ShipCrunch

The Jones Act and Affirmative Action

Subsidies, protectionism and entitlements desiccate an industry and its professionals

By Ryan Skinner (email)

John McCain's attack on the 90-year-old Jones Act has some rejoicing, others fretting 

When I studied at Duke University in the 90s, one of the hot campus topics was affirmative action, the government-backed policy of favouring racial minorities in hiring and school admissions. Effectively, an African-American, Hispanic-American or Native American with lower test results and grades than the mean would get accepted.

Ironically, most minorities at my school (and many others) hated affirmative action. Why, if it meant a ticket to a prestigious school? They understood that, in the school's ultra-competitive environment, they were branded "second-best". No one could tell who got into the school via affirmative action and who didn't, so it appeared that anyone with dark skin was given an unfair boost.

That kind of uncertainty corrodes integrity. Am I good enough? Do I have an unfair advantage? Would I be here if it weren't for unfair laws or rules? If you love competition or believe in the level playing field, government-granted help takes the legs out from under you.

Thus a florid discussion that popped up on Maritime Executive's LinkedIn group (probably the most vibrant online shipping community today), where many American mariners and shipping professionals railed against the Jones Act, should come as no surprise.

So far, 168 back-and-forth comments from 21 committed shipping men (and one woman - Go Maria Dixon!) basically conclude either that protectionism and entitlements suck or that they're a blessing. Nonetheless, they're a fact of life in the US market and you're a sucker who's going to kiss off the domestic shipping and shipbuilding industry if the Jones Act is scrapped.

Arguments for subsidies, favouritism and protectionism weigh heavily in the long run. Saving jobs, keeping strategically vital trades open, preserving naval construction capability, etc. - these are all strong and valid arguments.

On the con side, state-sponsored protectionism kills competitiveness, which is why most economists hate it. Once a business is protected, it starts becoming wasteful and dies if you stop propping it up. That's a pretty strong argument for business leaders to reject state aid. Yet, they do it again and again.

An argument that dances well in the spotlight but performs poorly on the poker table is simply that of morale. People working in state-sponsored industries quite simply feel inferior. They never know, and never will know, whether they actually could compete, given equal footing. That thought's a killer, and it's part of the uncertainty that surrounded affirmative action.

It looks like the Jones Act is headed for revision. To those who suffer under its incapacitating tyranny, it'll be a blessing.

Some gems from the Jones Act discussion at Maritime Executive's LinkedIn group:

Preaching shipping to an audience of none

What can go wrong when a gang of shipowners erect a defence of the industry? Everything.

By Ryan Skinner (email)

Last week I penned a short column questioning the organization, orientation and goals of yet another self-appointed outfit determined to ride to the defence of the shipping industry's tattered reputation. Here it is.

Yesterday, the director of said self-appointed outfit, Captain Peter Swift, voiced his dissatisfaction with my view on the opinion page of Lloyd's List.

First of all, I'm sorry, Captain Swift. I'm sorry I failed to convey my point.

My point was this: An organization inspired by, led by and composed of shipping people, determined to tell shipping stories and aiming to provide accurate details of the shipping industry, an organization just like that, has a zero percent chance of exerting a lasting influence on people outside the shipping industry.

You say I have no need to be concerned that you are trying to preach to the converted. I'm not concerned. I'm disappointed.

I am disappointed that what's truly exciting about the industry is not going to come across. Why? Because shipping people are among the least likely to know what might make shipping interesting or worth learning about to people who are not in shipping, and not likely to get into shipping.

I don't do this for fun. I don't do charity work. I do it for a living. I spend my time explaining to executives that those stories they want to tell, those stories about how spiffy their company and their product is, is one their audience is not predisposed to want to hear, or to believe. Let other people talk about how great you are. The smart leaders see the point.

What I fear most about the organization you've put together is precisely what you consider its strength. I quote: "While we have so far concentrated our membership on shipowners, ship managers, P&I, classification and educators our intention is to include everyone involved from ship design to recycling such as ship builders, underwriters, legal practitioners, ports, repair companies, marine equipment suppliers and manufacturers."

You are assembling a choir for self-congratulation, not industrial activism. Get environmental organizations, fair trade advocates, economists, politicians, technologists, entrepreneurs, natural and social scientists on your board and in your organization, not sailors, suppliers and ship-brokers.

The former will keep you focused on the social value of world trade driven by a responsible shipping industry. The former will keep you honest. The latter will simply applaud to see their name on a web-site, a banquet invitation or a press release. But perhaps that's what charities are all about, anyway.

When should you spill your oil: An Instruction Manual

A colloquial guide to proper oil spill etiquette, as formulated by ISO and EMSA policy

By Ryan Skinner (email)

This crane contributed to the development of this instruction manual

Before we go any further, please note:

If you are anywhere in or near the US Gulf of Mexico and you need to spill oil, DO SO NOW. Do not hesitate. Just dump it, report the oil to the US Coast Guard and deploy some booms. Send the bill to BP.

If you are within easy steaming distance of the US Gulf of Mexico, set your course for the gulf, then follow the above procedure.

The same rules apply if you are anywhere near the Bay of Bohai in China, except you should address the cost of cleanup to PetroChina. If they fail to pay, try BP there too.

If none of the above applies to your oil spill situation, you will need to follow a specific oil spill management programme. Good preparation for oil spills is key to ensuring a successful spill.

Rules of thumb for spill timing:

• Do NOT spill in US waters during presidential election season. Nor election season for the US Senate, or House of Representatives. Nor state senate seats in any state affected by your spill. School board elections are probably safe.
• If you are within spilling distance of waters inhabited by, or habitable for, walruses, guide your vessel there before spilling.
• A fast spill (a "wad") is preferable to a long, drawn-out and pathetic dribble of a spill. Instruct technical personnel appropriately.
• If you can time your spill when passing another vessel or rig, do so. Then report the spill to authorities, targeting the other vessel. Prepare for a "he who smelt it, dealt it" defence from those you accuse.

With the dawn of new satellite technology that can detect oil spills, the oil spill timing picture grows more complicated. Fortunately, careful management of the spill, along with knowledge of the limitations of said technology, does not have to threaten your planned oil spill.

According to the EMSA, the satellites may be confused by "sea ice, turbulence generated by a ship propeller, rain, naturally occurring algae blooms, reduced wind speeds in wind shadow areas (behind an island or coastal mountains), fish and the egos of oil company executives".

In other words, if you're steaming through a major storm just off a rugged coastline in frigid waters with plenty of algae, screw the engines up to full and spill at will. Otherwise, just let it fly in high winds and hope the satellites are looking the other way.

FYI: It is considered highly impolite to spill oil at weddings, funerals, birthdays, bar mitzvahs, christenings, a brit milah, or at or around a major yachting competition.

We hope this oil spill instruction manual contributes to your future successful oil spill.

Who can read the shipping market, and how?

Much of shipping market research fails the transition from anecdotal to analytical

By Ryan Skinner (email)

Stats released a couple weeks ago from Equasis on the world fleet as of 2009 indicate some 75,000 vessels, from small tugs to the biggest tankers. That's, roughly calculated, USD 250+ billion in floating assets, or let's say 10 billion in newbuildings per year for the last 25 years. Add to that the value in retrofit components, repairs, spares and consumables, which is again in the billions per year. Then pile on services. Let no one doubt: There's money to be made in this industry, even when profit margins are tight.

But all parties in the industry need more specific data to make their businesses succeed. I know of a ballast water management company whose system works particularly well on large tankers and bulk carriers. For him, there are surely accurate data sources and market research for the current fleets (by DWT) and newbuilds on order.

There's a big difference, however, between knowing how big the ballroom is, and knowing who's in the ballroom, what they're dancing, what they're thinking of now, what they're thinking of doing next, and what might make them dance with you. This is market intelligence, and - for all intents and purposes - it's not doing well in the shipping industry.

I talked to one CEO who's among the most active and forward-thinking market researchers in the industry. The picture he painted was one of plenty of opportunity, but little specificity. His name is Paul Luen and he runs Martek Marine - a company I lauded months ago for its well-designed web-site.

It was in the context of social networks that I gleaned Luen's insatiable hunger for market intelligence. He'd asked numerous groups how they felt about the engine sensors market, and again about the ballast water management market.

"The amount of market research available on the market is limited, and too scarce, especially on trends. Lately, it's true I've made a thrust into personal social networking. It's a powerful tool for gathering opinions - crowdsourcing, if you will. We need to position ourselves differently, as we want to quadruple our company in the next three years," said Luen.

He and Martek Marine dive into desktop research, surveys via Survey Monkey and direct questions to customers and prospects. He outsources some research to third-parties, though he feels like none of these companies have expertise in the marine market. He reads Plimsoll Reports ("too generic"), visits trade shows ("walk and talk") and queries the media ("a fantastic source on information in the public domain"). He still feels like it's not enough.

All this would seem to give Luen and Martek Marine a basis of anecdotal information. What about the kind of bona fide data upon which businesses need to make tough decisions? Where does anecdotal become analytical? "Good question. I stick to gut feeling. You assess where information is coming from. What's the source's vested interest?" he said.

Even when the media and the conference circuit try to provide venues for knowledge sharing, there is a yawning gap in terms of gathering actionable data. Running marine media? Invest in more market research. The market wants it. Run a conference? Use it to canvas attendees. There are plenty of opinions; leaders need more than opinions to make business arguments, though.

Lastly, what do you most want, in terms of market research, Paul? "An index on discretionary spending in shipping. There's a ton of indices on trades and commodities and ship types, but not enough that is precise enough for our purposes," he said. Sounds like a business confidence survey of purchasers and business developers in shipping companies and managers. Anyone doing that? No? They should.

Europe's maritime R&D priorities: 7th Framework programme 2011

Propping up both the environment and ailing European shipyards is at the heart of Europe's maritime R&D strategy

By Ryan Skinner (email)

If sulphur emission control areas and port-area air quality guidelines are the stick of European environmental regulation, the EU's R&D machinery must be the carrot. On Tuesday, the EU issued its latest calls for proposals for R&D funding, as part of its seventh framework programme.

A close reading of the guidance document outlining the EU's maritime R&D strategy objectives proves enlightening. First, the strategic priorities that surprise no one:

• Major reduction in CO₂ emissions, with the emphasis on step-change research in all surface transport modes
• Strengthening European competitiveness in all surface transport modes, through exploitation of the potential of eco-innovation...

Note particularly the emphasis on a step-change. Presumably step-change means wind, nuclear or fuel cell power, when applied to shipping. Ironically, real step-changes will probably stem from the kinds of R&D that have nothing inherently to do with shipping: battery technology, fuel chemistry, etc.

For all the high-mindedness, the funding priorities very quickly get down to hairy particularities.

SST.2011.1.1-1 Green retrofitting through optimization of hull-propulsion interaction

This is the easy win. Naval architects have for over a year been promising over 10% improvements in ship efficiency from better hull-propellor interactions. And, as this throws a big bone at underemployed European shipyards, politicians like it. In fact, it's so straightforward one wonder why it's necessary as part of strategic R&D investment.

SST.2011.1.1-2 Retrofitting of existing ships with green technologies

Extremely open-ended, isn't it? I mean, what supplier doesn't claim that their product is a green technology in one way or other? Thus the EU specifies: "Development of accurate assessment methods for determination of the environmental and operational benefits of these technologies." There's the rub, and this won't be a question answered in the maritime realm but rather at a pan-industrial level.

Interestingly, the same objective highlights "development of decision support systems for emission controls and energy optimization in the operation of ships...as well as constraints from e.g. slot times in harbors." Here we're looking at integrated ship performance monitoring. Slot times would probably be a reference to e-Navigation and vessel traffic services.

SST.2001.1.1-3 Towards zero emission marine engines

One director of a major marine engine manufacturer scoffed at the mere idea of zero emission engines. Alas, not the EU. Along with sops to R&D in cool combustion, new kinds of fuel injection, turbocharging and biofuel consumption, the programme prioritizes, as above, optimization and system integration. Yes, those ships that the class societies have wired up to the gills are the target here.

SST.2011.5.2-4. Exploring and fostering international collaboration in the waterborne transport sector

Maritime EU throws its weight behind co-operation with Brazil and Russia. This is undoubtedly part of a grander European scheme to secure a tight relationship with important new energy markets. It's strange to see that no Asian countries (China? India?) are mentioned.

OCEAN.2011-1. Multi-use offshore platforms

To the tune of EUR 14 million, the EU is keen to back more wind energy and aquaculture far from where people can see it. Part of the scope: "Development of transport solutions for optimized installation, maintenance, operation and services to shipping (breakwater, terminals, etc.)." All in all, this beast of an idea works better on paper than it does in practice. 

The oceans are in the cloud

Riveting hydrographic innovations set the pace for change elsewhere

By Ryan Skinner (email)

Read this, from Peio Elissalde of the little French geo-informatics outfit Marine GeoGarage: "[We're ushering in] a new era of nautical mapping services with the launch of a marine charts portal built on cloud computing technology."

It's probably the first time I've seen the "cloud computing" buzzword in the marine world. What is cloud computing? Basically, you plug into the information and services you want wherever you have Internet access. All those things that you used to find on your hard drive or your company's proprietary servers? Now they're in the cloud - huge server clusters run by the likes of Amazon, Microsoft, Google or IBM.

The crazy idea Marine GeoGarage had was to give marine chart users an online account, from which they can access the latest updated charts from a number of international hydrographic services. The way Marine GeoGarage builds the chart views for users, and how users interact with them, uses cloud computing technology.

Elissalde put it best: "You don't own charts anymore, just use them and share them anytime, anywhere you are via computer, mobile phone or any other Internet device." Google Maps for mariners, in other words.

Meanwhile, another guy named Tim Thornton of TeamSurv has a complementary idea. They want to crowdsource hydrographic data. How? If you put some sensors on any commercial ship or leisure craft to record depth and such, and gather this data based on its location, you have the foundation for making and updating marine charts. Imagine a hydrographic service with thousands of ships creating a firehose of new data, instead of a couple ships with multi-beam echo sounders mowing the proverbial oceanic lawn.

It's not too great a stretch to imagine TeamSurv feeding hydrographic data into the cloud, with hydrographic offices providing norms and quality certification, so suppliers like Marine GeoGarage can package value-added services. Yes, both companies are initially focusing on the light marine market; that's where much of our innovation comes from. In fact, there's every reason to believe the above model resembles the future. Some chart suppliers are preparing themselves for a future a lot like this.

What can the rest of the industry learn from this example? Anyone who can scale services worldwide around a core pool of data or functions, and fashion it into a subscription model service, for example, would be wise to explore a cloud model. Brokers, box-ship operators, even component suppliers, could exploit this. What if you could log in to your vessel from any Internet connection and pull down real-time operating data, with comparisons to similar plants?

The core idea is turning what used to be assets that you had to own and maintain into services you basically rent. Software's an obvious candidate. Hardware and infrastructure will follow. For one client, we held a workshop positing "Propulsion as a Service". Cloud propulsion may be a bridge too far, but it gets minds racing.

For nerds interested in the full online chat between me and Elissalde of Marine GeoGarage, just click through:

I see shipping news scams

Powerful medium for news and info creates powerful temptation to fool people, and yourself

By Ryan Skinner (email)

The Internet is not a way to print money. Shipping people, be warned: the Internet may have turned the information economy on its head, but it is still an economy. Value does not come out of the air.

As a player in the shipping PR economy, I see a fair share of hustles. Here are a few:

1) The Maritime Press Release Hustle

2) The Shipping News Site Hustle

3) The Scraped Shipping News Hustle

4) The New Shipping News Hustle

5) The Marine Address List Hustle

The sea is not our stomping ground

How to generate interest in shipping? Stop talking about shipping!

By Ryan Skinner (email)

Craig Eason of Lloyd's List recently called me up to get my opinions on a new maritime foundation that aims to cultivate the reputation of the shipping industry.

"Wait a sec, hasn't this been done before, I mean, again and again?"

He says they're using twitter this time, and social networking, and other Silicon Valley-smelling gizmos.

"Oh."

I spouted something on the spot that I hoped wouldn't seem too stupid in Lloyd's List, then spent the rest of the day returning to the topic.

My main message for Eason: You need to take your audience into account. That's alpha and omega in the communications and PR business. A non-shipping audience doesn't care about ships or shipping. Why should they?

Eason more or less concurred: Shipping will say that the industry moves 15,000 pairs of sneakers across the world every day. Who cares? Exactly.

I may be interested to know exactly how the sneakers I bought yesterday came to arrive at the store. I may be interested to hear how the two engines of globalization - the immaterial, Internet-driven transactional economy and the material web of product movements - interrelate. I'm probably at least fleetingly interested in world trade, emerging market economies, supply chains or the like.

What about the shipping industry's particular expertise dealing in an environment of multiple, conflicting jurisdictions? Political risk? Adapting to operational requirements from countless regulatory bodies, acting only half-concertedly?

Give me that. Just don't give me the amount of coal that moves over deep seas daily, or the number of nationalities working on big boats.

This maritime foundation better decide right away who the real audience is. So many of these efforts fail because the internal audience trumps the actual audience. In other words, people working for the foundation spend their time writing for the near audience of internal stakeholders (effectively, the big shipowners backing it), as opposed to the far audience - the public.

Before you scoff at their near-sightedness, know that this failure to target is widespread in business. In how many companies are the communicators working to stroke the egos of top management, as opposed to doing the real job, the harder job: Communicating to a world of strangers whose love isn't measured in your next pay-check but in political and business decisions years from now?

My advice for anyone endorsing shipping: Keep your eye on the real audience. Forget about ships. Focus on social utility. The sea isn't shipping's stomping ground.

[While I'm on the topic of shipping PR faux pas, I pass along an article I was sent by Ben Strong of AMVER. Articles like this, and the actions that result in them, do nothing to dispel shipping's reputation as an industry of shady practices and chummy, good ole boy relationships. Slimeballs.]

More on online advertising in shipping

A few tips to build your shipping business's visability on the Internet, by trusting your audience's instincts

By Ryan Skinner (email)

With a nod to ShipServ's excellent recent publication "the 10 essentials of online advertising in shipping", I humbly add a few more points.

I start with a broadside at advertising, in general. I feel like advertisements are, by nature, disruptive. That is, an ad gets between a user/viewer/customer and what they're actually after. When you want to read a TradeWinds article about Maersk's efforts to get back to profitability, that advertisement flickering on the right-side of the screen for bilge pumps is simply fuzz, an irritant. Much advertising is, for this reason, inefficient, for the advertiser, the reader and the carrier.

Fortunately, there are ways to reap the benefits of advertising without disrupting, and that's what I'm after in many of these new points. It's what I call trusting your audience. The audience knows what it wants, and it knows where to find it. When we spend money on efforts to increase our business online, we need to help that audience find us, understand us and interact with us, all in the right context. Don't just jump in front of them with jazz hands.

Is this the future of bridge design?

Will Ulstein liberate the design of bridges of offshore boats from the "book and box" approach?

By Ryan Skinner (email)

I wrote early this year about an augmented reality application that may allow ships to be piloted blindly by an iPhone. Now someone's designed the iBridge, or something like it.

I first met Christoffer Lange and Anders Kittilsen, Master's students at the architecture and design school of Oslo, back in March. They had just been to sea on Bourbon Orca, as Ulstein was backing their Master's diploma project - a re-think of the bridge on offshore boats.

Ulstein ignited imaginations in the global offshore segment years ago with its X-Bow - a revolutionary hull profile. Now it wants to redesign the inside of offshore ships too. So they urged Kittilsen and Lange to apply their creative energies to an offshore bridge.

And the two delivered as much freshness as Ulstein could ever hope for. They interviewed offshore officers, and videotaped them at work. They compared offshore operating stations to those of backhoe operators. And they sketched, sketched and sketched some more.

This is a field begging for change. Lange and Kittilsen pointed out that bridge consoles today resemble airport control towers in the 1950s. Rules and a limited list of suppliers have strangled development.

So Ulstein agreed to let Lange and Kittilsen disregard the rules, and the capabilities of its suppliers. If this means that the results will be only imaginary, it's the price they were willing to pay to unleash innovative forces.

In early June the two students presented their concept to an audience with the kind of thumping rock music, strobe lights and models that would excite the envy of any Detroit Auto Show. I know many maritime marketing types who could take lessons in how to create a glamorous Hollywood atmosphere from these students.

 The results were two concepts: Ultein LOOP and Ulstein Boomerang. The first is a Star Trek-looking bridge station ("Set the GMDSS to stun, First Mate Sulu") and the second an intriguing new bridge layout shape. Both would look at home in a Devo video, or, more charitably, a Mac store.

Will these concepts ever be realized? It's partly yards' own fault if bridge technology looks stuck in the cold war; they've systematically starved out competing suppliers so only one (local, conservative one) remains. Only change-minded shipowners might make it happen. Right now, though, they're probably not thinking big, as more and more boats focus on cleaning up oil, and not helping produce it.

For more pictures of the two concepts and the sketches and people behind them, go to this short photo album.

And for some interesting reflections by Lange and Kittilsen on bridge design and technologies, see below: