With more than 120 years of experience in owning and operating vessels, Crowley is uniquely suited to discuss best practices in ship management. In the Q&A below, the company’s Mike Golonka, vice president, ship management, shares industry insight for those considering the outsourcing of their vessel operations.
What qualities should a vessel owner look for in a management company to ensure a successful relationship?
While there are many factors to consider, the best ship management companies are often those that also own and manage their own fleets. Such companies understand intimately what it takes to keep a fleet up and running with high-quality standards. Additionally, transparency and clear, open communication are hugely important. For example, it’s critical that the costs of managing the ship be made completely transparent to eliminate friction and ensure a good working relationship. This can only be accomplished with clear, open communication. Another necessity is for the management company to employ an experienced, knowledgeable support staff that is also well connected in the industry. Both of these attributes can help to produce solutions and resources, especially when they are needed most. Finally, a vessel owner should seek a management company that is safety-oriented for the benefit of both employees and property, while also reducing claims and costs.
What’s the primary driver for vessel owners to sub out their technical and crewing management requirements to a third party?
The decision to outsource is typically a financially driven one. In most cases, outsourcing ship management services means that the owner can conduct business at a fraction of the cost, primarily due to the reduction in in-house staff and resources.
Another factor that helps to drive down the cost is the ship manager’s economies of scale, gained from the sheer volume of ships managed. As such, services and equipment are often acquired at cheaper bulk rates – savings that a transparent ship management company will pass on to the customer.
It is easy to say that quality ship management is critical to a profitable and safe marine operation. Explain why and how.
This is true. If ship work is done right the first time, lower costs and safer operations will result. Establishing clearly understood, high-quality operating procedures leave little room for interpretation and higher levels of consistency from ship to ship. As a bonus, high-quality ship management attracts and can help keep the most talented mariners, which often translates into even lower claim costs and proper maintenance on the vessel.
Are government and commercial contracts managed differently?
While every customer is unique, for the most part, commercial and government contracts are treated similarly at Crowley, with the exception of the considerations required for the more stringent regulations, differing reporting requirements and, in some cases, restricted budgets on the government side. Additionally, depending on the trade, safety and maintenance may weigh more heavily on the commercial side. But there is no single formula for ship management that will work for all customers; it’s very much a custom service.
What are the key benefits that result from outsourcing ship management?
Yes. These include:
Larger scale of economy for purchase of supplies, products, etc.
Larger scale of economy for insurance
Smaller office staff for the owner
Owner not directly required to keep abreast of latest regulatory development
More experienced and better support in the event of an emergency
Owner can focus on key business objective, ship owning
Flexibility in headcount when fleet sizes fluctuate or company makes entry into or exits various markets
Ship management company will likely represent owner’s interest in leading industry groups
Benefit of a mature ISM program and safety culture
Inheritance of a developed and well-trained crew
In addition to the above benefits, what sets Crowley apart is the company’s ability to create custom commercial ship management programs for customers. This allows us to be the “right fit” for virtually any vessel fleet or company while providing maximum benefits to all involved parties. Those who partner with Crowley receive dedicated commercial managers and a specialized staff tailored to their needs.
To learn whether Crowley’s ship management program is right for your fleet, visit https://www.crowley.com/What-We-Do/Vessel-Management/Overview.