TECHNICAL MANAGEMENT

Wilhelmsen Ship Management

The importance of the Ship Manager Business Area Strategy 2011-2015 June 11th, 2010

Aditya Saxena, Regional Manager Americas

Professional. Like you.

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Ship management-an outline history • • •

•

External ship management evolved historically from in-house management by ship owners marine departments Owners trying to overcome financial constraints, taxation and prohibitive crew costs turned to flagging out-era in early 1980’s At the same time, banks forced to take over vessels due to bankruptcies had to turn to external managers More recently, increasing complexity of rules, regulations and compliance requirements require a minimum critical mass of technical and HSEQ expertise to operate ships reliably. Allowing managers to handle this allows owners to concentrate on core commercial matters.

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Ship Management Market Characteristics 40 companies 58% of world merchant fleet managed by 1500 ship managers (in-house + third party) > 10 vessels

< 10 vessels

Source : GL, Fraunhofer CML, Best Practice Ship Management, 2013

100 companies > 40 SHIPS

310 companies

> 10 vessels

> 80 SHIPS

> 20 SHIPS

900 In-house ship managers

1500 companies managing more than 10 vessels



Fragmented market with few market leader



9 biggest international ship managers manages 5.1% of the world fleet > 1000 gt



Low entry barriers



Strong competition especially on price

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

1050 companies

< 20 SHIPS 600 Third party ship managers

Why is choosing the right ship manager important? 



With a growing number of ship managers and various types of contracts being used BIMCO introduced a model ship management agreement in 1988. It has been revised twice since then. Under BIMCO SHIPMAN, the manager is the agent of the owner and acts for and on behalf of the owner.

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

The ship manager represents the owner The ship manager is therefore representing the owner in: Communication with flag state, port states, classification societies Contracts for oil pollution response, US OPA90, etc. and internationally Communication with oil majors, Rightships, CDI or other vetting regimes Communication with charterers and commercial interests Communication with insurance underwriters The ship managers reputation and integrity is very important for the ship owner.

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

What is Technical Management?

IT

HSEQ & Audits

Accounting / Finance

Manning & Training Technical Back up

Vessel

Insurance

Legal Support Procurement Office Services

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Crew and Manning      

Quality of the crew is critical to efficient and safe ship operation. Ship managers have access to large crew pools Recruitment of the right crew is a big challenge for ship managers Retention of crew on same vessel or vessel pool is key A vessel specific training program is required Efficient crewing IT systems are needed to manage the above Does manager have own manning offices or procures crew from external crew agents? Controlling recruitment standards, governance, training.

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Seafarer Supply and Demand Outlook

700,000

25,000

582,500

600,000

500,000

466,000

476,000

601,500

618,200

639,900

21,700

20,000

19,000 15,000

400,000

300,000

10,000

10,000 200,000

5,000 100,000

-

-

2005 Global Officer supply

Continued growth in Asian officer supply due to significant income gap between jobs onshore vs. onboard

End of 2013

2018

Global Officer demand

Source : Drewry Manning Report 2014

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Shortfall

Increasing demand for officer : • Fleet growth continues • Increase requirement in MLC requires more officer on board WSM expects shortages to stabilize in long term view

Global Crew Breakdown (as of Country

Total Pool

Filipino

5,002

Indian

2,242

Polish

564

Norwegian

365

Croatian

486

Russian

382

Ukrainian

224

Korean

323

Romanian

507

Indonesian

187

Bangladeshi

78

Sri Lankan

74

Others **

511

Total:

10,945

** Includes Chinese, Swedish, Malaysian, Thai & others

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

June 2014)

Technical Management 

Pre-purchase inspection and assessment of ships condition

In operation:  Ensuring technical availability of a vessel  Ensuring regulatory compliance  Balancing maintenance costs with commercial objectives  Efficient drydock planning and execution

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Technical Management Processes

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Vessel Accounting     

Transparency Integrated Procurement and Accounting IT systems to capture liabilities as soon as they are incurred. Client access to accounts online 24/7 Accurate and consistent financial reports for effective decision making Sarbanes Oxley or ISAE32 type audits

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

WSM accounting process overview

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

KPIs and financial reporting Online access : Salesforce WSM’s customer portal through Salesforce, an interactive web based interface that allows customer to view financial reports and vessel performance Financial data – updated every 2 hours

Vessel Performance data – updated weekly

Drill down functionality until individual vessel Drill down functionality until invoice level

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Accounting integration

1.Committed Cost 2.Goods received 3.Invoice

Interface

1. Vessel cost from BassNet 2. Vessel cost from posting direct entries 3. Drill down to view invoices

Owner’s system / BI Tool

Interface

WSM Accounting system SAP

WSM Procurement system BassNet

Mapping WSM system to Owner’s system

1. Total vessel cost 2. Generate multiple report

This enables WSM to : • Map WSM chart of accounts to FRO chart of accounts • Customization of information output from WSM system to suit owner’s requirement • Automated information flow from WSM system to owner system

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Preparation Workflow

Establish a mapping table between WSM chart of accounts and owner chart of account Obtain additional information on 1.Format of file transfer 2.Mode of file transfer 3.Frequency of file transfer 4.Vendor code 5.PO number Send details and specifications to SAP team to build the interface program Systems Integration Test and User Acceptance Test being carried out to ensure seamless/error free interface Go live for file transfer

Transfer of financial data (two options available) • On transaction basis via daily data dump • On total per GL code basis via monthly file transfer of trial balances

Procurement      

Economies of scale due to large buying power Transactional procurement to strategic procurement Fleet agreements Vendor optimisation and management Supply chain management Procurement and accounts integration

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Fleet Contracts We have corporate contracts with major suppliers, we are able to enjoy the bulk purchase benefits through these contracts • MAN B&W • Wartsila • Mitsubishi • ExxonMobil Marine • Jotun Paints • WSS for chemicals and Gases • Alfa Laval • Schenker (Freight forwarding) • Nautisk Forlag (Charts and publications) etc • ABB • Wilhelmsen Ships Service – global agency

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

HSEQ

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

KPIs and financial reporting Online access : Salesforce WSM’s customer portal through Salesforce, an interactive web based interface that allows customer to view financial reports and vessel performance Financial data – updated every 2 hours

Vessel Performance data – updated weekly

Drill down functionality until individual vessel Drill down functionality until invoice level

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Our Services

Technical Management

Vessel Accounting

Ship Management Excellence

Accuracy and Timeliness

Crew Management Competent and Qualified crew

Dry Docking Maximizing Docking Investment

Procurement

IHM & Green Ship Recycling

HSEQ

Lay Up Management

Savings Through Economies of Scale

Safeguards against risk and continual improvement

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Hazardous Materials and Recycling Responsibility

Laid Up Vessel Asset Care

Governance Code of Conduct Policies and Regulations

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Governance and Transparency TRANSPARENCY – NO SURPRISES Our corporate values entail values that drives our commitment to be transparent in all levels of operations and service delivery to our customers

GOVERNANCE–THE RIGHT RESULT THE RIGHT WAY Our governance elements drives uniform performance and guidance in how we do business, prioritization, and how we work internally and externally for our stakeholders ESTABLISHED PROCESSES – PLUG & PLAY Our established processes and structure enable swift and seamless integration with our customer business processes

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Our Governance Our governance includes common tools and methods we use to achieve the right results in the right way The governing elements will drive a uniform performance and guide us in how we do business, prioritise, and how we work internally and do business towards external stakeholders. - Thomas Wilhelmsen, Group CEO

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Wilhelmsen Ship Management Global Network

OSLO

BERGEN

SOUTHAMPTON BUSAN

HOUSTON

KUALA LUMPUR (HQ)

Ship Management offices Manning offices

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

SINGAPORE

THANK YOU

Please forward all enquiries: www.wilhelmsen.com/shipmanagement [email protected]

Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company