The Evolution of Modern Class: A Conversation with DNV GL's Knut ?rbeck-Nilssen

MarEx caught up with Knut Ørbeck-Nilssen, CEO-Maritime of DNV GL, at last week’s Seatrade Cruise Global Conference in Fort Lauderdale. Since taking over the biggest piece of DNV GL last year, Ørbeck-Nilssen has been leading the push for “Modern Class,” which he defines as “using data in a smart way to enhance services.” Here’s what else he had to say:

How are you enjoying the conference so far?

For me it is so refreshing to come here, times are really good in the cruise industry. It’s a big contrast to some of the other sectors. I was just listening to the “State of the Industry” presentation yesterday, and all the top guys have an incredibly optimistic view on the future. It’s inspiring to hear. If you go to a similar conference on the bulker segment or container segment it’s at the total opposite end of the scale.

Is the cruise industry an important segment for DNV GL?

Oh yes, very important. In Miami, we have a very strong office supporting the cruise industry. Over the last couple of years we have taken the lion’s share of all the cruise ship newbuilds. With our current orderbook, combined with the sailing vessels we already have in class we are well on the way to becoming the biggest in the cruise segment? which is really fantastic.

Okay. So tell our readers a little bit about yourself. You are Norwegian, yes?

Yes, but I live in Hamburg, in Germany, which is where our maritime HQ is based. After moving to Hamburg, I quickly had to learn to speak German for the second time in my life. The first time was in high school where I had two years of German. That was more than 30 years ago. When I came to Germany I really had to make an effort to pick up the language again quickly.

I’m a civil engineer. I started working for the company in 1990, so it’s over 25 years now. When I first joined the company, I started at the bottom as a newbuilding surveyor and gradually worked my way up. Throughout this time, I’ve been heavily involved with the maritime business, offshore, and oil-and-gas-related activities. I’ve had numerous positions but most recently held the position of Chief Operating Officer of Maritime before becoming CEO last year.

How many languages do you speak?

Three - Norwegian of course, and English and German; I can also understand the Scandinavian languages but that’s because they’re all very similar.

You are the CEO of Maritime. How many divisions are there in DNV GL?

In all, we have five business areas. The largest business area is Maritime, followed by Oil & Gas, then Energy (renewables, energy transmission, and distribution), Business Assurance (management system certification), and finally Software which supports several industries with technical software.

And at the top we have the Group CEO, Remi Eriksen, who took over from Henrik Madsen. This transition took place more or less around the same time that I took over from Tor Svensen within Maritime last August.

My responsibilities include all the drilling rigs, floating production units, and for the most part anything that floats. All the fixed installations fall under Oil & Gas.

How many vessels do you class, and are you the biggest?

We are not that preoccupied with who is the biggest. Some of our competitors are very preoccupied with being the biggest. It’s much more important to be the leading classification society. When we say “leading” we mean in terms of customer responsiveness and quality, innovation, and service delivery. If you want to measure in size, in millions of gross tons we have vessels representing roughly 268 million gross tons, nearly 13,000 vessels. This is the biggest in terms of both vessels and gross tons.

What was the first thing you did when you became CEO?

One of my first tasks was to review the maritime strategy for business. This meant looking at the next five years (up until 2020) and mapping out where we would like to be and how we will get there.

After that, we called for a maritime convention for our top leaders. Because we are spread out all over the world, it’s difficult to gather everyone. But we brought in around 100 leaders and explained the strategy and all the key messages. In times of change like we are facing today, it’s important that we are all aligned and that we all have a clear understanding of where we want to go. This is one of the key ways we get there.

It’s very important when you have people from all around the globe to get them together so they can get to know each other. It’s the human factor.

Where do you see the company going in terms of growth, aside from the cruise industry?

We will continue to work in those sectors where we are already present – this includes all the major ship segments. We also have technical advisory services. We see a high demand for these services because of the increasing complexity within the industry. Over the last couple of years the fuel prices were high. At that time it was extremely important for the owners and yards to be able to decrease fuel consumption. To do this they turned to classification societies like ours in order to optimize lines to make more eco-friendly vessels. Today that pressure has diminished somewhat, but we still see many owners seeking all the efficiencies they can. However, there is still continuous pressure from regulators on owners and operators to reduce emissions to the air and water. This is an area where we, as a classification society, must respond to the needs of our customers and provide practical advice so they can comply with these regulations.

By 2025 the whole world will be part of an ECA. Right now it’s just the U.S. and northern Europe and Canada and the Caribbean. It’s going to take a lot of money to switch everything over.

Yes, just recently we launched one of our new notations to the industry to help cope with this. We call it the “scrubber ready notation” this is because scrubbers are becoming more and more the answer when you want to comply with the regulations. Even if the owner doesn’t really know if they’ll sail in an ECA area or not, they must consider that at the newbuild stage it is a good idea to at least make the vessel ready for installation in the future.

What about LNG?

We have been a leader in LNG from the beginning. In 2001 we became the first classification society to publish rules on LNG because LNG as a fuel is one of the ways that we can meet the requirements. We now have around 150 vessels. This includes vessels within the orderbook and vessels that are currently sailing with LNG as fuel. This gives us unrivaled experience. At the end of 2015 we signed a contract for first LNG fuelled bulker, this will be built to the newly released DNV GL rules.

This is one of the ways in which we are leading the industry by delivering solutions. Other areas include methanol and other hybrid solutions like batteries. Batteries are very attractive when you’re operating inside the port area, primarily because they have zero emissions. Naturally there are some limitations on how you can use them, but this is also an area where we have gained a lot of experience over the past few years.

What are you doing in the area of Big Data and cyberspace?

This is one of the key areas for DNV GL going forward. Vessels are more-and-more connected today. It is very important to have access to good quality data and to protect these data streams. Together with our customers, we are already running several pilot projects which examine these issues. We have one product out already, ECO Insight. This is really about helping shipowners manage fleet performance. With ECO Insight, owners are able to compare single vessels to other vessels in the fleet or compare their complete fleet against industry benchmarks. This is the vanguard of our Big Data approach and we will have much more coming in that area.

Okay, so tell us about this concept of “modern class.”

If you look at how class performs its core services, we’ve been doing it the same way for many years. Now with fantastic computing capabilities, modern technology, and connectivity it is possible for us to do things in a different way. Just to give you one example, last year we tested the use of drones to complete tank inspections –this is one of the things we mean when we talk about “modern class.” We’re looking to use new technologies and tools to help us improve efficiency and deliver even better results.

Wow, you used a drone?

Yes, we had a tanker coming into a shipyard in Poland, and when you have a tanker you need to first “gas free” the cargo holds to have safe access. Then you have to build scaffolding to look at the upper deck, to gain access to the top of the tanks. The team in Gdansk, customized an off the shelf drone, with more powerful lights and a high resolution camera and flew it up to see if there was any damage, any corrosion or cracks. This is really a fantastic way of completing an initial visual inspection. Our next step is to have a custom built drone, which we could even use in hazardous environments, which is another way of both saving time and costs, while increasing safety.

Exciting. What’s next?

Virtual reality – VR. In addition to drones, we are also using VR to track onboard inspections and surveys. These inspections track several data points and the path of the surveyor while onboard. Tracking the path of the surveyor is the key, this enables us to identify the paths that have been inspected and map out new paths for the next inspection. But, best of all the data is delivered to a team sitting in the office in real time. The data being collected is then directly linked to the approval drawings or a 3D model of the vessel. This means the team can easily see where the problem is and quickly identify a solution.