Monetizing what's most important for shipping's buyers. Your product? No! Compliance...
By Ryan Skinner (email)
You should only make money when you create value.
Um, yeah, alright.
Most shipping suppliers ship off their products to customers, then tick the box marked "Created Value". A bill follows.
But in how many cases was any value really created? That is, what is the value of a part beyond the pure cost of producing and delivering the part?
Arguably, many of shipping's suppliers are missing the golden opportunity to provide what shipowners really want: Compliance.
Two anecdotes illustrate this:
1) I'm engaged in a minor bureaucratic situation. My situation doesn't fit like a key into the bolt of the bureaucracy's rules. So I ask them, and ask again. However they answer, I won't get a real answer until my case is decided yes or no. What I would pay for up-front certainty? It's priceless.
2) On behalf of a client, I have asked the market for queries related to a particular area of shipping rules. Not surprisingly, every user's situation was unique; none fit precisely in the rulebook. Thus no one understood whether they might be stopped in port state control, or not.
Businesses hate uncertainty. And shipping companies are, by their very weather-prone and trans-jurisdictional natures, exposed to more uncertainty than most businesses. Eliminating uncertainty must have a very high dollar value for ship managers.
What I'm proposing is something as wild as a compliance guarantee. This kind of thing is being done in different guises. I believe Wilhelmsen offers something of this nature, even if the guarantee has no fiscal teeth. Wartsila seems to more or less argue for managers to outsource propulsion (like Rolls-Royce did in aviation).
It would require some inventive business modeling and an excruciatingly sharp focus on contractual clauses, but this model has merit. Any business needs to focus only on where the customer seeks value; if you do that, you'll only get better and better, in your customers' eyes.
Is there anyone in the business that gives customers a compliance guarantee? I'd love to hear about them, as an example....
For those willing to go down the business model re-development road, I can recommend two references that I have recently built off of:
Compliance is a complex matter, hence unclear answers to seamingly simple questions. I see three separate issues:
1. Compliance through technical measures
2. Compliance through operational measures
3. Regulators actually understanding that you are in compliance
The first one could potentially be outsourced, e.g. to class societies. The second is more difficult as it comes down the choices of the crew onboard. The third is completely unpredictable and comes down to the day to day feelings and opinions of regulators and inspectors with varying levels of knowledge.
Posted by: Lars Petter Blikom, DNV | February 24, 2011 at 10:37 AM
So the first is solveable. For the second, I have heard talk of major suppliers combining remote operational support and monitoring with occasional visits/in situ work during voyage by supplier staff. Thus, if a company can cover bases one and two, then perhaps it's time to swallow the risk of #3. Besides, who's more capable of describing the intricacies of an extremely complex propulsion system (for example) to regulators: the owner, or the supplier. More and more, it's the supplier, no?
Posted by: Ryan | February 24, 2011 at 10:47 AM
how soon would appear $Pl operators in all the countries?
Posted by: freelance writing job | March 24, 2011 at 02:11 PM