Following a protracted period with a somewhat stationary market, it now looks like the willingness to expand is returning to the shipping market. Established market players are starting to move, and this can be felt at Singapore-based ship management company Thome, where CEO Carsten Ostenfeldt is prepared for controlled expansion together with existing and new customers.
"As far as we can tell right now, the market is now back to seeing a certain desire to expand. In our case, we're experiencing increased demand, and we're also seeing this through increasing requirements for the quality we supply, while the opex budgets are kept completely flat," Carsten Ostenfeldt tells ShippingWatch.
Thome currently has approx.210 under so-called full tech management, and the company also handles crew management on an additional 100 ships.
New rules of play
While the arrival of eco-design ships brings new - though small - opportunities for expanding the ship management business, Carsten Ostenfeldt points to the equity funds' entry as a more significant perspective in regards to the future.
"The equity funds in general have no technical organizations to start from, and are thus really unable to handle the ships, so they have to go out and base their investments on collaborative ventures. In that light, it's more suited for ship management than carriers, who can expand through their existing in-house ship management, if that's their strategy," says Carsten Ostenfeldt.
He points out that these new players have a somewhat different approach to the profession than the traditional owners.
"There's an extreme focus on the budgets, and there'll be fairly little understanding in case the budgets don't measure up. With the other shipping companies, one can build relations that last beyond one year at a time, but these pure asset players can - when the right offer comes along - be in and out of the industry from one day to the next. So in a slightly different sense, we'll probably also have to the ready for such a case," says Carsten Ostenfeldt, adding that the new players also require a different form of communication:
"We have to speak a different language when dealing with the equity fund-owned companies. These people typically don't come from shipping, rather, they come from the financial spheres. And there's often not a dedicated shipping department that we can talk to, which makes the communication a bit different from what we're otherwise used to," he says.
The potential
Carsten Ostenfeldt has no comments about the recent rumors tying major players such as Scorpio and newly established Hafnia Tankers to the ship management branch of Thome, but going forward he does believe that the business could grow.
"Basically, ship management as an industry should have the potential to grow as the requirements for the carriers keep getting bigger. It's becoming increasingly difficult to operate a ship, and there are more and more things that one has to account for. I think that small organizations used to operating ten ships will finds things getting increasingly difficult in the future," says Carsten Ostenfeldt.
Low-margin activity
Around 20 percent of the global commercial fleet currently operates approx. 57,000 ships of more than 1,000 dwt, along with one third based on full tech ship management, and this type of collaboration will become more common going forward, says the Thome CEO, though he points out that there is still a long way from the rise of new opportunities to when ship management will become a golden business:
"It's a classic low-margin activity, and that's another reason that this type of company is getting bigger. With this size, one can deliver the goods at the right quality and at the right time, also in terms of more specialized functions," he says.
Thome currently employs around 10,000 crew members, and is among the five to seven largest ship management companies in the world. Around 70 percent of the company's business comes from the tank segment, though gas also accounts for a big part, and Thome has also been present in dry bulk for many years. Thome's offshore division remains quite small, but Carsten Ostenfeldt explains that the company also plans to grow this segment.
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