Svitzer Europe managing director Kasper Friis Nilaus spoke to Martyn Wingrove about the challenges of operating one of the biggest tug fleets in the region
Price pressures and competition make the northern European tug and towage market one of the most commercially challenging for owners. Shipping companies and ports are under pressure to control costs, which affects profit margins for marine service providers.
Tug owners therefore need to generate methods of competing effectively and maximising their margins through operational and strategic innovation. In this competitive market, Svitzer Europe has become a leader in providing tug services and technical innovation.
It mobilises tugs between ports to minimise downtime and offhire periods and can also utilise its links with the Svitzer global fleet to adopt tugs from outside the region when demand exceeds regional supply.
Svitzer Europe managing director Kasper Friis Nilaus explained to Tug Technology & Business in an exclusive interview how his organisation tackles the commercial challenges of operating in northern Europe. It operates a fleet of around 115 tugs in eight European countries with a steady newbuilding programme and access to tugs from regions such as South America when required.
Mr Nilaus said Svitzer’s customers are “cost conscious and desire the lowest possible prices” from towage and tug services. “Europe is the hardest hit from market pressures, despite this we have been able to grow our business with 3-4% more jobs compared to last year,” he said, adding that there has been increasing competition in the countries it operates in.
“Our biggest challenge is to keep our business sustainable under the current commercial pressure. To succeed we need our operation to be efficient both on and offshore,” he said. “Rates are under significant downwards pressure so unless your operation is under control it is difficult to grow in this market.”
“Rates are under significant downwards pressure so unless your operation is under control it is difficult to grow in this market”
Svitzer Europe achieves efficiency by mobilising tugs around the fleet to meet variations in demand and profitability.
“We have the scale and portfolio of tug operations to resist pressure on rates,” said Mr Nilaus. “Our operating challenge is about maintaining fleet utilisation. It is about getting as much out of our tugs, to have high service levels with the lowest number of vessels,” he told TTB.
But where there are growth opportunities, Svitzer Europe is ready to take them. “We are constantly looking at how to grow the business and are monitoring the market.”
To achieve this, Svitzer Europe has to minimise the number of days tugs are idle or unavailable due to technical issues. “We need tugs that are reliable as if tugs break down we have problems, at the same time we try to minimise unused tugs in ports. It is clearly an act of balance” Mr Nilaus said.
“We do as much maintenance as possible outside of the dock to reduce the direct costs and the out-of-service costs”
Tug maintenance is therefore vital to continue profitability. But so is minimising drydocking costs. With its large fleet Svitzer Europe has heavy drydocking schedules and strategies to reduce the time tugs have to stay in repair yards. It has “effective drydocking through planning” said Mr Nilaus.
This includes conducting routine maintenance while tugs are outside repair yards, during quiet periods in their operations. “We do not undertake routine maintenance while a tug is in dock,” he said. “We do as much maintenance as possible outside of the dock to reduce the direct costs and the out-of-service costs.”
When tugs are moved into drydock, Svitzer Europe mobilises another tug for cover. Mr Nilaus said this was done in June when its 2018-built Svitzer Vale was mobilised from London to Bremerhaven, Germany, to cover a tug that went into drydock.
Svitzer Vale is one of two harbour tugs Svitzer ordered from Turkish builder Sanmar to supplement its operations in northern Europe. These are both Delicay-class tractor tugs with bollard pulls of around 70 tonnes and maximum speeds of 12.5 knots. Svitzer Vale arrived in the Port of London at the beginning of May.
Svitzer Meridian was scheduled to arrive in July, when Svitzer Vale was to be mobilised to the Scandinavia and Germany cluster. However, Mr Nilaus said there were complications in these plans. “Svitzer Meridian is now expected in September following additional requirements,” he said.
Another method of achieving efficient operations is flexing tugs between ports when required. This happened in Q2 this year when a tug was temporarily sent to Felixstowe, UK, for a ship-handling job, before returning to its home port of London.
“We optimise the fleet and cover downtime by mobilising tugs to other ports”
“We optimise the fleet and cover downtime by mobilising tugs to other ports,” said Mr Nilaus. Tugs can also be mobilised to replace older vessels, which improves the overall age of the fleet. “A new tug will replace a 10-year-old tug that will be moved to another port,” he explained “to replace one that is 20 years old and that will replace a 30-year-old tug in another port. This cascade principle means we get the most out of the fleet.”
This also allows Svitzer Europe to be ahead of industry trends, such as the increasing need for more powerful tugs. “There has been inflation in bollard pull requirements with some ports now needing tugs with 80 tonnes of bollard pull,” said Mr Nilaus.
There are still ports where 40-tonne bollard pull tugs can be used, “but having higher tonne tugs is becoming the norm.” For example, 10 years ago there would be four 50-tonne bollard pull tugs in a port, but now in the same port there will be four 70-tonne bollard pull tugs. “The standard size is 70 tonnes of bollard pull now,” he added.
Svitzer tendered earlier this year for a terminal tug services contract. Mr Nilaus sees this as an example of client expectations. “The price difference between a 65-tonne and 70-tonne tug was minimal, so our customers would go for a higher tug to future-proof the bollard pull against requirements,” he explained.
With this in mind, there is a continuous need to renew the fleet in Europe, through careful newbuilding orders and global fleet movements. “We are maximising the life of our tugs by making a proper assessment before we look to expand the fleet,” said Mr Nilaus. Adding Svitzer Vale and Svitzer Meridian is an example of where Svitzer Europe found opportunities for newbuildings after such assessments.
It has also added to the fleet in the UK by mobilising tugs from outside the region. In July, 2008-built Svitzer Amazonas arrived in Liverpool from Colombia to bolster the fleet where it already operates six tugs in the port.
Mr Nilaus said this azimuthing stern drive tug, with 65 tonnes of bollard pull, was “brought over to meet the increased requirements in Liverpool due to higher workloads in the port.” He added that a “sister vessel will be coming to the UK later this year from the Americas fleet.”
Svitzer is a leader in developing technology for tugs – adopting the latest terminal tug designs, such as Sanmar’s new Bigacay series of terminal and escort tugs, and testing remote control techniques. Svitzer took delivery of Svitzer Tanger and Svitzer Tetouan tugs in August to support its operations at the Tanger Med 2 terminal in Morocco. Their architecture was adapted from a Robert Allan RAstar 2900 design.
Svitzer has also tested technology for remotely controlling tugs in ports using Rolls-Royce systems to operate Svitzer Hermod from a shore centre. Mr Nilaus said these technical developments can “open up new opportunities for the industry to improve” in a period when owners are commercially challenged.
Remote tug control is one of these opportunity-opening technologies and tests continue this year to refine these techniques. Mr Nilaus expects there to be incremental adoption of this technology in the future as tug operators understand the potential commercial benefits.
He said sensors and cameras could be added to tugs and commercial ships that are controlled by a master to improve their situational awareness. “I think the technology will be sliced up just like we have seen it in the car industry where more and more autonomous features have been added over the years, such as back sensors or automated parking,” he said. “We are constantly looking at the role of vessels to detect how this technology can be utilised.”
“Technology could be used to mobilise tugs between ports, with the vessel driven remotely”
Mr Nilaus thinks onshore control could be applied in tug operations. “Technology could be used to mobilise tugs between ports, with the vessel driven remotely with either a safety crew on board or the main crew resting so they are ready to work when the tug arrives in port,” he said.
Technology has also been developed to connect tugs to vessels, using a harpoon or a drone for delivering messenger lines. “Perhaps this will help tackle safety hazards on the fore deck that come from delivering lines – and solutions could come quickly,” said Mr Nilaus.
Svitzer focuses on safety and training
Safety is Svitzer’s number one priority. It has a global safety system that has been adapted to cover all of its operations. This includes emergency drills, management visits, incident reporting and seafarer training.
“We have high targets for vessel drills and proactive reports that identify potential for safety issues and their solutions,” said Svitzer Europe managing director Kasper Friis Nilaus. “We identify potential issues, report on these and then there will be a fix for them and equally importantly, we share best practice between vessels which makes good sense in a fleet with multiple sister vessels.”
Svitzer Europe runs an apprenticeship scheme in the UK for 17-20 year olds. It also recruits and retrains seafarers and engineers from outside the towage industry. “There is extensive training on simulators,” he said.
The company uses tug simulators in different locations in Europe, “which allows us to do practical training with both new and experienced masters” said Mr Nilaus. Training also includes continuously assessing masters and retraining them when required for operating tugs in extreme situations such as in high waves.
Svitzer Europe fleet details
Svitzer Europe operates a fleet of 137 vessels including 115 tugs and 22 workboats, such as line handlers. It has operations in ports in Denmark, Sweden, the Netherlands, Germany, UK, Portugal, Georgia and Belgium. More than half of the fleet operates in the UK, and a quarter works in Scandinavian countries. Half of the total European tug fleet have bollard pulls of between 60-80 tonnes and 35% of tugs have a bollard pull range of 40-60 tonnes.
|Svitzer Europe fleet by operating country|
|tugs and workboats||% of total|
Svitzer Europe tugs' bollard pull range
40-60 tonnes: 40
60-80 tonnes: 58
>80 tonnes: 17
Snapshot CV: Kasper Friis Nilaus
Employed by Svitzer since 2007, Kasper Friis Nilaus is a leader with high proficiency within the towage industry. Since the beginning of 2017, Mr Nilaus has been managing director of Svitzer Europe, the largest among four regions within Svitzer. As region head, he reports to Svitzer’s chief executive, Henriette Thygesen, and manages a fleet of 137 vessels.
Over the years with Svitzer, Mr Nilaus has held several global positions within the business development and commercial space, including as global chief commerical officer. He is educated as a lawyer topped with an MBA in finance and business strategy. Before joining Svitzer, he practised law in a Copenhagen-based law firm.