The "Transparency" Issue for Shipowners
How transparency improves the shipowner and ship repair yard dynamic
For any industry, the biggest advantage of increased transparency is enabling the right operational and financial decisions to be made at the right time and this is undoubtedly also the case for the maritime sector. The global shipping industry that we know today is built on the solid foundations of trusted, personal relationships that go back many years. These relationships remain crucially important both for the current and future generations of the global shipping community.
What is changing though is the growing ability to validate this trust, with the enhanced control and oversight available to shipowners and operators through the implementation and use of modern technology.
As one of the main benefits of the digital revolution, transparency is frequently credited with improving the customer journey, streamlining processes, enabling faster, better-informed decisions, supporting sustainability and saving money. However, in an industry not unknown for its ‘smoke and mirrors’, the concept of transparency has perhaps historically caused more consternation than confidence. More recently, the factors contributing towards a competitive edge have changed and transparency plays an increasingly important role.
Transparency is a broad term that has massive relevance across the board but let us explore it in terms of ship repair, retrofits and conversions and within this segment look at it from a technical, commercial and financial perspective.
The right repair or retrofit decision at the right time
Through the introduction of technology to digitalize some elements of the ship maintenance process, repairs, retrofits and conversions no longer need to be time-consuming, multi-layer and onerous tasks that drain both human and financial resources.
Tighter control and greater visibility over the scoping, booking and management of dry dock periods for repairs or ship conversions allows shipowners and operators to take a more proactive stance, responding faster and more accurately to market changes, pricing and availability.
Repair and retrofit decisions rely on…
- Trust and collaboration
- Control and oversight
- Cost and operational efficiencies
- Ship repair yard availability and contract terms
All these factors are either enabled or enhanced through access to real-time data, resulting in a mutually clear understanding from all involved of the scope of work, cost, duration and ultimately the right decision being made.
Validating trust throughout the dry dock process
People and relationships are not removed from the equation, far from it. The traditional way of conducting ship maintenance business through many layers of brokers may still appeal to some. However, for shipping stakeholders that want to move towards a clearer outlook on the immediate and longer-term operations of their key assets, technology offers a level of commercial transparency that comfortably sits alongside and actually works to strengthen their personal relationships.
In fact, on-demand, clear costs and the ability to compare ship repair yard availability and quotes to make fast, data-driven decisions actually have a positive impact on personal relationships and thereby help to validate and build trust.
Financial benefits of transparency in ship repair
With more accurate data and information available through the industry’s use of digital tools during the ship repair booking and management process, it is also possible that the sector may in future see more flexible payment terms for these types of projects.
It would be a gradual change, with a potentially steep learning curve and perhaps the need to start small, building towards the level of transparency that would be needed to achieve this. However, as long as the measures are implementable and make sound business sense for both the shipowners and the ship repair yards, the payment options landscape could look quite different in the near future.
Managing ship maintenance milestones
Shipping is a people-based industry and technology needs to work in harmony. By linking together the efforts of the shipowners and those of the ship repair yards in a clear and accountable way, digital tools are enhancing the process for everyone involved, saving time and money as well as freeing up resources that would otherwise be tied up with tedious paperwork and administration.
Access to real-time pricing and being able to manage the whole process online is a big step forward on the transparency journey for all stakeholders in the ship conversion and repair sector. Shipowners still need all maintenance and retrofit works to be carried out to the highest standards and ship repair yards need the freedom to get the job done without being micro-managed, but having a consolidated view of progress across multiple projects is a huge bonus for shipowners and fleet managers.
If there is reluctance in the sector to become more transparent in the day-to-day management of ship repair work, it must be outweighed by the benefits that will come with digitalization. A structural shift in the way that the industry views transparency is happening already, driven and enforced in part, through the institutions that are financing it. Ship repair, conversion and the wider industry that these are part of is on course to converge with other industry norms from a governance and due diligence perspective for longer term sustainability and future-proofing gains.