Navigating Horizons - Catalyst Maritime Trend Study 2010

NAVIGATING HORIZONS

Catalyst │Maritime Trend Study 2010 ©

Version 1.00


OPPORTUNITY DISCOVERY Niche princes / Process innovators /

Globalizers / Integrators / Adaptors / First movers / Epilogue (35-44)

INDUSTRY CHARACTERISTICS The inertia imperative /

characteristics (6-14)

TREND STUDY Wake-up call / Platform thinking / Eastern hotspots /

Apples and oranges / Carbon gamble / Safe shipping (15-34)

INTRODUCTION Background / Prologue / Highlights (2-5)

2


BACKGROUND Over the years, Catalyst has been engaged with a

broad range of international clients in the maritime industries, working on

an even wider pool of projects. Most projects have comprised elements of

market analysis, business development, innovation and strategic planning.

The study is neither exhaustive nor definitive. Change seldom is. It is a

snapshot of our most notable experience with a group of industries that we

see facing a number of exciting changes in the horizon.

We invite you to navigate freely through the presentation, trusting you will

be entertained and inspired to explore new future growth avenues.

3


OPENING If the owner is king, where does that leave the customer?

Maritime industries have long represented a market of commodities and

global competition, full of twists and turns due to its titanic size and the long

tail of stakeholders fighting day to day for a piece of an uncertain sized pie.

But when the market is pulling for deeper logistical solutions and legislation

bodies require still more stringent compliance standards, the only way

forward seems to be a focus on sustaining competitiveness by sound

strategic focus, new technologies, and innovation in all possible shapes.

The call for new business and market development has never been louder.

4


HIGHLIGHTS – a brief synopsis

The maritime industries are made complex by their titanic size, the

significant number of stakeholders involved, and the correlation with world

trade levels. However, their complexity should not become an excuse to

address diverse customer segments alike.

A number of key trends reveal a rising group of specialized players

that serve latent customer needs and form strategic partnerships. Others

exploit digitalization to enable transparency and efficiency gains. And new

innovators look towards growing legislation and emerging markets.

Navigating these new horizons requires a change in focus. 2009

separated the wheat from the calf in this highly fragmented industry, but

now leading companies are fine-tuning, sometimes even redefining, their

strategic focus. Management of change and new growth is thriving.

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6


Shipping is the product of world trade, typified by its global width

as well as its depth of influence across industries. Though processes are

simple and demand-driven, the result is restricted strategic agility.

• Commodity shipping is fragmented and characterized by fierce price competition

• Short-term speculation runs in parallel with long-term stable growth

• Numerous customer segments are catered to by each industry player

Industry characteristics │ Introduction

THE INERTIA IMPERATIVE

7


GDP MEANS TON-MILES There’s a positive linear correlation

between GDP and ton-miles. A steady growth in production headed by

emerging markets, by default leads to a proportional growth in shipping.

Exhibit: Development of G20 GDP relative to cargo growth, index 1999

Source : EIU, UNSTATS, Fearnley Review (Various Issues), Clarkson, Catalyst analysis

Notes:

• The index graph highlights the close relationship

between the growth of major economies (G20)

and ton-miles.

• It reveals that the relative distance of goods

shipped is increasing slightly

• Finally it points to the fact that shipping in general

is growing relative to the general economy,

regardless of the growing share of service

industries.

Industry characteristics │ Drivers

8

100

105

110

115

120

125

130

135

140

145

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

G20 GDP Cargo ton-miles Cargo tons


Exhibit: Estimated breakdown of maritime industries 2009

Source : Douglas-Westwood (2007) excl. private yachting & marine tourism

Notes:

• The pie chart breaks down the largest marine

industries, revealing that shipping and transport

services amount to only 41% of all maritime

industries excluding maritime tourism

(USD268bn).

• The ‘Other’ category representing 12% of the

market includes smaller industries such as cruise,

R&D, IT, commerce, etc.

BIG, BIGGER The collective value of the maritime industry is a

stunning USD1,3 trillion. It spans multiple value chains and markets,

whose bread-and-butter primarily depend on world trade levels.

Industry characteristics │ Size

Shipping & transport

Offshore oil & gas

Seafood processing

Marine equipment

Marine fishing

Shipbuilding

Ports Other

≈ USD 417 billion

9


Exhibit: Snapshot of the shipping segments

Source : Catalyst analysis

DIVERSE BUSINESS LOGICS Vessel types are many and cargo

types plenty. Each combination often represents yet another business

logic. For multi-segment players this means that one size never fits all.

Notes:

• The chart serves to highlight the significant

amount of segments that occur from a breakdown

of categories.

• The graph does not distingush between e.g. ship

owners and charterers, long/short/spot, regions

operated or niche industries such as special

cargo.

• Most of these sub-segments have their own

business logics, which emphazises that e.g.

service providers should cater to each segment

differently.

Grain

Forrestry

Coal

Pig Iron

Crude Oil

Product Oil

Gas

Chemical

Platform Supply

Windmill Supply

Anchor Handling

Subsea Cables

Dry

Tank

Celluar

MPP

Tweendeckers

Generel Cargo

Heavy Lift

Ro-Ro

Reefer

Projects

Offshore

Ferry

Cruise

Bulk

Liner

Specialized

Passenger

Shipping

Industry characteristics │ Diversity

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GLOCAL BUSINESS Trade is often global, but the business remains

local. Upon winning the cargo, the game changes to an array of local

requirements and opportunities. Until the next call, when they change again.

Exhibit: Average no. of employees per select company office, 2010

Source : Company websites

Notes:

• The chart illustrates the average number of

employees per office location for four major

players in different value chains.

• The chart demonstrates that the requirement for

local presence depend on position in the value

chain. – As an equipment manufacturer Wärtsilä

does not need the same presence as Inchcape,

who make it a key part of their value proposition.

• In contrast, other players reduce local presence

as they come to realize that their business is

dependent, or that they are able to better exploit

the scope of partnerships.

MSC (Liner)

441 Offices

TeeKay (Wet)

25 Offices

Inchcape (Port Agency)

255 Offices

Wärtsilä (Equipment)

57 Offices

Industry characteristics │ Globalization

0 100 200 300 400

11


Exhibit: Conceptual mapping of stakeholders involved in voyage operations

Source : Catalyst Analysis

Notes:

• The chart aims to break down a voyage from

fixture to final settlement. It highlights the

significant amount of dependencies between

various stakeholders, which complicate voyage

operations.

• The broker and the port agent take key role in

orchestrating the different stakeholders.

TOO MANY CHEFS Simple maritime business processes are

complicated by the large pool of stakeholders involved, which gear

up complexity and reverse the level of transparency and efficiency.

Cargo Owner/ Freight Forwarder

Vessel Operator/ Vessel Owner

Broker

Vessel/

Cargo

Fixture

Voyage

Planning

Port

Operation

Cargo

Loading Voyage

Operation

Port

Operation

Cargo

Discharge Voyage

Reporting

Voyage

Settlement

Terminal

Operator Port

Authorities

Ship

Suppliers Inspectors

Port

Agent

Industry characteristics │ Complexity

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A VERY LONG TAIL Volatility, low entry barriers and numerous market

segments. The result? – A significant fragmentation of the industry and its

players alike, complicating standards, innovation, and sales.

Exhibit: Distribution of operators controlling different no. of chemical tankers

Source : Fairplay 2010

Notes:

• The graph illustrates the significant fragmentation

of operators in the chemical tankers segment.

• Half of the segment controls just a single vessel.

• The picture is evident across many shipping

segments, which inhibit e.g. efficient sales

activities for players catering to these fragmented

segments.

# Operators

0 50 100 150 200 250 300 350 400

1

2

4-3

9-5

19-10

29-20

39-30

49-40

50+

Industry characteristics │ Fragmentation

13

# Vessels / Operator


UNCERTAIN CERTAINTY The relationship between world trade and

shipping fuels short-term speculation but also ensures long-term equilibrium

MOM & DAD The result of low entry barriers is a predominant pool of

family businesses, which distinguish and complicate industry development

ANTHILL OF PLAYERS The complexity is driven, not by the business

processes, but by the pool of different stakeholders involved in operations

SHIPPING, AND Although shipping by itself represents an enormous

market, the collective size of the maritime industries is much greater

BUSINESS MODELING Everyone’s different due to vessels, markets and

cargos. Differentiation requires recognition of each segment’s uniqueness

LOCAL EVERYWHERE Depending on customer segment and position

in the value chains, maritime industries require significant local knowledge

Industry characteristics │ Conclusion

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Trend study │ Wake-up call

WAKE-UP CALL

A tough period with over capacity and declining freight rates has led a

wave of core business focus and cash management. Clever outsourcing

partners will find ways to provide flexibility and overhead savings.

• Third party service providers facilitate owners’ overhead reductions

• Professionalized procurement practices lead to supplier price pressure

• Several M&A opportunities is calling for accelerated consolidation

16


Exhibit: Growth in market shares for major liner companies, 2000-2008

Source : AXS Alphaliner (2008), Catalyst analysis

Notes:

• The graph highlights the significant

consolidation happening in the liner market.

• Top 5 liner companies controlled a 43% market

share in 2008, making it the most consolidated

major shipping segment.

• High growth companies are MSC growing their

market share from 4,3% in 2000 to 12% in

2010 and CMA CGM growing from 2,3% in

2000 to 7,9% in 2008

• In the same period, the world TEU capacity

grew from 4,5 million to more than 12 million.

SIZE MATTERS Big players will become better at exploiting scale and

financial strength. Professional procurement will replace outdated supplier

contracts, which may increase downstream price pressure and consolidation.


-49%

-48%

-2%

22%

35% Top 5 carriers

Top 10 carriers

Top 11-25 carriers

Top 26-50 carriers

Top 51-100 carriers

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LEAN MACHINES The economic downturn facilitated severe

cost-cutting among owners and operators, affecting players across the

value chains. Business process redesign is a differentiating discipline.

18

Exhibit: Summary of Maersk Line strategic initiatives late 2008

Source : Maersk annual report (2009), Lorange (2009)

Notes:

• Maersk Line is the leading liner company in the

world, serving customers all over the globe.

• The Maersk Line fleet comprises more than 500

vessels and a number of containers

corresponding to more than 1,9m TEU and

representing a 16,3% market share.

• In 2009, the group-level ‘Project One’ cut costs by

USD2bn, focusing primarily on liner.

• Maersk Line turned a USD-995m gross loss to a

USD1,23bn gross profit between 1st half 2009-10.


Customer orientation

- A change of focus from speed to regularity enabling fuel

savings, accessibility and improved customer satisfaction

Competitiveness

- Re-focus on high-profit routes (Far East Asia), securing return

freight, avoiding delays and fuel cost savings

Productivity increase

- Staff reductions focusing on sales/employee and other drastic

overhead cost reductions


Trend study │ Platform thinking

PLATFORM THINKING

While captains connect their vessels online, service providers will

be busy building and maintaining a growing base of digital platforms that

offers global scale, locally and at sea.

• Data, information and instruments are digitalizing fast and online

• New business models are evolving around digital information assets

• Data & decision modeling drive transparency and process management

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Catalyst │Maritime Trend Study 2010 © 20

Exhibit: Examples of shipping functions being digitalized


Notes:

• The table is an indicative set of examples of

traditional shipping activities, which can now be

carried out digitally by various systems.

• In addition to efficiency gains, the digitalization

wave opens up opportunities for new business

models based on the digital information assets

that many players now possess.

Chartering Voyage Estimator, Cargo

Schedule, Fixture Notes, COA Demurrage Real Time Risk exposure,

Processing of claims …

Operations Vessel & Port Schedule, Voyage

mgt, Laytime Calculations, Bunker

mgt, Time Charter …

Pooling Vessel Performance, Pool

Financial Statements,

Allocation of Pool Revenues ..

Financials Tracking, processing , Auditing … Data Service Data Capturing, Disbursement

Accounts, Data platforms …

Planning Job Planning, Cargo Matching … Procurement Procurement Platforms,

RFQ,…

Trading Monitoring, Report Compliance

Confirmation, Invoicing … Remote

Monitoring

Engine performance, Fuel

Consumption …

#REFERENCE ! The digitalization of information challenges the broker

and his spreadsheet. The new face of competition lies in managing the

digital information asset, improving processes and coping with transparency.



Exhibit: VSAT operators and penetration

Source : Comsys report (2009)

Notes:

• The graph highlights the trend in broadband

connections on vessels, which reveal a

penetration growth that is expected to accelerate

even further in the coming years.

• It should be noted that the graph only depicts

active vessels for the VSAT technology, which is

currently considered high-end. Thus the

incorporation of other Internet technologies would

reveal a much greater penetration of connected

vessels.

SPACE SHIPS Today’s vessels are no longer solitary whales. The rapid

growth in broadband access enables shore-based stakeholders to access

information directly and to manage the optimization of vessel performance.


0

10

20

30

40

50

60

70

0

1000

2000

3000

4000

5000

6000

2002 2003 2004 2005 2006 2007

Active vessels VSAT operators

# V

essels

# O

pera

tors


Trend study │ Eastern hotspots

EASTERN HOTSPOTS

Entire supply chains continue to move East, creating new global

strategic trade hubs. In response, ship builders, owners and commodity

traders are relocating group operations to enjoy closer proximity.

• Intra-Asia trade represents the single largest global trade volume

• The number of port calls yields big business beyond shipping itself

• Far East Asia is quickly becoming the strategic shipping location

22


NON-STOP ASIA As GDP levels grow, emerging markets will

gradually shift from producers to consumers. The result will be still

larger intra-Asia trade as well as discharge of finished goods.

23

Exhibit: Regional Trade Comparison, 2009

Source : Clarkson

3.4

2.6

Intra-regional

Far East

MEI - FE

9.1

FE -

Australia

Europe - FE

Europe - MEI

3.2

FE- N. America

FE- S. America

Europe –

S. America

N. America

-Europe 3.3

8.7

6.4

3.2 N. America –

S. America

2.9

Intra-regional

N. America

2.7

3.4

Unit: Hundred Million Tonnes traded in either direction

(total)


Notes:

• Far East (FE) intra-regional trade alone amounts

to 12% of the world’s total.

• Trade between FE, the Middle East and India

regions amounts to 12,5% of the world’s total.

• From 1994 -2004 the intraregional trade in Asia

grew 417%, which is approximately 30% more

than the world average growth in this period.


Exhibit: State-owned share of Top 10 oil enterprises in major economies, 2010

Source : OneSource, company websites and Catalyst analysis

DEAR MR. PRESIDENT A significant share of the world economy is

controlled by governments, especially in the East. Navies, NGOs and

government-owned companies call for a careful re-thinking of maritime

value propositions and sales strategies.

24

Notes:

• There is a significant correlation between BRIC

countries/Middle East and state-control of natural

resources as opposed to the Western countries.

• The correlation is also present for coal, although

less significant.


China

Brazil

India

Russia

Middle East

USA

European Union

State-owned Enterprises Public Enterprises


Trend study │ Apples and oranges

APPLES AND ORANGES

Segmentation and specialization is the new array of competition.

Leading companies will intensify their parallel search for core capabilities

and attractive market niches to finally kill the commodity tiger.

• Cargo types and legislative diversity across markets drive differentiation

• The integrated shipping companies are accompanied by specialized players

• High-end segments such as offshore pose new market opportunities

25


Exhibit: Complexity of Regulation

Source : UNCITRAL

“It is well known that the current legal regime

governing the international carriage of goods

by sea is characterized by complexity, a

lack of uniformity and a failure to take

into account modern developments in,

and requirements of, the industry due to the

age of the existing conventions.”

- The United Nations Commission on International Trade Law

COAST GUARD, COME IN The chronic difference in legislation across

regions will drive specialized operators to seek cost advantages by

targeting specific market segments with barely compliant fleets.


Notes:

• Global shipping is primarily regulated by UN

agencies. IMO and ILO are examples of these.

• Flagstates will regulate issues not regulated by

UN – resulting in uneven competitive terms for

fleets of different flagstates. As a result, many

fleets operate under ‘flags of convenience’.

• The unevenness will be particularly apparent for

intra-regional trade, which does not neccesarily

involve IMO regulations.

• The Rotterdam Rules aim to unify the international

regulations for carriage of goods by sea. So far

this convention has been signed by 15 states.


Exhibit: Dimensions of specialization in value chains, industries and markets


BUSINESS CLASS Not all cargo owners will settle for travelling

coach. A new wave of specialized players will seek to break with

commodity margins through differentiated value propositions that meet

latent segment needs and require more special competencies.

27

Notes:

• The chart conceptualizes possible high-level

dimensions of specialization; i.e. a fully integrated

shipping company would encompass all

dimensions, whereas the red lines indicate a

highly specialized company (TCC) only chartering

liners between US & FE and with limited ops.

• The more specialized a company is, the deeper

solutions it can provide for its core segments

through e.g. cost advantages, bespoke services

or horizontal integration of value-add services.

• Several other dimensions of specialization exist

such as vessel size, high/low-end, long/short, etc.


“TCC example” The Containership Company, p. 41


Trend study │ Carbon gamble

CARBON GAMBLE

Future premiums on carbon emissions hold the power to alter

shipping altogether. Whether an opportunity or a risk, leading companies

are taking decisive action to prepare their fleets for a new competitive edge.

• IMO and cargo owners are defining a new competitive regime

• Fuel costs and CO2, NOX and SOX emissions are risk managed

• Shipping denotes a new high-growth segment to green innovation companies

28


ANCHORS AWEIGH The barriers to business are growing as IMO

gains stronger international foothold and cargo owners pull still greater

compliance standards. Do-it-smarter companies will invest in obliging and

efficient processes.

29

Exhibit: MARPOL timeline for reductions of SOx, NOx, CO2 and bio-invasion

Source : MARPOL

Notes:

• The chart highlights the signifcant emission

reduction requirements set by MARPOL.

• In order to comply with the standards, many fleets

are required to carry significant investments in

upgrading fleet equipment and engines.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Reduction Bio-invasion

NOx

SOx

CO2



Exhibit: Market forecasts for green shipping technologies, 2010-2016


GREEN IS THE NEW BLUE A fast-growing range of green innovations

targeted at ship owners is defining a new industry niche with tremendous

potential. It serves to both limit the risks of emissions and to cut fuel costs.

30

Notes:

• Catalyst has forecasted the market sizes for

shipping equipment within three select green

technologies.

• Supporting the MARPOL timeline for emission

reductions, this graph highlights the future

importance of shipping to green technology

providers.

-

2

4

6

8

10

12

14

16

2010 2011 2012 2013 2014 2015 2016

Bill

ion U

SD

Heat Recovery Ballast Water treatment Scrubbers



Trend study │ Safe shipping

SAFE SHIPPING

Insurance premiums in terms of investments in various security

measures are on the rise. Hazardous cargo represents a significant

business risk, but also an opportunity to differentiate through TMSA ratings.

• Significant future security investments; especially among Western fleets

• Active risk management of cargo and environmental protection

• High-end fleets will differentiate through safety investments

31


PRICING LIFEBUOYS The cost of safety is becoming a known factor

in the industry. As a result, the industry will invest heavily in state-of-the-

art safety systems, which unite cargo and environmental protection.

32

Exhibit: US Administration on recent BP accident

Source : NY Times, 13 July 2010

Notes:

• Although not a shipping accident per se, the BP

offshore disaster in the Mexocan Gulf is the latest

example of failure to recognize the potential

severity of accidents involving casualities and

environmental disasters at sea.

• The trend to address risk management proactively

was highlighted, when one of the world’s largest

enterprises, BP, was in jeopardy of going down.


“The way safety is measured is generally

around worker injuries and days away from

work, and that measure of safety is

irrelevant when you are looking at the

likelihood that a facility like an oil refinery

could explode. This is comparable to saying

that an airline is safe because the pilots and

mechanics haven’t been injured.”

David Michaels, assistant secretary of labor for occupational safety and health


Exhibit: Amendments to IMO Safety Convention SOLAS

Source : IMO

SWIMMING LESSONS Interest organizations are driving a new

ambitious safety regime, which will require significant future investments in

security such as crew training, vessel safeguard systems and sea patrols.

33

Notes:

• Investments in security and crew training are

expected to rise significantly in the coming years,

which is supported by the rising complexity of IMO

safety regulations.

• At the same time, TMSA ratings have become a

differentiating discipline, which serve as a

competitive edge in some high-end segments.

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Amendments per year Accumulated Amendments



CONCIERGE SERVICES The future will bring specialized players, who

provide vertical and bespoke solutions to customers and competitors

JACKIE CHAN The industry is more demand-driven than ever before.

Asia, especially China, will establish itself as the trade hub of the decade

EXPEDIA A combination of shorter lead times, IT and management will

drive transparency, simpler processes and lower industry complexity

COLLISION AVOIDANCE Fighting externalities will change to

managing risk proactively based on green and safe innovations

E-SHIPPING Digitalization of data and services will translate into

widespread efficiency gains and development of new core competencies

WALL STREET The dynamics of the maritime industries call for a new

set of management competencies focused on change and progress

Trend study│ Conclusion

34









35


Opportunity discovery │ Case studies introduction

OPPORTUNITY DISCOVERY

The future role model of the industry isn’t one but many. The horizons

suggest several promising positions to take. In concert they characterize an

industry growing in both speed, strategic focus, and customer orientation.

• Specialized players will offer higher value add to select customer segments

• The increasing pace of legislation and competition provide room for innovators

• Global integration of the industry will facilitate new business development

36


Exhibit: DA Desk case study

Source : Company website; The maritime executive

NICHE PRINCES Players successful in identifying attractive specialized

positions in the value chains will gain market share. They compete on

strategic customer understanding and narrow, industry-leading services.

37

Company description:

DA-Desk is the largest independent provider of port

cost management services to the shipping industry.

Focused on port disbursement control, DA-Desk

offers effective process management, early error

detection and a near paperless workflow. With more

than 80 customers DA-Desk handles 80,000 port

calls annually

Opportunity Discovery │ Case study

DA DESK has quickly grown to be the leading

provider of port cost management services.

Starting of with handling disbursement

accounts, DA DESK today offers a fully

integrated chartering, operations,

financials and port disbursement system.

The value proposition is clear and a good

example of growth through horizontal

integration.


Exhibit: Aalborg Industries case study

Source : The Maritime Executive

PROCESS INNOVATORS Foresight and speed is key for these service

& equipment providers. Their success is decided by a lasting ability to drive

legislation and cargo owners, and by providing cost and risk reductions.

38

Company profile:

Aalborg Industries is at the forefront of green

innovation and able to assist ship owners to meet

the new emission and ballast water requirements.

With respect to environmental and operational

enhancements, Aalborg Industries provides a range

of green solutions to support customers in building

and operating their commercial fleet to the highest

standard for low environmental impact.


In 2010, an EU Directive specified that fuel with

a maximum sulphur content of 0.1% can be

used when in port or at anchorage, and in order

to be compliant, Low Sulphur Fuel Oil needs to

be used. Aalborg Industries has developed

burner upgrading kits to ensure that safe

operation can be maintained and that boiler

plants remain in compliance with the

classification society requirements.


Exhibit: Inchcape Shipping Services case study

Source : The Maritime Executive; Quote by CCO Jon Corner

GLOBALIZERS To be truly global in shipping, one must be local. The

long tail of the industry offers great opportunities for those, who succeed in

providing the market with an intelligent platform of scope and scale.

39

Company profile:

Inchcape Shipping Services is the world's leading

marine services provider. Through its proprietary

network of some 255 offices employing over 3,800

people across 63 countries, ISS provides its

customers with an unparalleled global resource

delivered locally and tailored to each customer's

individual needs.


Inchcape Shipping Services to acquire Global

Marine Travel: “We see strong scope for using

the ISS network to build on GMT’s current

office footprint. We share many common

customers with GMT and have no doubt that

bringing together the services of the (crew)

travel provider and the agent providing marine

husbandry services, will lead to a stronger

value proposition and increase the strategic

partnership value to our customers.”


Exhibit: A. P. Moeller Maersk case study

Source : Company website; Lorange (2009)

INTEGRATORS The integrated shipping company is not dead. The

demand for one-stop solutions, portfolio risk management and several

M&A openings offer new space for conglomerates that match scale with

focused management of each division.

40

Company profile:

The A.P. Moller - Maersk Group is a worldwide

conglomerate. It operates in some 130 countries

and have a workforce of some 115,000 employees.

In addition to owning one of the world’s largest

shipping companies, the Group is involved in a wide

range of activities in the energy, logistics, retail and

manufacturing industries


The Maersk Group includes liner, logistics,

terminals, tanker and offshore supply, oil & gas,

retail and technology. “For all these shipping

activities, with their unique business models,

there is a built-in commodity element (with a

heavy cost focus) versus a niche

element (with a strong service focus).”


Exhibit: TCC case study

Source : Lloyds

ADAPTORS The grasshoppers of the industry bypass the inertia

imperative thanks to limited balance sheets. They jump from one latent

segment to the next, exploiting volatility and low barriers to operate.

41

Company profile:

The Containership Company (TCC) was founded in

2009 by Jakob Tolstrup-Møller and Captain Franck

Kayser, who both have a long history in container

shipping. The first sailing left Taicang port close to

Shanghai, on 17th April. In September 2010 Ningbo

will be added to the service portfolio providing a

direct service to Los Angeles. The business model

is focused on simplicity and transparency.


TCC "Company of the Year" Finalist

TCC is honored to be short-listed as one of just

4 finalists for "Company of the Year" by Lloyds

List Global Awards 2010. The award is for the

shipping firm that best adapted to the

conditions in 2009 by trimming costs,

proving nimble in negotiations with partners

and generally finding creative solutions to

prepare the business for a more robust market.


Exhibit: Seaspan case study

Source : Financial Times, 16 August 2010

FIRST MOVERS Fast and agile market developers are able to exploit

the delay in commoditization of new market openings. With high growth

emerging economies in Asia, and eventually Africa, the potential is great.

41

Company profile:

Seaspan Corporation charters containerships

pursuant to long-term, fixed-rate time charters to

major liner companies. It currently owns a large

modern fully contracted fleet of 68 vessels that are

entered into long-term contracts. All vessels are

deployed on fixed rate charters to take advantage of

the stable cash flow and high utilization rates that

are associated with long-term time charters.


As with its first-mover advantage in China’s

exploding container market, serious financial

problems facing Germany’s container ship

owning companies will “play into the hands” of

Seaspan, one of the world’s largest non-German

container ship owners, its chief executive says.

“We prefer to go for new ships, because there

are certain advantages to going for your own

ship design. We’re looking at opportunities and

we’re quite bullish.” Mr Wang tells FT.


NEW MARGINS New business development will become the channel to

sustaining profitability, as traditional markets commoditize further

NAVIGATING HORIZONS The changing landscape entails an ongoing

opportunistic mapping of internal strengths and new market opportunities

MANDATORY CREATIVITY The time is over when shipping could

ignore R&D. Senior executives are, and should be, frantic about innovation

SUCCESSION TO THE THRONE The customer will finally be king, as

specialized players dive deeper into the value creation of their clients

HOLDING HANDS Horizontal rather than vertical integration enables a

new wave of strategic partnerships with clients, suppliers and competitors

STRATEGIZING As players begin to leverage their lean operations,

management will require a change focus towards new growth avenues

Opportunity Discovery │ Conclusion

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CLOSING Inertia is deadly, but is it dead? The collective size of the

maritime industries may appear so gigantic that some people don’t observe

its movements. Instead they choose to focus on nurturing status quo – the

operations, the fleets, and the current market positions.

However, quick change of focus from latitude to altitude reveals some

remarkable new horizons: Markets defined by segment, not commodity;

Shipping companies with no ships; Digital voyage management, etc.

To navigate the new horizons successfully, requires a determined

management of change. This begins with management accepting change.

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ABOUT CATALYST Catalyst is an international management consulting

firm focusing on strategy, innovation and change. The company was

founded in Copenhagen in 2001 with the ambition to create a different

consulting offering. - An offering based on growth-driven business model

innovation, go-to-market strategies, and strong client involvement.

Catalyst caters to a wide range of international companies, primarily within

the maritime, energy, and green technology industries.

For more information, please contact us directly by e-mail or phone.

[email protected] or +45 3543 3277.

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