If you are attending in Dubrovnik and would like to catch up with Roger please do get in touch with him directly or via our contact form.

But in order to establish the correct solution ship operators themselves need to understand their own requirements and that is a huge task. With access to truly neutral data on communications costs and return on investment lacking it is virtually impossible. I think this is why there is so much talk about return on investment this year and the importance of quantifying that, not twelve months after investing in a communications system, but before the deal is signed. I hope that some of the work we do here at Stark Moore Macmillan during 2013 will begin to make that a real possibility for ship owners and operators.

I can’t leave the subject of Digital Ship Cyprus without mentioning the jugglers who entertained us during dinner. Along with everyone else I’ve sat through interminable ‘entertainment’ at industry dinners for more years than I care to remember. It is so rare to find something which was genuinely astonishing to watch, and felt like a flavour of the host country. Most enjoyable.

You can download a pdf copy of the article here.

As we move ever closer towards the launch of Inmarsat’s GX there is still a tendency to try and exploit the old perceived battle lines between VSAT and Inmarsat, and the ACI conference saw another example. But in truth the argument has moved on, and more importantly, it was never really an argument for ship operators and managers.

What these customers have always wanted and needed is information, clear propositions and methodologies by which they can accurately assess the cross-business efficiencies, benefits and savings of investing in IP broadband onboard. Baffling them with technical specifications is counter-productive for everyone.

Crew retention is the tip of the digital iceberg

Almost 12 months ago an ambitious project began to take shape. Roger Adamson of Stark Moore Macmillan, Vizada (now Astrium Services) and two of the largest crewing agencies in the world, Philippine Transmarine Carriers and CF Sharp, joined forces to embark on the most comprehensive survey of crew and their attitudes towards and use of communications at sea ever undertaken.

The resulting report has generated considerable interest. But while Adamson says it is encouraging to see so many shipmanagers and operators recognising the operational benefits of improved communications from a crew retention perspective, in this guest blog, he lays out why he believes there is a wider opportunity which comparatively few in the industry are really grasping.

Considering the enduring importance of crew retention it may seem surprising that until last year no organisation had commissioned definitive independent research into the communications requirements and habits of seafarers.

However, when confronted with the logistics of reaching, collecting and analysing the written, paper responses of almost 1,000 officers and ratings, this lack of comprehensive research becomes rather more understandable.

Key to any research project is the quality of the data and the sample. Had we not been working with PTC and CF Sharp which between them send over 47,000 crew each year to over 1,000 vessels in the commercial cargo and passenger sectors, it is unlikely such a survey would have been possible.

It certainly wouldn’t have produced such high quality data and responses. With the total market for satellite based crew communications estimated at approximately 925,000 individuals, our sample represents in the region of 1% of the market – making the dataset both fascinating and statistically significant.

One of the headline results has been that 68% of seafarers now have access to communications whilst at sea either all or most of the time with only 2% reporting that they never have access to communications. However those headline figures mask a wide variance between different sectors. For instance the passengership sector, despite having the highest levels of communications equipment on board, provides the lowest levels of free crew communications of any sector.

In common with the passenger sector, offshore vessels have very high levels of equipment, but neither of these are principally driven by crew communications requirements. For the passenger sector, high-bandwidth communications systems are major revenue generators with the penetration of VSAT extremely high.

Similarly, the offshore sector is well penetrated with VSAT systems as charterer requirements dictate high-bandwidth be available, but in contrast to the passenger sector, offshore vessels offer far better access to free and paid-for communications, most likely a reflection of the scarcity of qualified offshore crew.

Across the sectors 46% of crew are not provided with any form of free communications at all. In the context of crew retention that figure should be raising eyebrows.

As a regular speaker at the Informa Manning & Training conference, where this year I’ve been asked to speak to delegates in Dubrovnik about crew communications, I consistently hear managers and operators wrestling with the issue of crew retention.

I’m repeatedly being told that the expense of training crew means that retaining them offers real dollar savings and competitive advantage. When one considers the noise VSAT has been making over the past several years it is curious that we are still in a situation where almost half of all seafarers have no access to free communications, when the ability to provide them with such would not only assist in their retention, but also offer broader opportunities to ship managers and operators.

I think this is where the real issues lie. Traditionally the expense of satellite communications together with the necessity for robust equipment and reliability in an environment where mission-critical literally equates to life and death, has always meant failure wasn’t an option and experimentation challenging.

As one of the most regulated industries in the world, shipping is about compliance and meeting minimum requirements. In many respects it is a unique industry, but it is not immune from the digital revolution which has swept up every other.

With the IMO advocating an over-arching e-navigation strategy combining ECDIS with new technologies converging across navigation, IT and communications, the landscape of maritime business is changing fast.

The opportunities for forward thinking ship managers and operators are highly significant, but unlocking maritime’s digital promise will require a major shift in thinking. IT, communications and digital technologies have the potential to drive cost savings, service improvements and the all-important crew retention.

In my experience shipmanagers and operators are hungry to understand how and where their businesses can implement and benefit from these changes, but as yet suppliers aren’t creating the cross-businesses value propositions to help them.

By commissioning the Crew Communications 2012 survey Astrium have signaled their intention to address this need. The wealth of information it has provided to shipmanagers and operators about the crew they depend upon is extremely valuable, but it’s only the beginning of what’s required.

Case studies have always been the primary tool in the maritime salesperson’s armoury, but what’s needed now are more independent, in-depth studies and analysis which can inform both suppliers, and ship managers and operators.

The advent of new High Throughput Satellite systems, from Intelsat EPIC to Inmarsat’s GlobalXpress, O3B to Iridium NEXT, means bandwidth and speeds will accelerate further. But without the context of operational implementation and potential cost efficiencies these systems are just adding a new level of complexity for ship managers and operators.

We are approaching an era of real technology convergence in maritime which has the potential to transform the industry for the better. Doing so will require technology suppliers to gain a far more holistic and in-depth understanding of the shipping business. And for ship managers and operators to help them.

It was an ideal platform for myself and the team at Astrium who have worked so hard on this project, to share the first real comprehensive data about crew’s usage of and requirements for onboard communications. As always the industry crowd were hungry for all the information available and I hope were grateful to Astrium for allowing the key data to be published – the majority of our clients who undertake a survey this significant quite understandably prefer to keep the data to themselves.

I have no doubt that the results will be of very wide interest and encourage anyone with an interest to download the whitepaper free of charge which you can do here.

Astrium Services commissioned Stark Moore Macmillan to undertake a survey of seafarers in conjunction with two major Philippine crewing agents,Philippine Transmarine Carriers Inc.and CF Sharp Crew Management Inc.These two companies handle the arrival and departure of approximately 47,000 crew per annum providing offi cers and ratings to over 1,000 vessels in the commercial cargo (Tanker, Gas, Bulk,General Cargo, Container, Off shore,Car Carrier) and Passenger sectors.

Astrium Services is pleased to share an abridged version of the results as a free whitepaper with the industry. This can be downloaded here.

Managing the data shipboard load and creating low/high end opportunities

In the first part of my interview with Roger Adamson, the Stark Moore McMillan ceo laid out some of the issues that face the bandwidth vendors in 2013 and beyond. In the second part we discuss how owners and managers are adapting to the changing landscape of systems and services.

Among the issues discussed are how companies cope with the data flow that will increasingly come off the ship, whether there are opportunities at the ‘low end’ of the market for GSM services and what can we expect in the near term, especially from Inmarsat and the introduction of Global Xpress.

MI: We were talking before about the trend towards more data being available ‘off the ship’ and you mentioned that optimisation is an engrained requirement in shipping. Does that mean that either large amounts of data are not actually needed or that the optimisation means that volumes will never hit the gold rush levels we are hearing about? It seems to me that in many cases, shipmanagers can actually function perfectly well with a hundred megabits a month or less. If they organise well enough, they probably don’t need a huge amount so I’m not sure whether again it bears the VSAT argument out?

RA: “In some of the research we’ve done, around 70-100MB a month was average for a FleetBroadband user and around about 10-20Gb was average for a VSAT user. That 70-100MB is primarily operational data. But once you start going up into the gigabyte level then you’re probably talking only 10 or 20% of that being operational traffic, it’s a few gigabytes, and could be a lot less.

“The rest is taken up with crew access: browsing and a lot of people using things like Skype which is incredibly bandwidth inefficient but they’re using it because they think it’s free. They’re using it over a data circuit but it is just totally inefficient, so it’s chewing up bandwidth and distorting the figures.”

MI: Is there an issue too with the data collected and transmitted? High bandwidth promises more throughput and increased reporting but where does the data go and who uses it?

RA: “What vendors are basically saying is we’ll give you a big high bandwidth pipe and you can send all kinds of data from ship to shore. The trouble is you’ve got two or three people that are looking after each ship, or a fleet or a number of ships and these guys don’t have the bandwidth to be able to look at the data, interpret it or make decisions on it.

“A few people that I’ve heard from and spoken with are saying it’s great, it’s fantastic all this data coming back, but we just don’t have the time to look at it, what do we do with this stuff? They are busy trying to just manage the ships without getting into building the efficiency themselves and I don’t think there are that many ship operators with the level of staff that can make those decisions.”

MI: Looking at maritime satcoms from the other end of the telescope, there seems to be renewed interest in GSM and wireless services. Could pressure on the middle come the other way and give owners or operators at the low end an option so that they don’t need to kind of upgrade to higher bandwidth satellite?

“A few operators that I’ve talked to are using GSM services primarily in short sea trades and for container operators on liner routes, who know that they’re going to be within 3G coverage will work in certain places. We are starting to see some like European wide SIM cards where there’s one flat rate across Europe now.

“The problem if you like with GSM is making the business model work with a crew of 15 or 20 people. The concept is great, because people would rather be able to sit in their cabin and use their mobile phones, but getting the kit on board can create another administrative burden for shipowners and managers.

“Also the dynamics have changed. In the Philippines and in Northern Europe as well, users are moving away from SMS traffic in favour of social media and instant messaging. The previous business models were focussed not so much on voice but on SMS because the profit margin was better.”

MI: OK, looking into your crystal ball it would be interesting to know what you think are the trends that we should be looking out for in 2013. Aside from the consolidation and changing the sales focus, are there other major trends that you perceive in the market over the next couple of years?

“It’s an interesting time at the moment seeing Inmarsat try to go direct and go via the channel. It’s quite a juggling act and I think there will always be distributors who will get them into places in the market that would be very difficult for themselves to get to directly, because of the existing relationships.

“Certainly the danger is that you hack off your loyal distributors, or that they don’t have the margins they need in order to make it a profitable business to stay in so don’t put the same level of resource behind it as they once did.

“That said, the way Global Xpress looks, I can see them having a lot of success in the same way as they’ve had with FleetBroadband. Some 32,000 FB terminals in, let’s say, five years on the market and VSAT has been around since the mid to late 1990s and we’re up to 11-12,000 installations, it’s clear what works.

MI: What about the simple versus complex argument. I think users are beginning to grasp that buying GX won’t be the same as buying Fleet or Fleetbroadband?

RA: “Yes, what led people to buy Inmarsat equipment in the last few years was the simplicity and the understanding of the network. VSAT is more complex, with far more variables: which antenna do I have, what levels of coverage do I have, the key thing is the network operator or there could be four or five network operators that we’ve knitted together a patchwork.

“The model has been simple for people to understand and if that stays there, then GX will be quite difficult to match. We’ve seen that with the EPIC NG offering, which comes back to conditioning for the market and who you’re selling to but if you’re a ship owner or an operator what is EPIC?

“The Inmarsat model means one network, a smaller number of manufacturers and below deck and the above deck equipment in the one package. If they replicate that model and putting aside rain fade and Ka/Ku band issues, if they get the business model right then I can see that it is path of least resistance for VSAT going forward.”

Making the maritime satcom market an easier sell for the bandwidth vendors

I caught up with Roger Adamson, chief executive of maritime marketing specialist Stark Moore McMillan just before Christmas after an extended bout of email and phone tag. It’s a testament to how in demand are his services these days.

Adamson has a wealth of experience maritime and satcoms experience, including stints with Rydex and Setfair among others. At last year’s Global VSAT Forum, Adamson was among those urging the VSAT vendors to take a reality check about the market they were addressing.

Not only could they (nor anyone else) view shipping as a homogenous group but Adamson suggested that to gain more ground in maritime, sellers would need to sell their product at a higher level than the IT department.

It seemed a good way to kick of the New Year by looking back a little and forward a little more and dig a little deeper into what he thinks are the big issues for the satcoms industry and what matters to buyers and sellers alike. Part one is below – part two follows.

Maritime Insight: I was interested to ask you about the issue of fragmentation in shipping that you mentioned at GVF last year. Does this mean there are barriers in the way of the future which seems to be coming at us: massive bandwidth, lots of choice and loads of solutions?

Roger Adamson: “Selling satcoms into maritime ought to be a quite straightforward proposition. If you were to say that they were 45,000 ships out there and an average fleet size of 10 vessels per fleet then you’re not talking more than a universe of 4,500 companies. In reality it is probably more like double that.”

“I think the bigger concern is the fact that there are too many players in the satcom market. If we’ve got 90 or 100 VSAT suppliers then it makes sense that you’re going to see some further consolidation taking place, because there isn’t the value in the market. In fact, it’s going to be inevitable.”

Maritime Insight: I guess the other issue is that the value of broadband solutions has changed. Installing VSAT was supposed to be about business communications and now it’s really about crew communications as the main driver. For many owners that’s part of the mix but won’t it be hard to sell a big expensive system when they get by using a Inmarsat L-band product?

RA: “There is certainly a market which will never go to VSAT. We’ve gone through the early adopters of the cruise market, the offshore oil and gas markets are big consumers and you’re starting to see VSAT in bigger numbers in the commercial shipping sector. I can see sectors like the tanker markets becoming very receptive to that, any kind of tanker with large data transfer requirements.

“For them I can see adoption in relatively large numbers but when we talk about the bulk carrier and containership markets I think that’s going to be more of a struggle for the VSAT guys unless they can demonstrate a strong return on investment. Until that return on investment is actually defined clearly for the buyers they’re going to struggle to see the value proposition there.”

MI: That value proposition is key though isn’t it? The buying and selling of these systems has to change if it’s to really grow. It was mentioned a couple of times at the DigitalShip Athens event last year that shipping IT departments need to improve their understand the rest of the company and the shipping market, rather than letting people come in and sell them systems.

RA: “Certainly for an IT manager, buying VSAT means one less thing to justify every month in terms of why the airtime bill was twice what it was the month before. That fixed price element makes everybody’s life that much more simple.

“But I think there have probably been a number of those business cases put forward within shipowners and operators which have been turned down. You can imagine the conversation: People are saying OK, we’ve got this Inmarsat system in place and it’s costing us $1,000 a month and you’re telling me we need to move to this new thing and it’s $2,500? Give me the justification for that. But the IT guy isn’t best placed to give that justification because it’s not really in his job. Just having a bigger pipe doesn’t equate to two and a half times what they’re paying for comms.”

MI: That’s the buy side but what about the sell-side? How much work do they have to do to raise their game, particularly considering the tough times we are seeing for owners?

RA: “There needs to be a switch away from selling to the IT department on specifications and a start to selling to the ROI benefits into the senior management and board level. That will take a different kind of sales approach and probably a different sales team to what is currently in place within the supply side of the market.

“It’s very much a solution-orientated sale and it’s very much business process re-engineering, almost in the way that SAP sells in ERP and CRM solutions to big organisations.

“You need to be selling to somebody who has an overview of the entire business and can logically establish not just where savings can be made through the implementation of a broadband solution but where they can gain competitive advantage. And with all the best will in the world the IT department aren’t the people to do that, that’s very much board or operational level that has that overview and can see where the benefits are for them.”

MI: But why should owners be that interested in the new stuff that’s coming? Behind all the HTS and VSAT offerings coming to market over the next couple of years surely there’s actually a risk that given state of the market and the poor earnings being made that they’re going to see little incentive to make this investment and buy more airtime?

RA: “I think that comes back to the supply side of the market, understanding and demonstrating the return on investment and I think that’s the only way that this market is going to grow properly, unless we see dramatic price reductions.

“For the foreseeable future, megabits per second will be unusual unless you are in the offshore sector. Megabits or even half a megabit per ship is too costly. The only thing that would make that market jump instantly is if the HTS were on a comparable costs to the Inmarsat solutions, but logically that’s unlikely to be the case.

What about the big driver to ROI and higher spec satcoms solutions, the data avalanche that we hear so much about? The DPs, ISP and middleware vendors are convinced that owners want to use their own applications and devices onboard ship. To what extent and at what pace do you see that happening?

RA: “Seafarers are used to Inmarsat; traditionally an expensive narrowband service, so every piece of software that’s gone onto a ship until very recently has had a lot of time and a lot of money spent optimising it for the bandwidth.

“When you use software that is designed in that way, you’re never going to be pushing large volumes of operational data. When we start getting into a situation where users start buying off the shelf software to run on the ship then we’re going to see more bandwidth consumed than we have done on shore but then we will run into issues like latency which means it doesn’t operate anywhere near as well as people would like it to.

“I remember in the early days with Rydex [which provided an optimised email solution], we concluded that the shipping sector would always want to optimise the amount of data that it sends between the ship and shore. I’m not sure that there is any other industry out there that has been so caught up in reducing the amount of data that is transmitted from point A to point B.”

We look forward to working with you for a successful 2013.

Having attended the last MEC conference (part of the Riviera Maritime stable of conferences and publications) I was pleased to see both familiar and some new ship owner and manager faces around the halls. I hope that the considerable work Riviera and my colleagues on the Advisory Board put in to develop a tight programme contributed to the high level of delegates.

One of the final slots featured Capt. Kuba Szymanski on the need for enhanced dialogue between ship managers and operators and suppliers – something with which I very much agree. It is crucial for both parties that their dialogue and importantly, supplier’s understanding of the business of ship operations and management improves.

Cobham’s staff and dealers were both welcoming and focussed on the segmentation and stats I provided to them with many discovering insights which had previously eluded them and their colleagues. I think it’s fascinating that so many of us who work in the maritime industry don’t have a deeper understanding of the markets in which we operate. I know that in my time running both IMC and Rydex I would have benefitted from more research and understanding of our commercial environment.

One of the most common issues with this lack of market awareness is the tendency to set over-ambitious targets. An inaccurate understanding of the real size of the market – and people always assume it’s bigger than it is – leads to projections based on unachievable sales figures. Unfortunately I have personally seen whole maritime business cases collapse for just this reason.

So it was a pleasure to share some real, solid, useful data with the Cobham guys, and I thank them for their hospitality.

Alternatively download a copy of the article here.  Offcomm_News_Autumn2012.

During my slot I covered crew communications and gave some initial insight into the interim findings of the largest and most comprehensive crew survey ever undertaken which we’re currently working hard to deliver with partner Astrium Services – formerly Vizada. There’s no doubt that when it’s finished this study will be of major significance and I’m cautiously optimistic that Astrium will take the decision to share some of the data with the industry once all the analysis is done.

Aside from the good stuff at the conference India also held one or two memorable moments: a particularly hair-raising Tuc-Tuc ride stands out, as does the sight of the former HMS Hermes, Royal Navy Aircraft Carrier which my father-in-law was responsible for handing over to the Indian Navy, at anchor on the horizon. However, both these were entirely eclipsed by the drinks menu in the business class lounge at Mumbai where I was delighted to see that Champagne was offered by the pint.

Well of course I did. Wouldn’t you?

InterManager used the opportunity to present their KPI project – a massive undertaking with enormous potential which is attracting correspondingly significant interest. More details are available on the InterManager website.

Now this is unlikely to have a major effect on satellite communications operators with SMS services (such as Fleetbroadband & Iridium) as SMS traffic does not account for a significant part of their revenue and  the majority of the cost of these texts will be taken up in satellite airtime not the terrestrial termination charges.

Where it will have an impact is with providers of GSM services to the shipping industry and in particular those that are focussed on entry into the commercial shipping sector where business models are predicated on SMS traffic.

All studies and data have shown that the majority of usage will be SMS traffic which is particularly appealing to some of the largest target groups such as Filipino crew. Voice is seldom a requirement and our recent survey shows that usage is very limited through existing satellite solutions. This may increase with the addition of a GSM hub but probably not significantly amongst ratings as this more of a cultural preference.

In fact the Philippines has driven the SMS boom, embracing the technology early on. In 2001 whilst in Nordic countries users were sending 40 SMS/month, in the Philippines this was 300 SMS/month. USA users at that time had still failed to send significant volumes.

Distributed GSM providers will make their margin – not as great as the 4000% terrestrial margin but still very significant – on text messages. A significant shift away from SMS to other technologies could seriously affect the business models that are driving providers to make these services available to the commercial shipping sector.

The problem could be further compounded with the introduction of broadband communications solutions as they also provide greater access to free messaging services and social media. Introduction of VSAT communications in particular will open up access to these services. A higher proportion of the ship operators than you might think already allow crew to access services such as Skype through VSAT despite its inefficient use of bandwidth – it follows that crew will, or do, access instant messaging applications.

Most worrying for the providers of GSM services is that this appears to be a generational shift and not price related. In 2010 the Philippines began to witness a decline in SMS and that continues despite ‘ultra low’ pricing for these services. It would appear that users are moving to Facebook and Twitter and applications such as Whatsapp for their messaging requirements.

Despite this SMS traffic grew 40% in 2010 and is set to top 30% in 2011. The saving grace for maritime GSM operators may come from the fact that this growth is coming from emerging markets such as India who account for nearly 200,000 of the world’s officers and ratings and of course the Asian power house, China.

Uncertainty in the global shipping markets, depressed freight rates and over supply of tonnage leading to a reluctance on the part of ship operators to invest in new technology could mean that it will still be sometime before GSM coverage extends crew welfare to onboard commercial vessels.

We thank all of you for continuing to make working in the maritime space an enjoyable and fulfilling experience.