Shipmanagement companies are focusing more than ever before on the passenger ship sector, with several setting up businesses dedicated to this sector
The trend among shipmanagement companies to focus on passenger ships is gaining momentum – and several have set up new companies or subsidiaries to concentrate purely on this sector.
January 2015 saw Schoeller Holdings launch a new, standalone Columbia company focused solely on cruise: Columbia Cruise Services. Explaining the reasons behind this, Olaf Groeger, managing director of Columbia Cruise Services, told PST: “We wanted to put more emphasis on passenger ship management, our main goal is to be excellent, but at the time the passenger vessels were managed out of Columbia Shipmanagment - the standards were and are governed by oil majors, and the passenger ship side played a minority role. When we tried to expand and talk to passenger ship owners, we got the same answer: We were thought of as a good company, but not dedicated enough on the passenger ship side of things. Therefore we decided to de-harmonise the passenger ship side in its total and create a new company to just focus on this sector.”
The success of Columbia Cruise Services can be seen: When it was launched it started with three ships, (from Thomson Cruises) – fast forward two years and it now has 10 cruise ships under management, including two from Thomson: Thomson Celebration and Thomson Dream. Mr Groeger started with four employees – this number has swelled to 42.
As well as having a company focused totally on passenger ships, there is the added benefit that Columbia Cruise Services has a strong sister company behind it (Columbia Shipmanagement), which allows for economies of scale in terms of purchasing power.
Columbia Cruise Services offers a full range of services from hotel and catering to technical. The technical side encompasses fuel, deck and engine management. Mr Groeger singled out fuel management as being an important service: “We are very strong in fuel saving. We have expertise in fine tuning engines, and working out how much a cruise costs per passenger, based on fuel prices and other factors.”
A major part of this is the energy performance data that Columbia provides and manages. As well as leading to fuel efficiencies, using the data also boosts environmental savings. Mr Groeger said as an example that Thomson was targeting KPIs on carbon footprints spanning black and grey water quantities and exhaust gasses. Columbia’s key for successful management is one dedicated technical superintendent per cruise ship who is in overall charge of collating the data, evaluating it and fine-tuning the ship accordingly as well as liaising with customers and in-house departments and personnel.
Another dedicated passenger shipmanager, Cruise Management International (CMI), started operating last year. The business arose from a complicated background. Originally International Shipping Partners, owned by SunStone Ships’ president Niels-Erik Lund, it was taken over in December 2012, its name becoming FleetPro. Mr Lund stayed on until the end of 2013, according to contract. SunStone Ships’ technical and commercial operations were then managed by FleetPro Ocean and FleetPro Leisure.
In October 2015, four of the owners of the SunStone fleet, including Mr Lund, bought out FleetPro Leisure (the cruise ship hotel management company), and renamed it CMI Leisure. The same owners also formed CMI, a new technical company, which took over all the contracts in SunStone’s fleet from FleetPro.
In addition to the daily operation of these vessels, CMI has been busy with major upgrade work that is being carried out as part of a planned fleet-wide upgrade programme. With ISM (International Safety Management Code), ISPS (International Ship and Port Facility Security Code) and MLC (Maritime Labour Convention) certifications in place, the quality department focused on achieving the ISO 9000 quality management and ISO 14000 environmental management systems last year.
The launch of the two companies marks the end of a turbulent time for FleetPro. Mr Lund explained: “For most of 2015 the FleetPro organisation did not live up to our expectations about how our fleet should be managed.”
However, SunStone has put this behind it and has started 2016 on a strong footing with CMI and CMI Leisure. CMI has taken over the technical management of Sunstone Ships’ fleet of 10 vessels, as well as four cruise ships belonging to other companies.
Describing how CMI had needed to focus on restoring service levels after taking over from FleetPro, Mr Lund said: “We have had to focus on getting everything up and running again, and on managing the ships perfectly. That was our aim in 2016. But now we have established ourselves, 2017 is the year that we will look to expand.”
CMI is especially interested in expanding within the expedition and remote cruise sector. It is the largest technical manager of cruiseships operating within Antarctica, and also covers the Arctic and remote areas of Russia, among others. “CMI has a lot of knowledge. We have the in-house expertise and masters experienced with ice so we want to expand in this area,” explained Mr Lund.
CMI, too, has been establishing KPIs, including reducing off-time hire, keeping insurance claims below 60 per cent of annual premiums and reducing port and flag state deficiencies in order to check and validate performance with goals.
Shipmanagement company V.Group has also undergone some changes. Advent International announced in December last year that that it had agreed to acquire a majority ownership interest in V.Group, from OMERS Private Equity (“OPE”). OPE will reinvest in V.Group, working with Advent and the management team to support the continued growth and development of the business. V.Group’s management team will retain a minority stake in the company. The value of the transaction was not disclosed.
Advent said that following its investment, V.Group’s growth strategy will “remain focused on further geographical expansion and deepening its range of services organically and through complementary acquisitions. Advent will also support the management team in making significant investments in technology, systems and operations to continue to deliver world-class solutions for its clients”.
Per Bjornsen, V.Ships Leisure Director, told PST: “Advent International is a global private equity investor with a wealth of experience in a number of sectors and their partnership approach with us is very much aligned to the partnership approach we foster with our clients. Advent is committed to investing in our growth and this is an exciting next chapter in V.Group’s success.”
V.Group’s leisure business offers technical and deck/engine crew management services; safety and quality; environmental protection and planning; monitoring and implementation of maintenance of the vessel. It also provide itinerary planning and port operation with a unique experience in the start-up of cruise lines.
“We are expanding the energy and environmental management services we offer with voluntary implementation of ISO 140001 and ISO 5000 respectively,” Mr Bjornsen added.
“We are including ISO 18001 – occupational health and safety across the cruise fleet with excellent results – raising awareness and reducing incidents and accidents among crew and passengers.”