Competition benefits shipowners

PUBLISHED : Wednesday, 06 October, 1999, 12:00am
UPDATED : Wednesday, 06 October, 1999, 12:00am

Intense competition is forcing ship management companies to provide highly professional, responsible and efficient services to shipowners, according to a shipping executive.

President and managing director of maritime services provider Eurasia in Hong Kong, Rajaish Bajpaee, said ship managers also had to be productive and provide value-added service that met or exceeded their customers' expectations.

'While a few ship management companies have benefited from the increasing competition, the primary beneficiaries have been shipowners,' he told a conference recently.

Mr Bajpaee said most shipowners required managers to provide detailed vessel budgets, comprehensive breakdowns of operating costs and a varied host of other services.

'Such requirements in turn place an increasing competitive pressure on the ship manager to ensure that vessel budgets are carefully prepared, and that actual vessel-operating expenses are systematically monitored to ensure that the budget allocations are maintained,' Mr Bajpaee said.

Each ship management company had its own method for developing corporate marketing strategies and for assessing the strategies of their competitors within the ship management industry, he said.

Mr Bajpaee said the next five years were going to be particularly challenging for the shipping industry as the revised Standards of Training, Certification and Watchkeeping for Seafarers (STCW) Convention of 1995 would have to be fully implemented by 2002.

Over the same period the International Safety Management code certification, which became mandatory in July for certain types of vessels, would become a requirement for virtually every type of vessel, he said.

The impending implementation of these mandatory regulations has been having far-reaching effects on how shipping businesses were managed and how vessels were operated, he added.

Companies that failed to prepare for these changes would fall by the wayside, Mr Bajpaee said.

He said the challenges the independent ship manager faced were both internal and external.

There have been other challenges brought about by issues such as fewer seafarers, Y2K compliance, the increasing number of global mergers and acquisitions, piracy problems and more, Mr Bajpaee said.

For shipping companies that wished to maintain their competitive advantage, strategic planning was an absolute necessity, he said.

Mr Bajpaee said the original STCW Convention of 1978 had been the outcome of the International Maritime Organisation believing that a uniform, global training standard was needed for shipboard personnel due to increasing casualties because of human error.

When adopted in 1978, the convention was open to different interpretations and no uniform minimum level of competency was achieved, he said.

The revised convention insists training institutions must assume an increased responsibility for verifying that potential officer candidates possess the required knowledge and skills before they are recommended for the examinations held by the licence issuers, Mr Bajpaee said.