Ship management industry organisation Intermanager is looking for ways to convince vessel owners who do not use third-party managers that life could be better if they did.

Intermanager president Mark O'Neil, the chief executive of Columbia Shipmanagement, believes the resilience shown by managers during the Covid-19 crisis is proof that the future is bright for what he prefers to term "second-party" managers.

“If you think that some 30% of the world fleet is managed by third-party managers, then there is everything to gain in persuading the other 70% that: ‘You have seen what we have done over the last year, don’t you think that life would have been a lot easier for you if you had been with us?’

“There will always be crises,” O'Neil told TradeWinds.

“That said, the sector has to focus more on quality rather than driving down the price of the service to the extent it becomes very cut-throat,” he added.

O'Neil said Intermanager is looking into ways to create an inclusive industry standard, which is aspirational but achievable for individual companies. “The focus is quality service at a fair price. If we do that, I think our clients will buy into that and the overall quality of service will rise across the industry.”

But he added that he thinks “the concept of a third-party manager is an anachronism”.

“I don’t think there is any logic that a ship manager can’t manage a vessel to at least the same standard as an owner/operator. There is no reason why they should try less, be less interested or have less resources.

“Quite the reverse. There is every logic why a manager can potentially manage better if they are able to bring economies of scale, technologies, investment that perhaps the small owner/operator cannot," he explained.

'Second-party management'

The third-party tag suggests a divestment of responsibility or accountability that O'Neil does not like.

“We have to bring the industry much closer to the client and talk about second-party management, more about partnership, joint ventures and collaboration,” he said.

But what would an Intermanager standard look like, given the industry has previously adopted key performance indicators (KPIs) and benchmarking but still only attracts a third of the world’s fleet?

O’Neil said he does not want to pre-empt what the standard will be as Intermanager is just starting the process of working it out.

“We will look at what that standard looks and feels like. The worst thing we could do, would be to divide the sector into the big versus the small, the haves versus the have-nots. This has to be inclusive, achievable and realistic.

“But by the same token, we have to be quite ruthless if there are operators that simply don’t come up to the minimum standards. Just as RightShip [the bulker vetting scheme] is to the bulk sector, this can be a standard that clients benefit from,” he said.

Raising the bar

Intermanager does not want to revive KPIs as they suggest a pass or fail approach, but there will be performance criteria built in that works for the majority, O’Neil said.

The organisation hopes to have a “living standard that can develop with the industry as we all learn and adapt” ready by the middle of 2021, he added.

Collaboration could be between competing companies to provide joint services rather than wasteful differentiation. Sharing information would also be needed, as both can help in “raising the bar of our collective performance”.

O’Neil said: “No one benefits if a particular ship manager is held out for poor standards or malpractice. We should get to a point where second-party ship management partnership becomes a no-brainer.”