Inchcape Shipping – Bringing Value & Transparency
Shipping agents can be seen as a necessary evil in the maritime industry, but Inchcape is working hard to change that.
Inchcape Shipping’s history goes back to 1847 when it was established in India by a Scottish merchant, with its first customer being the British East India Company. Since then the company has grown, developed, and changed hands to become the business it is today, employing around 2,500 people with offices in 60 countries covering over 2,200 ports. Between Inchcape’s own offices and its partner agents, the company is able to cover every major port in the world.
“Our core business is to provide any services a ship requires when it calls into port. Those services can range from cargo-related services like customs clearance, arranging cargo movements, services related to the maritime asset itself, repairs, spares for maintenance, surveys and inspections,” explains Frank Olsen, CEO of Inchcape Shipping Services. “We also work with the soft assets – crew changes, getting people from their home country to whatever port they embark from. We’re a service provider to the world’s merchant fleets.”
Inchcape serves all kinds of vessels, ranging from the military to cruise ships to tankers to container ships and any other kind of vessel you can imagine. As one of the biggest ship agents in the world, in one year the company handles close to 70,000 port calls.
“We’re arguably the biggest but it’s a tight race between three companies,” Olsen tells us.
Working Smarter, Not Harder
As well as Inchcape’s impressive offering of core services, its Inchcape 360 portfolio also includes a selection of services which it calls, simply, ‘Smart’.
“That relates to information, and we talk about three types of information,” Olsen points out. “First there is static information, which is information about the port infrastructure that doesn’t change very often such as details about the port, key parameters i.e., depth of the draft, etc. Then we provide market intelligence relating to which ships are calling at which ports and what they’re doing there, and the commodity flows coming in and out of a port. The final piece of our information offering is the dynamic operational data. That means capturing all the timings and events that take place during a port call.”
For a shipowner and operator, this is invaluable information, allowing them to see why one ship may be performing better than another and helping to resolve any kind of dispute between interested parties when things are taking longer than is ideal.
“We coordinate all this information between shipowners, charterers, pilots and port authorities. We label this as ‘Smart Sight,” Olsen says. “This is Inchcape proprietary technology that we built and developed ourselves because it didn’t exist anywhere else. We are unique in that we can pull this information from our global network of port agents, in addition to accessing all the AIS data, analytics and open-source web scrapings. We’re one of the only players with eyes, ears and boots on the ground to capture information that isn’t otherwise publicly available. It’s a value-added service that we see growing.”
Inchcape’s Smart offering isn’t just about gathering information and making it accessible, it’s also about streamlining processes and using technology to save time and money for its customers.
“The other aspect of Smart is what we call Smart Pay. One of the activities we’re involved in is procuring services on behalf of ship operators or owners. We make payments to port authorities and local vendors on behalf of our principals,” Olsen tells us. “In order to do that we have established a smart way of handling payments that is far more cost-effective for the customer.”
Smart Pay is a single, fully integrated, multi-currency, transparent, digitally empowered platform that enables Inchcape to channel all transactions through one portal, enabling customers to take advantage of very favourable FX rates and banking charges.
A Truly Global Network
In an industry where the top spot is closely contested between the leading companies in the sector, Inchcape sets itself apart with the sheer comprehensiveness of its global network.
“Our global competitors have blank spots in some areas of the world, while we are truly global, with our own people, our own offices and vetted approved business partners,” explains Olsen. “The second big selling point for us is our procurement department. Strangely enough, we’re the only global agent with a dedicated procurement team, giving us much better control of our vendors and suppliers. We also utilise our large volume to get better buying power. When the world’s biggest ship owners go to a port, they still have less buying power than we do because we’re representing 30 shipowners in the same port.
The final differentiator is our Managed Services, a global coordinating centre managing all aspects of the port call operations for ship owners. It’s a complete outsourced solution. What we call a HUB solution.”
Of course, while Inchcape’s network reaches around the planet, so have the challenges of the last year.
“At the moment it’s hard not to mention COVID-19. It’s been an extreme challenge for us and many others and there are multiple aspects to that from a pure business perspective, particularly in April and May we saw a reduction in trading,” Olsen tells us. “We were able to address that effectively by adjusting our cost base and scaling our network according to activity.”
However, a dip in trade wasn’t the biggest challenge the industry faced. That was something far more dire.
“The other challenge, which became far more urgent, was that the lockdown and travel restrictions made it hard to perform crew changes. Being a seafarer myself, I understand it’s a huge strain on crew already away from families for nine months at a time when your contract is up and you can’t get home,” Olsen says.
It was a problem Inchcape immediately began work on addressing.
“We took the initiative in forming a cross-industry collaboration to approach port authorities, arrange charter flights and really try to find a solution to get serving crews home and fresh crews back onboard ships even during the strictest lockdowns,” says Olsen.
The Future is Growth
2020 was a tough year for most businesses but Inchcape has achieved reasonably good results and is now fully committed to using its financial strength, experience and global position to grow. To do this, the company is looking at three main areas.
The first is mergers, acquisitions, and the consolidation of a very fragmented industry.
“There are a lot of local actors and we can help these smaller companies by putting them into the Inchcape network,” Olsen points out.
Secondly, the company is looking to grow geographically.
“Our network is unique but there are always new and emerging markets,” Olsen says.
Finally, Inchcape wants to develop and expand its product offering, adding value for its customers. Shipping agents can be seen as a necessary evil or an unavoidable added cost-point, but Inchcape wants to go beyond that.
“We want to help our customers, giving them insight through information to plan their voyages better,” insists Olsen. “We’re looking a lot at the total cost of operation for ship owners and operators. Rather than looking at individual cost items, we look at it across the whole voyage and the whole fleet to see how to run your business more effectively.”
A big part of this process means pushing for strong governance, compliance and transparency. In 2019 Inchcape kicked off “The Year of Transparency”, which continues to this day.
“There’s been a lack of trust between ship owners and operators and the agent. The industry has been seen as only wanting to maximise profit,” Olsen admits. “We want to change that and be part of the solution to reduce the cost of operations. It’s not enough to say, ‘You can trust us’. You have to demonstrate that through complete transparency, taking the steps we can to offer our customers the best deal we can.”