Maitland Pinpoints Global Shipping's Woes, Solutions
Clay Maitland is a ubiquitous figure in the global shipping circuit, never shy to share his accrued maritime experience of more than 40 years, ask the tough questions or supply the blunt opinion. Set to celebrate his 70th birthday later this year but not slowing a step, Maritime Reporter & Engineering News caught up with Maitland in his Manhattan office late last month.
Most anyone who has seen Clay Maitland address a crowd; watched him grill a conference panel; or taken him one-on-one in conversation to discuss some nuance of the industry, probably knows that he is intelligent, quick of wit and opinion, never shy to express his beliefs nor offer quarter in blunt assessment of the maritime industry’s leadership.
He is literally ‘the man about town,’ seemingly two places at once and serving a dizzying number of roles, from his day job as a managing partner in International Registries, Inc. – which administers the Marshall Islands Ship Registry and the third largest in the world – to his various philanthropic endeavors and associations, including: Director of the Coast Guard Foundation; Member of the American Bureau of Shipping, and of the National Cargo Bureau; Founding Chairman of the North American Maritime Environment Protection Association (NAMEPA), and Chairman of the North American Maritime Ministry Association (NAMMA) Industry Advisory Board. Above all Maitland – who emigrated to the U.S. from England in 1947 with his mother aboard the Queen Elizabeth and is a graduate of SUNY Maritime – is passionate proponent on maritime matters; passionate about spreading his thoughts in a manner that – while he admits may not always be right, are intent on bringing to light the industry’s strengths and weaknesses to help create a safer, more efficient and sustainable maritime industry.
Leadership (or lack there of)
Many of the problems facing the maritime industry are not unique, as a stagnate global economy and the burden of meddlesome regulation saps the resources of most every industry. Most problematic however, according to Maitland, is a vacuum in leadership in political circles, in the board room, and even at trade association groups; a dearth of leadership that is willing and/or able to stand up and sing the industry’s praises or debate the industry’s problems.
“I think we all need to be more outspoken,” said Maitland. “This is the story of the industry; it is bean counters, bean counters and more bean counters (In fact Maitland had his own word for it: “BeanCounter-itis”). What do you have to do to turn it around? First of all you have to get people in the industry who know something about it. They do exist.”
In the U.S., Maitland reckons leadership woes start with what he views as the systematic degradation – many have called it the disappearance – of the U.S. Maritime Administration. “You’ve got a guy that came out of Capitol Hill where he was a railroad regulation guy working for Frank Lautenberg in NJ; that’s your Maritime Administrator. Can we please get somebody who knows something about the business? Sean Connaughton was the last one we had who had that.”
“The people who know about the industry, who know the culture … they don’t seem to get promoted,” Maitland continued. “Instead we have accountants, bankers and people from the Hill. Essentially you’ve got nobody out there who is really fighting for the U.S. merchant marine; nobody is fighting to save Kings Point other than Kings Point alumni.”
While some of the problem is a lack of interest and knowledge on maritime matters in general, Maitland is quick to point out that there are several bright minds and verbal advocates of maritime matters in government. “(In Washington) you’ve got some fairly able people ; they’re just not interested in us, in fact they’re not interested in transportation. Congress has not become less competent, just more polarized.” On the corporate level, Maitland counts ‘BeanCounter-itis’ as a cause for potential mishap. “A good example is Deepwater Horizon. Although it was a blowout (some of my friends said ‘it’s not a ship’ – of course a rig is a ship), it was due to complacency. BP is now at about $40 billion – that’s $40 billion with a ‘B’ – in cost, expenses, fines, charges, legal fees, etc. This is only one instance, but across the industry a lot of the decisions on the budget are made by finance people. They are very smart, but they are not risk managers,” said Maitland.
The Technical Solution
Addressing an onerous level of new rules and regulations which mandate the types of equipment that outfit a ship – from the bridge to the engine room and every space in between, is an acute problem for many shipowners, particularly in today’s down market where freight rates are already creating a cash crunch.
“If freight rates continue to be as depressed as they are now, the question is how long can the industry sustain the regulatory burden, deal with the overall cost burden … and I don’t have an answer to that. It’s a balance sheet problem. I do think there are going a lot of mergers and acquisitions; there’s will be continued scrapping. I think the industry is going to be a smaller industry,” Maitland said.
The industry today is a far safer than the one he entered in the mid- 1970s, a time when new tankers were blowing up due to tank cleaning mishaps, and bulk carrier break up and losses were more common. “I think technology is giving us a handle on what a ship does and where it is, that we did not have a generation ago,” Maitland said. But technology alone is not the silver bullet, and in fact in some instances, such as the emerging regulations regarding Ballast Water Treatment Systems, for example, which has been tagged as the biggest and most costly refit program in the industry’s history, the legislation has actually jumped far ahead of the technology. “In the case of ballast water … the technology has not kept pace with the regulations, particularly on the state level. So there we have a problem that has no visible solution yet, and I think we’re going to end up with a convention that we cannot enforce.”
“Costs are going up, margins are going down, how do we stay in business, how do we maintain and improve our safety record? The answer is: in many cases we’re not going to be able to, and many companies are going to go out of the business. It’s just like Aviation. You’ve seen a constant consolidation. I think that’s going to happen in commercial shipping too.”
Shipping Insight & Fleet Optimization
Fleet Optimization, the focus of the inaugural Shipping Insight set to take place October 8-10, 2012, in Stamford, Conn., is a term that can mean many things to many people. Clay Maitland will deliver the Keynote address the morning of October 9, so we thought we’d get his take on the meaning. “Shipping today is one of the safest, if not the safest carrier systems and supply chain in the world, which certainly was not the case when I started in this business,” said Maitland. “When I joined this company (International Registries) in 1976 we had a lot of problems that don’t exist today.” When I think of Fleet Optimization, I ask: “Do we have the ships that we want, for the trades that we service. An ore carrier should be an ore carrier, and designed for the cargo it is to carry. A lot of ships were built on a speculative basis to make money. Many ships are owned by investors – perfectly honest investors – that hire ship managers; many of them good, some of them not so good. If you’re going to optimize your fleet in terms of the life of the ship, the use of the ship, the safety of the ship, the ship has to be purpose built … and today they are not.”
Shipping Insight features Clay and an “A-List” of more than 30 industry experts.
(As published in the September 2012 edition of Maritime Reporter & Engineering News - www.marinelink.com)