This comprises a “Iead buyer” role and specialize in stringent supplier evaluation process, certain markets and materials. As a assessing quality and timeliness of result, ship managers get a strategic delivery as well as annual assessment view on global supplier markets for and planning talks. In this way, not only their main categories of spares, supplies quality and costs stay in line but the trans- and services and can optimize costs, actional work of the purchasing team quality and availability. There is a sound is reduced, giving more time for a more decision where to use long-term frame strategic view on the sourcing activities.

How does e-commerce in shipping work

An e-marketplace provider is operating the marketplace who offer these parts, an Internet site which allows shipping receives electronic quotations into its companies to find new suppliers or purchasing systems, selects one and suppliers to get in touch with new buy- places an electronic order, receives the ers for their products. The site is open electronic order confirmation, an elec- to many buyers and sellers by providing tronic delivery confirmation etc. commerce-related functionalities like catalogues, ordering, wanted advertise- All orders via the e-marketplace and all ment, trading exchange functionality and data (incl. often not typed in prices per capabilities like request for quotations. line item) are automatically entered in the purchasing system of the ship man- The Procurement system of the shipping ager. Next to the significant processing company is electronically connected to advantages, the access to a wider sup- the e-marketplace and sends all infor- plier base will allow more competitive mation over it, as is the sales system of prices. An advantage that is higher if the supplier. So when a ship manager fewer articles are part of framework wants to tender a spare part, it sends agreements. this tender to a number of suppliers on

27 Fraunhofer CML

The importance of ICT

In shipping as well as in private life, the the future, only a few see a stable So far, shipping has treated investments rapidly growing number of media and importance. in software technologies very con- types of information and communication servatively. If the investment level is demonstrates its increasing significance. The ICT field in shipping can be compared to the one for similar tech- Today, there is barely an area affecting structured into: nologies in the oil and gas industry, the the shipping industry, which evolves as picture is dazzling. For each USD 1,000 •• Software dynamically as Information and Com- the oil and gas industry invests into new •• Communication munication Technology (ICT). assets, USD 35 is invested into software •• Navigation technologies. ln shipping, for each USD •• Automation This also demonstrates the assessment 1,000 CAPEX, only USD 7 are put into of the role of ICT in the implementa- While the last three are strongly con- comparable software technologies, i.e. tion of best practice today. More than nected to hardware, the software seg- only 20% in total. There is a Iot of room 50% mark the highest possible value ment develops applications that run on for catching up. The change is already “Big potential” in our survey. On top, any PC. Every year an estimated amount happening today, despite or because of over 90% of the respondents expect of USD 500 million is spent on core fleet the difficult overall market situation. an increasing importance of ICT in management applications.

Role of ICT in implementing Role of ICT in implementing Main opportunities best practice today best practice in future in using ICT

Big potential Small potential Stable Big potential Small potential 8% Seamless information flow

Better decision support Increasing 92% Integration of ERP/BI solutions

0% 20% 40% 60% 80% 0% 20% 40% 60% 80%

Figure 14 – Role of ICT in implementing Figure 15 – Role of ICT in implementing best Figure 16 – Main opportunities in using ICT best practice today practice in future

28 ICT

Main challenges of using ICT

Big challenge Small challenge Usability Management of master data Document management Data migration Administration / support cost Security 0% 20% 40% 60% 80% 100% Figure 17 – Main challenges of using ICT

As main opportunities seen in using ICT, 2. A generation change in 5. Many implementation pro- respondents state seamless information management lowers barriers jects fall short of expectations flow, better decision support and integrated solutions as highest ranked, A younger management generation has Expectations on a software implemen- which confirms many of the stated best low to none barriers to computers any- tation project are high: higher transpar- practices above. Other opportunities more. Having grown up with them they ency, process efficiency, less interface seen are cost reduction by reduced are, in contrast, surprised how much communications, better compliance personnel, employee motivation or purely paper-based processes they find are all seen as results of successful planning capabilities. in a traditional shipping business. implementations. However, the internal effort involved is often underestimated. However, to reach these goals a set of And more than the functionality of challenges is commonplace. Not surpris- 3. Software usage strategies the different solutions does the imple- ingly, usability is ranked highest here, vary but come closer together mentation support make a difference which is often a main hurdle for crew to at the end. be better integrated into IT-supported Shipping companies either look for processes. The second key challenge is one integrated solution or follow the the management of master data, which “best of breed” approach (each func- 6. Need for services around is supported by many best practices tion from a different vendor), they rely software is increasing across above. Other challenges mentioned on in-house developments or mix these the board are training, integration into existing strategies. However, with better solu- systems and language barriers. tions in the market, a moving away from Following this, there is an increasing in-house developments and towards need for services such as implementa- The picture of the role of IT is com- more integrated solutions from one tion and integration support, process plemented by two market snapshots vendor can be observed. consulting and decision support. in 2009 and 2011 with approx. 200 shipping companies across the globe in which some clear trends can be 4. The buying criteria are stable established. Key buying criteria have and will be qual- ity of the product (content and technol- 1. IT budgets are not cut back ogy-wise), reputation of the provider, its service orientation, user- friendliness and Despite costs pressures across the board, value for money. Simply a low price is more than 80% of respondents do not rated as becoming less important, as it is cut back on their IT budgets, half of often paid twice in the long run. How- them will even increase the investment ever, respondents admit that price is so level into software technologies. easy to compare.

29 Fraunhofer CML

Appendix

Methodology The base for this study was twofold: In total, responses and interviews of geographical locations and functions more than 80 shipping companies could of respondents in shipping companies •• Numerous expert interviews and dis- be used for this study. During this phase, could be achieved. We would like to cussions from GL professionals around the anonymity of the questioned persons thank all participants and contributors! the globe in the full last year 2012. and their corresponding companies as •• An electronically submitted question- well as the privacy policy was preserved naire that was filled out by decision- to the full extent by GL and Fraunhofer makers from shipping companies. CML. A good mix of company sizes,

Participants – geographical distribution

Size represents the number of respondents

Figure 18 – Geographical distribution of respondents

30 Study contributors

Company profile

Who has been questioned? Fraunhofer CML GL Participants – type of ship manager The Fraunhofer Center for Maritime Germanischer Lloyd (GL) offers clas- Logistics and Services CML conducts sification services of plan approval,

8% Wholly professional contract research for inspection and certification of materials in-house 11% private- and public-sector clients in the and components as well as technical Semi- maritime industry, including ports, termi- assessments of ships in service. Its Mar- 11% independent nal operators, shipping companies and itime Solutions unit supports customers 69% Independent logistics service providers. around the world through software 3rd party solutions, management systems certifi-

n/a The Fraunhofer CML is part of the cation and training as well as consulting Fraunhofer Gesellschaft zur Förderung and engineering services. GL’s experts Figure 19 – Participants – type of ship manager angewandter Forschung e.V., consisting serve as advisors to governments, the of 80 research facilities with a total of IMO, flag and port states. The group Participants – company size 22,000 employees. is committed to a smarter, safer and greener future of shipping. Managed ships 0–50 4% www.cml.fraunhofer.de www.gl-group.com 50–100 19% >100 n/a 58% 19%

Management staff 0–50 12% 50–100 >100 Study contributors 19% 42% n/a. We thank the shipping community to have taken time for this study and we 27% thank the team of GL and Fraunhofer CML, who has put this all together. Crew pool 0–500 8% 500–1,500 Fraunhofer CML: GL: 12% 1,500–3,000 Prof. Dr.-Ing. Carlos Jahn Dr. Torsten Büssow 38% >3,000 n/a Ole John Kevin Brunn 19% Dania Hasberg Torsten Kappel 23% John Christian Olbers

Figure 20 – Company size Dominic Ng Jeffrey van der Gugten

31 0E845 · 2013-04-01 www.gl-group.com [email protected] Phone: +494036149-0 Brooktorkai 18·20457Hamburg,Germany Germanischer LloydSE without notice to change, supplement or delete parts of the pages or the entire presentation of services and products or to stop the publication temporarily or definitively. or temporarily publication the stop to or products and services of presentation right entire the the or pages the reserves of parts expressly delete or member Group GL Each supplement change, to notice non-binding. are and without alteration to subject be may products and services of excluded are presentations information, All law. by incomplete or permissible extent incorrect of use fullest the the to including provided, information of non-use or use the Group with GL the of member any connection in or of against out claims arising damage or Liability loss any to provided. relation in information the of quality or completeness accuracy, the for liability of kind any assume or warrant not does Group GL The www.gl-maritime-software.com [email protected] 20457 Hamburg,Germany Brooktorkai 18 GL MaritimeSoftwareGmbH Your contact This brochurewas producedwithconsideration fortheenvironment. Itisprintedonpaperthat100%recycledandhasanFSCaccreditation. Fraunhofer CML www.cml.fraunhofer.de [email protected] 21073 Hamburg,Germany Schwarzenbergstraße 95D Hamburg