Ship Management: Some Things Never Change
After 30 years of running one of the world’s leading ship management companies, Olav Eek Thorstensen has stepped down as CEO of Singapore-based Thome Group, leaving his successor, Olav Magnus Nortun, to take the helm. But with Olav Eek Thorstensen assuming the mantle of Thome Group Executive Chairman, there is plenty of experience and management brainpower available to help the group grow and strengthen in the years ahead.
MarEx spoke to Nortun to find out what is occupying his thoughts as he leads the company forward.
What challenges have been set for you at Thome?
The need for shipowners to cut costs is a never-ending theme of the market and with only 20 percent of owners using third party managers, there are plenty of opportunities to build on the scope of work and services we can offer our clients. In some cases, owners are earning freight revenues up to 20 percent below opex – a factor which creates its own efficiency issues for them. This is where a quality ship manager can help, not just through his larger purchasing and administrative power but also through implementation of tried and tested processes and procedures in key areas such as crewing – recruiting, training and retention – as well as all facets surrounding the technical management of the ship.
As a company, we are focusing on organic growth. We want to keep our position as the premier ship management company and make sure we continue to enjoy healthy, sustainable organic growth. Ship management is all about partnership with our owning principals, and it is important that the companies we work with share the same management ethos and the drive for quality that we as a group strive to deliver. As you well know, Thome is a major force in the management of today’s merchant ships, especially tankers, but we are also an established third party provider of offshore services, and we aim to be as much of a leader in the growing offshore sector as we are in our traditional vessel sectors.
Today’s low oil price is a blessing for fuel purchasing but a curse for the oil exploration and development industry. Offshore service vessel owners need to cut costs by between 20 and 30 percent, which opens up further opportunities for the outsourcing of technical services to third party ship management companies like us. So we see this ongoing situation as an opportunity.
The shipping industry has its work cut out pushing forward the boundaries of vessel operational efficiency – a challenge that Thome is already meeting and will continue to meet.
Where will you make changes?
Thome Ship Management offers full ship management services for vessels trading worldwide. We have a long history of successful management of all kinds of vessels particularly tankers, bulk carriers and container ships. The company was a pioneer in ship management and has a full suite of services it can offer its clients. It is a well-run organization.
So I am looking to see where we can leverage our strengths so we can further develop them. To be more efficient, we are looking at what we are going to outsource and how we are going to scale the organization moving forward.
We have a big presence in the Philippines, one we have had for a long time. We focus on crewing and purchasing there but may expand that further. Croatia is also a good source for officers, and we are looking at the feasibility of establishing a technical center there.
Additionally, LNG-fuelled vessel management is becoming more and more of a demand from our principals so we are planning to scale up that activity.
What experience do you bring to the job?
Prior to joining Thome, I worked with DNV GL in a variety of positions where I gained wide experience in the maritime industry, specifically strategic development and governance of production, knowledge management and systems related to ship classification.
I received a Master of Science in Naval Architecture from the Norwegian Institute of Technology with a postgraduate thesis in Management in a Technological Environment, and I have attended senior management courses at INSEAD, Fontainebleau and IMD in Lausanne.
That’s what your CV says. What about the real you?
Before I came to Thome, I was heavily involved in the integration of DNV and GL. I was also looking after vessels that traded globally from a technical point of view, factors I believe will add a strong perspective to the job I am doing here at Thome.
I now live in Singapore, which is the sixth country that I’ve had a work permit for. Here at Thome, we have different nationalities in our staff, our crew and our principals, and I believe I have a good understanding of what it takes to manage them effectively and productively.
How does Thome recruit its seafarers?
Launched in 2005 under Thome’s Human Element initiative, the Thome Global Cadet Program has already trained in excess of 1,350 cadets from at least 12 countries in Asia, Europe and the Far East. Currently there are 650 cadets at various stages of training on the program with another 250 plus due to join soon as deck, engine, and electrical and catering cadets in 2015. The success of this scheme has enabled Thome to fill all of its 2014 junior officer vacancies from within its own pool of trained seafarers.
As Thome Group continues with the controlled expansion of its fleet, the requirement for suitably trained officers to serve on board our tankers, bulkers, gas carriers and offshore vessels has increased exponentially. Our cadet program includes a robust selection process to ensure we recruit well-rounded individuals who benefit from our high quality coaching. Our cadets are a multi-national and multi-cultural group, fully representative of the diversity within Thome Group.
The cadet intake for 2015 is around 275 cadets globally with the Philippines remaining the core of the intake, but we continue to expand in Myanmar, Europe, India and China.
What are the technical challenges of the future?
Current and future legislation relating to emissions can be challenging for shipowners. Take the Ballast Water Management Convention, for example. Owners need to know what is the right product they need to invest in and when do they need to invest. They ask us: Is there a system that is actually complying with all the legislation? The convention has been around for about 10 years now, and we still haven’t got a firm implementation date. We still don’t have sufficient numbers of suppliers or equipment approved. What will happen? That is a real challenge for everyone.
Where is technology leading the industry?
Soon it will be possible for ships to stream video anywhere in the world. This will yield lots of possibilities for ship management companies including how to manage what is going on at sea, how to help the crew and how to can improve efficiencies by more enhanced online vessel-monitoring.
I see that this growing connectivity will help us guide and support them better – in ways we haven’t even imagined yet. It’s like when we got mobile phones, we didn’t really know what we would be able to do with them, and today they’re not really phones anymore – having a conversation is the least frequent job we use them for.
So connectivity will really shape the industry in the future, but how exactly? That’s still guess-work.
How do you view Thome operating in the future?
We will embrace technology sensibly, and we are heavily focused on how to harness Big Data to better serve our principals. We will give them the information they need, getting it directly from the source without too much filtering. With so many sensors on board it gives lots of new possibilities, and it will reshape the industry.
That said, technology is developing incredibly quickly, and that is a challenge. Is a new development something that is driven by need or by opportunity? We need to manage change so that it is driven by need, because there are a lot of things that you can do that don’t really give you benefit. It’s like young people and social media: Is it actual or is it virtual? How many friends do you really have?
While technology will change us, some things won’t change. Crewing is going to be just as important in the future as it is now. We will always need to know the level of competency we have on board, how the crew behave and how to develop the right safety culture that the crew can embrace.
Thome makes a point of ensuring that it is in control of the quality and numbers of new entrants it needs for the ships it manages. Being self-sufficient in this area is important. In ship management you have both the technical and the human element. You can’t have one without the other, and we are focusing on both going forward. – MarEx