Singapore remains magnet for ship management
Stephen Matthews, correspondent | 23 April 2018
Singapore’s digital innovation schemes are drawing more ship management companies to set up and grow their business there. Credit: Shutterstock
Singapore continues to attract ship-management companies from all over the world, with an almost constant flow of new and existing ship managers setting up or expanding their operations in the city state.
Recent developments include leading international group Wilhelmsen Ship Management moving its global head office from Kuala Lumpur, Malaysia, to Singapore during the first quarter of 2018, citing its advanced digitalisation facilities and networks.
“Singapore is an established maritime hub and a driver of digital innovation that will play a significant part in the company’s ongoing transformation. Relocating our global headquarters to Singapore enables us to position ourselves in the centre of an ecosystem that shares our ambition for growth and digitalisation,” the company said.
One of the largest ship-management operations in Singapore is Bernhard Schulte Shipmanagemt (BSM), which is part of the international Schulte Group and has 10 ship-management centres globally.
Raymond Peter, deputy managing director at BSM Singapore, said that his company manages about 100 vessels from Singapore, including 28 dry bulk carriers, 26 crude oil tankers, 21 chemical tankers, and 20 liquefied petroleum gas carriers, totalling more than 5 million dwt. It also has a further three vessels under crew management only.
BSM Singapore is looking to grow its tanker fleet, specifically in the niche asphalt tanker sector, with six vessels currently under management and a further two due for delivery. Although a small part of its fleet, the company is adding asphalt tankers “due to increasing demand for asphalt products”, Peter told Fairplay.
A further niche within the same sector is the growing demand for coal tar pitch (CTP) vessels, which are highly specialised because of the specific cargo-heating requirements for tar pitch. “One of our existing asphalt tankers is being converted to carry CTP. These vessels require specially trained crew due to the specific operational requirements and for safety reasons as CTP is highly carcinogenic,” Peter said.
He highlighted that BSM Singapore is looking at getting business from the growing demand for small bulk carriers and container ships. Existing mainstream sectors are not standing still either, and Peter told Fairplay that the company was talking to one owner with a view to managing three very large crude carriers (VLCCs). “We expect that the total fleet under management in Singapore will rise above 100 this year,” he added.
Despite this growth, he said BSM Singapore is cautious in its approach to expansion. “We use a risk-based approach. Rising demands on owners require good quality managers, especially as stakeholders increasingly include banks and other financial institutions, so an increasing pressure to ensure safety and quality always exists. Cyber security is [also] becoming increasingly important.
“We have developed a fleet concept so that technical and crewing teams are practically located together based on vessel-type expertise and the right people are on board ships with the appropriate experience and training. This helps us to be more robust in our responses to regulatory developments. Achieving these benefits means having a good size of fleet under management.”
Peter praised Singapore for its status as a top hub for ship managers, allowing BSM to continue its growth. “Singapore is an attractive location for ship managers due to its location and infrastructure. There is competition for qualified personnel, especially as more ship managers start up and others expand, as some shipowners [begin] setting up their own ship management teams. There is [an] ongoing competition to recruit and retain good-quality ship-management staff and we are taking various initiatives in doing so.”
Claes Eek Thorstensen, president of longstanding Singapore-based ship manager Thome Group, echoed Peter’s support of Singapore. “The main advantages are the maritime cluster, ease of doing business, communication and logistics, easy access to vessels, good available talent pool, and that it is easy to recruit foreign expertise to Singapore. The challenge is the increasing costs, but this can be mitigated by moving support services overseas, digitalisation, and working smarter and more efficiently. In our opinion, Singapore has gained strength as a ship-management centre. No other location can compete with Singapore due to its strategic location and ease of doing business.”
Thome Ship Management has amassed a total managed fleet of 220 vessels, across several ship types, and, such as BSM, is looking to expand. “We have continued to develop the group towards segment specialisation. With performance and broad exposure, we are fortunate to have grown in all segments. The focus is on optimising fleet performance, added value to clients, and to grow the fleet organically. The plan is also to expand the marine services to support the fleet and third parties. Work efficiency is one of [our] key focus areas,” Thorstensen added.
One challenge he highlighted is meeting the increasing demand for skilled crews. “Pressure from continuous operations on low or negative margins traditionally translates into cost-cutting exercises regarding crew numbers, training costs, and the number of cadet berths. Competent officers are a scarce commodity today, and the industry’s biggest challenge will be to find and develop the competencies required, while the shortage of officers will drive crew costs higher with a negative impact on current OPEX rates,” said Thorstensen.
Goodwood Ship Management is also incorporated in Singapore, with additional offices in Mumbai, India, and Manila, the Philippines. Ashok Sabnis, managing director at Goodwood, told Fairplay that its current fleet under full technical and crewing management comprises 49 vessels, 35 of which are VLCCs.
A further four VLCCs are under construction and due to join Goodwood’s managed fleet in the second half of 2018. Goodwood also manages tankers for several major owners, including VLCCs for DHT Holdings.
Sabnis said the size of the fleet is not as important as the quality of services being offered. “We can offer good economies of scale with a fleet of 50–60 ships. We believe our approach to ship management is slightly different to others. It is based on the perspective of shipowners, with full transparency of documentation and providing added value. Trust with clients is vital. We have built up a very good reputation. Our approach, offering a fully transparent owner’s perspective, has paid dividends.”
He stressed that Goodwood places particular importance on training crew. “We developed our own training centre in Mumbai in 2013, which has expanded in scope and size since then, with a full ship mission simulator. Last year we added an electronic engine simulator and training for electrical officers. This is a sensible and necessary investment and helps to generate significant savings for our clients.”
Sabnis said Goodwood’s policy is to promote staff from its fleet crew to office assignments, such as technical superintendents, so it has had no problems recruiting skilled ship-management staff.
Like BSM Singapore’s Peter, he noted the importance of cyber security. “This is a real threat that owners and managers must wake up to. In December 2017, we became the first shipping company to be accredited with the ISO27001 information security management system standard for cyber security,” he said.
Another major international ship-management company with operations based in Singapore is Anglo-Eastern Ship Management. It has two ship-management companies based in Singapore – one for tankers and another for dry-cargo vessels – and it will shortly be setting up a new joint-venture company for tankers with one of its existing clients.
Surendra Dutt, chief operating officer of Anglo-Eastern’s tanker division, told Fairplay, “We see Singapore as the main hub in this region for tankers and we will continue to grow our business there. Singapore costs are rising, but the pro-maritime business policies, presence of a large maritime cluster, and ease of doing business in Singapore are still an attraction for us.” He said Anglo-Eastern is aiming for annual fleet growth of about 5–10%, which the company believes is sustainable.
Anglo-Eastern is also addressing increasing demands from new technology. “We are developing a data warehouse for a big-data analytics capability. Internally, we are addressing the needs for our technical teams to have a single-point dashboard for readily available, on-demand data, and then commercially developing this data warehouse for our clients across the spectrum of systems that is readily available in a single portal anywhere. We believe this will improve efficiency and increase productivity,” said Dutt.
Another Singapore-based ship manager, Union Marine Management Services (UMMS), is taking a different tactic to reach a wider client base. The company is opening a division in Oslo to provide ship management services to its European clients.
UMMS managing director Vinay Gupta told Fairplay, “Our objective is to bring the ship-management team closer to the clients who would want their service providers to speak the same language, available in the same time zone, at their beck and call whenever required, and at Asian prices. We have also started a tanker division in Singapore and are in talks with some of the clients, who are considering giving us tankers for management.”