Frank About the Future
Inchcape Shipping Services (ISS) CEO Frank Olsen opens up on the challenges of COVID-19, the benefits of a global network, and a fundamental shift in the established ships agency marketplace. Change, he says, is coming.
“I haven’t spent this much time in Norway, without international travel, since I was at school,” laughs ISS CEO Frank Olsen over a call on Microsoft Teams.
With a career that’s taken in seven years at sea, mostly on RoRos with Wallenius Wilhelmsen, living in Costa Rica (where he briefly captained a dive vessel), work in Dubai, for Wilhelmsen Ships Service, and most recently a regular commute from his home outside Oslo to the Inchcape HQ in London, being forced to stay in one place must have come as a shock to the system.
How’s he coping?
“Well, it’s different,” he says, as the sound of his three kids returning home from their newly reopened school filters into the background. “But I’m quite enjoying it in some respects. The pandemic has obviously created entirely new working routines, but our organisation has responded well and our IT infrastructure has proven to be very capable, as have our people. There’s been challenges, clearly, but overall I’m satisfied with how it’s worked out.
“Whether my family are as happy with me being here is another matter,” he jokes. “You’d have to ask them!”
The children in the background fall suspiciously silent…
You’d expect the ‘challenges’ Olsen refers to to be severe.
As a sprawling global organisation boasting over 240 offices, in 68 countries, covering around 2,500 ports, this ships agency giant relies on its expert local people (roughly 3,000 of them) and its customers’ regular ship movements. Business as usual allows the firm to provide a vast array of services, ranging from full cargo agency, to dry-docking, survey and inspection, crew logistics, financial management, and bunker calls – all with the promise of standardized levels of service, transparency, value and complete global compliance.
But, of course, there’s been no business as usual.
So, what impact has Olsen seen?
“The short answer is roughly a 20% reduction in activity for the months of April and May, but we can see that’s coming back now,” he reveals. “Some segments have ceased trading entirely – cruise in particular, where we had to handle numerous challenging repatriation projects for passengers and crew – whereas others are operating according to schedules.
“However, even those that are sailing obviously face restrictions, especially with crew changes and logistics. That’s an important service offer for us, so we’ve had to adapt quickly. Luckily, we have excellent people with boots on the ground in ports worldwide and they, almost regardless of individual lockdown restrictions, are regarded as key workers. The world needs ships to sail and we’re on hand to enable that, facilitating seamless, reliable and efficient port calls, and finding solutions for our customers.
“In these disrupted times that’s arguably more important than ever.”
Although Olsen sees activity picking up again, he’s quick to acknowledge that the macro-economic situation is challenging, leading to mid- to long-term issues for his industry. Analysts at Inchcape are forecasting a decline in seaborne trade in the region of 5-7%, as the world recovers from COVID-19 and consumer spending suffers accordingly.
However, despite the dark clouds overhead, the head of this 170-year old business sees a significant silver lining for his global ‘big three’ ships agency.
“The market is still dominated by smaller agents catering for local ports,” he says. “Together they account for around 80% of port calls. That demonstrates the enormous potential for growth and we’re very ambitious in that respect - looking to double our roughly 5% share over the course of the next five years. As arguably the only pure play leading ships agency in the business we’re very confident that’s achievable.”
Olsen sees growth coming through potential acquisitions – the company is financially strong, especially after divesting its freight forwarding division in 2018 and deleveraging debt – but mainly through organic expansion, as more and more owners and operators see the benefits of choosing a global specialist.
Benefits that, he says, have only been consolidated by the current pandemic.
“The harsh reality of the situation is that many companies in our industry are struggling financially,” Olsen explains. “So, if I’m a shipowner being asked to prefund an agent with 80-100% of upcoming port calls, how certain can I be that that money is safe? How do I know that business will still be operating when my ship sails into port?
“That’s where size and stability are comforting factors. You know there’s no risk with Inchcape.”
But the benefits of size go far beyond mere survival.
Inchcape is positioning itself as a long-term partner for owners and operators. It’s global coverage and commitment to “trust and transparency” means that, in Olsen’s words, “you know exactly what you’re getting” through standardized service (regardless of port location) and compliance with the most stringent global and local rules and regulations. So, for example, there’s no danger of facilitation payments, suspect health and safety standards, non-accountable transactions, or anything less than optimal, proven value for money, among many other factors.
“You have one key account contact and they ensure excellent, reliable and predictable service worldwide,” he stresses. “Global operators should have global standards. With Inchcape you always have that peace of mind, no matter where, when and what the operations are. There are no local deviations.”
There certainly are in terms of the virus though.
So, does Olsen not see that as a potential benefit of the smaller operations, perhaps? The fact that they know exactly what’s going on in their home port?
“So do we,” he says, leaning into the screen with a smile.
Big picture benefits
Inchcape’s CEO acknowledges that owners may well get relevant information through local agents, but what they won’t get is a “bigger picture” perspective.
For example, an agent may advise that crew changes are no longer permitted in port, but will they have reliable, up to date information on which other ports allow them? Will they be able to advise on and facilitate services at alternative ports, both regionally and worldwide, if their own home base is under lockdown?
Inchcape, of course, can.
“We are a single entity, with people and vetted third party suppliers and representatives almost everywhere, covering the world of ports,” he states. “We can offer full, live and comprehensive updates on any and all restrictions, so owners can plan voyages both effectively and efficiently – going through only one stakeholder as opposed to managing countless calls and emails with an army of local agents and suppliers.
“We make life safer, simpler and more profitable for our partners, full stop.”
A world of difference
Olsen’s “world of ports” phrasing is not accidental.
This month sees Inchcape launch the latest iteration of its own World of Ports (WoP) – a digital service giving owners and operators access to a wealth of unique information to ensure safe, compatible and efficient port calls, worldwide.
WoP is built on proprietary data painstakingly gathered by ISS staff over the course of the last decade. Utilising a Google Maps interface, it gives users the ability to examine terminals right down to any individual berth, ensuring accurate details regarding parameters and restrictions, while integrated AIS feeds show exactly what is going on and where in terms of vessel movements for optimal arrivals and departure. Enriched port data – including environmental information, details of facilities and operational notes – is also included, with a client dashboard providing easy access, tailored information and vessel alerts.
“It’s a constantly updated, single source solution where our customers can access information relating to over 4,600 ports, 15,000 terminals and 36,000 individual berths,” Olsen states. “There really is nothing else quite like it, and it simply wouldn’t be possible without our global network and dedicated local workforce. These people are essentially operating as our customers’ eyes, ears and intelligence on the ground, ensuring smooth operations and maximum business efficiency.
“We believe it’s going to be a game-changer for the market – a very tangible demonstration of the added value we can deliver.”
Despite the benefits of digital technology, as shown through this Teams call, there’s no replacement for the ‘personal touch’ from expert people, and Olsen is keen to end the conversation on that note.
“Ships Agency is still a people business and relationships are important,” he notes. “That’s why, despite the obvious limitations of smaller local operations they still hold such a dominant market share.
“What we aim to show at Inchcape is that you can have all the benefits of dedicated local people, allied to a trusted global partner that can deliver real added value and competitive advantage. That extends across costs, governance, safety, intelligence, business efficiency, security and much, much more. The argument is that persuasive that we firmly believe a fundamental change is coming in terms of market division.”
In terms of changes for Olsen himself, the affable Inchcape CEO is looking forward to a return to some sort of normality with the scheduled reopening of the company’s headquarters planned for September.
“We’ll see if the family let me leave though, they might miss me too much!”
The call ends to the happy sound of laughter.
Whether it’s his or his children’s is open for debate.