Tag Archives: BIMCO

Safety divided by competition won’t go

There have been some puzzling headlines in the past week or so following the decision by the International Maritime Organization (IMO) to give recognition to the bid by satellite services provider Iridium to run the Global Maritime Distress and Safety System.

The IMO sub-committee on Navigation, Communications, Search and Rescue (NSCR) gave the nod to Iridium’s pitch, which will be subject to approval by the Maritime Safety Committee, though probably not before 2016.

It’s true to say that the surprise has been pretty evenly-distributed around the industry. Certainly, there will have been something close to bewilderment at the headquarters of INMARSAT, which runs GMDSS under mandate from the IMO and which will have been lobbying hard to get the proposal squashed.

The surprise in communications circles is largely due to the apparent mis-match between the requirement the IMO places on INMARSAT for GMDSS uptime of 99.99% and the performance of the existing Iridium network.

Despite its somewhat chequered history: a big launch, a spell in Chapter 11, rescue by the US Department of Defence, and resurgence as the appetite for low cost communications broke over shipping – ship owners like Iridium. The products themselves are cheap and cheerful; Iridium was among the first to identify the potential for what was then called “commodity voice communications” – selling handsets and airtime that could keep seafarers in touch at very low per minute rates.

This was because Iridium needed something to do with its global network of Low Earth Orbit (LEO) satellites in addition to the capacity that the US military was using. In time, data products followed and the same principle applied – they were cheap, easy to use and easy to fix when broken.

This was good for owners who didn’t want to spend a lot on their communications but just needed something on board. The data transfer rates weren’t high either but the owners weren’t necessarily worried.

Slightly more problematic was that its network of LEO satellites – rather more complex than a handset – had an equally creaky reputation in practice. Iridium’s engineers have done admirable work prolonging the working life of its constellation but even with the use of spares, outages are a regular occurrence. Since 2001, iridium has lost 10 satellites from its 66 strong constellation, nine from technical failures, one a collision.

Its fiercest critics say that in areas of greatest ship congestion, heavy demand results in the network being unable to cope and like a weak Wi-Fi signal in a conference room, the contention is such that no-one gets any service.

This must be subject to some question, since Iridium services still sell well, but no hardware manufacturer or service provider is likely to admit that any delicate shipboard technology, whether comms or navigation, is subject to operational failure. You have to talk to seafarers to get to hear that and normally they make you buy them lots of beer first.

But it is important in the light of the sub-committee’s decision because GMDSS is not a commercial service but rather a safety one, mandated by the IMO and one that all SOLAS ships are required to fit and maintain. For that to happen, the IMO demands a level of uptime that the current Iridium constellation appears unable to achieve.

No doubt Iridium is able to produce statistics that confirm it hits 99.99% availability, just as its rivals can produce data saying the opposite, but it is the spread between what its commercial service can manage and the IMO-mandated requirement that raises eyebrows.

Incumbent GMDSS operator INMARSAT has been left spluttering by the decision, which it presumably believes rather undermines the goals it has been set in providing GMDSS since 1979. INMARSAT has also formally unveiled its own evolution of GMDSS, called the Maritime Data Safety Service (MSDS) which will “upgrade” the service onto more its modern I-4 satellites.

Iridium plans a similar development and wants to launch an entirely new network, NEXT comprising 72 satellites from 2015 onwards, with service availability from 2017 onwards. Its key differentiator here is the polar coverage its current and future networks can provide and Inmarsat’s cannot. Iridium will need to get capacity utilisation on this new network too – it plans aeronautical in addition to maritime and land services for NEXT and will need to keep pace with the next generation VSAT and HTS services that will be in place by then.

It appears that the potential for ship traffic in the Polar Regions was among the swaying evidence considered at the IMO. Whether or not the growth potential of the Northern Sea Route is really enough to convince the MSC that this makes enough of a difference is questionable enough in itself. A recent survey by consultants PWC of German ship owners found that 60% saw no fresh opportunities from the NSR’s opening up.

What is far more dangerous surely is for any would-be operator to view GMDSS as a prize, an opportunity that has for too long been under the control of one of its rivals. Some of the coverage of the IMO decision (to say nothing of the comments on social media sites that specialise in pushing commercial interests over public ones) suggest just that.

No-one can credibly assert that Inmarsat has “control” of a service that it was created to deliver under the mandate of the IMO. GMDSS has nothing to do with commercial maritime services like broadband, VSAT or HTS. It is a public service dedicated to the safety of the world’s 1.5m seafarers.

Should the provision of such a service be subject to competition and to the vagaries of national interests? Or should any future decision instead be based on the facts and made in the light of day. Assuming that the IMO has not changed its baseline of 99.99% network uptime, does the proposed service meet the requirement or not?

My editor at BIMCO kindly added the following clarification to the article as published on its website.

Editor’s Note: The NCSR Sub-Committee agreed to invite the MSC to consider and decide on which independent body should produce a technical and operational assessment of the information and provide a report to the sub-committee for evaluation. Following receipt and evaluation of the assessment, the sub-committee would then make a recommendation to the MSC as to the adoption of an MSC resolution recognising the new maritime mobile satellite services provider.

How Social Media has outsourced the ‘Image of Shipping’ debate

My recent monthly article for BIMCO garnered more interest than usual – perhaps because it mentioned the mighty Maersk Line and its adventures in Social Media. Either way the subsequent Marine Money conference saw the closing panellists (the Dynasties of the Sea) make a detour away from finance and into the image of shipping.

A reflection on that piece follows, but it could be summarised as ‘if you wore a uniform in your first job, you care about the image of shipping and if you wore a suit then you probably don’t’.

Meantime, something strange has happened in shipping – the success of Maersk has created a situation where the image of shipping is achieving its first positive public engagement in a long time.

What can the other sectors learn from this and how does the rest of the industry need to know about the potential and the pitfalls of Social Media? Read on…

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How Social Media has outsourced the ‘Image of Shipping’ debate

In Italy, until comparatively recently, if your company went bust owing its creditors, the implications were more than just financial. Under the terms of the Royal Decree, a delinquent debtor would lose social rights, be prevented from voting and would be shunned in both public and private society.

These days of course, little of that rigmarole would be necessary. Even before your business went bust, there would be speculation on the internet, and Social Media in particular. Even before the deed was done, there would be a Twitter hashtag and providing the impact was significant enough, everyone with a SmartPhone and a stake in the story would be having their say.

Social Media is not all bad news of course – in many cases it can be the bearer of very good news. And 2013 looks like being the year when it breaks through in shipping, following years in which the pioneers stuck to their belief that it represents the next stage of not just media and reporting but also Customer Relationship Management.

I would go further and say Social Media is the opportunity that many in the industry have been waiting for to engage the public on “the image of shipping”. The example held up as the one to follow is Maersk Line, the container shipping arm of AP Moller-Maersk. And rightly so. Maersk has succeeded in extending its already very strong brand into a new channel and in doing so engaged with a new generation of stakeholders.

And let’s not forget how far it has come. As recently as the early 2000s, Lloyd’s List would receive the AP Moller (as was) financial results as one page of curly fax bearing perhaps 10 benchmark figures and a confirmation that the company had continued to operate in the reporting period.

There was no conference call, no interview, no PR-driven two-bottle lunch, but the finance editor still had to spin a front page lead and perhaps an analysis piece too. How this was achieved – and with such a degree of quality – is a testament to some long-vanished journalistic skills, but that’s another story.

Maersk Line is a Social Media success for a number of reasons. As its own Jonathan Wichmann points out, it’s a process that worked because it came from inside the organisation. It has completely embraced a culture of open information in the social media sense, across different platforms for images, news updates, social and professional interaction and more than that, it has engaged. Thus, when bad news strikes, as it must occasionally, your stakeholders already have some buy-in to your company and are more likely to see your point of view.

In my view, what Maersk Line is doing is something that only a handful of maritime companies could do successfully. In addition to ferry and cruise operators, container shipping is the most visible shipping sector, right on the nexus of B2B and B2C markets, so it makes perfect sense to engage in social media there. A portion of the general public already has some perception of the company and what it does, especially in its home territory.

There are other success stories, notably the IMO, which also brought in a specialist to run its programme. Moving a monolith like the IMO into the Social Media age will not have been without its issues – one of which is to illustrate how constrained was the traditional newsfeed out of the organisation.

But what Maersk has done is to become not just the proxy for container shipping in Social Media but for the wider shipping industry and many will be grateful for that. With Maersk Line making the running, the shipping industry finally has a positive, engaged and socially responsible role model to be proud of. With a similar programme in place at a major bulk carrier and tanker owner, we could perhaps begin to move on from bemoaning that nobody understands shipping.

The Maersk Social site is a great resource on what Jonathan Wichmann has done and this piece on his blog http://jonathanwichmann.com/2012/12/30/maersk-media-miracle/ is a useful primer on the early results.

I would add just a couple of words of caution to anyone attempting to emulate its success. As a PR consultant to the maritime industry, it is obvious to me that some players still don’t always get mainstream communications right.

There is a temptation to see Social Media as a way to go around those pesky journalists who won’t print your press releases and while this is literally true, it can’t make a dull story interesting. Social Media is not just another channel, it has different characteristics but it is easy to repeat the mistakes made in traditional communications.

There is a temptation, presumably among senior managers, to see Social Media as a distraction. They are right. Twitter in particular, is a gateway drug, sucking up as much time as you have available as you attempt to monitor a development or despair of the inability of others to spell or form sentences correctly. Much of the debate on LinkedIn groups is little more than sales pitches, and where you do find genuine conversations, the lack of active moderation can make threads difficult to follow.

It is easier than ever to be your own publisher and while in some ways this is a good thing, there are reasons why magazines and newspapers have a publisher, an editor, a team of reporters, sub-editors and production staff. Take these away and you are dealing with a very different beast, against which you have very little of the redress you enjoyed when you paid to read something.

Finally, is Social Media the second dotcom bubble? No. It’s one of the applications that the internet has been waiting for. The fact that the shipping industry hasn’t completely figured it out yet doesn’t make that less true. And to paraphrase Johnny Kulukundis, who saw very early on that the shipping community on the East Coast of the US needed a social forum that would irreverently entertain, inform and challenge it; “even if you don’t know what to do, do something”.