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Live From Nor-Shipping 2015
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Shipping's business model a 'dead parrot' declares Stopford

Shipping markets guru Martin Stopford declared the existing business model of the industry a “dead parrot” on Wednesday and said that a new management based solution was needed.

Speaking at Nor-Shipping Clarksons Research Services president Stopford noted that over the next 50 years the industry would spend between $4 - $8trn on new ships.

“Are we going to be spending an appropriate amount of money on how we use those assets, or are we going to continue to follow a business model of the last 30 years where you build a slightly bigger ship with every generation, and you going to have one person in the office per ship?” he asked.

Referencing Monty Python’s famous dead parrot sketch Stopford remarked: “Is that the business model you are going to use for the next 30 years? Because if you are I think its worn out, I think it's dead, it's a Norwegian parrot if you know John Cleese.”

He cited four problems with the existing business; firstly that the technology used was old and economies of scale had been taken to an extreme; second there was a real problem in attracting crew; third a change in the market so that two-thirds of the cargo was controlled by non-OECD countries; and fourth the industry has very weak customer relationships.

“The problem with the bulk shipping business over the last 20 -30 years is its been a gambling business not a management business,” he stated.

The solution as Stopford sees it is to “put the management back into shipping”.

“It's a management solution, you semi-automate ship operations, you semi-automate navigation and you implement door-to-door logistics.

“We need to put these things together and squeeze some more value out the transport chain and put a smile on the customer’s face. The customer should not be the person you are beating to death over the negotiating table.”

Implementing such a solution he claimed could create cost savings of 30%.

And how will this happen? “Other people are doing it. The technology is there. The possibility is there, it just needs the vision,” Stopford stated.

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