No ship is an island
A conversation between Windward CEO Ami Daniel and CEO of Anglo-Eastern, Bjorn Hojgaard
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When thinking of shipping, it is natural to gravitate towards vessels; however, it is just as important to think of the men and women who operate the ships. Today, the increased challenge of changing crews and maintaining ships has forced shipping leaders to quickly adopt new methods of operation and rapidly speed up the rate of digitization, all while bringing to light the importance shipping has on the daily lives of people around the world.
Windward CEO Ami Daniel sat down (virtually) with Bjorn Hojgaard, CEO of Anglo-Eastern, to discuss the difficulties keeping crews and ships safe in the face of growing fatigue and uncertainty, the digitization the shipping industry is experiencing, and the evolution leaders, particularly in the shipping industry, must undergo.
Below are our top five takeaways:
1. Safety starts and ends with people
The question “who is an essential worker?” has put the spotlight on the shipping industry and the important role seafarers have in keeping the economy running. To ensure the safety of the ships, the safety of the essential workers needs to be a top priority.
2. An opportunity to improve operational efficiency
Times of crisis challenge businesses to improve operational efficiency and inspections are no exception. The adaptability of the shipping industry has led many to seek alternative audit and inspection methods, integrating videos and photos to manage them remotely. The benefits of remote operation will likely linger long after the crisis is gone, and new hybrid models will become standard.
3. No ship is an island
The shipping industry has banded together during this time out of the recognition that no ship – and no company – is an island. It is the responsibility of larger, more established organizations, to look out not only for themselves, but for those within their community. Doing so will ultimately better the individuals and the industry, creating a win-win for all.
4. Good leaders are great followers
The role of a leader is not, ironically, to always lead. It is important to recognize when it is in the organization’s benefit to lead, and when it is more beneficial to let someone else lead the way. Being a good leader, especially in times such as these, is knowing when to follow.
5. Control what you can, prepare for what you can’t
To overcome adversity, recognize what you can and cannot control, and focus on what you can control. The only thing business can do to prepare for the unknown is to build resilience and remember that sunny days will come back.
Want more than our top takeaways? Read an edited version of the full conversation transcript below:
Ami Daniel: Hi everybody, we’re here again in the Beyond Borders podcast. I’m Ami Daniel, co-founder and CEO of Windward, and today we are with Bjorn the CEO of Anglo-Eastern. Bjorn, can you introduce yourself and Anglo-Eastern in a few words, please?
Bjorn Hojgaard: Yep. Thank you very much Ami for having me on. I am the CEO of Anglo-Eastern. We are a large management company headquartered in Hong Kong, with offices across four continents, 25 offices all over the world, about 30,000 seafarers on our books, and almost 1800 shore staff.
Ami Daniel: Wow. Okay, that’s big. Can you explain simply, I know in the world of shipping, there are those who own the ships, and there are those who operate the ships – what do you do?
Bjorn Hojgaard: So we manage the ships for owners that, for one [reason] or another, don’t want to do it themselves. There can be many reasons for that- benchmarking, to get rid of the hassles, to have someone else think about managing the ships, and you can think about the commercial space, the timing of your Investments, etc. But basically, the ship manager is an agent for, and on behalf of, the owner. So the owner says “well, here is my ship, here’s my purse, let’s agree on what I want to do with the ships and you buy crew, lube oil, store, spares, maintenance for my fleet. Make sure ships get from [point] A to [point] B, and do the job that I have charged them out to do.” So, that’s how it works.
Ami Daniel: You, for instance, have about 20,000 Indian seafarers, and you also have an Academy in India. Can you explain to me, in simple words, what’s the difference between crewing agencies and ship management, and who actually operates these ships?
Bjorn Hojgaard: So there are, if you will, three parties to it. There’s the manning agent, that’s the company in the local supply country where the crew comes from, who does the transactional stuff: identification, verification, getting visas done, equipping people with personal protective equipment, clothing, etc. before they go on-board,. making sure that tickets are booked, that they come back home again, they get debriefed… that’s a manning agent. Then there’s a crew manager, and the crew manager can either be combined with the technical manager or standalone. He’s the guy who will plan the rosters, do the training, make sure people actually fit the purpose, and that the team is put together in a proper way. Then the technical manager is the guy who does the procurement for the ships, making sure that the vessels are maintained, safety standards are kept, [and] planning the dry dockings. In many cases, the crew manager and the technical manager are one and the same, and they then call it the ship manager. We do the whole scope. That’s what we do for about 650 ships with, as you said, close to 20,000 Indian seafarers–Close to 30,000 seafarers in total.
Ami Daniel: It’s really hard to keep the ships operating without the ability to change crews. You can get them out of the vessel, but there are no airplanes to get them back home. So what do you think about this issue, and their potential statuses as key workers, what do we do with that?
Bjorn Hojgaard: As you probably know, 90% of goods transported worldwide are transported on ships. So look around you wherever you are, whether it is your desk, your phone, the sofa, the gadgets you have, the food you eat, the medical supplies you may need… most of it comes to your country by a ship, right? So shipping is the global supply chain. It is most important for all of us that we can move goods cheaply and reliably around the globe. Now, to do that, there are 50 or 60,000 deep-sea vessels plying the Seven Seas. There are about a million seafarers on board these ships, a million-plus, and they have a contract duration. They’re hired for a contract. Afterwards they go home, and someone else comes on board. Now it’s been increasingly difficult to get people on and off ships. We only do it in very limited numbers now, [so] that means people get to the end of the contract, and then they can’t go home because we can’t send relief on board, and we can’t get people off the ship. That’s three principal bottlenecks here. The first one is when the ship calls support, that port must allow the relief of crew- must allow the exchange of crew. That’s been a closed territory for a while now. The second bottleneck is that the Seafarer home country, in two-thirds of the cases, India for us, or the Philippines, or China, or Ukraine, or whatever the case may be, also needs to be open for business, and the third bottleneck is that once you have a country that is open [for] business and you have a port that allows [crews] change, you also need to have commercial flights to facilitate that move.
Ami Daniel: So that’s the human element. There’s another human element of safety at sea, and when you keep people on board for so long, there’s some natural deterioration in the quality of execution. But also, it’s becoming increasingly hard to do Port State Control inspections on vessels, SIRE inspections, and maintenance. The World Economic Forum just published that it’s harder to get classification approval because they can’t check the vessels. So what do you think is the impact we’re seeing, and the long-term impact on safety at sea?
Bjorn Hojgaard: Firstly, I think that it’s not the actual duration that makes people fatigued, and that increases the risk. It is the fact that people don’t know when that contract is going to be over. That, coupled with that concern about family members living in areas perhaps with the COVID-19 outbreaks, creates some stress on people onboard. That in turn may increase the risk. Now, we try to help people, we actually have counseling programs in place, but it’s all stopgap solutions. The only permanent solution would be to find a way to move seafarers around freely. And that’s why we’ve been advocating this concept of key workers – If you are a key worker, you’re part of an industry that’s vital to the world. We all intuitively get that the hospital staff- nurses, doctors- they obviously need to go to work because they have to help us cope with this crisis. But we also have to understand that without ships, without the goods coming by sea, we wouldn’t be able to cope with this crisis. So we need to maintain the openness of this global supply chain, and you can only do that if we start moving people back and forth for their contracts.
Inspection wise, it’s just come to that. I mean flags, port states, SIRE, surveys, etc. are all being done, or attempted to be done, remotely these days. And whereas it’s not the same as being physically on board, I do think that it actually gets there – maybe 80-90% of the way – because you do engage with people. I mean, you may not be there physically, but the same as we’re talking now, you do have a conversation with people on board, you get videos starting off running equipment, you take pictures, go through the list of stuff you wanted to check up on and see anyway, so I think that actually helps a lot, and what you see in our industry is that shipping is incredibly adaptable. What you see is that we’re all very fast coming around to do the next inspection. “Let’s do it remotely, let’s do the next orders remotely. Let’s do the next oil major audit remotely.” And even though it’s not going to replace the actual physical order inspection in the long run, I think it’s a good stopgap and it actually works. I think you might see that post COVID-19, instead of doing all these physical inspections, we might just do half and half. We might just mix and match coming out of this.
Ami Daniel: So you guys have been partnering with Wärtsilä and with Naval Dome, and probably some others, to take a leadership early adopter position – How do you see your role personally? Because you also, I believe, chair the Hong Kong Shipowners Association, so how do you see your leadership position in this space, and what can our audience learn from you about your perspective as a veteran in the industry?
Bjorn Hojgaard: I’ve been in shipping all my life, and I’ve benefited tremendously from shipping and from the associations and organizations working with shipping. So when I was asked to chair the Hong Kong Shipowners Association, it wasn’t really something to say no to. It was almost a duty, right? Now, what do you do when you chair these kinds of things? You just apply yourself. I mean, it’s all about just trying to put your time and effort in it. Because that’s what the industry needs. The great thing is that you see in many of these associations and organizations, whether it’s BIMCO or ICS, or INTERTANKO, etc., a lot of volunteer work is being done for the betterment of the industry. And I think that’s great. No man is an island, and no company is an Island. We all belong in the bigger industry, and in the bigger community. As you get older in particular, you start to appreciate that you are part of a bigger machine, and you need to contribute to the machine outside of your own little company as well. So that’s what I’m trying to do in Hong Kong Shipowners Association this way and other places where I participate.
Inside the company, we think digital is key. We come to a place for communication and digital abilities to give some new options for how we operate ships. If I look 20 years back, I think the Holy Grail to good ship management was choosing, training and developing really good people, and that’s by and large a functioning well-defined machine in getting good people trained and heading up through the ranks and making sure they are kept current in their units. I think the next two decades will be defined by leveraging technology to run more efficient ships, be more knowledgeable about what’s really happening, and make decisions based on facts rather than rumors. All these kinds of things are happening, and it’s incredibly important to be driving that from the top of a company. It doesn’t happen by itself, right? Any change is difficult, and digital changes management programs and all. [There’s] no exception to that.
Ami Daniel: So people talk about leadership, but you also talk about the concept of followership. I had a conversation about culture this week, and one of our VPs, Ron [Crean], brought up a model called Situational Leadership, and I think it’s quite similar. I ran this morning with one of my neighbors and he asked me “how much do you want to run, and how fast do you want to run?” I told him “listen, today I just [want to] follow.”. Because of work, I need to lead most of the time, and it was quite fun following somebody else’s pace. You get to listen in a different way when you don’t have the burden of leading.
Bjorn Hojgaard: Take cyclists – in a bicycle race five of them go off, and then one will have to get away from the big group to move to the front and lead. And how do they do that? They actually know that the only way they can do that is by working together, taking shifts. They take turns at being the leader of that little group, so that they break the wind, and then the others are shielded behind them. Then after they get tired, they get behind that little group and then somebody else leads. And that’s what it’s all about. You have to know when to lead and when to follow in order for the group to win. Being the leader all the time may not be the most productive for the whole group. So it’s all about saying “okay, in some situations, you have to follow, and being a good follower is as important as being a good leader.”
Ami Daniel: So what is the one takeaway our audience can take from you in terms of how to lead through adversity?
Bjorn Hojgaard: Well, the first thing to say about that is that when the weather is great and the sky is blue, and you’re leading, I really think that [if] you make 10 decisions, as long as you get one or two right, you would survive. You would do all right. Through adversity, that’s the time where you have to get 8 out of 10 decisions right in order to pull through. So leadership becomes much more critical in times of adversity. But it is also where you, as a leader, grow. You actually learn very little with the wind at your tail. It’s when you have the headwinds that you really learn and grow as a person and as a leader. The second thing is, crises [will] always be external things happening. What you can do in any company, and in any role, is focus on what’s within your control. Make sure you have some resilience. Don’t burn all your cash in the good times [or] you’ll have nothing to work as a buffer [with] when the crisis comes. Build resilience, and then focus on stuff within your control. Then know that there will be a day where the storm clouds disappear and the blue skies come back. So focus on what is within your control and make sure you make good use of time to make yourself ready for the return of better times. And that’s the only thing you can do.
Ami Daniel: I think that’s a great wrap up. Bjorn, CEO of Anglo-Eastern. Thank you so much for your time, and I hope the storm will pass quickly.
Bjorn Hojgaard: Thank you Ami, it was great to be here. It was fun. Let’s do it another time.