Ten major ship management companies with relatively small market shares.
This is the vision of the service industry for carriers, according to the CEO of one of the biggest global players, Bjørn Højgaard from Anglo-Eastern Univan Group, when asked about his take on the future of a sector, which has naturally been impacted by the recent tough years in shipping.
"I believe that within ten years we will see a development with more larger companies in ship management and many small, specialized companies with fewer companies in the middle," says Højgaard to ShippingWatch.
Since 2015, he has served as CEO of the then-new merger of the two ship management companies Univan Group and Anglo-Eastern Group, which are both headquartered in Hong Kong and whose merger created the world's second-largest in the industry after V. Group.
The development toward larger entities in ship management, in line with the shipping industry overall, recently peaked when German Colombia ship management and Marlov Navigation announced that the two companies had moved closer to a final merger after obtaining the necessary approval from the authorities.
With over 350 vessels under full management, Colombia Marlow will become the world's third-largest ship management group, while V. Group and Anglo-Eastern Univan Group control around 600-700 vessels.
"We see the same tendencies in our sector as among our customers in the shipping industry. But in contrast to the container industry, for example, we will likely not see super big companies. If we at Anglo-Eastern Univan Group today have a market share of 5 percent, we are one of the largest in our industry," says Højgaard.
When Univan and Anglo-Eastern announced their merger two years ago, the goal was not unconditional growth, nor did the merger give many operational advantages, but rather more resources to work with. The company operates approximately 700 vessels, of which 620 are under full technical management, and with approximately 28,000 seafarers and 1,800 employees on land.
"We have not grown much in either crew management or technical management. Two years ago, when we merged, we had 590 vessels. With 620 vessels today, this corresponds to a 5 percent growth year-on-year."
Is the development in line with your expectations in connection with the 2015 merger?
"No, not really. We were aware that the integration would take some time, and the focus has been the servicing of the existing customer base to a higher extent than adding more vessels. At the same time, we have seen an extreme decline in the number of newbuildings, while there are also vessels which have been sent to scrapping," says Højgaard:
"Anglo-Eastern Univan Group's customer service base, which covers all segments, differs itself from the norm in ship management with fewer, and larger, customers than the majority. The 20 largest customers make up approximately two thirds of the groups total fleet in management. "
What is Anglo-Eastern Univan Group's current growth target?
"We don't have a golden figure that we stick to. Certainly, we want to avoid our volumes shrinking, but 2-5 percent annually is a solid growth target for us. In a service industry such as ours, there is a constant pressure on costs, and that primarily comes from the many people we've employed. Every year, we experience an inflation squeeze on costs, which is not countered by a boost in the amounts we receive from customers."
"Therefore we must become more effective every year, and the way of doing that is to grow slightly all the time. Growth for growth's sake is not important to us. What is important for us, is also the primary thing we spend our time on – improving training and education of seafarers, just like we have several technology and development projects in the process. Our focus is on securing first-quality operations for the most demanding carriers in the world. Security and reliability is paramount."
The significant annual growth in Anglo-Eastern Univan Group resembles the largest players in ship management, showed a survey at IHS Fairplay.
English Edit: Lena Rutkowski