A couple of months ago, a photo appeared on social media showing a group of boiler-suited, mask-wearing shipyard staff huddled around a table strewn with coffee cups and documents in a small room.
The beaming face in the foreground taking the selfie had gleefully captioned it “We’re back.”
The shot summed up the desire by many in the newbuilding and sale-and-purchase markets to return to something like the face-to-face world of pre-Covid-19 days.
But about twice the number of newbuildings have been concluded in these past 12 lockdown months than in each of the previous two years, so is there any need to return to the old reality?
For one South Korean shipyard official, it is a resounding “yes”. He and others on the broking and shipowning side cite the difficulty of conducting technical meetings on newbuildings over Zoom or Teams.
Whereas an Asian shipyard would have sent its technical team to an owner to thrash out the details of a new vessel over a week, these discussions have had to be matched around different time zones in the virtual world. It has, for example, left a Korean yard just two to three hours at the end of the day to speak with a European owner’s team.
One yard chief recounts how his staff have been conducting meetings at midnight their time and working through weekends to fit in with clients, which has proved unpopular with his younger colleagues.
On the plus side, a newbuilding broker says the shorter time window has helped concentrate discussions. There are fewer distractions, which, for commercial discussions, stops them being used tactically.
Zoom can be fine, but if several people on each side are all talking over each other, it can be a nightmare.
“There is something quite unique about a newbuilding project. Doing it all online, it becomes transactional, when shipping is a relationship business. The alchemy is missing,” one owner explains.
In similar vein, there is widespread dislike of the virtual ship-naming ceremonies that have become the norm since pandemic travel restrictions kicked in.
Bring back the fun
One shipowning party describes them as “a good try but no substitute for the real thing”.
“I hope they go away,” another says. “Normally that’s the most fun part.”
A newbuilding broker is more blunt, labelling them “painful”.
“If you are spending $30m to $100m on a ship, I want to see what I have spent my money on and spend time with those involved in building it,” one owner’s representative says.
It appears to work both ways.
A yard executive admits that while virtual namings can save time and money, other aspects are more important, such as the chance to build connections with customers: “I think face to face is better to understand each other and celebrate the situation. Everyone wants to see the ship go to the ocean. These are kind of emotional things.”
But there are pandemic positives in the world of S&P.
CW Kellock director Paul Willcox says the past 18 months have given an impetus to online ship auctions, whether it be the eBay style ones — which he sees as more common in China and the United Arab Emirates — or over Zoom, as though all participants are in a room.
He says these will continue to feature in some jurisdictions.
Jury is out on ship inspections
Willcox recently fielded a request for an online auction in Greece, but the participants rebuffed it, preferring to meet in person. The US approach is more flexible and pragmatic, he says, and if the lawyers want to do it online, that is what happens. It is now “part of the armoury” for ship auctions.
The jury appears to remain out on ship inspections. Willcox says it is possible to do some things remotely, but it is “not the same as going round and giving it a tap with a hammer”.
One owner speaks of the need to rely on local third-party ship inspection reports. Although there is a desire to be able to go and look at tonnage again in person, the recent experience means there might be more use of these reports in future.
There is, however, apparent widespread agreement that online working has “revolutionised” closing meetings on ship deals. Whereas in pre-pandemic days buyers and sellers’ representatives, along with those on the legal and financial side of deals, would have travelled — usually by air — to the lawyer’s office for two days of visits, these meetings have been wrapped up more quickly and efficiently by being done virtually.
“That is something we might keep,” one owner says.
Running through TW+’s conversations with those in the business of buying and selling ships, both old and new, is the theme that shipping remains “a relationship business” and these Covid lockdown months have reinforced that view.
A shipyard marketing boss says that for almost two years, his company has proved it can win and close newbuilding orders without physically meeting its customers. “But if this goes on for another three, four or five years, then our relationships with our clients will weaken.”
At present, though, business travel remains virtually non-existent, particularly the long-haul variety, and that is causing frustrations.
“We have an Asia-focused industry that is unable to go to Asia,” one newbuilding broker laments. “It is not a hindrance, but I can’t see it changing for 12 months or so.”
Although some regional travel is opening up, meetings are proving shorter and more limited in number.
Brokers speak of not being able to fill their diaries as in the past. On a recent trip to Greece, one broker was able to tempt only a few owners to meet “furtively” outside the office for a short social meetings, which raises questions over the value of such trips.
“Getting a meaningful business trip in now is not that easy,” he says.
‘You hear so much more in the office’
Most agree that they will probably travel less in future and are now more ready and willing to jump on a video call with clients.
Shipbroking chiefs at some of the big UK-headquartered businesses have encouraged a back-to-the-office policy for their staff from September.
Gibsons Shipbrokers managing director Nigel Richardson believes it is good for brokers. Although they have been working well from home with their Teams links permanently on, they have become more “siloed” into whatever area they are working with. “You lose the benefit of all the information that is flowing around the office,” he says.
Other brokers agree. “You hear so much more in the office. You’re soaked in it. You are much more attuned to what is going on in the company and the market,” one senior director says. “That’s what we thrive on.”
They speak of younger staff members who want to get back to office life. But others also mention how some of those same employees, especially in the 25- to 40-year age bracket, are starting to ask questions about hybrid home and office working as they seek improved work-life balances.
Could this be a watershed moment for shipbroking shops as they finally begin to catch up with other industries?
A few aspects of virtual working might continue in the world of newbuildings and S&P, but ultimately what you can’t do is build relationships, Willcox says.
“In international shipping we all have friends around the world. There are people out there that I haven’t seen for two years,” he says, and the pandemic has reaffirmed to people that they have built up industry friendships and trust at a human level.
You can’t learn to trust people, get to know them or really “do a joke and have a good old guffaw and a pint of beer” on a Zoom call, Willcox adds.