The Maritime Economist Magazine Spring 2015 | Page 27

THEMARITIME Economist

voice of professionals

Some shipping companies plan their fleet
accordingly: The newest, most innovative ships are
owned. The somewhat older ships are sold and leased
back. The oldest ships in the fleet are then finally sold, and
eventual ad hoc needs would be covered through
occasional chartering in. In this way, the newest ships
are owned, and older ships are being disposed of in
an orderly manner.
There are, of course, cases where the old ships still
might have a useful value for a potential competitor.
In cases such as this the ship owner might want to be
reasonably sure that the ships to be sold do not end
up in the hands of potential competitors – new or
existing. To sell to parties that are not set up to
compete with the seller thus then then become key –
even if the selling price is lower than what it elsewise
might have been. Typical issues for the seller to assess
in this respect are: does the potential buyer have the
specific links to key clients, similar to what the seller
might have? If not so, it may be hard for the purchaser
to become as effective new competitor
We see from the above that innovations are critical,
particularly in order to succeed when it comes to
shipping niche strategies (in contrast to traditional
shipping strategies, which are driven by good
timing regarding “in/out”, “long/short”). How can we
approach this in effective ways?

Increasing the customer closeness

Traditionally many shipping companies have worked
through ship-brokers as a way to interface with one’s
customers. And, many traditional ship-brokers have
been following business models which essentially
are based on responding to requests from those
who have needs for transportation by attempting to
identify suitable tonnage and to offer this at a suitable
price – as high as possible without losing the deal. This
is thus essentially a business mode to compete on
costs. The customer is to be understood through an
“inside-out” set of lenses – as long as the best possible
set of rates is offered to the customer and accepted by
him, then, further specific dimensions ideally desired
by any customer would be irrelevant.
A closer relationship with the customer might be
seen as an “outside-in” one. Here, the specific needs
of a given customer must indeed be met. To listen
to a customer, and to actively dialogue with him (“let
us sit down and reason together”) becomes key
(Branson, 2014). How can this be done? Above all,
a close interpersonal relationship would typically
be an advantage – to build trust, based on willing
demonstration of relevant capabilities. For the ship
owner this would imply having capabilities to solve
what a customer might see as the most pursuing
specific problems or challenges. And, for the customer
the task would be to allow the specific experts the
freedom to dialogue with his/her counter-parts at the
shipping company. Often, this might not be the case!
Rather, instead, the dialogue might be channeled
through the customers’s chartering-in department!
The shipping company – specific customer dialogue is
often technical in nature, focused on coming up with
better solutions. Often this might result in building
new tonnage, or modifying existing one, to come up
with tonnage with specific capabilities tailored to these
needs.
The ship owner – key customer dialogue should be
ongoing, both so as to ensure that the link is strong
enough not to break down in case of disappearance

ME Mag

pool-companies (Lorange, 2009). Typical ways to
go about to implement this would be to charter in
tonnage rather than to own it – on t/c or b/b charter.
A variation of this might be to structure a so-called
sale/lease-back deal, involving that the owner sells a
ship and takes it back, typically on a long b/b charter at
a given rate. After a certain period of time, typically
quite a long one (say 10 years) then the owners shall
often have a put option, so that the ship can be forced
back to the previous owner at a given price, thus
giving the new owners a relatively clear minimum
return on the project. The original owners typically
have a call option, giving them the right to take the
ownership of the ship back if the freight rates have
gone significantly up during this time period.

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