NEWS / PRESS RELEASES
Bernhard Schulte Shipmanagement (Bermuda)
NYMAR Editor Ranjeeta McGroarty interviews BSM (Bermuda) Managing Director, Jens Alers about his views on the BSM Merger and the Shipping Industry.
Ranjeeta:
What is the role of a ship manager in the life of a ship owner?
Jens:
The role depends very much on the individual ship owning company as a client and its degree of interest to involve the ship manager in its overall business. We have clients who want us to work with them on almost every aspect of their business; from human resources, technical and commercial management, to engineering, design and negotiating the ordering of ships. There are some clients that take a much more selective approach. From the menu of products and services we offer, they might pick one or two items; for example, new building supervision or safety consultancy. Every client relationship starts somewhere, and the most successful relationships are those which grow over the years into symbiotic, flexible and integrated relations.
Ranjeeta:
Can you explain the activities of Schulte Group and BS Shipmanagement?
Jens:
The Schulte family has been involved in the maritime industry for 125 years. Our group rests on two main pillars—our people and a strong and strictly long-term commitment to clients, financiers, suppliers and other stakeholders. In that respect, nothing has changed since 1883, when the first Schulte generation entered the business.
Our people, all 15,000 of them (onshore and onboard), make sure that we will be around for the next 125 years.
Recently, I gave a presentation on our services and activities. Upon finishing, the CEO of the client company I gave the presentation to quipped: "So, you deliver pretty much everything, except for the milk?" I admit, we don't deliver the milk, but we do offer a wide range of products and services, including human resources onboard and ashore, training and education, safety, technical and engineering know-how, and ship design. In addition, we provide ship building and repair yard relationships, new building and conversion supervision, marine insurance, pool management, commercial, corporate and ship finance expertise.
Ranjeeta:
What type of ships do you manage and its geographical locations?
Jens:
The decision from where we do business is driven by three main factors: Proximity to the clients, the countries our seafarers come from and the trade of the ships we manage. Other important factors which influence location-based decisions are: well regulated jurisdictions, competitive pricing, taxes, and so on. In short: There will always be a dot near you on the Schulte map.
Bernhard Schulte Shipmanagement is organized divisionally along the lines of ship types: Crude, product and chemical tankers make up one division, gas tankers; FPSO's and offshore vessels are the second division and the third is made up of container ships, bulk carriers and car carriers. A forth division covers the many "value added" services we offer. We hold significant ship management market share in gas ships, container vessels, chemical and product tankers, FPSO's, the capsize sector as well as the new building supervision and maritime engineering sector. All in all, the group now has almost 300 ships under full management and another 350 in crew management. We have over 60 ships under new building supervision contract right now.
Ranjeeta:
Please sum up your day to day role and the most interesting part of your job?
Jens:
One needs to be flexible, because roles change. My role is no different. I have been in the maritime business for more than half my life now, most of that time with the Schulte Group in ship broking and project development, as well as shipmanagement.
It's rather difficult to say what the most interesting part of my job is. Our business does not provide me with a mere job. I need to be passionate about ships and the people who take care of them. What has always fascinated me the most is the global nature of the maritime business, and the extended family and friends one makes in it.
Ranjeeta:
There seems to have been a dark cloud hovering over some shipmanagement companies. What advice would you give ship owners when handing over the life of their vessels?
Jens:
I am not so sure which particular weather system and which ship managers you are referring to, but I do know that ship management is certainly not a ‘sunshine’ industry. We face the elements all the time. Ship managers get blamed for everything, including the weather and not being able to deliver the milk on time. Being in this business often feels like a thankless task, but it is the most rewarding place to be when the shore and the shipboard teams work together as one. In this manner, a huge difference is made with regards to the success of the ship, the fleet, and ultimately the bottom line of the owner.
What is my advice to ship owners? Don't base your decision on who you want to partner with solely on a budget in an Excel spreadsheet, but take a thorough look at organizations and their specific capabilities. Each shipmanagement company has different strengths and weaknesses. They can be measured. In the end, the ship owner needs to make the decision to take into account various factors affecting their business.
Ranjeeta:
Can you describe a challenging situation that you faced and overcame?
Jens:
A very successful and now retired industry colleague of mine once described his career as a ship manager as "living in a constant state of “unease.” Managing ships means one worries a lot. Ship managers are hired to worry! Ships operate in a hostile environment. Many people forget this, probably because they look at neat little Excel spreadsheets all day. I think the worst thing I have ever dealt with, was the death of a seafarer onboard one of our vessels. I felt I had totally failed the man, his family, and his colleagues onboard and ashore. That feeling will stay with me as a constant reminder of why safety is the highest priority in shipping. The most challenging situation I experienced was probably an emergency response I directed during an all night and day marathon. The ship we assisted had grounded during a hurricane and there was a distinct danger of her breaking apart. It was the combination of the skills of the professionals onboard, all the different parties we dealt with ashore, and a bit of luck, which saw her afloat again the next morning.
Ranjeeta:
Do you think ship managers are underpaid for the risks they assume?
Jens:
Yes, but this is our own fault. The fraternity of ship managers is just as desperately competitive and self-destructive as the airline industry, which continuously manages to shaft itself. Over the next few years, we hope to have sorted out this particular situation.
Ranjeeta:
How were the financial results for both the Schulte Group and BS Shipmanagement in 2007 and expectation for 2008? Were 2007 results as expected?
Jens:
We prefer not to talk about this issue because of the fact that we are a privately owned company and do not publish our financial results. Let's put it this way: Whoever has not made money in ship owning over the last few years might wish to reconsider their career options or to switch industries. Whoever has made money in the shipmanagement business over the last few years definitely has a fantastic team at work and must enjoy a great deal of client appreciation.
Ranjeeta:
You mentioned that you recently integrated your various shipmanagement entities. What was the reason and how difficult was the process?
Jens:
This is correct. Early last year, the leaders of the four Schulte management companies decided to join forces, not just as subsidiaries of one and the same shareholder, but to genuinely come together as one company under one brand and one integrated management team. We decided to call the company “Bernhard Schulte Shipmanagement” in recognition of our joint roots. To be honest, this reformation was long overdue! Complex integration and restructuring processes are never easy, but we are nearly a year into the merger now and business is running smoothly. We have ended the internal competition for precious resources, which can now be coordinated to the greater advantage of our clients and shareholders.
Ranjeeta:
Any expansion plans? If so, please explain.
Jens:
Expansion is not an end to itself. It has to be planned, it has to lead to increased profitability and it must strengthen, not stretch the company's human, technological and financial resources. As to our specific business expansion plans, I prefer to tell clients and NYMAR members about those in one on one conversations.
Ranjeeta:
Has the credit market affected your company?
Jens:
Nobody operates in a vacuum. As owners and commercial operators, we have always maintained an extremely solid balance sheet. We reap the rewards of such in the best of times, but especially at a time when money becomes a costlier commodity. As ship managers, we must always be aware of the potential risk of being left out in the cold when a client stops paying their bills. It could be one of the bills we sent. The closer one works with their client, the better the understanding of each others' business, and the more effectively the early warning systems work.
Ranjeeta:
I believe you are one of the first non-U.S members of NYMAR. What do you hope to see in the New York Maritime Cluster?
Jens:
Peter Shaerf actually told me I was the first overseas member to join NYMAR. Essentially, I am only halfway overseas: I spend a lot of time in New York, with our clients, ship brokers, technology partners, insurers, friends and family. I come to New York a lot – for business. I think this is a good endorsement for the New York Maritime Cluster.
Ranjeeta:
What changes do you see in the shipping industry and what should ship managers be looking out for?
Jens:
I see our business becoming ever more complex and complicated. There exists a general willingness within the industry (not just by its leaders) to operate in an environmentally responsible manner, essentially by turning what has always been a moral obligation into a dollars and sense business. I see a few industry participants leading the way into a new era of fuel saving propulsion technology. We are on the way towards integration, and not just by aligning our businesses with all stakeholders. We are including the regulatory bodies into one seamless information and work flow, and I foresee vast advancements in efficiency and productivity emanating from this.
Ranjeeta:
What are the main challenges for the industry and how do you see ship managers activities in 2008?
Jens:
We are more than halfway through 2008. The main challenge we faced from the beginning of this year, and of course well before then, will still be the challenge we will face in 2009 and beyond. We are currently in the middle of the biggest skill crunch since early man discovered how to make fire in his cave. The competition over professional and skilled human resources will heat up, and to some degree our industry only has itself to blame.
We are designing and building ships that take into account only cargo carrying, but not crew accommodating. This has to change! The smarter section of the industry is already taking steps to rectify this; however, we have to stop thinking of education and training as a cost and instead treat it as an investment. We need to integrate ship and shore careers in order to build and to retain talent. We must rethink the way we remunerate people; it's not just the wage increase that counts. It is a real share in the business that people want. Seafarers want to share in the financial success they create through their hard work onboard day and night. Dividends shouldn't just go to shareholders, but also to the ocean going stakeholders! Once this happens, we will be well on our way to overcome the shortage of qualified seafarers crisis that we are currently facing!
