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Wednesday, April 25, 2018

Angus Frew

Secretary General, BIMCO

Posted 4/3/2018 11:29:03 AM

Angus Frew, Secretary General, BIMCO (Photo: BIMCO)

BIMCO’s Secretary General & CEO, Angus Frew, discusses the burning topics of the day in maritime … environmental regulation, digitalization & cybersecurity, and reducing the administrative burden on the ship’s master. We left no stone unturned for the man who recently had his contract extended to the end of 2022 to remain at the helm of the world’s largest international shipping association. 
 
Many of our readers surely know BIMCO, but to kick things off, can you give me a ‘by-the-numbers’ overview of BIMCO today?
BIMCO is a not-for-profit organization. We are a very well-capitalized organization, and we aim to reinvest our funds in products of value to our members. We have a staff of around 55 members in four locations – two in Asia, Singapore and Shanghai – we are a global organization. We have around 2,000 members in 120 countries, (reinforcing the point that) we are global. Of the 2,000 members, 800 are ship owners, 700 are brokers, and the rest are made up of agents and other associates. We have more than a billion deadweight tons in membership, representing around 56% of global tonnage at the end of 2016. (Note, that is a growth from 2014 to 2016 of 54 to 56 percent on a tonnage basis). Our membership covers the three major sectors: containers, tankers and bulkers, and as you’d expect, we work very closely with other associations, in particular, the International Chamber of Shipping, Intertanko and Intercargo. 
 
Perhaps this is obvious, but why would I want to join BIMCO? 
We offer a wide range of practical tools and services to our members. We are a very practical organization. Clearly, we are well-known as leaders in developing contracts, standard contracts and clauses for the shipping industry. 
 
Given the practical nature of BIMCO’s services, as shipowners are increasingly stressed to keep on top of new regulations, do you see a growing importance of your practical services to your members?
Absolutely. It is something that we’ve always offered, but since I’ve been onboard it has been a point of focus. If you are negotiating a contract and you are not sure if you should give in on something, our support and advice team is just a phone call or an e-mail away. This is free to the members. Another simple one is if you’ve got an undisputed debt, we can help you recover that. In 2017 we helped recover 3.2 million dollars on behalf of our members, and that is another free service to our members. 
We also have “Shipping KPIs” which allows a ship owner to benchmark operations against others with a similar size and type of ship. That is also free of charge. Members must commit to enter data, but in return, you can get some really important benchmarking data to help you see if you are as efficient as you would think. 
 
Have there been any new service offering introductions of late?
We have just launched – three weeks ago in Singapore – our new contract editor system called Smart-Con, which uses the latest standard industry software. In fact, Microsoft (are) happy because we are using their latest products.
 
From what I’ve read, environmental regulation, promoting digitalization, and reducing administrative burden on the ship’s master are three areas of focus for BIMCO, is that correct? 
Yes, that’s absolutely right. 
 
Let's talk for a moment about the market, which has obviously been challenged in recent years, to put it mildly. When you look at the market, what do you see today?
It is difficult across all sectors, but it differs sector by sector. We see (some hope) in dry bulk – if we can encourage people not to buy new ships, and keep the supply side under control, and preferably scrap some ships. We’re seeing growth in terms of trade, so it continues to be a supply-side issue.
 
So we have a tough market, and at the same time an increasing number of environmental regulations which can be capital intensive. 
The environmental agenda is the most important issue to shipping right now and, of course, it’s on top of our agenda, too. First, there is the (IMO marine fuel) sulfur cap, and 2020 is not a long way away. This is interesting because it is probably the first piece of regulation where there is a substantial financial benefit for not complying. So we really focus on the compliance side on that issue.
We also have some concern about fuel availability. We funded a study alongside the IMO study, and it highlighted a lack of de-sulphurization capacity in the refining industry. And even if there is enough fuel worldwide, there will be places – regions – where at least initially, we believe, where fuel availability will be an issue. 
 
Digging further into the environment, a topic that could fill our pages 100 times over, where are we, and where are we heading?
We honestly believe that carbon emissions from ships peaked in 2008. So we are probably the only sector in the world that has actually peaked its emissions. I think that’s incredibly positive. 
Second, we really want to see a doubling of efficiency on a ton/kilometer basis by 2050. And we believe that we are making good headway towards that. We see much more efficient ships on the sea today than were around in 2008. 
And the last one is the really tough one. The industry has to aim to completely de-carbonize, something that realistically will not be until the second half of this century. We are not in a position to even start at this moment. We need to spend research & development on new zero-carbon fuel types and new propulsion units. 
 
So lets turn talk to another big topic, digitalization. It sounds as if this plays into all that you’re doing with your membership.
Digitalization is one of the three themes, specifically promoting digitalization across our industry to drive efficiency, safety and security. We are an organization focused on how we can – from our contracts work to a lot of our technical work –improve the standards and create standards for the industry which generate efficiency. So digitalization is just an extension of that. And we are involved in some exciting projects on that theme. We’ve been involved in the EU funded project called Efficiency 2, which will wrap-up shortly, which is focused on the port-ship interface and how we can drive standardization in reporting across the world. A huge amount of the bridge team’s time is spent reporting to different ports. 
 
That would seem to be a natural link to your third objective, which is lightening the load of the ship’s crew.
Our third theme is linked to that: the reduction of the administrative burden on the ship’s master. There is a lot of work in standardization and we’re trying to find out how we can help reduce that.
 
So digitalization, the software, the cyber, the autonomy and lightening the load on the ship’s master ... it all goes hand-in-hand.
It does. 
 
Drilling down a bit more into the digitalization trends, from where you sit, what is the reality on the ships, in the ports?
It depends on the conversation. For example, the work that’s been happening in the industry on cybersecurity onboard ships is strong. I think there are a lot of industries that wish that cyber was on the tip of all their executives’ tongues like it is in maritime. That doesn’t mean we’ve solved the problem, but awareness is the beginning of being able to protect yourself against cyber attacks. BIMCO is a leading light in this area, and we have guidelines and standards on software maintenance. 
 
Looking at the digitalization in whole, what is the key to moving it forward, faster?
We are a conservative industry. But I think (once we get) the bit between the teeth – we actually get on with things. There are a host of projects that we’re working on where digitalization doesn’t happen without standardization. So we are really focused on standardization. You talk about autonomous ships; there is no autonomy without standardization.
 
Our time is running short, and I’d like to turn the conversation back to the market and achieving balance in the marketplace. Are there recommendations from BIMCO on trying to maintain balance and stability?
We wrote a piece called “The Road to Recovery,” about 18 months ago. I think the keys to the changes are, as the industry consolidates, and as we have fewer, bigger players, that we’ll make more rational decisions based on the market requirements, rather than only individual requirements. I think a lot of people buy and sell ships for the capital gain, and one more ship from their companies makes little difference to the industry. But I think when it becomes the much bigger organizations that are really focused on servicing the industry, and they will be in a better position to make more rational decisions because there will be fewer players.
 
When I read the news of your recent contract extension I was struck by one of your goals going forward: having this industry speak in a clear and unified voice. Why is it important, and what’s your strategy to do it?
The industry has a lot of associations, all with a viewpoint. By not speaking in an aligned manner, it simply makes it too easy for them to either do nothing or to pick holes. What is very clear is that when we do speak together, the countries in IMO actually listen. So there is the roundtable – the roundtable of international shipping associations – and that is BIMCO, the International Chamber of Shipping, Intertanko and Intercargo, and on the big issues we spent a lot of time working together to get a common agreement among our organizations and our members.  We are directly linked to our members and they participate in all of our work. If we can get the political and the practical to work together, it’s a very strong partnership.
 

(As published in the March 2018 edition of Maritime Reporter & Engineering News)
Q1 2018  - Cruise Shipping Trends