Marine Link
Saturday, September 23, 2017

Invisible Shipping Industry must act to Raise Profile

October 5, 2004

Intertanko managing director Dr Peter Swift has urged the maritime industry to embrace self-policing and self-promotion in a bid to increase political and public appreciation of shipping's contribution to society.

"Our industry is largely invisible," he declared as guest speaker at IMPA 2004, the International Marine Purchasing Association's conference and exhibition in London. "There is little awareness among politicians or society in general of their dependence on the services we provide or the effective manner in which we go about our business."

Dr Swift said his members - who include more than 240 independent tanker owners - carried some 60% of the oil and chemicals consumed worldwide.

"We are all beneficiaries of their day in, day out efficiency and reliability," he observed. "Sea transport represents just one pence per litre of the price we pay for petrol in the UK, five cents in the USA and ten yen in Japan."

Yet public interest was stirred only on the rare headline-making occasions when something went wrong. "Unfortunately that prompts a rash of counter-productive legislative measures," he complained. "It seems disproportionate given that shipping is highly regulated, its safety record is the envy of other industries and it is the most environmentally friendly form of commercial transport."

The industry required consistent, international regulation and legislation rather than a diverse regional approach, Dr Swift asserted. It also needed to encourage the dismantling of artificial trade barriers.

Suggesting internal and external initiatives to secure these objectives, Dr Swift said that maritime trade associations must promote the highest levels of professional standards and transparency. "It's true that one rotten apple can spoil the barrel," he acknowledged, "so we must be sure to adopt policies of zero tolerance for any instances of sub-standard practices."

Meanwhile it was vital for the industry to communicate its achievements and requirements to governments and the public at large. "Society needs reminding that 40,000 ocean-going ships are plying their trade in highly capable fashion in the most hostile environments," said Dr Swift.

"We should not need to remind our political friends that international transport is totally reliant on a healthy maritime industry but we must work hard to ensure they receive a positive impression," he added.

"We must also deliver the message that they too have an important role to play in ensuring a free market and level playing fields so that we can compete fairly in a global scenario."

Dr Swift was among more than 800 participants at IMPA 2004 - a 33% increase on the record set at last year's 25th anniversary event. Attendance was boosted by the biggest exhibition in the show's history, with space at Kensington Town Hall extended by 30% across three floors to accommodate over 100 stands. Next year's show is already virtually sold out after most exhibitors re-booked on site.

The IMPA Debate

The conference programme also featured a major forum on the case for co-operation between buyers and suppliers.

Chaired by Captain Stephen Bligh, chief executive of the UK's Maritime & Coastguard Agency, the IMPA Debate aired the key conclusions reached during earlier workshops in which purchase and supply delegates set out their respective criteria for doing business with each other.

Acknowledging the modern trend towards partnership sourcing, there was widespread support for collaborative rather than combative business relationships in situations where each side stood to benefit - such as purchasers wanting to encourage R&D or suppliers wanting to nurture promising new customers.

On the other hand, it was emphasised that selling organisations categorised customers according to value of business and their attractiveness on issues including speed of payment and ability to make decisions. Unattractive low spenders would be "lost without pain" while unattractive high spenders were liable to be exploited for short-term gain.

Purchasers also admitted to a horses-for-courses approach depending on market circumstances. As one delegate explained: "If there are only one or two producers for a main engine part, they hold the big cards so we need a relationship. But that's not relevant if we're buying chicken - it's very easy for us to control the consumables market and get competition."

The other main conclusions revealed similarly mixed views. Purchasers thought a reduction in the number of preferred suppliers was inevitable for the foreseeable future, whereas suppliers warned that such consolidation ran the risk of eliminating competition.

Some delegates supported the notion that all negotiations were about win-win outcomes but others clung to the view that most buyer-seller relationships in the marine industry were adversarial.

"There's a real danger of getting too friendly with suppliers," said one delegate. "It can be difficult to get the balance between a personal and a professional, technical-based relationship. In those circumstances you need to have an understanding that it's OK to try other suppliers."

Others predicted that the speed and scope of e-commerce would force a dramatic change in buyer-supplier communication. Against this, delegates argued that it was easy to get the price via the Internet but hard to establish total life cycle cost without personal relationships.

In what amounted to an endorsement of the IMPA Debate initiative, Capt. Bligh concluded: "It just goes to show that most things can be resolved if we talk to each other. We can't do without the human interface. In the end it comes down to trust and relationships."

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