Tres examines the benefits of outsourcing specialist services, including vessel performance, in today’s markets.
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In our many conversations with shipping companies, decision-makers are constantly evaluating how they can use data and technology to outperform peers. For ship owners, this can mean more efficient vessels that are more competitive in the marketplace. For technical managers, this can mean providing differentiated services or reducing opex that are unique when compared to their competitors.
Some large ship owners or technical managers have invested in vessel performance teams and in-house software development to support ongoing efficiency initiatives. Some owners and managers have even launched voyage monitoring centers with around-the-clock performance services.
When markets are strong, there is sufficient cash flow to support such initiatives. When markets are uncertain (think COVID-19) or difficult, spending slows or meaningfully stops. Expenditures on software updates and maintenance are typically the first area where money is no longer deployed. In more challenging situations, there are headcount cuts. Vessel performance initiatives are then tackled on a part-time basis or not at all.
Not only do these companies struggle through challenging times, but they are also at a competitive disadvantage when markets rebound. This reactive approach is not ideal, but there are still proactive measures that companies can take to make vessel performance a core part of their value proposition, regardless of market swings.
Is outsourcing an option?
The alternative and the better choice in relation to costs and benefits is to outsource vessel performance management. Companies like Tres employ specialists such as marine engineers, deck officers, naval architects, data analysts, software engineers and other highly experienced people that can monitor and guide your fleet, without the same capital and cash flow requirements of building in-house performance capabilities.
Specialist companies can use economies of scale and the cost advantages that enterprises obtain due to their scale of operation. This is difficult to copy for smaller companies unless you consider outsourcing of specialist services.
We see a number of financial and operational benefits of outsourcing specialist services. These include:
- Economies of scale – the cost of software development and other services are typically spread among a full client base, which drastically lowers per unit cost.
- More specialized staff – smaller companies in particular may not have the means or desire to hire the breadth of professional talent needed to provide in-depth perspectives across operations.
- Lower overhead costs – outsourcing eliminates the need for extra office space, hardware, insurance etc. that often add up when building robust teams.
- Reduction in operational risks – employee turnover can pose a big risk to in-house teams, which is not the case for specialist companies with a deep bench of talent.
- Improve in-house productivity – outsourced specialist services allow your employees to focus on core tasks and other value-added activities; we typically see in-house resources pulled in many different directions, which challenges efficiency and productivity.
- Increased flexibility – it is simple to scale up or down on resources based on market dynamics or company strategy.
- Leverage industry benchmarks and best practices – a quality specialist provider will have experience with similar vessel types and peers and be able to offer anonymized benchmarks and suggest best practices.
At Tres Solutions, we cover all aspects of vessel performance management, ensuring our client’s vessels are among the best performing in the market. We have an expert-driven vessel performance center, monitoring and advising vessels and shore teams on a 24/7 basis.
We take pride in ensuring that our experienced team of marine engineers, officers, naval architects, software engineers and corporate strategists can provide you with a world-class service and ensure that your vessels operate in the most efficient way while you focus on your daily work.