WÄRTSILÄ used to make engines. Now they identify themselves as being a smart technology business and concern themselves with how to link smart vessels with smart ports while optimising vessel operations through better connectivity. This is more than slick marketing and their approach is replicated across the maritime services sector. The shift from transactional sales to long-term agreements, from sales of products and services to working with the customer to maintain performance marks a tangible shift in strategy, not just for the technology providers, but the way the wider industry is set up. Our interview with senior Wartsila executives this week reveals that only one-third of marine services is currently long-term agreement, with the rest still stubbornly transactional, but that is something they are seeking to change quickly and they are not alone in making that transition. It is a different objective for the sales teams who now care more about finding long-term partners than one-time customers. That is an important dynamic to understand for anyone hoping to profit from the digitalised shift in an industry now fully focussed on asset management, and increasingly on predictive maintenance
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Wärtsilä smart technology optimism tempered by geopolitics
Most newspapers have by now published their summer holiday recommendations of beach reading and holiday page-turners. At Lloyd’s List we’ve eschewed our usual list of fruity romance and whodunnit thrillers for the real drama of decarbonisation in shipping and logistics. While our editor’s current bedside reading may be a little dry for some tastes, the International Chamber of Shipping’s recent publication on shipping’s Paris agreement is worth a quick glance, if only to acquaint yourselves with the key issues. Even a cursory canter through the key points will give you some idea of the seismic changes heading our way as an industry, but more importantly it will make clear the opportunities and risks involved for our customers. The worldwide availability of zero CO2 fuels could take at least another 30 years to deliver, but the R&D budgets needed to kick off these changes are being developed now. Partnerships are being formed, thought leadership positions are in development, grants and subsidies are there for the taking and the big consultancies and non-traditional shipping tech providers are actively looking for insight and routes into the shipping community. First-mover advantage remains an elusive concept with little historic precedent in shipping, but opportunities abound for the eagle-eyed able to make the right connections.
A COMBINATION of economic slowdown and trade war escalation has finally rattled China’s customarily cool shipping élite. China’s latest quarterly economic results suggest Beijing is struggling to stimulate growth while keeping its debt level under control. That is not good news for shipping, so when the usually measured tone of Xu Lirong, chairman of Cosco Shipping, starts mentioning trade friction casting shadows over a recovery in shipping, it’s time to ask a few questions. Our China Editor Cichen Shen was out in Shanghai last week taking the temperature of the industry and he has sensed a shift in the tone of previously bullish executives who were until recently dismissive of trade war troubles hitting shipping. We highly recommend reading Cichen’s excellent interview with the president of SIPG and his analysis of why the slowing Chinese economy and trade war is impacting shipping prospects, but you can also listen to Cichen and our editor Richard Meade talking through the topic on this week’s podcast recorded in Hong Kong.
Listen to this weeks Lloyd's List Podcast: Trade trouble and regulatory reform
Down and out in Bermuda – Insurance Day roundtable provides a platform for discussion and insight for the reinsurance market, which is not getting any easier. Executives had hoped rate rises might be on the cards after last year’s devastating hurricane season, but after the January 1 renewals provided a tantalising glimmer of a rise, the weight of the abundant capital pressed back hard on the market. Disappointment and frustration were evident when Insurance Day travelled to Bermuda last month. The talk is now of the “new normal” market dynamics. The question for the market is how to respond. Insurance Day and Axis Capital gathered executives from the Bermuda market to debate these issues and explore the challenges of finding profitable new business to replace less profitable property catastrophe. Worth a read as a primer on an important topic (and while you’re there check out their recent excellent in-depth collection on a Marine market under pressure amid aggregation fears). But also worth noting the nifty way that Michael Faulkner and the team gathered an insightful executive panel for a simple round-table discussion that simultaneously offered invaluable insight and positioned ID as the go to platform for discussion in the market.
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Roundtable: Hard times ahead as Bermuda adjusts to the 'new normal'
Our annual shipping awards celebrate the best of the best in shipping, but our independent panel of judges can only consider the entries put in front of them, so we would like to urge all Lloyd’s List readers to consider entering this year. Innovation and excellence is required as standard in shipping today and there is plenty to be proud of in our industry. Modesty is falsely applied in a world casting about for answers to tough questions. If you’re proud of an achievement, shed light on it. Enter the Lloyd’s List Awards now.
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