2019 and beyond: A ship managers view

At the end of last year veteran shipping journalist Keith Wallis interviewed Anglo Eastern Univan’s chief executive Bjorn Hojgaard.

The cocktail of autonomous ships, new designs, alternative fuels, global regulations and changing trade patterns means shipping has never had less visibility into the future than today, the head of ship manager, Anglo-Eastern Univan said.

“It’s a new position for shipping to be in, where an owner building a ship today could see it obsolete by 2030,” Bjorn Hojgaard, Anglo-Eastern Univan chief executive said.

“The biggest issue in the 1990s was double sides and double bottoms. Going back further the biggest change was building ships using steel. Looking at the crystal ball now there are so many forks in the road, it’s unusually difficult to decide what to invest in,” Hojgaard said.

“It’s an exciting time to be in shipping,” he added.

“It also makes the life of a ship manager very interesting. There are so many possible paths such as autonomous ships, alternative fuels like hydrogen and fuel cells and evolving trade routes. You have to have a grasp on many of these to plan ahead,” Hojgaard said.

For the record, Hojgaard doubts there will be fully autonomous ships sailing the oceans except perhaps on short-sea trades that will still require regular shore-based monitoring.

“As to autonomous ships I think it is more a question of how many crew there will actually be on board. The human element is still needed if machinery goes wrong. People on board make things safe,” he said.

This support for seafarers extends to the International Maritime Organisation’s 2020 sulphur cap regulations, where the raft of compliance options including scrubbers, low sulphur and alternative fuels will make life “more complex for poor seafarers”. “The added complexity makes if more difficult for them,” he said.

Hojgaard is also passionate the current generation are the stewards of Planet Earth for future generations. Hence, his despair at moves to fit scrubbers – or as he calls them refineries on ships – to comply with the rules, while calling discussions about the IMO 2020 rules a “Red Herring” when the industry should be focused on the wider issue of greenhouse gas emissions.
He was speaking close to the two-year anniversary of the full integration of Anglo-Eastern and Univan into a single entity.

“No clients have left us because of the merger. On the contrary our ship owner customers come to us because they see the benefits of scale. It is also so much easier to attract seafarers and people to join us. We receive around 22,000 applications a year for the 440 positions available on our cadet programme in India. It gives us the opportunity to handpick the best,” Hojgaard said.

Anglo-Eastern Univan is currently planning the second phase of its maritime academy at Karjat, about 90 minutes drive from Mumbai. Hojgaard said the extension, which will allow Anglo-Eastern Univan to increase the number of cadets by 120 a year, should be completed by the end of 2019.

Currently around 18,000 of its 27,000 seafarers are Indian, while one in five Indian seafarers goes on board an Anglo-Eastern ship, Hojgaard said. That comes as Anglo-Eastern Univan has seen a steady increase in the number of ships it manages to a current tally of around 650 vessels.

He estimated around 15%-20% of the global merchant fleet is under third party ship management of which Anglo-Eastern has about 6%-7% of that market.

But the expansion of the fleet also comes against an annual churn of about 10%-15% as vessels are bought and sold.

“That’s the equivalent of one almost every two days. It amazes me it happens and I don’t really get to hear about it,” Hojgaard added. But he admitted that “one of the challenges of size is that it does become a little impersonal.”

“If a ship manager has 30 ships then it’s got 90 masters and the principals know everyone. Now we have more than 1,200 captains,” Hojgaard said.

“The real advantage of size is we can take over 18 ships in the space of six weeks and it doesn’t have an impact on our operations. Taking over 18 ships would have an impact for a ship management firm or an owner with 30 vessels.” Hojgaard explained.

He also sees more consolidation on the way, pointing out that four companies have merged in the last two and a half years, although he  thinks a ship manager with 30 ships can still find a niche to operate in. “The hardest place to be is perhaps 100-300 ships. At that size you are two small to really leverage scale, and too big to be a boutique offering”, he said.

 

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