News Article 01/10/2004

Shipping and Bureaucracy

01/10/2004 - Efoplistis - ISSUE 138 - October 2004 www.efoplistis.gr

Shipping and Bureaucracy

Institutional and bureaucratic requirements and contemporary management in the shipping industry

The institutional and bureaucratic requirements that have now been internationally enforced on the shipping industry pose a new set of issues and dilemmas for the ship-owners and ship managers. These new issues concerning the management, operation and function of the ships, are further complicated by the major concern of international competition. Recently OCIMF published an assessment (TMSA) for self-rating of tanker companies, which, at least implicitly, sets the rules for commercial chartering. In the interview that follows Mr Nikolaos Hondos, CEO of Athenian Sea Carriers, attempts to clarify and pacify our concerns.

Institutional and bureaucratic requirements in shipping

-One of the major issues concerning the management and operation of the ships today is that of the excessive bureaucracy and large number of rules and restrictions that exist. How do you deal with that successfully?

"For the efficient operation and management of the ships today, a large number of rules and restrictions are required, as well as their constant monitoring, resulting in the increase in bureaucracy which can be dealt with, to some extent, through Information Technology."

-The charters, and more specifically, The Oil Companies International Management Forum (OCIMF) has recently published "A Best Practice Guide for Ship Operators" in addition to their relevant publication, "Tanker Management & Self Assessment". What is your opinion regarding those publications? How do the Oil Companies' requirements, outlined within, affect bureaucracy?

"The OCIMF publications are neither rules nor laws. They are merely suggestions for the formation of an excellent operating system. I believe that for any well-organized company, which is constantly thriving to improve, any such effort is more than welcomed. It is an opportunity for self-criticism and of detecting the weaknesses in one's system."

-Are they not creating the need for the excessive concentration of information? That is to say, don't they assist information processing much more than they do risk management and process efficiency?

"The need for centralization in the management of information is pressing and is not just the consequence of the aforementioned guidelines laid down by the OCIMF. The need arises from the plethora of rules, standards and inspections that constitute the framework of the shipping industry."

-How do you think they affect issues concerning commercial chartering of tankers?

"The effect is indirect because it depends on the approval, or not, of a ship or of the managing company itself from the charter oil company. The adoption of the suggested requirements ensures to a greater extent the successful outcome of the inspections."

Shipping and Information technology

-How can the requirements of accountability and management be combined with the need of increased cost efficiency in shipping management?

"OCIMF's program is a tool that enables a shipping company to set quantitative aims and hence be able to improve the operating system that the company uses in order to increase its performance and its cost efficiency. The company's assessment of its own operating system for managing safety, according to the ISM code for the tankers, is a huge responsibility and one which concerns the entire company. The adoption of information technology provides the necessary software support for a shipping company to manage and run its operations more efficiently."

-What are the current ways and tools used for managing and operating ships? Which specific measures have you taken and which tools are you using at Athenian in order to comply with(the vetting inspections of the oil companies?

"There are no tools that guarantee a positive outcome from the vetting inspections. The managing and operating tools are in place to ensure the correct running of the company's operations and the appropriate monitoring of the ships in the fleet. When everything works as it should, the success of the Vetting does not come as a surprise.

Please let it also be noted that Athenian Sea Carriers doesn't set the standard according to the satisfaction of the clients (customer quality service), which by the way is regarded as a priority, but according to the satisfaction of the stakeholders of the company, and has already been awarded the title of European Commitment to Excellence. The company is also constantly aiming at even greater achievements; to be awarded the European Recognition for Excellence Award."

-You talked about tools that serve the correct running of the company's operations and the appropriate monitoring of the ships in the fleet. In the past, this kind of operating systems were used only in the office environment, where as today we find their use in the ships, of equal importance and necessity. Which operating system does your company (Athenian) use? Which are the ship users, if any?

We are using the "Task Assistant" of Ulysses Systems, for the Preventive Maintenance System (PMS) and the Purchasing system, used to manage/administer purchasing, materials and storage, both in the office and ships. The system is used in its entirety both in the office and from the officers on board the ships. In the near future, we are also undertaking another of Ulysses Systems applications called "Operations, Safety and Quality".

-Have Ulysses Systems and the "Task Assistant" helped you improve your managerial efficiency? And how does this system differ from other similar systems used in shipping?

"We have developed a detailed and structured Preventive Maintenance System (PMS) for each ship in the fleet and the tracking of each ship's operations is done through the Task Assistant of Ulysses Systems. Therefore, the managerial efficiency, in this particular case, is definitely superior to other systems. The usability of the software, in other words the speed and level percentage of use, or should I say, the level of user friendliness, was the primary criterion when it came to choosing software that were destined to be used by officers onboard the ship."

-Purchasing software is one of the most difficult decisions to make and very few senior executives take on the responsibility. Can you give us your opinion on some of the dilemmas that arise and on what criteria one can base his decision?

"The seafarers should only be faced with simple tools that will enable them to do their work effortlessly and swiftly. The software should evoke a positive reaction and should not be a program that one handles with difficulty, inducing a negative response to change.

Other important criteria are the cost of running the application, the length of period it will be utilized and how many personnel or other company resources it will require. There is, however, always the possibility of the software and its maintenance, not meeting expectations. The chosen software, which must be compatible with the already existing applications and ideally also with an open code, will have to also support each individual sector of every branch of shipping. It will also have to provide the possibility of a cost effective and easy upgrade for individual departments, which is no easy task if a single application exists which refers to the whole of the corporate spectrum (ERP)."

Hellenic shipping and new technologies

-How is shipping different in its adoption of information technology? The reason I am asking is because shipping companies employ a wide variety of personnel such as captains, chief engineers and superintendents, who use a variety of systems, thus making multi-tasking unavoidable, and something that one should take into consideration when making any software purchasing decisions.

"In today's specialized way of work every industry has its own idiosyncrasies and shipping is no exception, but rather, a leading example. Shipping requires specialized and constant communication between the fleet's ships and the company's offices world wide (charters-crew-agents), thus making computerization an absolute requirement, in order to be able to compete/ for competing in an international market."

-How has the new technology facilitated or burdened the seafarers' job on a day-to-day basis and how willing were they to embrace the new technology?

The seafarers' job is favored from the new technology in mid to long-term, because in the short-term the benefits are rather counterweighed by the need for intensive training and the acceptance of change. In respect to the above, other factors which come in to play are the age, nationality and amount of preparation involved to make the product acceptable. In the long-run, however, a seafarer's life has not only been made easier but also safer with the ability to provide immediate, detailed information for efficient, on-time handling of emergency circumstances. This alone constitutes information technology a "Must". The software should, of course, be user-friendly and effective and should be able to serve as a valuable guide to the sailors in today's vast demand for concentrated information. The seafarers, most of the times, are negatively predisposed and will be willing to embrace the new technologies only after they are convinced in practice, that this will decrease their workload rather than increase it."

-Do you think that the shipping education provided nowadays to the Greek seafarers prepares them well enough to efficiently use and operate such technologically advanced operating systems?

"I think that the leading, foremost important factor is age. The younger Greek seafarers have a sound background in computing through their education, but also, on a more personal level, they seem to follow today's trends and find it interesting. They seem to be a lot more up-to-date with the latest technologies in computing and are familiar with Windows environment, thus having potential to efficiently and correctly make use of the new IT technologies and operating systems."

-Can the new advanced operating systems save lives? Can they protect the environment and can they protect the seafarers from the legal responsibilities (criminalization and liabilities)?

"In all industries, and shipping being no exception, the management systems (e.g. ISM, ISO, Risk management etc.) have as primary goals the safe-keeping of the employees, the protection of the environment and consequently the avoidance of legal liabilities. The need to control and tackle these circumstances, constitute the implementation of such software and the demand for specialized personnel, a priority. It has become an undisputable necessity."

-The problem of fatigued seafarers to the point of exhaustion is now well and widely recognized. How are the smaller crew numbers justified by the more advanced operating tools?

"The convention STCW95 on crew handling has a specific clause that refers to the working hours and hours of rest. The smaller crews' numbers are most definitely a consequence of the progress made in automation. Nevertheless, most shipping companies nowadays prefer, as a precautionary step, bigger crews than the ones required by the "minimum safe manning" egulations."

-Are the multi-national crews facilitated by the new technologies in terms of assimilating information? Do they ease communication?

"The application of new information technologies on the ships with multi-national crews certainly help when informing the crew but also in terms of the operation of the ship itself. At this point we have to stress, however, that multi-national crews can potentially cause problems because of cultural differences, differences in the level of education, religion, and in general any difference between them.

One must be very careful when choosing the people that will work together, so as to minimize any potential friction between crew-members that might hinder in some way the operation of the ship.