If there’s one thing any business man operating on a small profit margin will not do, is throw money at a new idea they never thought up themselves.
So its not surprising that technology manufacturers find selling to shipowners a tough job, especially now. Luckily some of these manufacturers have legislation on their side otherwise they would get absolutely no where with us, their reluctant, tight-fisted and cynical potential customers.
But rules make the difference, and the IMO’s two biggest committees – one of safety and one on the marine environment – are the vendors greatest assets, more or less forcing owners and operators to put equipment on their ships and then making sure it still works when they do. Port state control is also another good friend, the cousin of the IMO, making sure business remains brisk in some quarters.
What are the profit margins of shipping companies? 5%, 10%? It’s not a lot. How much is likely to be added to the price of a newbuilding to bring it up to scratch given the coming decade of deadlines facing us as environmental and safety rules come into force? $10m? How much will have to be spent on retrofitting or adpating old tonnage – just as much?
The key has got to be the financing. How will the technology companies offer financing to the owners. Some of the equipment being developed and touted to the industry has hefty price tags, unproven histories, and the potential for adding to the ships’ crews’ workload, yet have the weight of the law behind them. It’s a sellers market all right, so there needs to be more incentives to get the owners onboard.
In my humble opinion, the answer has to lie in how the financing is going to be arranged to remove the risks from the owners shoulders and get them more used to using the equipment, whether it be a ballast water system, a scrubber, a NOx reducing SCR or any other new, yet expensive change.
This has to be the carrot that offsets the legislative stick.
I have had word that there’s a few equipment manufacturers that are offering some form of financing, whether it is for owners of 10 or more ships to get the first system for free, or the ability for a shipowner to pay back a system’s costs through the fuel savings made during a five year period after its installed.
This surely is a way to go to overcome our reluctance to engage in untried ideas. Ask almost every scrubber maker, ballast water system company or other large equipment maker and you will get an obtuse answer to the costs of the equipment, and its installation. Ask how sales and interest are and they will almost always say “Booming, dear chap, booming!”
This isnn’t so surprising really, there’s possibly a competitive edge to having the price secret and I am sure they are always getting enquiries, but the price is not all there is to it. There’s simply the reassurance of getting a good product and getting the customer to believe in it. After all each unit is aalmost bespoke to the specific ship design. Only when this starts happening will the ballast water, scrubber or other big tech products start selling and the IMO deadlines can be met.
Lloyd’s List
The captured shipowner and the carrot
If there’s one thing any business man operating on a small profit margin will not do, is throw money at a new idea they never thought up themselves.
So its not surprising that technology manufacturers find selling to shipowners a tough job, especially now. Luckily some of these manufacturers have legislation on their side otherwise they would get absolutely no where with us, their reluctant, tight-fisted and cynical potential customers.
But rules make the difference, and the IMO’s two biggest committees – one of safety and one on the marine environment – are the vendors greatest assets, more or less forcing owners and operators to put equipment on their ships and then making sure it still works when they do. Port state control is also another good friend, the cousin of the IMO, making sure business remains brisk in some quarters.
What are the profit margins of shipping companies? 5%, 10%? It’s not a lot. How much is likely to be added to the price of a newbuilding to bring it up to scratch given the coming decade of deadlines facing us as environmental and safety rules come into force? $10m? How much will have to be spent on retrofitting or adpating old tonnage – just as much?
The key has got to be the financing. How will the technology companies offer financing to the owners. Some of the equipment being developed and touted to the industry has hefty price tags, unproven histories, and the potential for adding to the ships’ crews’ workload, yet have the weight of the law behind them. It’s a sellers market all right, so there needs to be more incentives to get the owners onboard.
In my humble opinion, the answer has to lie in how the financing is going to be arranged to remove the risks from the owners shoulders and get them more used to using the equipment, whether it be a ballast water system, a scrubber, a NOx reducing SCR or any other new, yet expensive change.
This has to be the carrot that offsets the legislative stick.
I have had word that there’s a few equipment manufacturers that are offering some form of financing, whether it is for owners of 10 or more ships to get the first system for free, or the ability for a shipowner to pay back a system’s costs through the fuel savings made during a five year period after its installed.
This surely is a way to go to overcome our reluctance to engage in untried ideas. Ask almost every scrubber maker, ballast water system company or other large equipment maker and you will get an obtuse answer to the costs of the equipment, and its installation. Ask how sales and interest are and they will almost always say “Booming, dear chap, booming!”
This isnn’t so surprising really, there’s possibly a competitive edge to having the price secret and I am sure they are always getting enquiries, but the price is not all there is to it. There’s simply the reassurance of getting a good product and getting the customer to believe in it. After all each unit is aalmost bespoke to the specific ship design. Only when this starts happening will the ballast water, scrubber or other big tech products start selling and the IMO deadlines can be met.