Bernhard Schulte Shipmanagement a Heritage of Distinction
Five generations of family leadership have made Bernhard Schulte a household name in international shipping. The ship management business is the latest in a long line of successes.
(Article originally published in July/Aug 2014 edition.)
It all began in 1883, nearly a century and a half ago, when Johann Hermann Schulte founded Schulte & Bruns with his friend and partner, Christoph Bruns, in Papenburg, Germany. Schulte & Bruns started out as a ship agency and brokerage business but soon entered the Baltic timber trade and by the turn of the century had acquired 12 sailing vessels.
Ten years later the partnership ended for the first time when Schulte moved to Emden and began chartering vessels on his own. He managed to buy his first steamship before World War I and then founded a shipyard in 1917. After the war, runaway inflation and an economic crisis hit Germany hard and Schulte’s son, Konsul Heinrich, took the helm and navigated the firm through the volatile and changing shipping markets.
War and Peace
By the Second World War the company had grown to 16 vessels with offices in Rotterdam, Hamburg and Duisburg. It also had a thriving inland waterways business and other ship-related activities and was fast becoming a true shipping conglomerate. But the Second World War ended all that and, when the smoke finally cleared in 1945, there was little left.
The Allies demanded reparations, and the company turned over its three remaining steamships. Now under the leadership of the third generation, Konsul Bernhard Schulte and his brother Hans-Heinrich, it still owned an office building, a shipyard, a few inland vessels and a fishing fleet. While emergence from the war was slow, the company’s primary operations consisted of stevedoring war materials, food imports for a starving population, and scrap trading.
By 1949 the company was regaining its status and was finally able to purchase its first vessel since the end of the war. The on-again, off-again partnership between the Schulte and Bruns families was reestablished, and by the early 1950s the company owned 16 vessels, had resurrected its previous businesses, and was one of the leading shipping companies in postwar Germany.
But the partnership again unraveled, and in 1955 Konsul Bernhard Schulte took four ships and opened a new office in Hamburg. While the core business of Schulte & Bruns had been importing timber and ores and exporting coke and coal, Schulte decided to test the spot market with his ships.
He chartered the three smaller ships to the timber trade on Russia’s White and Barents seas during the summer months and repositioned the vessels in winter to the Mediterranean for the citrus trade from Spain and Morocco. The company’s largest ship, the 10,000-dwt Henriette Schulte, worked the global spot market.
During the 1950s and 1960s the company – in partnership with other investors – expanded its fleet to 14 vessels, and the fourth generation joined the firm as Dr. Heinrich Schulte assumed management of the operating fleet while his brother Thomas established a new Chartering Department. Profits were flowing as the ships were always working, and in 1971 the Schulte family bought out its partners’ interests and became a truly family-owned company once again.
A New Business, Crisis, and Rebirth
In 1972 Schulte bought 25 percent of a startup ship management company based in Limassol, Cyprus, named Hanseatic. It was a daring decision at the time, and a number of shipping analysts voiced doubt about outsourcing operations and crews to third-party firms. Ultimately, of course, it was a decision that proved prescient.
By 1980 the company owned 30 ships, including gas carriers, container ships and bulkers, and the ship management group managed nearly 100 vessels from its offices in Cyprus, Hong Kong, Bermuda and the Isle of Man. To help manage the company’s fast-growing businesses, Ascan Lutteroth, brother-in-law of Heinrich and Thomas Schulte, joined the company.
When recession hit the shipping industry the next year the company struggled, and its financial stability was threatened. By the time it ended in 1987 the fleet was down to 22 vessels, and reserves were limited. Thomas Schulte decided to leave the company, and he took four vessels with him and set up shop on his own.
In a bold move designed to put the crisis behind it, the surviving company ordered five new fully cellularized container ships and opened two new ship management offices. The strategy worked, and by 1996 it was able to acquire the Hamburg-based, century-old liner company Oldenburg-Portugiesische Dampfschiffs-Rhederei. That same year it added five chemical and products carriers from A.P. Møller. Bernhard Schulte had emerged from the long recession with its global operations in great shape and an expanding ship management group.
Further expansion followed. In 2004 the company bought the first of several crude oil tankers and then acquired three pressurized gas carriers along with shares in Hong Kong-based Unigas Ltd, the owner of 20 gas tankers. Today its fleet totals more than 100 vessels, including crude, chemical and product carriers, gas tankers, container ships and bulk carriers. It has real estate interests worldwide and a pooling and chartering business with Reederei NORD named O&S Chartering.
Ship Management Goes Mainstream
When the nascent ship management industry began evolving in the late 1970s and 1980s, Schulte took its decades of operating experience and designed programs that provided guidance and support to operators and charterers. Along the way it acquired a number of new companies. Finally, in 2008, Schulte consolidated its farflung ship management operations, consisting of Hanseatic and Navigo in Cyprus, Atlantic Marine in Bermuda, Eurasia in Hong Kong and Dorchester Marine in the U.K., into one company – Bernhard Schulte Shipmanagement (BSM).
Today, BSM manages around 700 vessels, employs about 20,000 seafarers, and has over 30 offices, 1,500 shoreside personnel, and a total of 40 nationalities. Its CEO is Rajaish Bajpaee, based in Hong Kong. Bajpaee holds a Marine Engineering degree from the prestigious Marine Engineering & Research Institute in Calcutta and earned his MBA from the Asian Institute of Management in Manila. He is a licensed Chief Engineer and so knows the business from ship to shore.
Commercial vessels are highly expensive capital assets, and their logistics and operations are complex undertakings requiring multifaceted expertise. The daunting regulatory environment for ships, which encompasses international conventions, port state and flag issues, environmental/emission control/ballast water standards, and safety and training requirements like IMO’s 1995 Standards of Training, Certification and Watchkeeping, poses costly compliance issues for shipowners.
The ship management industry offers owners the opportunity to consolidate required services such as protection and indemnity insurance, maintenance and drydocking, cargo logistics, fuel and lubes, and port expenses under one contract. As ships travel the world, so too do their crews. BSM not only assists seafarers with passport requirements, hotels and air travel, but also provides training at its in-house facilities in China, Cyprus, India, the Philippines and Poland.
The diversity of the fleet under BSM’s management includes oil tankers, product and chemical tankers, LNG and LPG carriers, container ships, bulk carriers, offshore energy support vessels and FPSOs. This assortment of ships working in different sectors requires a diverse set of management skills, which BSM is ideally suited to provide.
The company has five training centers with simulators and provides refresher and upgrade courses to mariners at all levels through internal and external workshops and seminars. It recruits licensed and rated mariners from offices in China, the Philippines, India, Russia, Ukraine, Poland, Asia Pacific and Africa. It also recruits cadets from approved maritime academies and supports them financially, offering onboard training on a variety of ship platforms so they can be trained to their full potential.
In 2004, while serving as President of InterManager, the international ship management association, Bajpaee initiated the KPI (Key Performance Indicators) Project. Its goal was to establish a standard methodology for measuring performance in shipping, which would lead to increased transparency, better governance, and the development of future regulations, and it succeeded.
Today, Bajpaee is on the Board of Directors of the successor organization, the nonprofit KPI Association Limited, which recently performed KPI evaluations of more than 2,700 vessels. The evaluations included seven Shipping Performance Indicators (SPI), 33 Key Performance Indicators (KPI) and 64 Performance Indicators (PI), all of which will provide the standards for self-regulation by ship management companies and owners.
“Powered by People”
Bernard Schulte Shipmanagement is the culmination of generations of shipowning knowledge and experience. From crew management and technical services to chartering, newbuilding and conversion consultancy, port agency, onboard catering and housekeeping services, galley, travel services and more, vessel owners can contract full management services for a single ship or a whole fleet of ships.
Bajpaee says BSM is always seeking people who want a challenge and want to change the status quo and find better ways to get things done. The company’s tagline is “powered by people,” which deepens their sense of identity, belonging and involvement. Powered by its people, the future of Bernhard Schulte Shipmanagement looks more than secure.
Tony Munoz is Publisher and Editor-in-Chief of The Maritime Executive.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.